MSCI Inc (MSCI) — Q4 2019 Earnings Call Transcript

Thank you, operator. Good day, and welcome to the MSCI fourth quarter and full year 2019 earnings conference call. Earlier this morning, we issued a press release announcing our results for the fourth quarter and full year 2019. This press release, along with our earnings presentation, which we will reference on our call, and a brief fourth quarter update are available on our website, msci.com under the Investor Relations tab. Let me remind you that this call contains forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speaks only as of the date on which they are made and are governed by the language on the second slide of today's presentation. For a discussion of additional risks and uncertainties, please see the risk factors and forward-looking statements disclaimer in our most recent Form 10-K and in our other SEC filings. During today's call, in addition to results presented on the basis of U.S. GAAP, we also refer to non-GAAP measures, including but not limited to, organic operating revenue growth rates, adjusted EBITDA, adjusted EBITDA expenses, adjusted EPS, and free cash flow. We believe our non-GAAP measures facilitate meaningful period-to-period comparisons and provide insight into our core operating performance. You'll find the reconciliation to the equivalent GAAP measures in the earnings materials and an explanation of why we deem this information to be meaningful, as well as how management uses these measures on pages 25 to 33 of the earnings presentation. We will also discuss organic run-rate growth figures which exclude the impacts of changes in foreign currency and the impacts of any acquisitions or divestitures. On the call today are Henry Fernandez, our Chairman and CEO; Baer Pettit, our President and COO; and Linda Huber, our Chief Financial Officer. I would also like to point out that members of the media may be on the call this morning in a listen-only mode. With that, let me now turn the call over to Henry Fernandez. Henry?

Thank you, Salli. Hello everyone and thank you for joining us today. Before I go through my prepared remarks, I would like to give you some reflections as we enter a new decade and what we should expect from MSCI. As many of you know, I've been at the helm of MSCI for almost 25 years, and I can categorically tell you that today I am more excited and more optimistic about this franchise than I have ever been. I'm sure that is not only me, but my partners here, Baer and Linda, share that optimism. Our franchise is getting stronger at an accelerated pace. In terms of what we do for clients all over the world, from solving problems to uncovering opportunities, we help them understand when industry bodies want to learn from us, when government officials and regulators want to gather insights from us, everyone wants to engage with MSCI about how we are helping to change the investment industry. Our strategic investment choices at MSCI are vastly wider and deeper than they were 10 years ago, thanks to the more central role that we play in the global investment industry. Our financial model is not only very resilient and diversified, but it is presenting us with significant new organic opportunities for investments with even higher rates of return and short to medium-term paybacks. The reason for this is that what we do is normally built upon existing infrastructure and cost base at MSCI, and that infrastructure is more developed. Any incremental investment for new initiatives yields much higher incremental payoffs, and therefore, an acceleration of internal rates of returns. This is clearly the case in index and ESG, for example. We are therefore positioning ourselves to take full advantage of this dynamic and hopefully accelerate shareholder value creation throughout this new decade. With those reflections, let me now go through my prepared remarks. In the fourth quarter, we delivered strong performance across our franchise with year-over-year growth of 12% in operating revenues, 16% in adjusted EBITDA, and 27% in adjusted EPS. In the fourth quarter, assets under management in equity ETFs linked to MSCI indices reached a record high of $934 billion. The increase of $119 billion from the third quarter was driven by both strength in the dollar markets and very healthy cash inflows into ETFs linked to MSCI indices. Since the start of the New Year, we have continued to see growth in AUM levels and equity ETFs linked to MSCI indices. At the end of last week, they exceeded $960 billion, setting a new record and coming close to the $1 trillion mark. We should be great to achieve that. Notably, although inflows to global equity ETFs were lower throughout 2019 compared to 2018, MSCI actually saw a 48% increase in equity ETF inflows linked to our indices, demonstrating the power and diversity of our ETF investing franchise. About a year ago at our Investor Day, we shared with you the three pillars of our strategy. Today I'm excited to give you an update on our progress. At that time we told you we would, one, grow our core business; two, execute in-flight opportunities; and three, capture a new wave of opportunities in order to serve a wider and deeper variety of clients' investment problems and opportunities, which in turn will fuel the growth of the company and creation of shareholder value. We have been delivering on our promise to execute in these areas of growth while serving as responsible stewards of your capital. In the core business, we have produced significant growth as we continued to innovate and add content in response to changing markets and client interests. You can see evidence of this continuous progress in our well-established solutions like our equity market cap indices, our equity risk and performance analytics, as well as our multi-asset class risk analytics. As of December 31, 2019, we’ve reached a combined run rate for our index analytics segments of almost $1.5 billion, up 13% year-over-year. In addition to accelerating our core business, we have executed on a number of in-flight growth opportunities to meet the needs of our customers and the investment community more broadly. Let me give you a few examples. First, within our futures and options business, we expanded our strategic partnerships with key derivative exchanges in the U.S. and Europe. The run rate from futures and options grew over 56% compared to the prior year. Second, regarding our ESG business, the October 2019 acquisition of Carbon Delta provided us with essential climate value at risk capabilities for our ESG franchise. Of course, the climate change segment of our ESG franchise is an area that we're intensely focused on as the world is paying increasing attention to the impact of climate change in various areas, specifically on the portfolios of our clients. We are very pleased with the progress we have made with our integration efforts at Carbon Delta and the level of client interest already observed. Third, in fixed income, we’ve recently launched 15 MSCI fixed income ESG and Factor indices, leveraging our 30-plus years of extensive experience in fixed income risks and performance analytics, as well as our leadership in index construction and state-of-the-art data capabilities. Finally, in real estate, we continue to grow and expand our offering of private real estate data and analytics and are optimistic that our growth in this segment will gradually accelerate. We have invested in new wave opportunities that will drive our future growth. Most recently, we entered into a strategic relationship through a significant minority investment in the Burgiss Group, a leading provider of investment decision tools for private asset classes. This was an area of significant focus at our Investor Day a year ago. Our positioning in private assets is critical to supporting clients who are increasingly looking for solutions that expand both public and private assets. Our alliance with Burgiss is intended to accelerate and expand the use of data analytics and other investment decision support tools for investors in private asset classes globally. More broadly, we remain committed to providing our clients with tools that will enable them to capitalize on the significant new investment opportunities and challenges. We believe this puts MSCI at the leading edge of modern investing. As we enter the new decade, we're proud of what we have built and the tremendous value that our employees have created for our clients, and in turn, our shareholders. Before I pass the call to my partner Baer, I would like to congratulate him on celebrating his 20th anniversary at MSCI this month, as a partner during this time. Mr. Pettit?

Thank you, Henry. Twenty very interesting years indeed, and undoubtedly more excitement ahead of us. Clearly, I share your enthusiasm about the many opportunities to drive growth and shareholder value at MSCI. Henry talked about the three-pillar strategy that we discussed with you at Investor Day. At that event, we also highlighted the secular forces that are transforming the investment industry, including the move from activity to index-enabled investing, increasing globalization and acceleration of capital flows, and the need to incorporate ESG, more specifically, climate change considerations into investment processes. MSCI continues to be well-positioned to help global investors build modern portfolios that will capitalize on this transformation. Our sales efforts have led to total organic run rate growth of more than 14% in the fourth quarter year-over-year. Gross sales grew about 20% in each of our segments in the fourth quarter, and we reached record total gross sales of over $75 million. The fourth quarter's retention rate was down from the third quarter, but in line with last year's fourth quarter rate at 92.9%. This was a result of a seasonal decline due to the concentration of contracts that generally come up for renewal in the fourth quarter. We're working hard to deliver must-have products and solutions to our clients with the aim that such tools become embedded in their processes, analyses, and thinking about investing. Our recurring subscription run rate, which recorded our ninth straight quarter of organic double-digit percentage growth, saw strength across all geographies, notably in Asia Pacific and Europe. From a client perspective, asset managers and asset owners, which collectively comprise two-thirds of our subscription run rate, grew above 11% each. At a segment level, the index and analytics subscription run rate grew more than 11% and 7% respectively. Within analytics, we recorded strong recurring sales growth in our equity and multi-asset class solutions, notably to asset owners. Within our other segments, we crossed milestones of $100 million for our ESG research subscription run rate and $50 million for our real estate subscription run rate. Our ability to achieve these strong results and to deliver attractive returns on our investment dollars validate our disciplined capital allocation approach. Our daily focus is to help clients build portfolios more effectively and efficiently. I'd like to walk you through a few recent examples of this. First, innovation within our ESG and factor categories has been a key differentiator in the cash inflows to equity ETFs linked to MSCI indices. In 2019, MSCI was the number one index provider based on cash inflows to equity ETFs. Second, as we have often communicated, there are significant client benefits in integrating MSCI research and content across various investment use cases. In the ESG space, this integration has driven our combined ESG research and index run rate to nearly $150 million in 2019. Third, our continuous investments in modeling new risk categories have bolstered our analytics growth. One example is in the area of liquidity metrics, where our innovative solutions were well received in 2019 and contributed meaningfully to our financial results. Next, our interactions with major global asset owners and asset managers show us that our real estate offerings are an important input to their investment decisions. Furthermore, our 2019 client surveys indicate significant improvements in customer satisfaction regarding our real estate products and services. Finally, last week we published the MSCI principles of sustainable investing to further equip investors with a framework to integrate ESG into their investment processes and make the global shift toward sustainable investing. Overall, we have substantial momentum heading into 2020, and we are confident in our ability to continue delivering for our clients. This confidence underpins our guidance, which Linda will review in addition to going over our financial performance. Over to you, Linda.

Thanks, Baer, and hello to everyone on the call. I'll start with operating revenue, where we reported $407 million in the quarter, up 12% from the prior year. Looking at each of our business units, first, in index, operating revenue grew approximately 16%. Growth in asset-based fees was a meaningful contributor. In addition, we saw strength in recurring subscription revenue, driven by continued momentum in developed market modules and the impact of custom ESG indices. Second, analytics operating revenue increased more than 5% with continued strong growth and nonrecurring revenue from implementation and other services, as well as an uptick in recurring subscription revenue. Finally, for our other segments, operating revenues grew 20%, reflecting robust growth across our ESG rating and screening offerings. In asset-based fee revenue, we grew 18%, driven by strong ETF revenue and average assets under management grew 21% year-over-year, particularly in equity ETFs linked to MSCI indices. Sequentially, the average basis points fee increased slightly to 5.01 basis points. This was due to the mix of ETFs capturing flows rather than a reversal of the broader context. Non-ETF assets fund revenue was up 11%, boosted by increased contributions from higher fee products. Finally, futures and options revenue, one of our high growth areas, reached approximately $3 million compared to last year. As you heard from Henry, ending assets under management in equity ETFs linked to MSCI indices were $934 billion as of December 31, 2019, up 34% versus the prior year-end and up more than 14% versus the prior quarter-end. On a sequential basis, MSCI recorded $56 billion of inflows into 5.2 MSCI indices across geographic market exposures, notably those associated with developed markets outside the U.S. Additionally, factor and ESG funds accounted for nearly one-third of cash inflows into equity ETFs linked to our indices. Year-over-year, around 40% of the $239 billion growth in assets under management at year-end was attributable to cash inflows, with the balance coming from market appreciation. Now I'll shift focus to adjusted earnings per share. Adjusted EPS was $1.67 per share in the fourth quarter, up 27% year-over-year. More than two-thirds of the growth in adjusted EPS was from higher operating revenue, net of operating expenses, providing strong proof points on the earnings power of our franchise. The remaining third of the growth in adjusted EPS was driven primarily by a lower tax rate and reduced share count, partially offset by higher interest expense. Turning to our balance sheet and capital allocation, we ended the year with $1.5 billion of cash and $3.1 billion of debt. In November, we issued $1 billion of debt at a coupon of 4% and allocated $500 million of the proceeds to partially refinance our 5.25% coupon notes due in 2024, of which we currently have $300 million remaining. In the fourth quarter, MSCI paid approximately $58 million in dividends to its shareholders but did not repurchase any shares. Before I turn the call back to Henry, I'd like to share some elements of the 2020 guidance we published in our press release this morning. MSCI's trend for 2020 is based on assumptions related to a number of macroeconomic and capital market factors, particularly those related to equity markets. These assumptions are subject to uncertainty and actual results for the year could differ materially from our current guidance. For the full year 2020, we currently expect adjusted EBITDA expenses in the range of $750 million to $770 million and capital expenditures in the range of $60 million to $70 million. As you know, we cannot predict asset-based fee revenue. However, it is our intention that higher levels of operating revenues will coincide with higher levels of expenses and capital expenditures as we invest back in our growing businesses. Finally, we expect free cash flow to be in the range of $580 million to $640 million. Free cash flow in 2020 is projected to decline from 2019, primarily due to two factors. First, the absence of tax benefits related to stock-based compensation last year, and second, increased capital expenditures this year. A full list of our guidance is included in our earnings release published this morning, as well as in our earnings presentation for this call. Both are available in the investor relations section of our website at msci.com. Before we move to Q&A, I'd like to turn the call back over to Henry.

Thank you, Linda. I’m pleased to announce that we've added two new Directors to our Board. Paula Volent and Sandy Rattray have been appointed to serve as Independent Directors effective February 26th of this year, increasing our Board from 10 to 12 directors. Both Paula and Sandy have extensive experience in the investment industry. Paula is currently the Chief Investment Officer of Bowdoin College in the U.S., recognized as one of the best performing endowments, and Sandy is currently the Chief Investment Officer of the Man Group in the UK. I’m confident they will provide diverse and valuable perspectives, drawing from their combined global experience and their expertise across asset classes and emerging industry trends, including technological innovation. And with that, we'll move over now to Q&A.

Could you talk about the decision to make ESG ratings available for free on the website? My take was that the objective is to broaden the use of the ratings and have MSCI continue to be the standard there. And I guess could you just discuss if that changes your ESG business model at all? Finally, with a lot of new big name providers entering the ESG space, do you think there'll be more price competition in ESG? Thanks.

Hi, Toni, Baer here. Clearly, transparency is a critical element in sustainable investing. We have demonstrated our commitment to that both to the broader market and also to companies by making this information available at this level. Equally, central to the notion of ESG investing and sustainable investing is the ability to deeply investigate the underlying information relating to companies' activities, supply chains, and the enormous diversity of their operations. We are confident that by putting this on our website, it shows our commitment to transparency in providing headline information to the market, but that our subscription model and the need to provide detailed research behind the ratings will continue to be a very important economic driver for us.

And do you think pricing will be more competitive?

At this stage, we don't have a great deal of evidence of that. As you know, it's an area of investing that is growing dramatically quickly. We've seen enormous changes even within the last year or two, let alone the last five years. So it's difficult to make a forward-looking judgment about that. I think you can see our results are robust and continue to be strong and attractive. So at present, we don't have any evidence of strong pricing pressure.

Got it. Thanks. For my follow-up, I just wanted to get an update on the Beyond Analytics look by this quarter. I wanted to understand if the number of clients adopting the platform was above what you expected originally. Could you also talk about any future cross-selling opportunities with that? That'd be great.

Sure. For the moment, Beyond is not having a material impact on the analytics numbers. During the course of 2020, it will not be a major contributor to the analytics sales. We're confident in the platform's future, but from a pure accounting revenue point of view for 2020, it should not have a material impact.

Henry, the Burgiss deal sounds interesting. I was wondering if you could help describe this in the context of all the partnerships, and what your pipeline looks like? We weren't familiar with Burgiss. I'm sure there are plenty of other partnerships out there, so I'm curious about your thoughts on that.

Yes. So Manav, let me start with Burgiss, and then we can broaden to other forms of partnerships. Burgiss is one of the leading, if not the leading provider of private asset class data and analytics through an integrated technology platform. They've been in this field for about 30 years, serving about 1,000 clients in 36 countries. Importantly, their product line consists of about 10,000 funds representing $7 trillion of committed capital. A significant portion of their strength is in private equity, but it's not exclusively so. Let me break this down further. Of those 10,000 funds, roughly 6,000 are in private equity, representing approximately $400 trillion of the total. Another close to 2,000 funds, representing about $1.5 trillion, are in private real assets, natural resources, and infrastructure. Lastly, around 1,000 funds, representing just under a trillion dollars, are in other private assets. This is an incredibly rich database that can help Burgiss commercialize more rapidly. A lot of our efforts are aimed at helping them commercialize their products. Additionally, we can leverage our databases at MSCI to build risk models, performance attribution models, performance measurement models, and more for these various private assets. We are extremely excited about this partnership and investment, which will enhance our private asset product line significantly. More broadly, one of the key tenets of MSCI’s strategy is to build partnerships. Whether they are distribution partnerships, research partnerships, or technology collaborations, these relationships serve as a foundation for creating ecosystems where MSCI can be at the center, helping our clients. We have been doing this for years, but we accelerated our partnership initiatives over the last two to three years. You will see us actively pursuing more of these collaborations moving forward.

Okay, got it. One of the reasons we asked that is out of curiosity regarding capital allocation. Should we expect to see more of these partnerships? How do we view the balance of buybacks going forward? Your stock has nearly doubled since the last time you disclosed it was around $147.

Yes. We have an integrated capital allocation approach, which encompasses external capital allocation through dividends, share buybacks, and maintaining appropriate leverage ratios. Our objective is to run the company within the minimal amount of capital necessary and return any excess capital to shareholders. The internal allocation process focuses on deploying capital for organic investments, and Linda can elaborate on that later. External M&A or partnerships are opportunistic but have a unified goal. I won’t say we're accelerating our M&A or partnership strategies, but whenever we identify opportunities with potential high rates of return, we will pursue them and use excess capital to return dividends and conduct opportunistic share buybacks.

We continue to pay our dividends, totaling about $58 million per quarter. We'll reassess our dividend rates later in the year, as we usually do. Partnerships are significant but don’t usually require substantial cash outlays, which is beneficial. We do plan to repurchase shares, specifically targeting around 2.2 million shares at prices lower than where we are currently trading. We'll continue to evaluate our approach but remain focused on opportunistic buybacks.

I just want to ask about the guidance briefly here. I understand you don’t have drive revenues due to the asset-based side. But you guide operating cash flow and free cash flow. Linda, you mentioned that there is clearly a level that if the asset base is performing better, you would spend a little bit more. Can you help us understand how you think about that side of the business in terms of budgeting for market performance, flows, and pricing? Thanks.

Okay, Alex, you're asking for all the variables we haven't previously guided on. We started with adjusted EBITDA expense guidance as we felt this would be more helpful for shareholders, with a range of $750 million to $770 million. The previous year's equivalent was $707 million. The number of ETFs linked to MSCI has indeed grown significantly, currently at $950 million. In planning for our expense growth, we're taking a conservative approach given the significant jump in that number in recent months.

So that basically means you're not seeking much help from the markets is that correct? Did I hear that right?

We are being very thoughtful and moderate in our expectations regarding market performance due to the substantial growth we have already seen.

Yeah, good. Just a second quick question, I think you provided a little color on analytics growth. The sales were impressive. Could you expand a bit more on where the growth is coming from? Is it mostly upselling? Can you discuss the regions or customer types driving demand? That would be great! Thanks.

Sure. We’ve seen strong growth across analytics, as I mentioned earlier. It's not concentrated in just one area but is broadly positive. However, particularly encouraging trends are evident in asset owners, who are driven by total portfolio analysis of risk and returns. Interestingly, we observed above-average growth in Asia. While we want to encourage strong performance in Asia, we acknowledge that maintaining such exceptional levels may be challenging. Additionally, the strength in total portfolio analytics should continue.

First question for you on the index business. You talked about the retention rate being flat year-over-year and seeing a downtick on a sequential basis, which was driven mostly by seasonal components. I know it’s a high-class problem having a 93% retention rate, but I wanted to know if there was anything behind that downtick and also where investors are going when they leave?

The good news, Bill, is there’s nothing concerning in the headline. The Q4 number was consistent with our expectations. The index numbers have continued to remain strong, and there's no significant underlying story that we see there. The total company and index numbers are stable.

Got it. And then as a follow-up, on the analytics business, you noted a slug of nonrecurring revenue from implementation. Could you discuss if that suggests acceleration in the analytics business or how to interpret that?

Sure. Let me elaborate on nonrecurring sales a bit. Last year, there was approximately a 50-50 split in nonrecurring sales between equity index and analytics. For equity index, the main drivers were the continued strengthening of the third pillar of derivatives in equity index, particularly through structured products and OTC licenses. In analytics, the key drivers are implementation and managed services, typically in a two-thirds to one-third ratio. As our larger, more complex deals grow, the associated managed services linked to this will also increase. However, it’s important to note that while we expect this category will grow, it may be lumpy.

Sounds like Linda has to establish a new category for recurring and nonrecurring.

We'll just focus on maintaining a solid influx of revenue.

I wanted to return to ESG for a second. Could you frame how you see ESG evolving? It’s clearly a hot area right now. What products do you expect to drive growth in the short term, how do you plan to price them, and what are your thoughts on competition in this space?

ESG investing or sustainable investing is a major, permanent secular trend. Driven by factors like the shrinking world in terms of information dissemination and switching to accountability for actions, every aspect of investing will incorporate sustainability. In the industry ten years from now, I anticipate that sustainable investing will be integrated into all investment processes. MSCI seeks to be the leading provider of all necessary tools to facilitate this transition, covering ESG research to ratings, ESG indices across all asset classes, and ESG risk models. We are well-positioned due to our extensive product range and central role in the investment industry. While competition in this space is expected, we believe our quality, comprehensive offerings, and the uniqueness of our multi-asset class firm grant us a significant advantage.

On fixed income indexing, we frequently hear concerns about under-penetration. Can you discuss the barriers to fixed income index penetration? Do you see it becoming a viable product comparable to equities over time, and how do you plan to attract asset flows?

At MSCI, we don’t classify ourselves merely as an index provider; our focus is on helping investors build better portfolios, which incorporates diverse elements including indices, analytics, and data. We see a critical need for fixed income investors to look at models or indices—successfully integrating securities, re-weighted based on ESG and factor paradigms. While ESG may currently serve mainly as a risk management tool within fixed income strategies, we believe its importance will grow significantly over time. We are addressing client needs through thorough consultations, ensuring our new indices meet the specific requirements.

Additionally, we've gathered positive feedback across various client types surrounding the recent launch of new indices. Although these will not significantly impact MSCI in the short term, we expect to provide updates on related benchmark wins and product launches throughout the year.

Regarding guidance for 6% to 9% growth in EBITDA expenses for this new year, could you quickly highlight where those incremental spends are directed? Could you rank the top three or four areas? That's my first question.

Technology underpins all our investments, paired with product investments to ensure we deliver for our clients. Major product investment areas include ESG, as Henry detailed, the ongoing expansion of fixed income, index innovation, and the rapidly growing futures and options segment. We also observe strong growth in the Analytics business with margins close to 35%. We have numerous areas meriting investment, and those will be overarching priorities going forward.

It's key to note that our expenses, while categorized as EBITDA for accounting purposes, signify genuine investments aimed at driving growth. We focus on high-risk-adjusted internal returns, quick paybacks, and high EBITDA multiples from these investments. Balancing these areas is critical, yet we’re intensely focused on investments yielding strong returns.

Regarding the $1.5 billion cash on your balance sheet, would you classify your appetite for sizable acquisitions as low given your current internal growth initiatives?

Yes, that’s accurate, Craig. While we have some dry powder, we are satisfied with our existing position and direction. As mentioned, we’re opting for a partnership approach, which has proven effective so far. To clarify regarding Burgiss, this is a minority stake, and we will not be consolidating Burgiss's financials. Our share of their income will flow to other income and expense and will appear in net lines. I suggest Salli follow up with you offline to address your question in detail.

I wanted to ask about the core index business. What's driving the stable 10-11% growth in that area, especially given that flows in active management are virtually nil? Is this merely a consequence of existing asset owners or wealth managers, or are you introducing new products?

When analyzing the index product line, you can categorize it into segments such as market cap indices—specifically, the ACWI IMI family—ESG indices, factor indices, and their respective use cases. Growth in market cap indices is largely driven by continued globalization of equity markets and expansion of usage among organizations. Additionally, an organization wanting to scale up the number of professionals using indices can incur corresponding fee increases. Growth encouraged by new custom indices—tailored demands such as exclusion—has also been notable. Indeed, the ETF category reflects this continued growth.

Thank you. Lastly, can you frame your approach to measuring the impact of ESG investing? Given the ongoing discourse around defining and quantifying ESG metrics, how do you intend to navigate that ambiguity?

In the coming years, we will apply the same performance analysis and attributions as in traditional portfolios. For example, a portfolio with an ESG mandate will analyze how performance is affected by particular industries, and to what extent it suffers from traditional sectors like energy. We will continue to deliver comprehensive tools for ESG portfolio analysis, ensuring our clients can weigh performance against expectations with a holistic view of their investments. This is part of our ongoing commitment to invest in the tools and solutions our clients need.

I would like to thank you again for the opportunity to present the last 10 years of outstanding performance and the anticipation of what we can achieve in the next 10 years. I want you to recognize how much we value the belief that you and our shareholders have put in us; the trust and confidence in running this great franchise and being good stewards of capital. I hope we never disappoint. Thank you very much.