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American Financial Group Inc. (NYSE:AFG)

Acquisition of Summit Holdings Southeast, Inc. Conference Call

January 09, 2014 11:30 AM ET

Executives

Diane P. Weidner – Assistant Vice President-Investor Relations

Carl H. Lindner III – Co-Chief Executive Officer, Co-President and Director

Joseph E. Consolino – Executive Vice President and Chief Financial Officer

Analysts

Amit Kumar – Macquarie Capital Inc.

Ryan Byrnes – Janney Montgomery Scott LLC

Vincent DeAugustino – Keefe, Bruyette & Woods

Steve Virgili – New Vernon Investments

Operator

Good day ladies and gentleman and thank you for standing by and welcome to the American Financial Group Incorporated’s Conference Call. At this time all participants are in a listen-only mode. Later we’ll conduct the question-and-answer session and instructions will be given at that time (Operator Instructions).

As a reminder today’s conference may be recorded. It’s now my pleasure to turn the floor over to Diane Weidner. Ma’am, the floor is yours.

Diane P. Weidner

Thank you. Good morning and welcome to American Financial Group Investor Conference call to discuss the agreement and its reach with Liberty Mutual Insurance to acquire Summit Holdings Southeast.

Within today’s discussion are Carl Lindner III, Co-CEO of American Financial Group; and Jeff Consolino, AFG's Chief Financial Officer. Craig Lindner Co-CEO is also with us today. If you are viewing the webcast from our website you can follow-on with the slide presentation if you’d like.

Certain statements made during this call are not historical facts and may be considered forward-looking statements and are based on estimates, assumptions and projections, which management believes are reasonable, but by their nature is subject to risks and uncertainties. The factors which could cause actual results and/or financial condition to differ materially from those suggested by such forward-looking statements include, but are not limited to those discussed or identified from time-to-time in AFG's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K and quarterly reports on Form 10-Q.

We do not promise to update such forward-looking statements to reflect actual results or changes in assumptions or other factors that could affect these statements. If you are reading a transcript of this call please note that it may not be authorized or reviewed for accuracy, thus it may contain factual or transcription errors that could materially alter the intent or meaning of our statement.

Now I’m pleased to turn the call over to Carl Lindner III.

Carl H. Lindner III

Good morning. We announced earlier today that AFG has entered into a definitive agreement to acquire Summit Holdings Southeast or Summit from Liberty Mutual Insurance. As you’ll see on Slide 3 of the webcast, purpose of our call today is to provide an overview of the transaction, discuss the strategic fit with AFG and the related financial implications.

We are really excited about this morning’s announcement for several reasons. First of all, we view Summit’s business as a specialty workers’ comp carrier to be an excellent fit with our business model and our corporate culture. It nicely complements our existing workers’ comp specialty companies.

Secondly, this acquisition adds $1 billion of cash to our balance sheet which will put to work in our investment portfolio. As you know we’re real proud of the historical investment returns that American Money Management has produced, like they are a in-house money manager as they’ve out performed the industry and major indices. Finally, we view this acquisition as an intelligent use of our excess capital. We expect to achieve double-digit returns on capital in this business and have immediate earnings accretion.

Now if you turn to Slide 4, you’ll see that the purchase price of Summit’s tangible book value plus $45 million. This representation the price that’s approximately 80% of Summit’s GAAP book value and 110% of Summit’s tangible GAAP book value. AFG will capitalize Summit to an A+, Standard & Poor’s capital level, which will also allow AFG’s P&C operations to remain capitalized to A+ Standard & Poor standard after the purchase. The transaction is subject to customary regulatory approvals as expected to close late in the first quarter or earlier in the second quarter of 2014.

AFG’s total capital investment in Summit will be approximately $400 million which is well within the $900 million in excess capital that AFG reported at September 30, 2013. AFG has over $500 million of cash and liquid investments at the holding company level which will be more than sufficient to complete the transaction. There will be no external financing in this transaction. The addition of Summit’s business will be immediately accretive to AFG’s 2014 earnings per share following closing.

We said many times, and undertaking a transaction just because it’s accretive to earnings per share is not our target rather our primary focus is to produce healthy long-term returns in the double-digits. Summit’s business is expected to generate after-tax returns of 11% to 12% overtime. Jeff will talk a little bit more about this later.

Following the transaction, Summit will operate as a distinct business unit within our specialty, property and casualty group. We’re pleased to welcome Carol Sipe and her leadership team. It will continue to ensure the delivery of the quality products and services that have made Summit a market leader in the region and all the regions it serves. Summit will retain its own brand as a member of Great American Insurance Group.

Summit is the leading provider of workers’ comp solutions in the South-East United States and its headquarter in Lakeland, Florida with officers also in Gainesville, Georgia and Baton Rouge, Louisiana as you’ll see on Slide 5. Insurance subsidiaries, Bridgefield Employers and Bridgefield Casualty were approximately $538 million in direct premiums in 2012. An additional $110 million in premiums are under management for non-affiliated insurers managed by Summit.

The business is focused on small and medium sized accounts across multiple industries. Summit has approximately 740 employees and distributes its products through more than 1,600 independent agents.

With the addition of Summit, AFG has added another specialty niche insurance business with a leading market position, bringing us to a total of 29 specialty, property and casualty businesses. Half of our business comes from units with top 10 market rankings. Summit’s leadership in its southeast region adds to that.

With the addition of Summit’s business, our specialty casualty group grows from about 34% of total gross written premiums at December 31, 2012 to approximately 41% on a pro forma basis. You will see this information on Slide 8.

Like many of AFG’ insurance businesses, Summit also has a leading market position, earning a top 5 ranking in Florida, Mississippi, Louisiana and Kentucky as you will see on Slide 9.

Summit is well diversified across industry classes with the vast majority of policies representing small, medium size accounts. Summit’s business as a workers’ comp specialist is one that we know well. Two of our existing businesses, Republic Indemnity and Strategic Comp are also workers’ comp specialists as summarized on Slide 10. Both of these businesses are growing, achieving strong rate increases and are expected to earn double digit returns this year.

We feel that we are well positioned in this market and we are enthusiastic about adding another specialist workers’ compensation business. We believe that specialization is a key success factor in our business.

Our Republic Indemnity unit is a specialty workers’ comp, ensure operating in California. With 68 years of experience in the California market, our management has the depth of underwriting expertise to consistently outperform the market by 14 percentage points over the last decade. Republic today is seeing significant rate opportunity and profitable growth.

Our Strategic Comp unit has a unique business model which helps its clients reduce losses and workers’ comp costs. Strategic Comp has seen substantial profitable growth since we acquired the company in 2008.

Now if you turn to Slide 11, you will see that Republic’s business is West Coast based with California predominating. Strategic Comp is regionally focused in selected states and Summit is focused in the Southeast with Florida representing over half of its business taken altogether, no one state or region dominates.

AFG has been able to skillfully manage the workers’ comp cycle in our mix of business over sustained period of time. We’ve discussed with many of you our willingness to walk away from business when we couldn’t achieve appropriate returns as is evidenced on Slide 12. Today, they’re with pricing on the upswing and rate adequacy in our targeted markets, AFG is back to growing its workers comp business.

Turning to Slide 13, you will see that Summit also has a strong track record for producing results that outperform the industry and through nine months of 2013 has achieved 96 combined ratio.

Now I’d like to turn the discussion over to Jeff Consolino who will review some of the financial implications of the Summit acquisition.

Joseph E. Consolino

Thank you, Carl. I am delighted to speak to all of you this morning and delighted to speak to our new associates at Summit. We welcome you to AFG and you are joining a great company.

Starting on Slide 15, this talks to our capital adequacy, financial condition and liquidity and capital management strategy. You’ve seen these statements on a recurring basis from American Financial Group.

Our excess capital is approximately $900 million as of September 30, 2013. The total capital committed to Summit of approximately $400 million is well within that $900 million in excess capital reported at the end of the third quarter. Our strategy continues to be opportunistic, balancing profitable organic growth, expansion of specialty niches, acquisitions, startups and stress maintaining a minimum of $100 million to $200 million in dry powder.

As we are opportunistic with management or excess capital, we added our 28 specialty P&C business earlier this year with a formation of our professional liability division and have been pursuing opportunities to organically grow our specialty casualty and annuity operations during the 2013 year.

In addition to these strategic uses of our excess capital, we announced a 13% increase in AFG’s ordinary quarterly dividend in October to $0.88 per share per year and $1 per share special dividend that was paid in December.

If you turn to Slide 16, the acquired entities that comprise of Summit Group illustrated on this slide within the dashed outline. The underwriting companies that are owned by Summit Holdings Southeast will be capitalized as standalone entities.

On Slide 17, you will see that in 2014, we expect that earnings per share will be increased through this transaction by approximately $0.20 per share. On an annual run rate basis, we estimate earnings per share accretion in the range of $0.40 to $0.50 per share. The acquisition of Summit will have no impact on our balance sheet ratios. As such, the pro forma debt-to-capital ratio for AFG remains at 18% and our excess capital remains over $500 million.

To get more specific on the financial impact of adding Summit, on Slide 18, we’ve presented summary GAAP income statement data for Summit covering the 12 months period through September 30, 2013. In using this data in your financial models, I’d ask that you consider the effect of the closing date and other items on the amount of earnings that will come through the AFG in calendar 2014.

Net investment income as presented here does not give effect the additional $150 million of capital that AFG will add to Summit. However what might look like a $55 million pretax run rate for net investment income after that capital contribution will be tampered by the fact that the seller is delivering cash to us and deploying rather than securities.

We believe that we will be able to get fully invested after two quarters, but until then our investment yields will reflect the drag of $1 billion cash balance. Summit’s combined ratio continues to improve with the improving business environment and workers compensation.

After the transaction, AFG will purchase a greater level of reinsurance for Summit and has previously been the case under Liberty’s ownership. I’d expect that the reinsurance cost were approximately two points on the combined ratio.

Finally, the $45 tangible book value premium will create amortizable intangibles. While we have not finalized our purchase accounting, an average of seven years might be reasonable with the resulting amortization being deductible for book purposes.

After looking at all of these annual run rate items, then consider that we expect to close in late in the first quarter of 2014 or early in the second quarter. As a result, AFG will pickup only a partial year of Summit’s income statement data in calendar 2014. These factors form the basis for expectations about EPS accretion in 2014 and beyond.

Turning to Slide 19, as Carl mentioned, our in-house investment management team, American Money Management has consistently delivered investment out-performance. We are pleased that the Summit transaction will increase AFG’s invested assets by about $1 billion to a total of $30.9 billion. We believe this will provide a nice opportunity to leverage American Money Management superior investment management capabilities overtime.

The charts on Slide 19 illustrate the September 30, 2013 actual and pro forma combined investment portfolios. In the near-term, this will increase the cash component until these funds can be fully invested. The quality of our fixed maturity portfolio remains unchanged by the transaction.

With that said, now we’d like to open the lines for any questions.

Question-and-Answer Session

Operator

Sure, thanks sir. (Operator Instructions) And it looks like our first question in queue will come from the line of Amit Kumar with Macquarie. Please go ahead, your line is now open.

Amit Kumar – Macquarie Capital Inc.

Thanks and good morning and thanks for taking my questions. Just a few questions here, first of all, just on the discussion on excess capital, was there some internal debate on using the cash or deploying the capital to buyback more stock for 2014 and how does this alter your thought process on buying back stock going forward, because if I plug that number into my model, I think one gets to the same level of accretion. Just wanted to hear what you thought about that in terms of deploying capital?

Carl H. Lindner III

Of course, it is Amit. We all were continually struggled to continually try to seek out the highest and best used for our excess capital going in a direction we feel with the highest returns as you know we’ve been opportunistic purchasers of our stock. We’ll continue to be able to do that. The size of this transaction uses a chunk of our excess capital, $400 million of $900 million that it gives us plenty of flexibility to continue to opportunistically do share repurchases if we consider that to be highest and best use. So of course we continually debate day by day. In this case we were excited with this transaction were over time we feel we can manage this business to achieving a 11% to 12% returns and compared to our stock price, at least hear in the short-term, it looks like a good choice. So..

Amit Kumar – Macquarie Capital Inc.

Got it.

Carl H. Lindner III

That’s how we look at it.

Amit Kumar – Macquarie Capital Inc.

The second question I had was on Summit’s reserves, obviously the tax statements are a bit commingled. Can you talk about the resource, maybe talk about the level of IBNR and what does your analysis of reserves tell you about them? Are they adequate or more than adequate or would it be some sort of adjustment going forward?

Joseph E. Consolino

Hi, Amit this is Jeff. As Carl mentioned at the outset this transaction is the result of the discussion between us and the seller Liberty Mutual where we had ample opportunity to evaluate Summit including its loss reserves. Liberty is obviously a responsible parent company with good processes and excellent reserving actuaries and financial people. As we got into the due diligence our conclusion is that Summit’s reserves are adequate and we’ve had plenty of time to do our own in house and external review there.

In terms of benchmarks, you hate to rely on just a single number like an IBNR percentage to demonstrate anything, but of the reserves we’re bringing across which are $1 billion net, about 70% of that reserve base is made up of IBNR. The total industry at year-end in the U.S. for the workers comp plan is a touch under 50%. So if you were looking at Summit’s loss reserves, you’d see a heavier IBNR component than a typical company.

Amit Kumar – Macquarie Capital Inc.

Got it. And would you plan to release some more data on the reserves separately down the road so that we can actually do our own analysis or at the time of closing, would there be more data or no?

Carl H. Lindner III

Until you’re through in the qualifier of closing I was going to give you an unreserved yes. You see Summit’s reserves in Schedule P when we file it for the 2014 year. Until then Summit will be included within our consolidated GAAP financial statements from the closing date of acquisition and any movements in Summits reserves will come through our prior period line as we reported today.

Amit Kumar – Macquarie Capital Inc.

Got it. And final question, and I'll stop here. In terms of you talking about the market conditions, and obviously talked about your prudent performance with Republic. When you look forward, how does the book shape up, and how does the combined ratio shape up going forward for this book, now that it will be under your control? I guess, does it expand, does it contract a bit? Do you expect the combined ratios to improve, I guess, when you apply your practices to them? Maybe just talk about your forward outlook on this book.

Carl H. Lindner III

Want to start with, we’re enthusiastic about the current management team and their track record, that’s positive. One thing we’re exited about is, their use of predictive modeling and predictive analytics and some of their approach on managing the claims in the healthcare side. We actually think those are things that we could probably leverage and would be useful coming the other way and up. But of course I think as the AFG management team also will have some insights and have some positive things to bring to I think Summit’s management team also. Clearly we have a high barn, high expectations with all of our businesses to earn that proper returns and we’ll look at Summit through the same eyes.

Amit Kumar – Macquarie Capital Inc.

Got it. Okay, I will stop here and re-queue. Thank you so much for all the answers.

Operator

Thank you, sir. And it looks like our next question on the queue will come from the line of Ryan Byrnes with Janney. Please go ahead. Your line is open.

Ryan Byrnes – Janney Montgomery Scott LLC

Thanks guys. So I just had a question, it looks like that Summit has some relationships managing some captive insurance companies. Just wanted to see if they own any of the capital there, and I guess how you guys view those businesses going forward?

Joseph E. Consolino

Thank you, Ryan. This is Jeff Consolino. Summit’s business does incorporate a business that manages third-party insurance companies for which they receive fee income. It’s been a good contributor to Summit’s pretax income on the order of – call it $10 million a year over time. We like the business, of course we like the management, so we have no expectations that that will change, but these are truly third-party non-affiliates. So Summit does not own any of the capital of those entities. It’s the management relationship.

Ryan Byrnes – Janney Montgomery Scott LLC

Great. Thank you. And then also, I noticed you guys are obviously putting more capital into them, and also, is there any – I guess going from A to A-plus, what's the rationale there? I imagine, obviously, it would hurt some ROE targets.

Joseph E. Consolino

I would point you back to the slide that showed the structure of Summit pre-acquisition on Page 16. Summit participated in the Liberty Mutual inter company pool and as a result did not need to maintain a standalone capital base as all with their premiums and losses receded to Liberty Mutual. As we take Summit out of the Liberty Pool we need to establish a standalone capital base for it and so the total capital that we’ll put in is equal to an A+ level under the applicable Standard & Poor’s methodology.

You also may have seen a release from A.M. Best come up this morning affirming an A rating for Summit. So it’s not that Summit was working with one capital base and we’re adding more capital to get a higher rating or gear up the growth. This is our assessment and discussions with our rating agency partners and using our analysis as to when appropriate standalone capital basis for a company with more than $500 million of premium and about a $1 billion of net loss reserves.

Ryan Byrnes – Janney Montgomery Scott LLC

Okay. Great. And then last one, obviously, I think you guys mentioned that Summit is just kind of a small and mid-account focused. Have you announced I guess the average policy or premium per policy on the business?

Carl H. Lindner III

We have, going to get you to the slide there.

Ryan Byrnes – Janney Montgomery Scott LLC

Okay, sorry.

Carl H. Lindner III

Slide number 9. If you look at slide 9 on the bottom left by policy size you can see that 60% of the business is less than $10,000, another 23% is less than 25,000. So it really is a small and mid-account focused. If you look at this data for our Republic Indemnity unit, this would work pretty similar.

Ryan Byrnes – Janney Montgomery Scott LLC

Great, thanks for your interest guys.

Operator

Thank you, sir. And it looks like our next phone question in queue will come from the line of Vincent DeAugustino with KBW. Please go ahead. Your line is open.

Vincent DeAugustino – Keefe, Bruyette & Woods

Thanks and good morning. Thanks for doing the call. Just the first question I'd have is, it does seem like Summit's a fairly attractive unit. I'm just curious if you maybe you got to talk about why Liberty wanted to part with it? And then I'm also surprised that you're getting 10%-plus ROE business kind of at this valuation. Just so I am just kind of curious of any thoughts that you might have on the deal, and kind of how you guys seem to work out such a favorable deal for yourself.

Joseph E. Consolino

This is Jeff Consolino. I wanted to say that in no way do we speak for Liberty Mutual and so there they’re intense in pursuing a transaction of their own. I think that we actually paid a fair price to Liberty for this business and Liberty did not go out and auction the business. This transaction is the result of a conversation that was initiated between our two organizations. My understanding from Liberty is that their commercial division strategy is to approach workers’ comp on a package basis with other commercial products, all under the Liberty brand. So that makes Summit strategic, not set onset, my understanding from Liberty.

I believe Liberty is benefiting in transacting with AFG as we’re straightforward, financially capable organization. We are an organization that prices our people and prices specialization and it’s my belief that Liberty is a good parent company. You can feel positively about selling Summit to an organization like ours where the Summit people have the chance to continue with their record of success and continue to build their careers.

Carl H. Lindner III

This is Carl. On the return side, I think working with Summit’s management team, we’ll have to continue to improve the underwriting profitability and manage money as we do that well to get to the 10% plus returns. So it will take a little bit of work.

Vincent DeAugustino – Keefe, Bruyette & Woods

And just following up on that, I was just also curious if you might have any comments on anything from Summit's business in terms of pricing trends more recently and then second, any other initiatives that may have been midway under way when you guys had come into the picture, just so we can think about what some of those initiatives might be?

Carl H. Lindner III

On the pricing front, I think last couple of years Summit has been achieving meaningful price increase. I think they’ve achieved around 8% in 2012, well 7% this year. Summit has, as the case with workers comp when you look across the country is in need of – has been a need of rate increase. So the rate trend has been good. We are enthusiastic that the management team has taken many of the right steps to continue to improve the profitability.

So I mentioned before, we are particularly excited about how predictive analytics, predictive modeling can be used to continue to improve things and yes, we’re hoping to use some of their insights and expertise, so maybe to help impact the rest of our business.

Vincent DeAugustino – Keefe, Bruyette & Woods

And then just one last one for Jeff. You had mentioned some of the IBRN metrics and I was just curious, I don’t think this is the case based off of the slide deck, but would there be any major differences in terms of tail or class of business that might make that comparison to the industry not really apples-to-apples or is it truly just giving the vision, sorry, I think about this way, but is that delta really the result of this difference in conservatism, even though when numbers…

Joseph E. Consolino

Yes, I hope I cautioned appropriately when I quoted those numbers, on over the lines and one particular data point to tell the whole story, the level of IBNR is just one component of reserve adequacy along with case and other reserves when you looked up to book ultimate loss reserves.

Clearly we’ve seen some problems which other companies in this industry that have failed to provide for adequate IBNR. I hope that data point would show you that Summit and Liberty are not in that camp, but I don’t thank you could use those ratios just as simple as to leave some track one from another and reach any firm conclusions because you need to get under the hood and look at everything else. We’ve been under the hood, we like what we see reserves are inherently uncertain but we do believe that reserves are adequately faded.

Vincent DeAugustino – Keefe, Bruyette & Woods

That’s great. Thanks very much.

Operator

Thank you, sir. Our next question will come from Steve Virgili with New Vernon Investments. Please go ahead. Your line is open.

Steve Virgili – New Vernon Investments

Good morning. Thank you. Quick question on the business that is managed for unaffiliated entities. Is that an attorney-in-fact business, is that what that is?

Carl H. Lindner III

Attorney-in-fact – this is Jeff, is typically for a reciprocal. The entities in question here are non-reciprocal organizations. They are marginally mutual organization, some converted from Self Insurance Funds over the years. Regardless of the legal form, Summit provides all of the services required to help those businesses operate and it’s compensated for that with a fee. That’s the nature of the business.

Steve Virgili – New Vernon Investments

So it’s the same idea basically?

Carl H. Lindner III

It’s the same idea. Again I am not an expert on reciprocals in attorney-in-fact, I understand there are certain things that attorney-in-fact can’t do for reciprocal. I’d have to refresh my memory on that.

Steve Virgili – New Vernon Investments

Okay. Thank you. And last question, with respect to the agencies that distribute Summit's products, can you give us a sense of where Summit's products rank on the distribution spectrum or is it a top product for their typical agents, or is it kind of second or third kind of, where does Summit kind of fall?

Carl H. Lindner III

Summit is the market share leader in Florida and has a strong market share in all of the surrounding southeastern states. Summit put a lot of energy and management attention on maintaining excellent agent relationships. So they feel like they are very effective and at the top of their agents lists. I’m not sure I can generalize anymore than that other than I think you’d see from Summit with its agencies, what you’d expect from a well performing company that’s the leader in its business.

Steve Virgili – New Vernon Investments

Okay, I’m sorry one last question going back to the fees that they generate from managing the affiliated entities. How much of earnings does that account for?

Carl H. Lindner III

It’s meaningful and earlier in the call I had indicated that it’s approximately $10 million pretax in the aggregate. You won’t obviously see that flow through our financial statements in any specific line items. Frankly we view that profit stream as part of the overall profit stream of the organization.

Steve Virgili – New Vernon Investments

Okay, thank you very much.

Operator

Thank you sir. (Operator Instructions) and our next question will be a follow up question from Amit Kumar with Macquarie. Please go ahead, your line is open.

Amit Kumar – Macquarie Capital

Thanks. Just two clean up questions. Should we anticipate, I guess any changes on the employee base from Summit or you expect other tensions going to be unchanged. I guess in terms of the employees coming over.

Carl H. Lindner III

I don’t think we expect any changes. We’re excited by the management group and the group of employees we have. As you know we run our businesses pretty entrepreneurially. Now each of the 29 businesses, business heads were kind of like many CEO’s and they make the day-to-day decisions, so…

Amit Kumar – Macquarie Capital

Got it. And are there any new employment contracts to retain the top management going forward from Summit?

Joseph E. Consolino

Amit, this is Jeff. There are a series of incentives to retain management that will create stickiness as part of the transaction. Going forward once Summit is ensconced as a unit of AFG, those managers will participate in our usual long-term incentive plans which have also showed to create a lot of alignment with the company and a lot of retention for our employees.

Amit Kumar – Macquarie Capital

But nothing extra is being put in place, I guess that’s what I was trying to ask.

Joseph E. Consolino

No, I am sorry. I said there is financial incentive for the top management related to the transaction.

Amit Kumar – Macquarie Capital

Okay.

Joseph E. Consolino

That will adhere to the benefit of management for staying but we wouldn’t have undertaken transaction like this if we didn’t think the people were excellent cultural fit and we didn’t feel that they would want to stay with us. So the whole discussion of putting money on the table to retain people I think is almost beside the point.

Amit Kumar – Macquarie Capital

I think a lot of company is looking back and I disagree with that, but thanks for all the answers and congratulations and look forward to your earnings conference call. Thanks.

Joseph E. Consolino

Thanks Amit.

Operator

Thank you, sir. (Operator Instructions) And presenters, I am showing no additional phone questions in the queue. I’d like to turn the call back over to management for any additional or closing remarks.

Diane P. Weidner

Thank you, Hue. And thank you for joining us this morning. We look forward to talking with you again when we release our 2013 fourth quarter results.

Operator

Thank you, presenters. And thank you ladies and gentlemen. Again this does conclude today’s call. Thank you for your participation and have a wonderful day. Attendees you may now all disconnect.

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