Prudential Financial Inc. (NYSE:PRU) Company Conference Call September 14, 2020 9:00 AM ET

Company Participants

Charlie Lowrey - Chairman, Chief Executive Officer

Conference Call Participants

Tracy Benguigui - Barclays

Tracy Benguigui

Good morning. I’m Tracy Benguigui. I joined Barclays recently as the new insurance analyst, and I’m pleased to kick off our insurance morning with Charlie Lowrey, Chairman and CEO of Prudential Financial.

Charlie, thank you for being here with us.

Charlie Lowrey

Thanks, Tracy, for having me. I’m looking forward to this a lot.

Tracy Benguigui

Excellent. Just some housekeeping items before we kick off. There is a live polling question left side of your screen. If that’s for username, please use Barclays2. Look for the next button to move through polling questions. We can see the results in real time.

The first one is just for fun. The next question really gives me a sense what’s on your mind, and also on the left side there is a Q&A box.

Today’s session format is a fireside chat. I’ll first go through my prepared Q&A with Charlie and then turn it over to your submitted questions.

That out of the way, Charlie, can you provide us a 360-view of Prudential in this dynamic environment we’re living in?

Charlie Lowrey

Sure. Let me just take a couple of minutes, Tracy, and provide context for you. What I want to do is emphasize a few of the comments we made on the second quarter call and amplify them.

The first is that we have a very strong balance sheet, right? I think the financial industry learned a lot from the great financial crisis and put into place really robust risk frameworks from which we then emphasized and put forward kind of a playbook, if you will, and we can talk about that more as we go forward. But the point is we have a really strong balance sheet and we have very, very good liquidity, and that risk framework has served us really well. We’re in a strong capital position, and what that enables us to do is to focus on our business, and that’s really important.

In terms of the business, the insurance industry has really been hit by a trifecta of stuff. First you have COVID, then you had the recession, finally you have low interest rates for longer. COVID so far has turned out to be not as bad as anticipated. The recession, we can talk about as we go forward, right, and that’s really the credit cycle, where are we in the credit cycle, and what do we expect going forward, and then there’s lower for longer interest rates, and that obviously had a big headwind effect on us. We’ve said that it will affect us to the tune of $0.30 annually on an EPS basis.

Then finally, we’re taking short and long term actions, and we talked about some of those things on the call, so we’re on track with our short term actions, whether it’s the re-pricing of product, whether it’s the creation of new products, whether it’s our expense savings initiatives, and then we’re looking to do more on a long term basis and accelerate that in terms of transforming the company into a less market rate sensitive company, a less interest rate sensitive company, less capital intensive company, and a company with higher growth.

We’re using this opportunity to accelerate the changes of technology, customer service, expense savings, personnel, etc., and we’re right in the middle of that as we go forward, and to the extent you want, we can talk more about it. So that provides a little bit of context for you as we go forward.

Tracy Benguigui

Excellent. Reducing market sensitivity, which has been a key objective at Prudential, low interest rates are not new but it definitely feels different right now. We’ve seen Prudential react by re-pricing or completely exiting products that are not meeting your return hurdles. Likewise, a number of years ago, you updated your hedging strategy and moderated the richness of guarantees, so at this point, Charlie, how much more work do you have to do?

Charlie Lowrey

I’d say there is more work to do, so we are constantly re-pricing products. You’ve seen us do it before, as you said. We’ve been doing it for years, starting with in Japan where we’ve been--we’ve had low interest rates for 20 years. We are either re-pricing products or we stopped selling products, the single premium yen-dominated product, effectively HDI and GUL single life, so we’ve done a lot of that, as you said.

You then, kind of more into product design, now that may be what we’ve done reducing the retention limit on our life product from $20 million to $10 million, something as simple as that. It’s creating a buffered product like Flex Start or putting simply term on assurance, so product design in this environment is a big part of that. That’d be kind of the third thing.

The fourth is looking at our investment portfolio, we have a conservative investment portfolio, so you look at the strategic asset allocation in light of the low interest rate environment for longer, and what are--how do you optimize the risk-return trade-offs, if you will, and the volatility trade-off. We’re looking at that.

We’re looking at our existing books of business and what we’ve said is nothing is off the table. We’re looking at either reinsuring them, potentially selling some of them, running some of them down, so we’re looking at all that in terms of the opportunities that we may have.

Finally, last but not least, the business mix, right, so we want to emphasize less interest rate sensitive businesses, ones with less volatility, and ones that are less capital intensive, as I mentioned - you think about asset management, retirement, assurance as we go forward.

So those are kind of the six levers, if you will, that I think we either have pulled or we are pulling as we go forward.

Tracy Benguigui

Excellent. [Indiscernible] things that you’ve mentioned on a balance sheet perspective, how open are you to pursue reinsurance or sales of businesses or blocks, particularly how do the economics look in today’s environment in doing something like that?

Charlie Lowrey

Well, I think there’s a balance, right? We work for shareholders, so what we’re going to do is look at if we make a decision to do something, look at the long term benefit to shareholders. That may mean either selling a portion, it may mean reinsuring a portion, it may mean reinsuring the entire block if we can get a good price. It may be if the prices aren’t great that we see out there, and we think there’s far more value to shareholders in holding it and running it off, we might do that.

The other aspect of this is if you were to sell a business, would you get a multiple expansion, how much would that multiple expansion be, and how does that relate to the amount of proceeds that you would get versus that multiple expansion, so we’re weighing all these things as we go forward. But rest assured, we will do what’s right for shareholders.

Tracy Benguigui

Okay, great. Let’s talk about [indiscernible] liability in the broader retirement and savings market. You mentioned re-pricing, moderation of the benefits, redesign. Do you feel we could stiff offer competitive products relative to, let’s say, a plain vanilla mutual fund?

Charlie Lowrey

Yes, I do, and I do for a number of reasons. Let’s think that we’ve been operating in Japan successfully for 20 years in an extraordinarily low investment--excuse me, interest rate environment, and as a result, you’ve seen that we’ve been able to operate successfully.

A couple of macro comments and then I’ll get into some other things. In times like this, what we’ve experienced before - we’ve experienced in Japan, we’ve experienced here is the value of our products and what we do are even more apparent and more important to people in the volatile and low interest rate environment we’re in today. As an insurance company and as a diversified insurance company, we can pull risk, like longevity risk, in order to create retirement outcomes for our customers, so that’s really important.

When you look at Prudential and our complementary business mix, it provides diversification and capital benefits which can reduce the sensitivity of market movements, which helps clients. We’ve taken actions to lower market sensitivity, we manage interest rate exposure very carefully, and we’ve accelerated expense actions which will help us in terms of pricing our products.

Despite the headwinds associated with the pandemic, the recession and the low interest rate environment, I think we’ve made some pretty good progress. We have record levels of AUM and PGIM and we’ve really expanded internationally - now 35% of our AUM is from international clients. Our retail expansion has been very good; in fact, we were ranked number one in the U.S. mutual fund franchise across active and passive asset managers on a net year to date basis, which kind of surprised us, actually, but we were. We’re further building our alternatives capability, so PGIM, we’re taking advantage of things.

In international, we’re leveraging off of Japan and our strength in Japan to do other things You’ve seen us--you know, what we’ve done in terms of moving from developing to developed markets in terms--or rather developed markets into developing markets, I apologize, by selling Poland, Italy, Korea, and now announcing Taiwan. We’ve expanded in Brazil in our bank distribution and we’ve expanded through Habitat, our Chilean pension fund business into Colombia and Peru, so we’re doing things at the margin there.

Then in the U.S. business, obviously we bought Assurance in order to expand our digital distribution, and we’re accelerating our future work initiatives, our expense initiatives as we go forward, and we may even expand them. So there is a lot we are doing in order to strengthen our overall business and be able to provide the right clients to--the right products to the right clients as we think about expanding our addressable universe.

Tracy Benguigui

Great. [Indiscernible] going to address a lot of the other items you mentioned on PGIM and expense savings, so maybe if I could just pick on longevity, since you’ve mentioned that on the institutional channel. Maybe we could shift gears and talk about PRT. Can you discuss your appetite for pension risk transfers and longevity reinsurance in the current economic environment? I guess I’m wondering are there issues with the funding status of pension plans that would limit deal flow.

Charlie Lowrey

Yes, and if you would have asked me last year, as another analyst did, what do you think the volume of PRT would be this year, I would say--I said I thought it would be significantly lower than it was last year. Last year was a banner year, right, and in fact if you looked in the first quarter, all bets were off because of what happened. But in the second quarter, the equity markets obviously bounced back and funding came up, right, so funding is back within a few points of where it was, so a few points in terms of the supply, the willingness of corporations to actually transact, and then I’ll get into the demand, but one is that funding is back to almost previous levels.

Two, the volatility that we’ve seen, it reminds corporations of the value of pension risk transfer, so that’s really important. The third is PBGC fees keep going up, so if you’re a pension fund and you have a high number of potential retirees with low balances, you’re getting crushed by the PBGC fees and therefore it would be good to transact to get out from under those.

Then fourth, low interest rates enable companies to borrow to fund that last little bit that they need to, so the pipeline, especially we think in the fourth quarter, is expected to recover and be reasonably robust this year, so the supply side, I think is okay.

Now on the demand side, low interest rates, frankly, make it a challenge for people looking to assume these assets, because obviously we have to reinvest the proceeds that we receive, and if it’s at low interest rate environment especially if you’re focused on retirees and therefore you have a shorter duration, is a challenge.

What I’ll say about PRU is that we have been--we will be disciplined about our pricing and we’ll see where the market is and what competitors do, but we think the supply will be there but the demand side is going to be a little bit challenging, I think.

Tracy Benguigui

Maybe just staying on the demand side a little bit and your discipline and risk appetite, just remind us what’s your appetite for deferred lives transactions?

Charlie Lowrey

Limited. It is quite limited. One, you have to have additional capital to protect against unexpected longevity, and there’s limited optionality associated with this liability. Two, because the duration is much longer for deferred lives, it’s more difficult to find the assets. With retirees, the average age is plus or minus 75. It’s much easier, obviously, for [indiscernible] matching. Then with retirees, you don’t have the tail risk such as sudden medical discoveries like a cure to cancer or diabetes or something else, so we much prefer and are much more comfortable with retirees than we are with deferred.

Tracy Benguigui

Okay, great. Maybe let’s just touch upon COVID-19 a little bit. The reason why I’m asking you this upcoming question is because Prudential is really one of the few companies that really talks about a longevity risk, mortality risk, do you even have a percentage you put into earnings to benefit from that, so just taking that to another level, COVID-19 could be described in a way as a black swan event. We saw the emergence of mortality, morbidity, credit, interest rate and equity risk all in one, and the pandemic angle makes this crisis feel a little bit different than in the financial crisis.

I’m wondering if these scenarios were built into your internal models, and if we should throw our longstanding correlation matrices out the window.

Charlie Lowrey

Well, I hope not for the latter question, and to the former question, absolutely.

When I talked about what we learned coming out of the great financial crisis, it was that we had to have an even stronger risk framework, and as we built that up over the years, we in fact had a pandemic playbook which some of us, honestly, kind of though, really, why do we need this? But thank goodness we had it.

You actually saw us put it to use in March before everything became what it is. We went out and issued $1.5 billion of debt. Now, we were going to do a $500 green bond, which we did, but we added a billion dollars to it because some of the signals were flashing red and our CFO, Ken Tanji, said, you know what? I just want some more. I want to be safe. I want to make sure we have a robust capital framework, and we’re going to go out early and we’re going to do an additional billion dollars. That was specifically because of the risk process that we put in place.

So we have this framework and we have been using it and continue to use it as we monitor what’s going on. There’s a dashboard that we use, and we analyze potential scenarios for each business and then for the company as a whole.

The other thing I would say, and the second quarter really highlights this, is the diversification we have. There is an inherent diversification in our businesses and you saw that with the net impact to mortality, which was actually favorably by $100 million across our businesses in the second quarter, and you’re like, how is that possible? The reason was because the deaths in the U.K. were higher than estimated, and what’s where we have a lot of our longevity exposure, and therefore that offset what turned out to be less than estimated impacts to our U.S. and group business and very limited deaths and as a result ramifications in Japan.

I think this particular example highlights the complementary nature of our business mix, and in particular our retirement longevity business with regard the life insurance mortality business, so there are a couple of things going on. One is a robust risk framework and the other is just the inherent diversification of the businesses.

Tracy Benguigui

I guess [indiscernible] wondering if you’ve considered any other type of silver lining from this opportunity with disruption-led opportunities. I mean, for instance, life insurance still is sold for the most part at the kitchen table, and I’m wondering how successful your digital and hybrid effort has been to overcome these few and far between kitchen table discussions.

Charlie Lowrey

I think it is--the silver lining is that we are accelerating a lot of what we were already doing, and we’ve had to do that. Just as an example, we went 100% remote in 48 hours. If you had asked us beforehand whether we could have done that ,we would have put together a committee, we would have studied it for two years and said it was impossible. And yet, we did it in 48 hours - that proved to us that we can operate at a completely different speed than we had before.

When you think about silver linings, one of the acceleration of many of the initiatives we already had outstanding. The second is our ability through that to expand, I think, our addressable universe and serving more of the needs of society, and you’ve seen us do that through assurance and putting the simply term product on there. You’ve seen us do it with the group business in terms of the digitization of all our online education, which was done in person by advisors before.

You’ve also seen a silver lining, I think, and we saw this is Japan in 2011 after the earthquake, where although there was a decrease in activity, there was an increase in the acknowledgment of the importance of what we offer, whether it is life insurance, emergency savings, retirement, all the products that can provide people with peace of mind and financial wellness. That’s the second thing, is we think there will be a greater recognition of what we have to offer.

I think the third is accelerating how we feel like we’re doing in terms of distribution in that, I think, we feel we’re well positioned but we needed to do more. We needed to do more revamping the front end of our systems, so with our retirement clients doing more online, and we’ve been doing that, introducing more chat boxes, introducing all sorts of things, and we’ve done that throughout COVID at a pace that we wouldn’t--frankly, we wouldn’t have done before, and to expand strengthen the full array of distribution models we have, right, because I think we have an omnichannel distribution, whether it’s direct to consumer, whether it’s hybrid, whether it’s digital, or whether it’s face-to-face. We have been strengthening each of those and focusing on each of those during this time.

The final thing is just I think we also--during these times, you think about the solutions that clients need, and we’ve been broadening that set of solutions, again whether it’s putting on a very simple term product on assurance, whether it’s introducing a buffered product, call it Flex Guard to take the place of HDI, that kind of thing. We’ve been speeding up, frankly, the product development process as well.

So in a nutshell, it’s the acceleration of many of the things we were doing, but doing them faster and, hopefully, doing them better.

Tracy Benguigui

Excellent. I’m just wondering, any early learnings you can gauge from your Asian sales efforts, which may have been ahead of the curve, the COVID-19 curve relative to the U.S.?

Charlie Lowrey

Yes, I think there is, and our Japan business in particular has really, really strong relationships. The life planners and life plan consultants have extraordinarily strong relationships in what has been, I think--I won’t say surprising, but pleasing to us is how those relationships, which normally have been face-to-face because that’s the way you do business in Japan mostly, have transformed to a digital nature. The life planners and life plan consultants have adapted to increase the use of virtual tools, including online consulting and digital solutions to connect to customers, and that’ something we were a little nervous about - could they make that transition, and they really have.

The other thing is, I think, just the needs based approach we have to selling and death protection products continue to be of real value to our customers. There, they get it, they see what’s happening, they want these products, and if they can only get it digitally, they will. As it turns out, Japan obviously hasn’t been hit a hard, they’ve begun to open up a bit, so that’s alleviated some of this, but we’ve been really pleased with the pivot that the life planners and the life consultants have been able to do.

Tracy Benguigui

Great. In your opening remarks, you talked about [indiscernible]. These days, people within life insurance are gravitating to more a fee-based business than spread business, given the interest rate environment. How would you describe the symbiotic benefits of PGIM upon your U.S. financial wellness and international insurance businesses?

Charlie Lowrey

There’s kind of a virtuous circle, right? The thing I love about the asset management business is it is a ruthless business - either you perform and you gain assets, or you don’t perform and you lose assets. It’s as simple as that, and PGIM has performed very, very well. In fact, 85% of the its asset under management are outperforming their benchmarks over a three, five and 10-year period, so they’re performing well. That performance and their ability to create alpha enhances the competiveness of the U.S. businesses, so the U.S. businesses, which obviously gave them their balances, do better and that then leads U.S. businesses to do better, which then gives PGIM more business and increases the scale of PGIM.

In addition to that, and we can get into this at some point if you want on the retail side, but PRU has the ability and does seed funds to create track records by which then PGIM can go out and raise money and then use that in various ways, including helping our clients, our retail clients and some of our institutional clients. There are many ways in which PGIM helps PRU as a whole, and Prudential helps PGIM. It’s actually--it works quite well.

Tracy Benguigui

Maybe one thing you didn’t talk about there [indiscernible]. Are you offering proprietary PGIM funds in your VA sub-accounts, for instance?

Charlie Lowrey

Yes, absolutely. It is--you know, over 50% of our VA funds are proprietary PGIM funds. The VA goes through a very robust process. We have loads of external managers but PGIM competes for those, and to the extent that an objective group looks at these and says, yeah, PGIM’s best, then they go--they get the assets. But they compete for those.

Tracy Benguigui

Just recognizing that Prudential is actually the biggest client of PGIM, so how has PGIM influenced your total return on your general account?

Charlie Lowrey

It produces significant outflows, so every quarter it looks at--we look at the performance of PGIM relative to the benchmarks and see what has happened and what is there, and it has created significant alpha over time. As I said, the performance has been really good and it really remains a key driver to the success of the businesses by virtue of its performance in the general account, so we’ve been very pleased with PGIM’s performance.

Tracy Benguigui

Great . We have about 10 minutes. I’m just going to remind folks to submit questions in the Q&A box, which will be emailed to me, so just a reminder there.

Maybe shifting gears and talking about capital management. Has COVID-19 reshaped your desired capital deployment measures upon your menu of choices, either M&A, share buybacks, or reinvestment back into the business?

Charlie Lowrey

Not really. We have a playbook, we’re following that playbook, and so our capital deployment approach really hasn’t changed at all. We paused our share repurchases in the second quarter in line with our risk framework and the playbook that we had in place, and until we get better visibility about the depth and duration of the pandemic and the possible recession that may still come, as well as the length of the credit cycle because the credit cycle has been more benign in the first half than we thought, but we think that the duration of it may continue for quite some time as furloughs turn into layoffs, as other things happen. We’re watching that very closely and we’ll focus on maintaining our financial strength, our flexibility and, frankly, our resiliency over time.

We’ll continue to evaluate the macro environment, if you will, and as conditions evolve, we will continue to assess the appropriate time and the amount for the resumption of share repurchases, but until then they are going to remain on pause. What we don’t want to do, Tracy, is to start them and then stop them again. Dividends are the most important thing - we’ve said that. We will continue to prioritize dividends and seek to maintain them through the cycles, and then stock buybacks, when we feel we can start the program again, we will. But we’re going to be cautious because we are--we’re concerned about the credit cycle, especially in the second half.

Tracy Benguigui

Got it. [Indiscernible] chomping at the bit on augmenting capital-light business mix. How does that position PRU on an ROE perspective in light of this new era of ultra-low interest rates?

Charlie Lowrey

Yes, would that we go could go back to the 3% 10-year - that would be kind of nice. We’ll continue to be very disciplined about our pricing and have taken steps, as you now, to re-price our product and emphasize new products that are less market sensitive. Our annual ROE on an adjusted basis in the second quarter was about 12% if you’re adjusting for unique items that--you know, the puts and takes that came out of that, such as annual assumption updates and things like that. But looking forward, there are two things--there’s a plus and there’s a minus to the ROE, so the minus is obviously the sustained low interest rates, which are a headwind, and we’ve quantified that, as I said in the beginning, about $0.03 a quarter which is cumulative, so over a year that’s about $0.30. That’s a big headwind.

The positive is that we have net business growth and that we have initiated a strong expense savings and efficiency effort, right, to improve our efficiency, to improve customer experience initiatives, and we’ve stated to you all that it’s going to--we’re looking for $500 million of run rate improvement by the end of 2022. That’s to mitigate some of the headwinds and to add to our run rate earnings, so that in combination with all the other things we’re doing, hopefully, offsets or more than offsets the headwinds that are out there, so we’re actively managing this, but you know, we have a headwind which is called low interest rates.

Tracy Benguigui

Okay, great. I want to circle back [indiscernible] staying on the theme of capital-light business. Last September, Prudential paid $2.4 billion on a bet on insurance tech platform, Assurance IQ. One year later, are you happy you made this bet?

Charlie Lowrey

Yes. We are very happy, and we better be - we paid a lot of money for it. We are happy with it. We think it is doing what we wanted it to do, and if you look at many of the metrics of the transaction, they are actually doing quite well in terms of the number of customers, in terms of the number of products, in terms of all sorts of things. They’re going in the right direction.

This is very much a fourth quarter business, so we’re anxiously awaiting fourth quarter. They’ve been preparing for it for a year for Medicaid, Medicaid Advantage, Medicare, so we’ll see what happens there, but in terms of the synergies between the businesses, what they have taught us, what they’re giving us and hopefully what we are giving them, is on track.

We thought we’d get a simplified term product on by the end of, I think, the third quarter. We bumped that up a quarter, so we’re on track there. They put other things on the site, and there is a tremendous amount of interest by insurers to get onto the site to begin to sell their product too, because it’s open architecture. So we’re quite pleased with where it is.

Obviously COVID has affected this to a certain extent as everybody left, and in that environment especially with a company like Assurance, the benefits of being together are great. But they’re managing though that, they’re managing well, and so we continue to be extremely excited about the potential that we have there.

Tracy Benguigui

Excellent. Low interest rates has always been a [indiscernible] but you did talk a little bit earlier about the ability to raise capital with some debt issuances, and I’m wondering what opportunities are in the market for a possible further refinancing or prefunding of upcoming maturities.

Charlie Lowrey

Yea, we have done three debt issues. We did the first one in March and then we did another pre-funding for a transaction in 2023, and then we recently did one, so better to be lucky than smart - there was, I think, great execution but we really kinged in terms of some of the interest rates and the execution on this.

The third transaction actually was a--is going to replace a transaction that existed and it’s going to be extremely accretive to the company for a shareholders, so we were able to take advantage of that. We will look for other opportunities to do that. Obviously it is an extraordinarily good environment and I think we have been quite aggressive in taking advantage of that so far with these three debt issues, including the first-ever green bond that was done by an insurance company in the U.S. We were very excited about that, but as I said, that was done in March and we added a billion dollars to that opportunistically, just to make sure that we were in a fortress-like position, if you will, with our balance sheet going into something we didn’t know what it was going to be. But again, our risk framework started flashing red and we said, we better raise more capital, so we did it at an opportune time and then we’ve done it twice since then.

If there are other opportunities to do that, we will absolutely take advantage of them.

Tracy Benguigui

Great. I’m just watching the clock - we have about two minutes left, so let’s call this a rapid fire session, okay? I’ve got two quick questions for you.

It appears actually that your expense savings have materialized better than expectations. What does the rest of the year look like?

Charlie Lowrey

I think the rest of the year looks pretty good. We expect to incur some operating costs of approximately $60 million for COVID, but that will be offset a little bit by lower travel and entertainment expenses in the second half of about $30 million, so we feel good about what we’ve put into place and we feel good about what we’re predicting for the second half of the year.

Tracy Benguigui

Okay, so just in time, I’ve got one question in, and that has to do with your commercial real estate offices. What are the longer term implications for your own needs and for the properties held in your investment portfolio?

Charlie Lowrey

Yes well, the properties held--it’s two different questions. Very quickly, the properties held in the investment portfolio, I think we’re in reasonable shape. We’re underweight and have been underweight hotels and office and retail. We’re overweight in terms of industrial and apartments, so I think we’re in reasonable shape there. In terms of our own space, we’re rethinking that and we’ve told people they’re not coming back to work--most people aren’t coming back into work until 2021, and only then if they feel comfortable. I think it’s fair to say we will over time shrink our real estate space and we’re looking at ways to do that and locations by which to do that.

Tracy Benguigui

Excellent. We’re out of time, but maybe the last rapid fire question I would have for you is, any kind of bold prediction for 2021? And it can be fun.

Charlie Lowrey

Wow, that is tough. What I would say is that--and this is just a personal view, I think a vaccine will be a longer time in coming, and one of the reasons, they may have one but then the distribution of it is going to be very, very difficult, and so I think we’re going to be in the environment we’re in for quite a while and we’re just going to have to get used to the new normal.

As companies, we will have to respond to that new normal, so not as much a prediction as a resignation that we’re in this for the long term, and it wouldn’t surprise me, Tracy, if we do this next year, that we’d be doing it--I’d almost anticipate we’d be doing it virtually.

Tracy Benguigui

Okay [indiscernible]. I had a lot of fun talking to you [indiscernible] and like to thank you so much for participating in today’s session.

Charlie Lowrey

Great, well thank you for having me. It’s an honor and a great opportunity for us, so thank you.

Tracy Benguigui

Okay, bye.

Charlie Lowrey

See you.

Question-and-Answer Session

Operator