Fairfax Financial Holdings' CEO Discusses Q1 2014 Results - Earnings Call Transcript

May. 2.14 | About: Fairfax Financial (FRFHF)

Fairfax Financial Holdings Limited (OTCPK:FRFHF) Q1 2014 Earnings Conference Call May 2, 2014 8:30 AM ET

Executives

Eric Salsberg - Vice President, Corporate Affairs and Corporate Secretary

Prem Watsa - Chairman and Chief Executive Officer

Dave Bonham - Chief Financial Officer

Analysts

Paul Holden - CIBC

Tom MacKinnon - BMO Capital

Mikel Abasolo - Solo Capital Management

Daniel Baldini - Oberon Asset Management

Art Charpentier - Merritt Research

Operator

Good morning and welcome to Fairfax’s 2014 First Quarter Results Conference Call. Your lines have been placed in a listen-only mode. After the presentation, we will conduct a question-and-answer session. (Operator Instructions) Today’s conference is being recorded. If you have any objections, you may disconnect at this time.

Your host for today’s call is Prem Watsa with opening remarks from Eric Salsberg. Mr. Salsberg, please begin.

Eric Salsberg - Vice President, Corporate Affairs and Corporate Secretary

Thank you. Good morning, and welcome to our call to discuss Fairfax’s 2014 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 which are set out under Risk Factors in our base shelf prospectus, which has been filed with Canadian Securities Regulators and is available on SEDAR.

I will now turn the call over to our Chairman and CEO, Prem Watsa.

Prem Watsa - Chairman and Chief Executive Officer

Thank you, Eric. Good morning, ladies and gentlemen. Welcome to Fairfax’s first quarter conference call. I plan to give you some of the highlights and then pass it on to Dave Bonham, our CFO for additional financial details.

In the first quarter of 2014, book value per share increased 11.7% adjusted for the $10 per share common dividend paid in the first quarter of 2014. Our insurance companies had an excellent first quarter with a combined ratio of 93% with excellent reserving and significant underwriting profits of $99 million. OdysseyRe again had an excellent combined ratio of 85.6%, while Zenith had a combined ratio of 90.6%.

As shown on Page 28 of our quarterly report, we have realized gains on our investment portfolio of $380 million. Excluding all hedging losses and perform mark-to-market fluctuations in our investment portfolios, we earned $493 million in pre-tax income, including all hedging losses and mark-to-market fluctuations. In our investment portfolio, we reported after tax income of $0.8 billion in the first quarter of 2014 in excess of our $0.6 billion loss for the full year 2013.

As I mentioned to you in the past, prior to last year, we had two years, 1990 and 1999 that we had a negative total return on our investments. In both cases, we have rebounded significantly in the following year. With our loss in 2013, our first quarter in 2014 has rebounded significantly again. You will note our investment portfolios went up by $1 billion in the first quarter of 2014 in spite of being fully hedged, 30% in cash and little exposure to corporate bonds.

How did this happen? U.S. treasury rates dropped by approximately 50 basis points and our common stocks like the Bank of Ireland did much better than the Russell Index. We have yet to financially benefit from our hedges and are approximately $100 billion in deflation swaps. And of costs, our cash position gives us great optionality. At our Annual Meeting, we made the point that while we were protecting our capital on the downside, our investment portfolios could also do very well. The first quarter of 2014 was the case in point.

Our common stock portfolios continued to be hedged at approximately 90%. We did not add to our hedges. We continue to be soundly financed with year end cash and marketable securities in the holding company of $1.1 billion. Our insurance and reinsurance businesses, premium volume remained flat in the first quarter of 2014 after a number of years of growth. The combined ratio for our insurance and reinsurance operations as I have said before was 93%. At the subsidiary level, the increase in net premiums written in 2013 and 2014 and combined ratios were as follows. So, OdysseyRe had a 5% approximately decline in premium, combined ratio – in the first quarter, combined ratio of 85.6%; Crum & Forster was up 16%, combined ratio of 99.8%; Northbridge in Canadian dollars was up about 1% with a 99.8% combined ratio; Zenith was up about 1.2% with a 90.6% combined ratio; and Fairfax Asia was up about 35.6% with a combined ratio of 93.8%.

As we have said before, very low interest rates and reduced reserve redundancies means there will be no place to hide for the industry. Combined ratios will have to drop well below 100% for the industry to make a single-digit return on equity with these low interest rates. While the short-term is always tough to predict, fundamentals will eventually play out.

Net investment gains of $1.6 billion in the first quarter consisted of the following. Please refer to Page 2 of our press release. Net gains on equity and equity-related investments of $562 million, resulted from net gains of $63.7 million from common stocks and $71.5 million net loss on our equity hedge, reflecting the outperformance of our common stock portfolio, which is the Russell Index. We have realized gains of $393 million in our equity and equity-related holdings in the first quarter of 2014. Also, we had unrealized gains of $474 million, primarily on our municipal and treasury bond portfolio, because of the impact of dropping interest rates.

As we have mentioned many times in our annual meetings, annual reports and quarterly calls, with IFRS accounting where stocks and bonds are recorded at market and subject to mark-to-market gains or losses, quarterly and annual income will fluctuate widely and investment results will only make sense over the long-term.

Core inflation continues to be at or below 1% in the United States and Europe, levels not seen since the 1950s. In spite of QE1, QE2 and QE3, our CPI-linked derivatives with nominal value of approximately $100 billion are down 72% from our cost and are carried on our balance sheet at $164 million at the end of the first quarter, even though they have 7.7 years almost 8 years to run. Please remember that it took five years as we mentioned in our annual meeting took fives years in Japan before deflation sets in for the next 18 years.

When you review our statements even though when we own more than 20% of a company, we equity account, and we – when we own more than 30%, we consolidate, so that mark to market gains in these companies are not reflected in our results. As you see on Page 11 of our quarterly report the fair values of our investment in associates is $2.5 billion versus the carrying value of $2 billion and unrealized gain of approximately $0.5 billion that’s not on our balance sheet.

We continue to be concerned about the prospects for the financial markets and the economies of North America and Western Europe accentuated as we have said many times before by the potential weakness in China and emerging markets. We have said – as we have said now for some time, we believe there continues to be a big disconnect between the financial markets and the underlying economic fundamentals. As of March 31, 2014 we have $7.7 billion in cash and short-term investments in our portfolios which is approximately 30% of our total investment portfolio to take advantage of opportunities that may come our way. As a result, in the short-term our investment income will be reduced.

Now, I would like to turn it over to Dave Bonham, our CFO, so he can give you some more information on the underlying financials. Dave?

Dave Bonham - Chief Financial Officer

Thank you, Prem. First, I will focus on Fairfax’s consolidated results for the first of 2014 and I will move on to the operating company results and we will finish with the consolidated financial position. For the first quarter of 2014, Fairfax reported net earnings of $785 million or $35.72 per share on a fully diluted basis. And that compares to the first quarter of 2013 when we reported net earnings of $162 million or $7.12 per share on a fully diluted basis. Fairfax showed improved underwriting results in 2014 with our insurance and reinsurance operations reporting an underwriting profit of $99 million and a combined ratio of 92% and that compares to the first quarter of 2013 when we reported an underwriting profit of $86 million and a combined ratio of 94%. That’s a year-over-year increase of $13 million in our underwriting profit.

In terms of reserve development, we experienced $56 million of net favorable prior year reserve development and that benefited the combined ratio by 4 points in the first quarter of 2014. In the same quarter last year we reported $36 million of favorable reserve development representing 2.5 combined ratio points. Current period catastrophe losses totaled $31 million or 2.2 combined ratio points in the first quarter of 2014 and that was essentially unchanged on a year-over-year basis. As Prem mentioned already net premiums written by our insurance and reinsurance operations increased slightly in the first quarter of 2014 by 0.4%.

Now, turning to our operating company results starting with OdysseyRe, in the first quarter of 2014 OdysseyRe reported an underwriting profit of $75 million and a combined ratio of 85.6% that compared with an underwriting profit of $95 million and a combined ratio of 83% in the first quarter of 2013. Catastrophe losses were $22 million and that translated into 4.3 combined ratio points and those are principally comprised of flooding in parts of UK and other attritional losses. That compared with current period catastrophe losses, all primarily which were attritional of $32 million or 5.8 combined ratio points in the first quarter of 2013.

OdysseyRe’s combined ratio benefited from $22 million or 4.2 combined ratio points of net favorable prior year reserve development and that was principally favorable emergence on the prior year’s non-catastrophe loss reserves.

Odyssey wrote $573 million of net premiums in the first quarter, a decrease of approximately 5% from net premiums of $604 million in the first quarter of 2013 and that principally reflected lower writings of property business and most notably a year-over-year decrease in participation on a Florida property quota share reinsurance contract and that was partially offset by growth across most lines of the U.S. insurance division and the growth there is inclusive of renewals related to the Surety business of American Safety.

Moving on to Crum & Forster, Crum & Forster’s underwriting results, were relatively unchanged in the first quarter of 2014 compared to last year with combined ratios of 99.8% compared to 99.7% respectively. Similarly, underwriting profit of $0.6 million in the first quarter of 2014 was comparable to the underwriting profit of $0.8 million in the first quarter of 2013. Current period catastrophe losses of $7.5 million had a 2.4 percentage point impact on Crum & Forster’s combined ratio in 2015 and were the result of severe winter weather in the U.S. Northeast. First quarter of 2013 was not impacted at all by catastrophe losses.

Net premiums written by Crum & Forster increased by 16.1% in the first quarter of 2014 and that primarily reflected renewals of the American Safety business in environmental casualty and the CoverX specialty lines of business, the positive impact of the acquisition of Hartville in pet insurance and the growth in the Fairmont Accident & Health business.

Zenith reported significant improvements in its combined ratio, which decreased from 110% in the first quarter of 2013 to 91% in the first quarter of 2014. That improvement reflected the following. A year-over-year decrease of 7.2 percentage points in the accident year loss ratio in the first quarter of 2014 and that was related to earned price increases exceeding estimates of loss trends. Secondly, Zenith had increased net favorable development of prior year’s reserves, representing 10.2 percentage points on the first quarter of 2014 combined ratio. And that development was primarily related to the 2013 and 2012 accident years. And finally, decreases in the underwriting expense ratio of 2.2 percentage points and that was a result of a 10% increase in net premiums earned on a year-over-year basis. Net premiums written by Zenith of $290 million in the first quarter of 2014 increased by 1% year-over-year and that reflected premium rate increases.

Northbridge reported a combined ratio of 99.8% in the first quarter, an improvement relative to its combined ratio of 100.5% in the first quarter of 2013. Northbridge’s combined ratio included the benefit of net favorable prior year reserve development across most accident years and lines of business of $15 million or 6.7 combined ratio points. And that compared to net favorable development of $9 million or 3.5 combined ratio points in the first quarter of 2013. There are no catastrophe events in the first quarters of 2014 or 2013, but Northbridge’s accident year combined ratio was as adversely affected by severe Canadian winter weather and the impact it had on Northbridge’s transportation and logistics and direct personal lines business.

Adjusting for the one-time impact of the intercompany unearned premium portfolio transfer between Northbridge and Group Re in 2013 and excluding the unfavorable impact of translating Northbridge’s premiums from Canadian dollars to U.S. dollars, net premiums written by Northbridge increased by 1.1% in the first quarter of 2014 in Canadian dollar terms. And that reflected modest improvements in rate, retention of new business partially offset by the strategic non-renewal of one portfolio of business.

Fairfax Asia’s combined ratio increased from 91% in the first quarter of 2013 to 94% in the first quarter of 2014 and that was primarily the result of net adverse prior year period reserve development of 4.6 points compared to net favorable prior period reserve development of 6.5 points in the prior year. Unfavorable emergence in 2014 was principally related to marine hull loss reserves at First Capital and the impact of the mandatory participation by Pacific Insurance in the Malaysian motor vehicle insurance pool.

On a year-over-year, net premiums written by Fairfax Asia increased by 36% in the first quarter of 2014 principally reflecting increased writings in the accident and health, engineering, commercial auto and property lines of business. The combined ratio of the insurance and reinsurance other division improved from 98.4% in the first quarter of 2013 and 97.7% in the first quarter of 2014. Net premiums written decreased by 17.3% in the first quarter after excluding initial one-time impact of that underwritten premium portfolio transferred to Northbridge that we mentioned, which suppressed the net premiums written in the insurance and reinsurance other segment by $39 million in 2013. So after about adjustment the decrease of 17.3% principally reflected the non-renewal of certain classes of business where terms and conditions were considered to be inadequate at Polish Re and Advent.

Runoff reported an operating loss of $21 million in the first quarter of 2014 compared to an operating loss of $34 million in the same period in 2013. The year-over-year improvement in operating profitability primarily reflected lower net adverse development at TIG Insurance.

Our consolidated interest and dividend income decreased from $100 million in the first quarter of 2013 to $91 million in the first quarter of 2014. The decrease reflected lower dividends earned on common stocks as a result of the sale of dividend paying equities in 2013. The company recorded an income tax provision of $334 million in the first quarter of 2014 at an effective tax rate of 29.9%. The effective tax rate was higher than our Canadian statutory income tax rate of 26.5% reflecting a significant income earned in the U.S., which is taxed at the U.S. statutory income tax rate of 35%.

Turning to our financial position, our total debt to total capital ratio decreased to 25.1% at March 31, 2014 from 26.1% at December 31, 2013 and that was primarily as a result of the increase in our common shareholders equity reflecting the net earnings in the quarter. And now I will now pass it back over to you Prem.

Prem Watsa - Chairman and Chief Executive Officer

Thank you, Dave. Now Wendy we are happy to answer our shareholders questions, please give us your name, your company name and try to limit your questions to only one to let us addresses all. So, Wendy we are ready for the questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) The first question is from Paul Holden with CIBC.

Paul Holden - CIBC

Great, thank you. I wanted to ask a question about your appetite to underwrite more business if I look at your underwriting leverage still a little bit on the low side at 0.8 times equity, didn’t see much premium growth this quarter, but yet your underwriting margins are quite healthy so just kind of square off the healthy margins versus lack of organic growth?

Prem Watsa

Yes, Paul that’s a good question we haven’t – we had not as you said we are writing 0.8 times capital. We have got lots of capital. At the moment, the prices across the industry are coming down some, more on the cat related business and less on other businesses. We have got a very well diversified worldwide business. But and you see some of them are expanding. You’ve seen in Fairfax Asia for example we have got significant growth. And Crum & Forster because of the acquisition of Hartville and the environmental business where we have expanded, but broadly speaking we are – it’s not a hard market by any stretch of the imagination. And we have got the capital, we have got the management, we have got the ability to expand at the right time and at the moment we are holding steady.

Paul Holden - CIBC

Okay. Thank you.

Prem Watsa

Thank you, Paul. Next question Wendy.

Operator

The next question is from Tom MacKinnon with BMO Capital.

Tom MacKinnon - BMO Capital

Yes, thanks. Good morning everyone. Prem when I look at the hold co cash position it’s just a little over $1 billion and it’s actually a little bit lower than it was in the third quarter of last year and then like about 45 days after the third quarter of last year you raised equity and the primary purpose of it you mentioned in the press release was to augment your cash position at the holding company, so you got $1 billion at the holding company now and you had $1 billion at the holding company in the third quarter and you wanted more, then so can you help us understand why you might have needed the money then and you don’t need it now with the same kind of hold co cash levels.

Prem Watsa

Yes, Tom. That’s a good question and at the end of the third quarter when we look at it, we went through on results in the third quarter and for the nine months as reflected significant unrealized losses and read this I said before we had focused on having rock solid balance sheet under any circumstances. So, I think it was at that bad time that those conditions continue for some time than our financial position, perhaps, would be less strong. We took the opportunity to raise the equity and just keep it really, really strong. Well, today is the opposite, Tom, you’ve got – we saw our first quarter’s earnings, you saw how the cash position to be realized as you know the Bank of Ireland went up more than three times and we sold a third of our position and we got our capital bank, but big fans of the Bank of Ireland and which we’ve out for the company. And I’ve said in our annual meeting that’s the first company that we have a $1 billion approximately depending on the stock price on a day-to-day basis of unrealized gains. So, we have in a very sound financial position and we have no intention of raising any common equity. We’re very, very careful, but financial position will always – if we have any doubts about financial strength we’ll raise some equity and that’s today we think we’re in a very strong position and I’m getting stronger after the first quarter.

Tom MacKinnon - BMO Capital

Did you anticipate some to augment that billion more or to move it up higher and what would be the potential flows out of the subsidiaries as a result of the Bank of Ireland gains?

Prem Watsa

Yes, so, Tom, like we have – we’ve said that our dividend capability normalized is between $0.5 billion to a $1 billion from the insurance companies like OdysseyRe and Zenith and we don’t need to take those dividends there in the companies as Paul in the previous question said we’ve got 0.8 times operating leverage so, we have excess capital in our companies. We can take that up at anytime that we need to in terms of augmenting that $1 billion that we have in holding company. So, we like the fact that our insurance that well-capitalized not significant operating leverage there. We can literally as I said this before we can double our premium when the opportunity comes and of course we can take dividends if we want it.

Tom MacKinnon - BMO Capital

Okay, thank you very much.

Prem Watsa

Thank you, Tom. Next question, Wendy?

Operator

Thank you. The next question is from Mikel Abasolo with Solo Capital Management.

Mikel Abasolo - Solo Capital Management

Yes, hello, thank you for taking my question. This question comes from someone who fully shares your concerns about the economies – developed economies and market in general. My question to you is, under which circumstances or under which scenario do you conceive changes substantially, your investment stands and one that do you have any claims if I’m correct, it’s May 2010, thank you.

Prem Watsa

Repeat that last part again if you don’t mind, Mikel.

Mikel Abasolo - Solo Capital Management

Yes, yes, the question is you’ve been – you had your equity investment portfolio hedge essentially since 2010 based on the diagnoses of the dreadful economic situation underlying the apparently better numbers that economies throughout and I guess it also in terms of your concerns about valuations. Now my question is what would change your mind about those equity hedges. Why you need you feel more constructed about investing in equities or about hedging your equity portfolio and what would be the scenario of what – why would be those consensus?

Prem Watsa

Yes, I know that’s a very good question and it’s one that we, of course review all the time and to that – at our annual meeting and the – we might as time goes by just model through so that the United States grows on 2% or 1.5%, 2.5% something like that, Europe model through and China also, all the problems in China we talked about at our annual meeting, may be well model through. So in that case, we won’t have any problems, any unintended consequences and on that hedge we’ll slowly come off, and right now we haven’t increased our hedge, we haven’t reduced it either our stock positions went up, a hedges with the same amount so, it’s down to 90% right now. So that’s certainly one possibility.

On the other side, you saw the first quarter GMP growth in the United States, very minimal you saw inflation in Europe, but a 0.5% in the United States in the 1% area, China, there is lots of things happening in China, you can monitor them in terms of the capital market the default in the trust area in the wealth management products and corporate bonds, lot of changes and in the mix of all this, as the Fed tapers, meaning they no longer are buying government bonds, the long treasuries went down as you know in the last few days the 3.42%, below 3.5%. So, we look at all of this and wonder, if we are going to model through and we might well do that, but there is a possibility of cause of unintended consequences. They might originate from China. They might originate in the United States so we’ve got a very low economic growth on almost no growth in the first quarter. It’s suppose many people say it’s because of the winter, one of the second quarter comes in the similar way, I’m just – I’m not saying it will – I’m just saying it might and we might all wonder what the affects of QE1, QE2, and QE3 are so, we take all of this into account and all of us we’ve got investment commitment and we watch it very carefully, but today, we’re very happy with the position that we’ve got. So, thank you for your question.

Mikel Abasolo - Solo Capital Management

Thank you very much.

Prem Watsa

May I go to the next question, Wendy?

Operator

The next question is from Daniel Baldini with Oberon Asset Management.

Prem Watsa

Good morning, Daniel.

Daniel Baldini - Oberon Asset Management

Good morning. Thanks for taking my question and it’s a little bit long so, please bear with me. Over the past couple of years, you’ve committed a fair amount of capital to the run-off business and I was wondering if you could explain a little bit what your operating philosophy is there and maybe by way of comparison. If I look at the results in 2013 and 2012, there was a small underwriting profit in ’13 and small underwriting loss in 2012 and when there has been pre-tax income its come really from the gains on investments that happened again in the first quarter of this year. I know the only other business that I’m familiar with, that our company that are familiar with is (indiscernible). And my sense is that they are roughly the same scale as your run-off business and they seemed to have operating income of 100 plus million every year around the past couple of years, but not really not so much in terms of investment income or realized gains. Now, I’m assuming both companies are capably managed and I’m wondering if you could sort of outline your philosophy and how it leads to these different results.

Prem Watsa

Yeah, so, in the business of run-off, first of all, you’ve got to have an exceptional run-off team and we do have an exceptional run-off team located in the United States and in the U.K., and they have been doing this for better part of 20 years. They are among the best in the United States and in the world there is only a few run-off companies. In the last five or six years we might have made Daniel about seven acquisition or something like that and our rates of return we watched this very carefully. Our rates of return are in excess of 30% for the whole book of business. We look at each one of them and we see what the rates of return are and the rates of return exceptional, the two components as you well know, one is on the underwriting or making sure that the claims are well preserved and are paying off with their expenses below what we set them up and the second is the investment side.

So the advantage of – the advantage of the runoff is we have noticed over the – as you know the claims, you can see every claim, if you like before you buy something, you can check every claim and make sure that appropriately was up. You can add a margin on top of that, which we do while in the ongoing business you take risks in the ongoing business. And you never know, what’s going to happen whenever you underwrite. So, the runoff business has a lot of attributes to it that provide downside protection as long as you know what you are doing. And we have a separate runoff company, it’s not mixed with our ongoing operations, it’s separate, they are focused on it. And we think it will be – it will continue to be a great opportunity for us. But there is no pressure to buy a company just like there is no pressure on Fairfax to buy a company, an insurance company. There is no pressure to add to our runoff. It has meet our requirements, which is to make 15% return on our capital. And if it does that, then we make the acquisitions. And in the past as I said, 5 to 6 years, the runoff book has done really well.

Daniel Baldini - Oberon Asset Management

Alright, thank you.

Prem Watsa

Thank you, Daniel. Next question, Wendy?

Operator

The next question is from Art Charpentier with Merritt Research.

Prem Watsa

Yes, good morning Art.

Art Charpentier - Merritt Research

Good morning. You showed a very nice unrealized gain in your bond portfolio in the first quarter and in your opening remarks attributed, seem to attribute that to the I think 30 basis point rally, in the U.S. treasuries. And I guess my question is and I understand it’s not necessarily your position that rates would be improving, but my question or rising I should say, my question is should we see a reversal of that in the next several months or quarters or whatever show rates moving 30, 40, 50 basis points in the other direction. Would we – would this kind of result – would we see the mirror image of this or do you in fact have I don’t know mechanisms, protections, whatever to mitigate the harm that, that could cause?

Prem Watsa

Yes. Art, that’s a good question. Of course, if interest rates go up, you would see some reversal of our positions as long as we haven’t sold them, sold the bonds. If we have stock prices come down for Bank of Ireland or other stock divisions that we have, we will see some reversal. Yes, so that’s the reason I make the point that the only way to measure with us, with mark-to-market fluctuations is to take the long-term view and wait till they have realized. And so that’s just been our view for a long time. And – but your point is well taken, these things can be changed, it can reverse and that can certainly happen.

Art Charpentier - Merritt Research

May I ask if you have any appetite to realize some of these gains?

Prem Watsa

I think just repeat that again, Art, sorry.

Art Charpentier - Merritt Research

I said may I ask if you have any appetite at this time to realize some of those bond gains?

Prem Watsa

Yes. I mean, obviously I am not going to tell you when we are going to realize it or not, but yes, no we have Bank of Ireland, that went up three times, we have sold a third of our position. So we realized that yes, you might say that position was like a $1.2 billion, $1.3 billion in our books and you might say how are they going to realize that they own almost 10% of the company. Well, the environment change and there was a ton of demand, and Wilbur Ross and ourselves sold a third of our position. So, yes, we are in the marketplace. We look at opportunities. We look at prices fluctuating everyday. And we don’t react to them. But when we want to, we can. We have and we will and we can.

Art Charpentier - Merritt Research

Okay, thank you very much.

Prem Watsa

Thank you, Art. Thanks again. Wendy, next question please?

Operator

The next question is from Tom MacKinnon with BMO Capital.

Tom MacKinnon - BMO Capital

Thanks very much. Prem, just looking on the Bloomberg on the Bank of Ireland Holdings, some is listed under Fairfax and some is listed under Prem Watsa. Now, I’m – are those amalgamated? Are those supposed to be the Fairfax Holdings, is that the way we should be looking at that.

Prem Watsa

That’s a good question, Tom, whenever because I’m the controlling shareholder of Fairfax. So, any position at Fairfax owns comes to me, I wish that whole position was mind, but it’s not. So, it’s don’t be – I think I might have Tom and I think it’s disclosed something like 100,000 shares of Bank of Ireland and the rest of all Fairfax. At any time, we disclosed the position that we have that Fairfax has from a reporting standpoint it comes up to May because of a controlled position and then of course if I’m a director that you have reporting obligations because of being a director also. But so, but I think I have to – I’m sure our report it separately my own position in Fairfax’s position.

Tom MacKinnon - BMO Capital

Okay, thanks for that.

Prem Watsa

Okay, thank you, Tom, thanks for asking the question. Wendy, next question?

Operator

I’m showing no further questions.

Prem Watsa - Chairman and Chief Executive Officer

Thank you, Wendy. Well, there are no more questions. Thank you all for joining us on this call and we look forward to presenting to you again after the next quarter. Thank you, Wendy.

Operator

Thank you. This does conclude today’s conference. Thank you for joining. You may disconnect at this time.

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