That's day two of the Bank of America Financial Services Conference for 2025. This is the room that we'll be discussing MetLife. We're really pleased. We have CEO Michel Khalaf and CFO John McCallion here. Just a little bio, even though maybe it doesn't seem necessary, but they both assumed their current roles in 2019. Michel is kind of almost a lifer because he came with the Alico acquisition, and I looked at the bio, and it seems like you were working at Alico from the beginning.
That's right.
Right? So he's pretty amazing, you know, to stay in the same place for an entire career. He's a member of the board of the U.S.-China Business Council, The Geneva Association, and the Partnership for New York City, and we appreciate that. John has had many roles within the MetLife, I guess, ecosystem. Certainly, in addition to right now to being the CFO, he's also the head of the MetLife Investment Management business, which has some interesting things. We'll try and ask some questions about that. And he's been there since 2006 before being a PricewaterhouseCoopers auditor. And thank you both for being here.
Both Syracuse graduates, too.
Both Syracuse graduates.
The Orangemen .
Very good.
I didn't see anything.
I didn't see anything last night.
Played Miami.
Played Miami. That's why they brought you here. So, you know, I think that we'll start with talking about five-year planning. And, you know, I think there's always going to be some troubles, and I understand I'm talking to John Hall, but Next Horizons, New Frontiers, New Horizons, Next Frontiers, there's a little bit of it's not easy to remember which one, but we are on the next five-year plan here, which was laid out in December this year. Can you talk about sort of the core principles of the New Frontier, which I think is the correct appellation for the current five-year plan?
Absolutely. And first of all, thank you, Josh, for giving us a good excuse to escape the Northeast cold for this South Beach beautiful weather here. Yeah, really pleased to roll out our New Frontier strategy in December. And I would say it was, you know, the culmination of a rigorous 18-month effort on the part of the management team, also very much engaged with the board on this. And, you know, the way to think about New Frontier is that, you know, it really builds on the way we've executed on the pillars of Next Horizon, which were focus, simplify, and differentiate. And I think a good sort of measure of how well we've executed on those pillars is the fact that we've met, if not exceeded, all of our five-year Next Horizon targets. So that's a little bit the backdrop.
And then, you know, combine that with the fact that we are present and we have a strong presence in highly attractive markets with significant profit pools. We are, so, you know, from a positioning perspective, we have also a number of competitive moats that are hard for others, I would say, to breach or to replicate. And then, you know, we considered some of the, you know, important, I would say, trends that provide some tailwinds to the industry as a whole, and I think to MetLife in particular. So, you know, think about, you know, the sort of increasing importance that employers and employees place on benefits. You know, think about the convergence of asset management and insurance, you know, the demographics that are also sort of fueling demand for retirement products, a higher interest rate environment.
You know, another one that we see particularly in LATAM, but I think it's a trend that we're going to see play out in other parts of the world as well, is, you know, what we call democratization of financial services. All those, you know, trends helped also inform our New Frontier strategy. You know, at the core, I would say the strategy focuses on four areas. Those areas contribute 80% of our earnings today, and we believe they're going to, you know, help fuel our growth going forward. I think what's new in New Frontier is that growth is very much front, right, and center when it comes to our strategy. By growth, I mean responsible growth. You know, we talked about, you know, four areas. One, you know, continuing to expand our, you know, market-leading group benefits franchise.
And here we think that our size and scale actually are, you know, give us the sort of impetus to continue to drive growth there. You know, the second one is, you know, around sort of our, you know, the retirement platforms and our ability to originate, you know, whether in the U.S. on the institutional front or in Japan on the retail front. So continuing to build on that. And then, you know, we talked about asset management, MIM, MetLife Investment Management becoming a segment in 2025 and our aspiration to achieve $1 trillion in assets under management. And last but not least, we talked about some high-growth markets where we're already quite well positioned and where we see further opportunities for growth, namely in India, China, Mexico, and Brazil. So I think taken together, we're really excited about this, you know, this next five-year journey.
We think that New Frontier will give us, gives us, provides us with a strong platform to continue to achieve, you know, strong success going forward.
I think it might be worthwhile to mention a few of the achievements under the Next Horizon strategy and contrast them with what the new guidance is for the next five years, and particularly ROE, capital return. Maybe some want to share just a few you think are the primary drivers.
Yeah, the three we had for Next Horizon were ROE, which we started out five years ago at 12%–14% in terms of our target. We've upped that to 15%–17% as part of New Frontier. And obviously, throughout the Next Horizon, we had an opportunity to increase it to 13%–15%. So we've been gradually improving that. And I'll talk a little bit about maybe some of the drivers in a second. You know, expenses have been kind of, I'd say, a DNA-type muscle for us that we've been really working on over the time. And so we have this direct expense ratio that we've been focused on, and we've made tremendous progress on that Next Horizon. And we put out another target for us to go down another 100 basis points over the five-year period. And then the third one was cash.
We think, you know, given our business profile, our mix of business, you know, we've been able to put out a cumulative cash flow metric. We had $20 billion plus in the last Next Horizon strategy. We've upped that to $25 billion as part of New Frontier. And then the fourth thing we added, which again, I think is a function of the evolution that we've seen in our business, is adding an EPS growth target, a double-digit growth over the five-year period. And again, I think that's a function of, you know, things that we've done over the last five, quite honestly, probably a decade to get us to this position, to position our portfolio.
The market-leading businesses that Michel had, the diversification that we have with all of those, and that gives us the confidence to be able to put out, you know, those types of metrics, which we think are really differentiating from a value proposition when you think about who we are and what you get with, you know, with this type of firm. You know, I think from the ROE perspective, I just highlight a few things. One, on a new business perspective, we've been generating high teens IRRs unlevered. Now, it takes time in a big insurance company for those to find their way, you know, to, you know, have a material impact, but we've been doing that for several years now. Second, higher interest rates have helped on the in-force. That has been a tailwind.
And then the third thing is, you know, we've been running off a segment that's probably a lower ROE segment, MetLife Holdings. And we did some; we shared some statistics at the investor day just how that has changed over the five-year period. So all of those things have put us in a position to be able to be more aggressive on the New Frontier targets.
The one thing that I would add here is that, you know, also over the Next Horizon period, you know, to John's point, we've managed to sort of improve our returns while at the same time reducing our beta in both absolute and relative terms, and I think, you know, as we think about New Frontier, really what's sort of unique in terms of our value proposition, I believe, is that, you know, you're getting growth, responsible growth, attractive returns, and you're getting it at lower risk, and it's not one or the other, but all three. Let's talk about one of the largest pieces of the puzzle, group benefits. I mean, in terms of, you know, premium fees coming from group benefits and group life, Met is the industry leader second to none, substantially, and you have a 4%–7% growth target. How do you get there?
What are the elements that are going to put that together? It's on a, you know, it's mid to high single digits, I guess, but at the same time, you are so big. What can you do there?
Yeah. And you know, I think you know, one of the reasons why we you know, why we feel confident in our ability to deliver on this is the fact that you know, we're convinced that size is an advantage here. And you know, especially given you know, the need to make meaningful investments in this business, something that we've been doing over a number of years here. And you know, if you think about 2024, we grew at 5.3%, excluding for the impact of participating policies, which is how we measure PFO growth. And you know, over the Next Horizon period, we added $6.6 billion to our group business, which is sort of the equivalent of a top five player. And you know, our PFOs now stand at close to $25 billion. So very significant.
And what I believe is the most attractive segment of the life, of the U.S. life industry. There are, I think, a few trends that, you know, we believe will allow us to, you know, achieve the 4%–7% growth rate. You know, the first one is, you know, we see consolidation, especially at the lower end of the market, broker consolidation with bigger brokers acquiring smaller ones. I think this is, you know, we tend to have very strong relationships with these big brokers. We tend to already be on their panel. So this gives us access to more employers in that space. And that's a highly fragmented market. So there's a good, really good opportunity for us there. You know, I think the, you know, the other area where we see opportunity is the fact that employers are looking to do more with fewer providers.
You know, having the widest product set in the entire industry. Actually, our experience shows that the longer an employer is with us, the more products they have with us. On average, in the national account space, our employers are with us for 22+ years. That's another area where we see, you know, good growth potential. The last one is what I would sort of call the protection and confusion gap when it comes to enrollment and re-enrollment. You know, clearly, employers want their employees to use the benefits that they offer them. Our survey showed that the enrollment and re-enrollment experience can be quite overwhelming.
Here we've invested in a capability that not only makes it much easier for employees to choose the right benefit structure that best fits their needs, but also makes it easier, seamless for them to use those benefits, which is, again, which contributes to better persistency the more people use their benefits. You know, those are some of the sort of trends that I think are, you know, tailwinds for our business. That's why we feel confident about our ability to deliver on the 4%–7% PFO growth here.
And then the margins, disability has been remarkably good for a long time. Maybe it's flex work or something that's driving the changes, but this is obviously getting rewritten all the time. Some interesting volatility in post-COVID health outcomes on the life side, dental utilization. Where are we entering the New Frontier period in terms of margins? And is the business arguably over-earning? Do we have to reset our view longer term?
Yeah, I don't think it's over-earning. I think it's, you know, this is a competitive market. Price matters. It's not the only thing that matters. But, you know, we think it's still pretty rational. And we've seen for us, you know, we have two kind of margin metrics that we provide. We have a life mortality ratio, benefit ratio, and we have a non-medical health ratio, which combines a number of different things, disability, dental, and some of our voluntary products. And on the life side, we certainly have seen better, you know, margins there for the last year. Our range was 84%-89% benefit ratio. For the full year, we were slightly under that if you exclude kind of the one-offs. So we didn't change our range in the outlook.
Our view is for now, it's probably a good range, although if things continue the way we've seen, like in the second half of the year, it's most likely that, you know, we will be at the bottom end of that range or bottom half. On the non-medical health side, I think we came in slightly above the midpoint, 72.2, I think, midpoint 71 or 71.5, something like that. And so there, we think we get back to the middle part of the range. One of the things that was probably a bit of elevated for the last couple of years has been dental. We've been repricing. The kind of repricing actions will take full effect in 2025. So our view is that all else equal that we're back to the midpoint.
I think from a margin perspective, we think things kind of continue the way they have been, maybe a little better even relative to 2024. We also see that our mix of business, the efficiency focus that we have and other things, there's another part of our profit margin that's emerging. We gave some additional guidance this year to kind of encapsulate, you know, capture that. We think that continues to be a driver over the next several years as well. All in all, we think margins stay healthy at this point. We think that, you know, it's been a pretty competitive and balanced market. We see, you know, good things ahead.
Let's move a little bit to the U.S. retirement business in some sense. I mean, it seems like we've entered a new paradigm for interest rates and whatnot. And that clearly is a major input in how the business operates. Can you talk about the spread environment and what that means for MetLife?
Yeah, I mean, spreads, you know, we talked a little bit about this on the last earnings call. We had a few different dynamics going on on spreads. One, we had some roll-off of some interest rate caps that were very profitable. And that has been happening over the last two years. They ended at the end of 2024. And at the same time, on the other side, we've had VII improving, variable investment income, our private equity LP returns, and some real estate LP returns. So that has been gradually getting better. And we saw that throughout 2024. So now the caps have rolled off. We saw stability in that core spread, ex variable investment income between third and fourth quarter.
We think, and we're probably for the first time have a pretty good sense of the next few years around core spreads, where typically we would be hesitant to go beyond a year. We think core spreads kind of stabilize from here, and then we see VII improving, so if you look at where we ended last year, I think the full year all-in spread was somewhere around 117. The range for next year has kind of the midpoint in the 122+ area, so we actually think all-in spreads improve year over year with a full benefit of VII, and core spreads stabilize from here forward. You might get a little headwind from a steepening of the curve. That's actually a tailwind for us, but in the short term, there's a little bit of one to two basis point headwind from the short end coming down.
But ultimately, it's a tailwind for that business. But all in all, we think, you know, spread environment is stable and I think getting healthier with VII improving.
And as you talk about VII improvement, 2024 was a below plan year. What were some of the headwinds that were preventing you from realizing your, it is volatile, it's variable, that's going to be the case.
Yeah, variable investment.
At the same time, why the confidence that it gets better from here?
Yeah, I mean, we did see certainly it improved dramatically over 2023, which is probably our low year, right? We had about $1 billion of VII in 2024. We're projecting $1.7 billion in 2025. We believe there's just this gradual improvement that will occur in 2025. A few things going on. Obviously, public markets have been strong. That typically is a tailwind, although there's other dynamics going on in the private market. Having said that, we think the underlying portfolio companies are performing well. We're seeing kind of an improving regulatory environment. So kind of very more accommodating business-friendly environment emerging. We believe exits start to improve in 2025. That's kind of the word on the street. You all may know better than us. But so that sets up a good backdrop for private equity. And then the other piece to the VII is real estate.
That has been a, you know, it's gone through its own challenges. We see that improving. So even in the first quarter, our, you know, our view is that you'll see real estate start to come off its lower returns. They won't get to ultimate, you know, kind of longer-term historical returns, but it will start to emerge positively in the first quarter. We gave a sense of, you know, I think our VII in the fourth quarter was just about almost $300 million. If you were to take the 17 and divide by four, that would be 425. We think we'll be somewhere between those two in the first quarter.
All right. And sticking with that theme on retirement a little bit, obviously for the past decade, even longer, Pension Risk Transfer has been a huge benefit to revenue growth over time. There's not an infinite amount of pensions on there, but you're still pretty confident about what the pipeline looks like. Can we sort of scale that a bit?
Sure, sure. And I think we wrote our first PRT deal over 100 years ago. So, I mean, this is a, well, to your point, this is a well-established market that's grown significantly over the last 10 years. And if you think about, you know, sort of the, you know, DB plans out there and, you know, the opportunity is still sort of, I think, you know, in the $1-$2 trillion range. So there's still plenty, you know, of potential business that over time, some of it at least should come to market. You know, we're continuing. We had a good year last year, $6.4 billion in PRT premium. We were off to a good start this year. We already wrote a deal in January. And so the, you know, the pipeline, you know, continues to be healthy.
I think, you know, this is a valuable product for plan sponsors. So I don't think that's going to go away anytime soon. A good indicator of sort of, you know, potentially what might come to market is the fact that funding levels are very healthy. That's always a very strong indicator, you know, markets are, you know, performing well as well. So I think all the, you know, those factors point to, you know, a pipeline that should continue to be strong in the coming years. From our perspective, you know, we tend to focus on the jumbo end of the market where, you know, less competition, fewer players plays to our strength as well. You know, not that we don't do deals of all sizes, but I would say our sweet spot is the jumbo end.
Again, we think that, you know, we'll continue to win our fair share there.
The last retirement question, let's move around the globe a little bit to the Japanese market and how Met is positioned for growth there.
Yeah, and Japan is an important business for us. It's our second largest market. It contributes, you know, around $1 billion a year in earnings to us. And we've, over the Next Horizon period, we've improved our market standing. We're now the fourth largest player, life player in that market. I think Japan is going through, you know, important change and transformation, positive, I would say, you know, on a number of fronts. So sort of, you know, if you think about the economy, you know, we're seeing wage inflation that's driving consumer demand. You know, we are seeing also, you know, and I think we'll see that increasingly, you know, people start to shift some of their savings away from bank deposits into other market-linked instruments simply because in an inflationary environment, you know, it's punitive to keep your money in, you know, in cash.
I think that's something that's going to benefit the industry and MetLife over time. Then, you know, the third sort of, you know, important phenomenon in Japan is sort of this aging population, which is creating, you know, gaps when it comes to retirement and healthcare as well. All those, I think, you know, create opportunities for the industry. We are, you know, extremely well positioned from a distribution perspective, very well diversified. We are the number one player in the general agency channel. We have our own career agency and we're strong in the bank channel as well. We also have very strong product manufacturing and innovation capabilities. We were the first to introduce U.S. dollar products in Japan.
Then I think, you know, when you combine that with our sort of financial strength, with our investment capabilities, also capabilities on the reinsurance front, I think we, you know, we think all those sort of play to our advantage in terms of continuing to drive success for our business in Japan. We feel good about how Japan has performed for us over the last five years, but importantly also in terms of its trajectory going forward.
To some extent, MetLife's present presence in the investment management community is underappreciated. For many years, I don't think it was nearly touted as well. Given the size, about $700 billion in AUM, and you're targeting $1 trillion. Can you talk a little bit about what some of the advantages that MetLife has in that market? And you've done some bolt-on acquisitions recently. Maybe you want to talk about why MetLife is the right home for those businesses.
Yeah, and you know, we've been, we've had a scaled investment business for quite some time, for decades. And then a little over a decade ago, we started to deploy those activities to third parties. And look, it's scale matters, right? Unique capabilities matter. And we have those things. And so that's given us the ability to think about this business differently. And you heard Michel earlier talk about that being one of the four priorities in New Frontier. You know, as we think about the next five years, that being a more prominent and more material business for MetLife. And we think that's an important aspect to our next five years plus. And, you know, with that, we see a market that's fairly fragmented, one where scale will matter. And we think we can be a beneficiary from that, I'll say, consolidation.
We saw that with a few announcements recently. We announced the acquisition of PineBridge recently. It's a $100 billion global asset manager, market leading, you know, strategic fit and cultural fit. I mean, just, you know, really good way to kind of add and complement what we have and what they have together. I think it's a one plus one equals more than two. We're really excited about that. We're excited about welcoming them to the MetLife family. They have great public credit, private credit. Their presence in Asia is very additive to us. We're really excited about that. We had another smaller acquisition we announced as well around just shortly after that with some more niche capabilities, about $6 billion of assets from an asset manager called Mesirow.
You know, one of their primary ones is kind of a high yield small capability that will fit very nicely into both the PineBridge MetLife combined platform. So again, it's an exciting time. We're off to a great start. A trillion is a big aspiration. So, but it will be a complement of organic and inorganic. But right now, obviously, we have a lot to focus on here with these two acquisitions.
For what it's worth, I have a lot more questions, but I also want to give the audience the opportunity to ask. If you want to ask a question, just raise your hand and I'll make it happen. We do have one over here.
Michel, you talked about the ability to penetrate the accounts when they're there for an extended period of time. I think you said the average client in the national accounts is about 22 years now. Can you just give a little more color about how deeply penetrated they are? And then what are the remaining opportunities within national accounts to further penetrate?
Yeah, I mean, I think the good news is that there's still a long ways to go for us. On average, employers in the sort of national account space offer more than 10 products. And, you know, I think our average right now is just over three products per employer. So that gives you a bit of a sense of sort of, you know, how much room to, you know, to further grow we have there. And like I said, the fact that, you know, I think every employer today has some kind of a vendor optimization strategy, just given risks associated with and complexities with dealing with multiple vendors. And we do think this plays to our strength here from a relationship and product set perspective.
You know, John, you said that MetLife has some unique investment capabilities. And one of those capabilities is in commercial real estate, which if we go back in time, about three, four years ago, was three years ago, was generally a hot topic. People aren't talking about as much. Can you talk a little about asset gathering interest in that space right now? Two, what your outlook is for one area in particular, office? And three, you know, doing the post-mortem on the post-COVID scare about office real estate, how Met's portfolio behaved?
Yeah, it's definitely shifted over the last three years. It's no longer question one on these webcasts. But look, I think our view right now is that there has, you know, we've gone through a lot over the last three years. We believe that, you know, things have kind of, I'll say, troughed. Depends on this, you know, non-office probably still has a bit to go. I'm sorry, office has a bit to go. Non-office likely troughed and is on the, you know, the uptick. But office is pretty close. You know, we believe we've reached peak vacancy rates. You know, the return to office momentum is continuing. And then third thing, you know, we've seen, you know, leasings increase, the number of leasings. So the office space is getting better.
When we think about it, if you use like loan to value, we've probably reached peak loan to values at this juncture, and then we're starting to see transactions pick up, so all of those, and those are all a function of too. On top of it, the backdrop is, you know, the construction pipeline has really slowed, so that supply demand is starting to kind of get to some better balance, and that generally improves the outlook. There's still obviously a number of things to occur for the dust to fully settle, and we'll see that play out in 2025. You know, from an outlook perspective, and you think about, you know, some of our strategies, you know, we see in the non-office space. I mean, we are looking more at, you know, I'd say we obviously are always core, core plus.
We're also thinking opportunistic type strategies at this juncture. And it's a good time for entry into that space. But look, this is a long-term asset class. You lean into your strengths is what we do. Everything goes through its own cycles. We have fared very well. And I think we have basically fared as we said we would. And we think, you know, there's more to come, but we think from a capital perspective, you know, modest changes from here forward.
You know, we talk a little about Japan, but MetLife is really a global company. You know, there's some higher growth areas, and two countries in particular that I don't think people associate with MetLife broadly were highlighted during the investor day. One was Brazil. The other was India. Can you talk about your positioning in emerging markets for higher growth areas?
Sure, and you know, I think, you know, one of the things to emphasize here is that, you know, this is not about planting flags. I mean, these are well-established businesses where we are, you know, really well positioned, and these are profitable businesses for MetLife today, and we believe they will be. They will contribute even more to our earnings going forward. You know, Brazil is an interesting market. You know, I referenced earlier this democratization of financial services, and I think, you know, we really see that play out in Brazil where some of the native digital banks have sprung up and taken very significant share of that market, a market traditionally dominated by, you know, a few large banks with also insurance manufacturing capabilities, so these new players have opened up, you know, a new distribution channel for us.
We had invested, you know, we had seen this trend emerge. And we had invested in capabilities that allow us to integrate seamlessly into, you know, those digital natives ecosystem systems. You know, one of their sort of key criteria to be able to partner with these players is this, you know, ability. You have to sort of be part of their journey. You cannot create your own journey and sort of have that as part of their offering. We've done that very effectively. And that's really been fueling our growth in Brazil. We are the fastest growing insurance company on the market. And we see sort of a pathway to continue to grow very nicely there. And now we see some of these banks move to other parts of the region of LATAM, such as Mexico and Chile, where we again have very strong presence.
So we tend to benefit from that. And then, you know, India is another, you know, growth market for us. You know, we have a strong presence, a partnership with the second largest public sector bank in India, Punjab National Bank or PNB. That partnership gives us access to over 10,000 branches, 180 million potential customers there. And, you know, we see really important opportunities and increasing. We're in about 50% of their branches today. We see opportunities to, you know, grow that presence as well as increase our penetration, the take-up rates, you know, in the branches where we're already there. So we've increased our ownership in India to close to 49%. And again, I think this will be an important market for the future for MetLife.
You know, we talk about those opportunities, but the truth is that MetLife is a global company. One of the downsides is we're currently in a very protectionist kind of economic leadership position in this country, which is making the dollar quite strong. A, does this enable some M&A opportunities that, given that MetLife's currency is very, very attractive right now? But two, from earnings, from earnings perspective, there's some headwinds. Can we sort of frame maybe those pluses and minuses out there?
We did, yeah, we did mention, you know, as part of our outlook, the fact that, you know, based on the forward curves, we are seeing some FX headwinds. And I think we framed it at the $150 million-$175 million range for 2025. But I mean, I think one of our superpowers is the fact that we are a very diversified company. I think diversification is our friend. And so, you know, and that part of that diversification is geography, is product, is channel. So, you know, so we think that's an advantage. You know, you will go through sort of periods where, you know, there are pressures in one area or the other. But I think diversification gives us the chance to, you know, despite that, you know, perform.
You know, I think, you know, a proof point to that is the fact that, you know, despite these FX pressures, you know, the outlook targets that we came out with are very much consistent with, you know, our New Frontier, the New Frontier targets that we had, you know, announced back in December. So again, I think, you know, we'll have to see how things play out, obviously, from an M&A perspective. I think that was the question. You know, we're very disciplined when it comes to M&A. We always look for strategic fit. We look for sort of what, you know, can sort of an M&A opportunity help us accelerate revenue growth, bring in a new product or a new capability that complements what we already have, you know, on the asset management front in particular.
Cultural fit is also very important, something that we look at. And then we look for M&A transactions to be accretive across, you know, a multitude of, you know, financial, you know, think about EPS, ROE, free cash flow, and the like. And we compare also any M&A transaction to other potential uses of capital. I don't think the new sort of geopolitical environment changes our view on M&A. And we had talked in the past about group and asset management being the two areas where, you know, we wouldn't consider doing something that is complementary to what we have. And I would say that that view hasn't changed.
In terms of the outlook based on the forward curve, is there any way that we can track this? I mean, you'll update FSA on a quarterly basis. But of course, these are moving right now. When we look at that forward curve, is there a place that investors should be looking that targets Met's exposure to the dollar?
Yeah, I mean, I think the biggest places we've seen the impact has been Latin America. Mexico, obviously, has probably been the biggest change in the last three months or so. That's probably the biggest one to track. But obviously, it's that. And, you know, a little bit of Asia. Because we're a heavily U.S. dollar product in Japan, we're not as sensitive as you would think otherwise about, you know, I think maybe a third to maybe a little more of our book is U.S. dollar. So we're pretty almost naturally hedged there. Probably Mexico is the biggest one. And that's where we've seen the biggest headwind in the 150– 175.
On that, I think we'll call to close here. Thanks, everyone who is in attendance and people who are listening on the webcast. Thank you very much to John and Michel for being here. Have a wonderful day.
Thank you for having me.
Thank you.
Thank you.