Hello. Thank you for standing by. My name is Gary. I will be your conference operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, management will conduct a question and answer session. Conference participants will be given instructions at that time. As a reminder, this conference call is being recorded. At this time, I will turn the call over to Makela Taphorn, Director, Investor Relations at Artisan Partners.
Thank you. Welcome to the Artisan Partners Asset Management business update and earnings call. Today's call will include remarks from Eric Colson, Chairman and CEO. C.J. Daley, CFO. Our latest results and investor presentation are available on the investor relations section of our website. Following these remarks, we will open the line for questions. Before we begin, I'd like to remind you that our comments made on today's call include responses to questions, may deal with forward-looking statements, which are subject to risks and uncertainties that are presented in the earnings release and detailed in our filings with the SEC. In addition, some of our remarks made today will include references to non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release. I will now turn the call over to Eric Colson.
Thank you, Makela. Thank you everyone for joining the call or reading the transcript. Last week, we published our 2018 annual report. The report focuses on our commitment to generating high value-added, sustainable outcomes for clients, employees, and shareholders. I encourage you to read the report, which is available on our website. As a firm, we have always focused on sustainable outcomes. For our clients, we compound wealth over the long term to help them secure their futures and achieve their goals. For our investment talent, we take a deliberate approach to bringing on new people and developing franchises, which increases the probability of success across generations and through market cycles. For our shareholders, we thoughtfully grow our business value while maintaining financial discipline and generating significant cash. Lastly, we operate with integrity and behave ethically.
We remain true to who we are as a firm. We communicate our long-term approach to our stakeholders. That's our primary purpose on these calls. None of this is new for us. We have built and managed our relationships with clients, key investment talent, employees, and shareholders with a long-term approach and mutual respect in order to establish and maintain trust. We have a real, substantive, and successful record on sustainability, not just new policies or initiatives in reaction to a popular movement. We have always felt strongly about building and growing a sustainable firm. Now, we are providing greater transparency and speaking more specifically about these topics. As a firm, our sustainability over time will ultimately rest on our ability to add value for clients. Slide two shows our long-term investment performance net of fees.
On average, our nine investment strategies with track records of at least 10 years have outperformed their benchmarks by 237 basis points per year net of fees since inception. Our newer strategies have also added value for clients. Since inception and net of fees, the High Income, Developing World, Thematic, and Global Discovery strategies have outperformed by 166, 442, 1,683, and 739 basis points per year. Everything about Artisan is designed to generate and compound wealth over the long term for clients. We are nine for nine in terms of launching and developing successful investment teams. Every investment firm believes in a similar set of values and core principles, which can make it difficult to distinguish among firms. What distinguishes us is sustainable, repeatable outcomes. One team after another, one strategy after another.
We have had success across nine autonomous teams, generations of talent, multiple asset classes, and various market cycles. The alpha we generate pays pensions, funds retirements, supports education, and in general, improves people's lives. Assume an employee contributes $10,000 per year to a retirement account for 40 years. Compounded at 6% annually, the savings would grow to $1.6 million at retirement. Adding 200 basis points of after-fee alpha and compounding the savings at 8% annually results in $2.8 million at retirement. Over $1 million more for the retiree. What we do can make a big difference in people's lives. That's a huge responsibility and a wonderful opportunity. Slide three shows the topics covered in our 2018 sustainability report, which is part of our annual report. As I said earlier, we have always focused on sustainable outcomes for all of our stakeholders. We are now speaking more specifically about these items.
Last year, we joined the UN-supported Principles for Responsible Investment. We are committed to implementing the six principles. As active fundamental researchers, our investment teams have always focused on understanding all of the material issues related to their investments, including ESG issues. Recently, we have seen increased interest in ESG topics, research, and data from our investment teams. We're actively working to improve ESG-related data and resources and better communicate how our teams incorporate ESG into their fundamental bottom-up processes. In keeping with our pursuit of high value-added, differentiated outcomes and our autonomous investment team model, our approach to these matters is thoughtful and tailored. That takes time and often means that we will be different from the crowd. Similar to how we seek to add value for clients, we want our compensation, benefits, and culture to have a significant, positive, long-term impact on our employees' lives.
We have always matched 100% of employee 401(k) contributions. We cover 100% of participating employee healthcare premiums. We pay for qualifying undergraduate, graduate, and professional education for employees. Most importantly, we seek to provide compelling work with long-term opportunities so that employees want to be here for their entire careers. Over the long term, we believe that our combination of compensation, benefits, and culture has generated results for our employees that we can be proud of. Slide four is an example of the Artisan high value-added differentiated approach. The slide summarizes the investment process of the Artisan Sustainable Emerging Markets team. The team systematically considers the sustainability of a firm's earnings and its competitive advantage. The team also conducts a quantitative and qualitative assessment of ESG factors. The ESG assessment incorporates third-party data, as well as the team's qualitative assessment of environmental, social, and governance factors.
None of this is new for the team. It is, though, differentiated and high value-added. Differentiated because while the team cares passionately about emerging markets, people, and communities, the team believes that an exclusionary ESG approach based on the values of the developed world would be inconsistent with progress and sustainability in emerging markets. High value-added because the team's sustainability assessment relies in large part on the judgment of an experienced team of emerging markets investors, most of whom were born and educated in emerging markets. While the team leverages third-party data, they don't outsource any decision-making. They own it all, including occasional friction with asset allocators over the team's approach to sustainability. Lastly, the team itself is a terrific example of a sustainable franchise. Stable, enduring, consistent, diverse, and always aiming to improve.
On slide five, I want to switch topics to the ongoing disruption we see in investment management, driven primarily by changes in asset owner behavior and new technology. The Casey Quirk visual is a good representation of the disruption. An increasingly diverse set of clients are demanding customized investment solutions and service, driving greater complexity in investment strategies, vehicles, client service, and communication. At the same time, asset owners are becoming more powerful, whether because of OCIO, the consolidation of investment consultants, or the increased centralization of decision-making at financial advisors and broker-dealers. Of course, everyone seems to have less and less time to absorb the massive amounts of data, information, and noise produced within the industry. These overarching trends manifest themselves in many ways, including demand for outcome-oriented strategies, fee pressure, changing economic models for distribution, increased digitalization, and demand for more efficient investment vehicles.
We will always be an investment firm first. We have always taken a deliberate approach to trends like these. We don't guess. We prioritize maintaining our high value-added investment offerings. We want to be early on the right investment talent, the right investment resources, and the right investment returns. If we are, we will be in a good position to capitalize on changes in the distribution landscape. We monitor distribution trends closely, waiting for trends that reach a tipping point. We don't want our distribution model to hinder our client relationships, which is dramatically different than being a distribution pioneer. When a clear trend surfaces, we'll be ready to take advantage to better serve our existing clients and reach additional clients. Slide six is a concrete example of a couple of trends.
First, the popularity of cleaner, more straightforward mutual fund share classes, and second, the resulting economic pressure this is placing on some intermediaries. This slide shows the evolution of our U.S. mutual fund assets over the last five years. Over that time, we've gone from about two-thirds investor shares to about one-third investor shares, with the balance made up of our institutional and advisor share classes. We launched the advisor share class in 2014 in response to client and intermediary demands. It's a good example of how we have aligned with an industry trend without trying to be all things to all people. As a consequence of this evolution, the total amount we pay to intermediaries for distribution has significantly declined. The evolution shown on this slide has been good for our clients and for us, we recognize that it presents issues for certain intermediaries.
Intermediaries who maintain an open- architecture platforms provide valuable service to investors. They provide choice. Without them, more investors will end up in closed structures with less opportunity for asset managers to compete on quality of results, similar to many proprietary 401(k) target date options. We prefer transparency, choice, and the ability to compete on investment results net of fees. It's important that they evolve to remain economically viable. Another place where we may be reaching a tipping point is active ETFs and smaller balance SMAs. These technologies are becoming increasingly viable and accessible. They can provide investors with better tax outcomes and greater customization. We believe that both technologies may allow us to better serve existing clients and expand our business. All of this disruption creates opportunity.
Given the quality of our investment offering, we are well-positioned to take advantage of these trends as they crystallize. I will now turn it over to C.J. to discuss our recent business and financial results.
Thanks, Eric. Our financial highlights are presented on slide seven. As usual, I will focus my comments on adjusted results, which we utilize to evaluate our business results and operations. Following the sharp declines in global equity markets in the fourth quarter of 2018, our assets under management began the quarter at $96.2 billion. The strong rebound in markets during the first quarter of 2019, as well as alpha generated by our investment teams, drove assets under management to $108 billion at March 31. Average AUM for the quarter was consistent with the previous quarter, while revenues decreased 2%, primarily due to two fewer billing days in the quarter. Our effective average fee rate remained at 72 basis points, reflecting our active, high-value add product mix.
Operating margin in the March quarter was 30.9%, reflecting the impact on revenue of two less billing days in the quarter, higher seasonal expenses, which are typical in the first quarter, and a previously discussed occupancy charge for relocation of one of our investment teams. Adjusted earnings per adjusted share were $0.55. Our board of directors approved a quarterly variable cash dividend of $0.55 per share, which represents approximately 80% of the cash generated during the quarter. Assets under management and net client cash flows are on slide eight. Average AUM for the quarter was $104.9 billion, consistent with the preceding December 2018 quarter.
However, as a result of the strong rebound in global equity markets and alpha generation across our investment strategies, both of which were offset in part by net client cash outflows, our ending AUM was up 12% from last quarter and ended at $107.8 billion. Client cash outflows in the quarter of $1.1 billion reflected continued headwinds, as well as structural changes in asset allocation and the defined contribution market. Turning to revenues and expenses on slide 9. Revenues of $187 million in the March quarter were down 2% compared to the December quarter due to the two fewer billing days, and down 12% compared to the March quarter of last year, in line with declines in average assets under management. As noted, our average fee rate remained relatively stable for the quarter and year.
Operating expenses were up 2% in the quarter, primarily due to $4.3 million in higher seasonal expenses and a $2 million occupancy charge associated with an office relocation. These higher expenses were partially offset by a decline in investment team onboarding costs related to the new Non-U.S. Small-Mid Growth investment team members. Further detail on compensation and benefits expenses are presented on slide 10. Compensation and benefits costs are our largest operating expense, and the majority of this expense varies directly with revenue. Compensation and benefits expenses rose slightly this quarter to 53.1% of revenues, compared to 51.4% in the December 2018 quarter. Higher compensation for annual merit raises and incentive compensation drove the increase. Declining costs from the December quarter for onboarding the new Non-U.S. Small-Mid Growth investment team members was offset by higher first quarter seasonal expenses.
Compared to the March quarter of 2018, compensation costs declined as a result of a decline in incentive compensation paid to our investment and marketing professionals as a result of lower revenues. Equity-based compensation expense decreased $2.2 million, as higher grant date value awards became fully amortized during 2018. The operating margin and adjusted earnings per share are presented on slide 11. Our operating margin was negatively impacted this quarter by two fewer billing days and higher seasonal expenses. As a result, our operating margin was 30.9%, down from 33.5% last quarter. The decline from 37.7% in the prior year quarter was primarily the result of lower average AUM. In addition, we have continued to make long-term investments to support sustainable growth in our investment franchises, including annual equity grants to our investment talent, dedicated office space to support autonomous investment cultures, and strategic distribution and technology enhancements.
These investments, along with investments we have made over the last several years, have created significant additional capacity for growth over time and have strengthened the long-term economic alignment of our investment teams. Adjusted net income per adjusted share was $0.55 in the March 2019 quarter, compared to $0.61 last quarter and $0.78 for the same quarter of last year. Which brings me to our dividend discussion on slide 12. The quarterly dividend recently declared at $0.55 reflects approximately 80% of the cash generated during the March 2019 quarter. As in prior years, we will consider the payment of a special annual dividend after the end of the year. That process involves us assessing the current market environment and business conditions and any needs to retain cash for strategic investment or other corporate purposes.
Our capital management philosophy has been, and continues to be, payment of a majority, if not all, the cash generated from operations in the form of cash dividends. Our balance sheet summary is on slide 13. Our cash position is healthy and leverage remains modest. In closing, as a high value-added investment manager, we expect that long-term investment performance will be the primary driver of our long-term financial results. Over shorter time periods, our results are subject to the volatility of global equity markets and client cash flow trends. We remain focused on executing on our model to provide our talent with the best opportunity to deliver results for our clients and shareholders over the long term. That concludes my comments, and we look forward to your questions. I will now turn the call back to the operator.
We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Kenneth Lee with RBC Capital Markets. Please go ahead.
Thanks for taking my question. Appreciate the overview of the key distribution trends. Just a follow-up on the prepared remarks regarding active ETFs and the smaller separate account distribution trends. What potential changes would you expect to see over the near term, given these trends? Thanks.
Hi, Kenneth. It's Eric. In the near term, I'll define that the next year, I don't see any changes for us. First, on the active ETF, as you look at our array of strategies primarily using high degrees of freedom, the current ETF's active ETF structure will only incorporate U.S. securities. It'd be difficult for us to leverage that new vehicle. Secondly, around the ETF, given our focus on high value-added results and a need to control capacity, we've always stated that we look at the total capacity, the velocity of assets, and the mix of assets. We need to be more thoughtful and think about how to control capacity within that vehicle. That structure, I think, is a little ways out for us.
I do think the smaller separate account business and many of the, I guess, call them fintech or smaller companies developing platforms to help us leverage their operations to go out and service smaller accounts is moving along. Again, I think that's also probably about a little over a year out as well.
Got you. Very helpful. Just one follow-up on the commentary regarding the outflows seen in the quarter. Once again, in the prepared remarks, you talked about the defined contribution as well as some asset allocation changes. Wondering if you could just provide a little bit more details on that. Presumably, it's been impacting mid-cap strategies, but wondering if there's any other key strategies where you've seen an impact across those two items. Thanks.
The DC channel's been the same. There's no changes from past statements. I think you've seen an also continued movement in the active-passive rebalancing. We saw a bit of that in the international space this past quarter, which impacted the International Growth and International Value strategies with regards to flow movement. That'd probably be the two trends for the quarter.
Okay. Very helpful. Thank you very much.
The next question comes from Alex Blostein with Goldman Sachs. Please go ahead.
Hey, good morning, everyone. Your growth team and the global equity teams both continue to have very strong performance. Obviously, long term has been good, but even the one year looks like it's improved on an excess performance net of fees, that is. Is that starting to resonate, do you think, with any of the channels to actually drive better flows on either side of those teams or the kind of secular shift to passive ultimately still kind of always that? Do you guys see any opportunities to open any of the closed strategies there, given, again, strong performance from a capacity perspective?
Yeah, certainly. Alex, this is Eric. The global equity and the growth teams have had very strong performance. With regards to the global equity team and primarily the Non-U.S. Growth strategy, which is the bulk of the assets for the global equity team, has delivered good performance. We've seen quite a few clients just rebalancing around that strong performance. Q1 saw some asset allocation of rebalancing some outflows that occurred because of strong performance being rebalanced towards value managers or other asset classes, given the strength of the strategy. There was, in my mind, normal flows that occurred in global equity. The growth team, again, strong performance. We saw quite a bit of interest in the Global Opportunities, U.S. Small-Cap Growth, and Global Discovery strategy. The U.S. Mid-Cap Growth we've talked about in the past.
A little bit of rebalancing that actually occurred in Global Opportunities now that it's a little bit more mature. I think those were fairly normal rebalancing, especially given strong performance. With regards to open or closed, at this point, we probably have never been more open in the history of the firm when you look across all the strategies. Especially since we've been public. This is probably the greatest capacity story we have.
Got it. I guess I'm just curious if there are anything that you guys see on the horizon that could actually accelerate growth sales in any of the strategies that's performing well.
The sales cycle and being able to predict that has always been difficult in this industry. We have no forward statement on flows to make.
Got you. All right, fair enough. C.J. Daley, just one for you. I don't think I caught your sort of near-term outlook on expenses, maybe just run us through what you guys expect on the expense front for the rest of the year. Especially maybe taking into account some of the discussion points you guys made earlier around distribution.
Yeah. I think the guidance remains similar to what I gave last quarter. Occupancy, we expect to run around $5 million a quarter. This quarter, we had a $2 million charge for that lease abandonment in N.Y. We still think that $5 million is a good number. We'll have some double rent that'll start to subside as we move into the middle of the year there. Technology cost. As we talked about our spend around distribution and investments, that's continued to expect to run about $10 million a quarter, although that will fluctuate a bit as you saw this quarter because it just ebbs and flows based on product or end-to-end project start and ramp-up time. That's still good.
We expect equity-based comp to be quite a bit lower as a result of those early grants rolling off that were at a higher value at the grant date. Overall, take that all into consideration, expense overall should be relatively flat to last year. That, of course, given our variable model, really will depend a lot on what revenues and AUM levels do throughout the year.
Great. Thanks for all the detail there.
The next question comes from Robert Lee with KBW. Please go ahead.
Thanks for taking my questions this morning. C.J., following up a little bit on some of the distribution initiatives, can you maybe drill down into that a little bit and give us a sense of what is actually underway right now. Understanding some of the tech spending may be related to that, but are you actively currently seeding and building SMA CIT vehicles? Maybe the second question related to this is, oftentimes in retail at least, they're demanding, at least initially, if it's a new product, larger asset bases or seed capital. Does this at all impact how you're thinking about capital management going forward? Do you think you'll see a need to put up more seed capital than you have historically?
Yeah. Our technology spend is really around supporting our investment teams, the distribution spend is supporting our distribution team. On the investment side, we're putting more development into tools for the investment teams around their research process. Market data spend is up as teams demand more data and better ways to utilize that data. On the distribution side, it's more of a move from a relationship-based model to a knowledge-based model, where we're using data as well to help the teams capture and utilize data to be more efficient in their sales efforts. There's no underlying R&D going on with vehicles that we're not disclosing.
What would-
From a capital management standpoint-
We fund all of this from our strong cash earnings generation. There isn't any capital management policy changes. All that spend you see in the line items on P&L.
Okay. Maybe just as a follow-up, if I think of some of the things you're talking about, SMAs, other investment vehicles, and working more closely with changing intermediary models, do you envision having to restaff or staff up more in the retail channels? Or maybe start more aggressively looking at newer channels within intermediary, whether it's registered investment advisors. Should we be thinking that over the next several years, that that could be something in the way we see some investment?
Hi, Robert. It's Eric. I wouldn't forecast any investment in there with regards to the ETF structure. I think people are guesstimating out there anywhere from two to three basis points of some type of cost that would go in there if you did move forward on the current proposed active ETF. More structures would come out, and cost of that would probably come down a bit. That vehicle or structure would go through our same channels. We wait for that client demand to surface for the vehicle that best suits their needs. Our focus on is delivering the investment strategies, and as our clients surface up different needs, such that we saw in the past of the evolution of an advisory share, which we put in place a few years ago due to the demand by the client base.
We would expect the same for the active ETF as well as the SMA business. It wouldn't be a spend into trying to forge a new channel. It's reacting to the dynamics of our current clients and intermediary relationships.
Okay, thanks for taking my questions.
The next question comes from William Katz with Citigroup. Please go ahead.
Okay. Thank you very much for taking the question this morning. First question comes back to the discussion on sustainable investing, I guess ESG more broadly. Obviously, you spent a lot of time in your prepared remarks today and looked at your annual shareholder letter, was very helpful. Thank you for that. Are you envisioning any sort of shift in product opportunity to leverage or harness what you've been doing for a bit of time now? It seems like there's a fairly high level of growth in ESG product in the system. I'm sort of wondering how you think about maybe leveraging it on the sales side.
Hi, Bill. It's Eric. When we thought about the ESG, there's a firm perspective of our shareholders asking how we're positioned. There's our investment teams seeking information and data to go into their research and how they evolve. Then there's the question you're posing on a client perspective of the strategy output and how a portfolio is designed to fit into ESG demands. We primarily are focusing on the firm side of the equation. Secondly, making sure our teams have the data and research to go into their investment process. To understand the risks of all securities that are invested in. As clients request restrictions, as we've done in the past with any type of ESG or social restriction, we will react to that and create a portfolio. We have not designed a specific ESG portfolio, and market that to sell into the industry.
I agree with you that there has been a large proliferation of ESG product. My view is it's just going to be incorporated into the investment philosophy and process of all strategies that people are going to seek to have that incorporated. The differentiation between just a typical active product and a specific ESG portfolio will converge.
Okay. It's helpful. I just want to come back to your comments where you used the slide from one of the consultants out there. It sounds like you're, maybe I misheard, I apologize if I did, that you're still not really changing any kind of distribution philosophy yet. You're sort of waiting for something more profound to potentially emerge. I guess, what might change in the near term that you're looking or watching for that might sort of ignite the more proactive organic growth path?
The trend we're highlighting specifically, is the movement to cleaner shares. As the revenue share goes down to zero, which you'll see in the institutional or clean share, as assets migrate into lower revenue share structures, that's going to put pressure on the intermediary open-architecture business. We will see more and more discussions with those platforms and how we work with those platforms will change, which we're clearly at a tipping point, which we think is a very good tipping point. We welcome a much more transparent, open structure to compete on net of fees, as opposed to a closed structure, which we clearly saw occur in the defined contribution business, with target date funds moving primarily the growth into closed structures.
We're going to be working more with our intermediary partners, as that evolves, you move to a clean structure, it does open the door quite a bit for the active ETF, which carries a zero revenue share as well. We believe the infrastructure and operations are very close on the intermediary side to move towards this clean structure as well as the active ETF. We're spending quite a bit of attention and our time on the distribution space at this point.
Okay. That's helpful. Just last one. Bigger picture question for you, just the devil's advocate. You have among best-in-class performance, you're one of the few that's actually seen a nice improvement in performance over the last year or so versus many of your publicly-traded peers. Yet, as the conversation is showing today, you're really not seeing it translate into sort of gross or net sales at this point in time. As good as your performance is, appreciating sort of some of the distribution changes that are out there, does Artisan need to be part of a larger platform to potentially leverage more of a global distribution network to really take advantage of the growth at this point? Or is the independent path the most likely conclusion?
From a distribution angle, we 100% believe in the global mindset. Going from virtually zero non-U.S. client base seven years ago, to today, over 20% of our assets. We also believe that you have to go broader and deeper into the wealth channel. Both put quite a bit of demand on independent firms to broaden out. The continuation of open architecture and the continued efforts in digitalization create a wonderful opportunity for a firm like Artisan that can leverage those models, compete in open structures, and leverage a digital marketing and sales strategy to go deeper into the wealth channel. Creates a wonderful opportunity for us. We think those are both at tipping points at this point in the cycle, that we're excited about. That's why we're highlighting the changes this quarter.
It's a signal that where we believe the market's going, where we're spending time, and where we're putting resources behind, with the mindset that these trends play out over time.
Okay. Thank you very much for taking the questions.
The next question comes from Daniel Fannon with Jefferies & Company. Please go ahead.
Thanks. Kind of following up on that last point around global distribution, you highlighted the 20% of AUM coming from outside, but that number has been stagnant for the last several quarters. Just thinking about some of the changes that are happening here in the U.S. that you highlighted and are watching or looking at, I guess, outside the U.S., what are you guys doing to kind of improve your positioning there or continue the growth that you have seen? It doesn't seem as there's much structural changes or opportunities as there is here in the U.S., maybe give us a little bit of insight there, too.
Certainly. Dan, this is Eric again. We primarily have built that non-U.S., leveraging our institutional brand, our institutional distribution, and we've been building a presence in the intermediary space outside the U.S. That takes a bit of time. First, you have to build up your vehicles in the UCITS structure, get that to a size and scale that you can operate on these platforms. These non-U.S. intermediary platforms have been reinvesting to broaden out into open architecture. Again, that just takes some time. We believe that we're on track to broaden out the distribution outside the U.S. from where we've been, which is right around that 20% number for the last year or two. We think there's quite a bit of interesting opportunity both inside the U.S. and outside the U.S., given the changes going on.
Okay. Then just switching topics. Performance fees, I know they're a small contributor, with your performance improving, can you give us a sense of, or remind us which funds carry those attributes? Is there a way to maybe frame kind of what a year where performance is good, those numbers could look like?
Yeah. Dan, we have opportunities for performance fees primarily in the June and the December quarter. There's only a handful of performance fee accounts across three or four strategies. Primarily our global strategies, and obviously our hedge funds. Our private structures. They've been very immaterial. I think the largest quarter for recollection has been just a couple million dollars of performance fees. We would expect that to continue to be a very small portion and not material to our overall results.
Okay. Thank you.
This concludes our question and answer session. The conference is also now concluded. Thank you for attending today's presentation. You may now disconnect.