Assured Guaranty Ltd. Price & Performance (AGO)

If you're listening to a replay of this call, if you're reading the transcript of the call, please note that our statements made today may have been updated since this call. Please refer to the Investor Information section of our website for our most recent presentations and SEC filings most current financial filings, and for the risk factors. This presentation also includes references to non GAAP financial measures. We present the GAAP financial measures most directly comparable to the non GAAP financial measures, referenced in this presentation along with a reconciliation between such GAAP and non GAAP financial measures, and our current financial supplement and equity investor presentation, which are on our website at assuredguarantee.com, Turning to the presentation, our speakers today are Dominic Federico, President and Chief Executive Officer of Short Guaranty Limited Rob Balanson, our Chief Operating Officer and Ben Rosenbloom, our Chief Financial Officer. After their remarks, we'll open the call to your questions. As the webcast is not enabled for Q and A, please dial into the call if you'd like to ask a question. I will now turn the call over to Dominic. Thank you, Robert.

Welcome to TerreGEN joining today's call. Assured Guaranty produced many significant achievements in 2024. Our fortieth year in business and our twentieth year as a publicly traded company. We are in adjusted operating income per share of $7.1 and created significant future earnings from strong financial guarantee originations Once again, we reached record year end highs for adjusted book value per share of $170.12 Adjusted operating shareholders' equity per share at $114.75 and shareholders' equity per share at $108.8 We continue to build value for both the short term guaranteed shareholders and policyholders. Aego's common stock share price rose 20% for the year to $90.01 And in our capital management program, we repurchased 11% of the common shares that were outstanding at 12/31/2023. While meeting our 2024 target, of repurchasing $500,000,000 of our shares, further managing our excess capital. In new business production, PVP across our three financial guarantee businesses topped $400,000,000 for the second year in a row. U. S. Public finance originated $270,000,000 in PPP its highest annual total in four years in both non U. S. Public finance and global structured finance saw strong production and built solid pipelines for 2025 and beyond. We Assured the winner of the bond buyers overall 2024 deal of the year, and the healthcare financing Northeast Regional and Innovative financing category winners.

Rob will tell you more about our participation in these exceptional transactions when he reviews our production results in a few moments. We expanded our geographic reach and pursued further opportunities in Australia, New Zealand, and Asia by opening an office in Australia and one in Singapore. We made further inroads in Continental Europe and continue to view it as an area of opportunity. As we mentioned on several previous earnings calls, we completed the consolidation of our two primary insurance subsidiaries into one emerging Assured guarantee municipal into Assured Guaranty Inc. Thereby creating a more efficient capital structure and a larger insurer with a more highly diversified Assured portfolio larger capital base and greater claims paying resources. This is one of several strategic moves that we made in recent years that better position us for growth profitability and corporate efficiencies. The inception to date return on our alternative investments including funds managed by SoundPoint and AHP, was approximately 13% through year end. Regarding our one remaining unresolved Puerto Rico exposure, [indiscernible] the Title III court has ordered the parties to continue mediation. And extended the time for them to resolve their differences. Additionally, the first circuit has confirmed that bondholders are secured by an unavoidable security interest [indiscernible] current and future net revenues.

And twice denied rehearing petitions by the FOMB asking the court to reconsider such ruling. We remain committed to a fair and consensual resolution for all PREPA stakeholders and are determined to enforce our rights as a Assured creditor. We are well positioned for success in 2025 and The U. S. Municipal bond market has started the year with a very strong new issue volume. Some analysts project that 2025 volume will rival or even exceed the annual record volume of 2024. Another important achievement and another example of Assured defending our legal rights in early February twenty twenty five, we successfully concluded litigation with Lehman Brothers International Europe we will recognize a pre tax gain of approximately $103,000,000 in the first quarter of twenty twenty five. Then we'll discuss this further in a few minutes.

During our forty year history, we have proven over and over the value and reliability of our guarantee and resilience of our business model. Even through some extraordinarily difficult global economic environments and geopolitical events. We believe we have untapped business opportunities around the world as well as the financial strength and talented people to successfully pursue these opportunities over the coming years and decades. I will now turn the call over to Rob to provide more details about our production results. Thank you, Dominic.

Business production across our three main business lines, S. Public finance, non U. S. Public finance, and global structured finance continued to perform well As Dominic mentioned, PVP across our three financial guarantee businesses topped $400,000,000 for the second year in a row and was appreciably higher than the $375,000,000 in 2022. In U. S. Public finance, we had a very strong year. Reaching $270,000,000 in PVP. Results were primarily driven by continued recognition of the value of our guarantee across the credit spectrum. And the use of our insurance on some very large infrastructure transactions combined with a record year in overall municipal par issued. Which exceeded $500,000,000,000 for the first time.

Bond insurance continued to be in strong demand in 2024. With the industry's annual penetration rate at 8.3%, of par issued. This was the fourth consecutive year when industry PAR penetration reached 8% or higher? Assured Guarantee achieved a fourteen year high for annual new issue insured par sold, Assured more than $24,000,000,000 during 2024.

The most since 2010.

Assured Guaranty insured 58% of the total insured par issued in 2024 as we continued our leadership position in the industry. We insured nearly 800 new Assured transactions for the year. We finished the year with an excellent fourth quarter. Capturing 61% share of par insured in the primary municipal bond market. Total insured municipal par sold reached 10% penetration of the municipal bond market during the fourth quarter.

For a short guarantee, fourth quarter primary market Assured par increased by 37% year over year to $7,400,000,000 During the year, Assured Guaranty rep par amounts of $100,000,000 or more on each of 48 municipal transactions. This tied our 2021 all time high in this category and included six deals with more than $500,000,000 of AG in short par. As we helped launch several of the markets largest and most high profile transactions. We believe this indicates that institutional investors increasingly place greater value on our guarantee. Among our largest transactions in 2024, three were honored at the Bonbuyers Deal of the Year ceremony. These included the overall 2024 deal of the year the BrightLine Florida Passenger Rail project issue, where we insured $1,100,000,000 of par This transaction also won in the innovative financing category, The Northeast Regional deal of the year was awarded to the JFK International Airport new Terminal 1 project where we ensured a total of $1600000000.0.800000000 dollars in June 2024, and $800,000,000 in December 2023. And the healthcare financing winner issued by the Westchester Medical Center Health Network serving Westchester County, New York where we insured $259,000,000 of par.

These transactions were noteworthy for their underlying credit profiles par amounts and use of insurance to expand and diversify the bond buyer base and to enhance the overall liquidity of the transaction. Also in 2024, we saw an increase in the use of our insurance among AA credits defined as those credits rated in the AA category by S and P and or Moody's on an uninsured basis. Year over year, we insured 27% more of these policies for 38% more par reflecting a total of 103 policies and approximately $4,400,000,000 of insured par.

Non U. S. Public finance contributed $67,000,000 of PPP in 2024.

A very solid result.

In 2024, non U. S. Public finance PDP included secondary market guarantees of several U. K. Regulated utilities and airport transactions. As well as the annual renewal of certain liquidity guarantees.

Our strong 2024 production results also included $65,000,000 of PVP generated by our Global Structured Finance business.

Transactions primarily in insurance securitizations, bank balance sheet relief subscription finance and the guarantee of a diversified real estate portfolio. As part of our new business growth strategy in Australia, for example, we ensured a transaction in 2024 for a bank which provided protection on an approximately $600,000,000 core lending portfolio. We continue to pursue both public finance and structured finance opportunities Australia. All three of our major financial guarantee businesses are providing solid and we continue to look for opportunities by expanding our geographic reach and exploring new product opportunities, In addition to building our business further in our U. S. And UK markets, we are pursuing opportunities in Australia, New Zealand, Continental Europe, in Asia. I will now turn the call over to Ben to discuss our detailed financial results. Thank you, Dominic and Rob. I am pleased to report fourth quarter twenty twenty four adjusted operating income of $66,000,000 or $1.27 per share. By comparison, in the fourth quarter of twenty twenty three, we reported adjusted operating income of $338,000,000 or $5.75 per share which included $2.00 $8,000,000 in non recurring benefits related to tax law changes, in Bermuda and New York State.

The Insurance segment contributed $98,000,000 of adjusted operating income in the fourth quarter of twenty twenty four, compared with $339,000,000 in the same period of last year. The most notable item driving the quarter over quarter variance is the prior year benefit related to Bermuda tax law changes of $189,000,000 In addition, the fourth quarter of twenty twenty three included an after tax fair value gain of $25,000,000 on Puerto Rico contingent value instruments or CVIs, that we received in 2022 as part of the resolution of most of our Puerto Rico exposures.

Comparable amounts in the fourth quarter of twenty twenty four were negligible. Since 2022, we've been strategically reducing our CVI position. And as of December 31, 2024, we held only 21% of the original notional amount we received or $123,000,000 on a fair value basis. Lastly, loss expense increased from $7,000,000 in the fourth quarter of twenty twenty three, to $31,000,000 This quarter, mainly due to lower expected recoveries uncertain long dated US public finance transactions and increased losses on certain insured healthcare transactions loss expense is based on both the amount of economic development a reporting period and the amortization of the deferred premium revenue. In the fourth quarter of twenty twenty four, net economic loss development was $17,000,000 primarily attributable to certain healthcare and U. K. Regulated utility exposures. Turning to net earned premiums and credit derivative revenues. In the fourth quarter of twenty twenty four, we reported an increase to $107,000,000 from $86,000,000 in the fourth quarter of twenty twenty three. This was attributable to both an increase in acceleration due to refundings and an increase in scheduled net earned premiums. Our deferred premium revenue remained strong at $3,900,000,000 as a result of the new business production.

In addition to the Insurance segment, our participation in the asset management business is an important strategic initiative in terms of diversifying our stream of earnings.

SoundPoint has been working steadily towards maximizing the synergies with the Assured I'm business we contributed to them in July of twenty twenty three. In the Corporate division, adjusted operating loss was $34,000,000 in the fourth quarter of twenty twenty four compared with $16,000,000 in the prior year. Which included a $19,000,000 benefit related to New York State tax law changes. In terms of our investment results, the company's portfolio of increasingly diverse assets continues to perform well. With a stable stream of interest income from the fixed maturity portfolio, complemented by income from alternative investments. On a consolidated basis, net investment income from our available for sale fixed maturity and short term investments, was $93,000,000 in the fourth quarter of twenty twenty four, compared with $95,000,000 in the fourth quarter of twenty twenty three. The available for sale fixed maturity and short term investment portfolio primarily consists of these three types of investments. The largest component mainly consists of investment grade long term debt securities and short term investments. Income from this portfolio is relatively predictable but may vary based on short term interest rates. Net investment income from these securities was $71,000,000 which is in line with the $70,000,000 of income in the fourth quarter of twenty twenty three.

We also have another portfolio consisting of loss mitigation securities which are bonds that we insured and later purchased at a discount to mitigate losses and other securities including those we acquired in the resolution of previously troubled insured exposures, such as the 2022 Puerto Rico resolution. In recent years, we have not been actively and have sold most of our Puerto Rico securities We expect this portfolio to continue to amortize down. Net investment income on these investments was $11,000,000 in the fourth quarter of twenty twenty four compared with $24,000,000 in the fourth quarter of twenty twenty three.

Lastly, in the fourth quarter, approximately $263,000,000 in CLO equity tranches that we previously held in a consolidated SoundPoint fund were transferred to the available for sale fixed maturity security portfolio. Net investment income on CLO securities was $11,000,000 in the fourth quarter of twenty twenty four. The company considers the SoundPoint managed CLO equity tranches to be a component of the alternative investment strategy. Our partnership with SoundPoint continues to promote our alternative investment strategy. With the goal of increasing the company's overall investment returns. In addition, to the income from CLO equity tranches in the fixed maturity portfolio earnings from our alternative investments were $24,000,000 in the fourth quarter of twenty twenty four compared with $22,000,000 in the fourth quarter of twenty twenty three.

On an inception to date basis, alternative investments have generated an annualized internal rate of return of approximately 13%. [indiscernible] a full year basis, 2024 adjusted operating income was $389,000,000 or $7.1 per share compared with $648,000,000 or $10.07 $8 per share Our prior year results included a $175,000,000 after tax gain associated and HP transactions, and the $2.00 $8,000,000 in tax benefits mentioned earlier, These large non recurring benefits in 2023 were lower loss expense and increased net earned premiums in 2024. Our full year tax rate on adjusted operating income was 19.2%, The effective tax rate is a function of taxable income across jurisdictions and varies [indiscernible] [indiscernible] The strong results in 2024 reflects the cumulative effect of our long standing strategic initiatives across all aspects of the business. First, we continued to write new business across all markets in accordance with our strategy to grow our deferred earnings. And we continue to work with troubled issuers to resolve underperforming exposures. We have also successfully diversified earnings through our Asset Management segment and improved investment results via alternative investment strategy where the annualized returns have consistently exceeded returns on the fixed maturity portfolio. And lastly, we have continued to return value to shareholders through our successful capital management strategies.

In 2024, we paid $68,000,000 in dividends and the Board of Directors recently approved a 10% increase to our quarterly dividend per share from $0.31 to $0.34 We also merged our U. S. Subsidiaries and paid $400,000,000 in special dividends from these subsidiaries to the holding companies. Which is an important step in order to meet our share repurchase goal for the year. This program continues to be one of our most accretive strategies. In 2024, we repurchased 6,200,000.0 shares were $5.00 $2,000,000 at an average price of $81.28 per share. This represents 11% of the shares that were outstanding as of December 31, 2023. Since the beginning of our share repurchase program in 2013, and through December 31, 2024, we have returned $5,400,000,000 shareholders under the program and retired over 150,000,000 shares ending the year with 50,500,000.0 shares outstanding. As of today, our remaining authorization is approximately $276,000,000 and our holding company cash and investment balances are approximately $352,000,000 of which $53,000,000 resides in AGL. Share repurchases along with adjusted operating income and new business production, collectively contributed to new records for adjusted operating shareholders' equity per share of over $114 and adjusted book value per share of over $170 While adjusted operating income varies from period to period, the consistent quarterly increases in these book value metrics reflect how the successful execution of all our strategic key initiatives build shareholder value over the long term.

Looking forward, the first quarter of twenty twenty five I want to highlight the successful conclusion of a long disputed claim brought against us by Lehman Brothers International Europe or LBIE in 2011. Following the exhaustion of LBIE's appeals, we will be recognizing a pre tax gain of $103,000,000 in the first quarter of twenty twenty five, which represents the full satisfaction of the judgment in our favor and includes reimbursement of attorneys fees and expenses along with the accrued interest. I'll now turn the call over to our operator to give you the instructions for the Q and A period. Our first question comes from Marisa Lobo with UBS.

Marisa, your line is now open. Please go ahead. Thanks. Good morning. Thanks for taking my question. I was hoping you could review the recent developments on on Thames Water and what near term developments are you looking for look at your reserve provision And also any developments on Southern Water as well.

Sure. Sure. So let's start with Thames Water and we'll we can take it from there. So obviously, let's start with our The UK water sector is essential service, obviously, and those water utilities are monopolies in their service areas. So that's a good fact to start. The U. K. Government has stated that they really don't plan to nationalize the water utilities and frankly don't really seem to have the room in their budget to do so. And they would like to see additional investment. So I think the Mac macroeconomic background for The UK Water sector looks pretty good. When you drill down to Thames specifically, our debt is at the senior operating level. So again, it's an area that we feel pretty good about They've made progress in their recent in the final regulatory determination recently. So again, an improvement in their underlying financials and they have stated along with some of the other U. K. Water utilities that they're going to go through the competition and market authority and appeal that And obviously, the past is never predictive of the future, but historically that there's been success when companies have appealed that. So we do feel pretty bullish about going forward, And frankly, obviously, our reserving means that we have to look at all possible scenarios.

So when we look at the scenarios, we do feel really good about this. We think that these they will come out really well, but obviously we do have some pessimistic scenarios that result in a loss. We are looking forward to see how the competition market authority plays out and how this plays out frankly in the public markets and we are there to help support any restructuring that needs to be done, but we do feel going to get out of here with no loss.

I should emphasize we're at the operating company level, not the HoldCo level. Number two, rates are adequate to pay debt service but not to provide for CapEx additional capital improvement So it's a capital issue, not a operating issue. Three, they're going to appeal the rate that was granted to them and the appeal process has been fairly successful for the order. Companies in terms of succeeding in the appeal process. And they're not that far off between the requested result rate and what the current rate or the challenge rate could be So when you look at it all and the factors included, it looks like a pretty good situation for us.

Got it. Thanks for that. And the timeline to the CMA process? [indiscernible] Yes.

I would say that probably best guess would be maybe beginning of twenty twenty six.

Remember, in terms of the signed the liquidity agreement, so that will remain able to take away the short term issue of them running out of cash or having a debt sitting in the cash position even with the capital expenses [indiscernible] So that really puts a lot of relief into the system as well.

Got it. Thank you. And could you discuss if the California wildfires had any impact on your we've gone through the portfolio more times than I can count and we don't see really any exposure to the California Even the stuffs we have are kind of in good position No one's missed a debt service, no one plans on missing a debt service payment. So at the end of the day, it's a tragedy without question, but it doesn't seem to have any effect on the municipal performance.

Great. And finally, I'm just looking at the level of non U. S. Structured finance par written this quarter, dollars 2,100,000,000.0 in well ahead of our expectations. Could you give us more color on the geographies that drove it? And expected returns for these new exposures?

The geography is still dominated pretty much by The UK however because of our geographic expansion, we're seeing opportunities now and we've actually recorded transactions that Continental Europe as well as Australia We're looking all around in Asia and the Far East for other opportunities. Yes. We're seeing a lot of opportunity in Australia, a lot of the non U. S. Level structure finance is going to be in Australia as we see going forward. We did a very large transaction for a core loan portfolio.

For an Australian bank.

On excess position, that's in the non U. S. Structured finance sector and we feel really, we're very excited about it. And just to give you a little color on that structured finance business that we're shifting to is more shorter dated will earn more quickly, So when you're looking at PPP totals, we have other this business is more repeatable. And so you'll have business rolling into the next year as opposed to these large life insurance capital relief transactions which have to be constantly renegotiated you'll see a repeat more repeatable performance [indiscernible] It might look like our public financing has a steady stream of flow business. We're trying to create flow business in the other areas of the company as well. And the fund finance represents a flow business for us in the structured area And as Rob said, you can't record PVP on the same basis you would on the municipal side, on expected life of the program, you can only record it on the years you got actual contracted agreement but these things tend to automatic not automatically, but renew annually. So you're understanding PVP, but you're building up a stronger earnings portfolio and a quicker earnings profile.

Got it. Thanks for that. That's it for me.

You're welcome.

Thank you very much. Our next question comes from Jordan Hymowitz with Philadelphia Eagles Capital Management.

Thanks, guys. The only thing that makes me happier that following you guys for nineteen years at this point is seeing the Eagles win the Super Bowl twice in my lifetime.

I have a couple of questions.

First of all, you said the average premium premium written was 1.26, so that's up from 1.23 and I believe it was below 1.2%.

A year or so ago.

So hypothetically, if everything would be put on at this rate, what would your return on equity be?

I mean, it would be like 11%, 12%, is that reasonable? On the business rate, yes.

Yes.

Yes.

The ROE or the return on the business is really based on mix. By [indiscernible] business.

I just want to give you some numbers, Stuart. So So looking at ROE, public finance is generally in the 8% to 10% range Structured finance is going to be somewhere between 1218%. And international infrastructure is somewhere between 1520%.

So that mix of business change That's where the ROE is going to be coming from that mix. [indiscernible] [indiscernible] So when used to be an 8% to 10% business four years ago because it was all domestic, is now with the current mix probably a low double digit mix on average fare? [indiscernible] As you shift into more structured finance and international infrastructure, [indiscernible] Remember, public finance is always going to be a significant portion of of your business mix. So looking at a different way, if it was say eleven, twelve versus eight to nine, five years ago, And another way of saying is once you right size the capital, you could be earning $10 plus per share Yes, probably in that range. But again, you have to I think you got to separate two things. You got to separate out the amount of business being written and the amount of business being earned, right? So it does take a while for the business to come in and the ROE what I'd say is, I think if we right sized our capital, we'd probably be at low double digit return company, right? So that would make sense. And then you got to look at how much business you're writing to achieve that low double digit return to know exactly what your dollars per share earnings is going to come out of that.

It's really important. I have a question to all of you. Remember, we're writing business in today's current market, which means today's current interest rates and today's current credit spread. Those things do change. So there's favorable markets in some cases and less favorable markets in other cases.

And therefore, you got to remember, it's only one year's contribution.

Our earned premium is made up of twenty years of contribution of different rates different returns, etcetera, so the mix of business. But you're looking at the current market yields of today's business, which doesn't mean necessarily the same market you're going to see through the rest of 2020. And it's also important to note that in public finance, we're still capturing like on average like 70% to 70% of that spread savings. So you're still providing significant value. And the other lines of business, structural finance and international infrastructure are less sensitive to changes in credit spreads.

I understand all that, but I remember 2019 and 2020 arguing with people, that you could make $7 a share and people said that will take forever and now you're there.

I'm just looking with the next leg up as since we plan to be here for a long time. My second question is interest rates have fallen a lot in the past month.

And there's a $6 difference between stated book and operating book, which I believe is all AOCI.

So won't a fair amount of that AOCI be reversed plus you'll get the $2 from Lehman this quarter. So could it be gap between adjusted book or operating book, I'm sorry, and stated book be much closer this quarter if the quarter ended today?

First of all, interest rates are going to bounce around quite a bit. So a lot of this is unrealized gains and losses that come through on securities that we have. So it's not really tangible. I mean, you could move it up and down. It's doesn't really matter. Obviously, you're right about the Lehman Lehman Brothers, you get $100,000,000 in and let's we're just under 50,000,000 shares outstanding right now. So that is $2 a share. So you would pick up that pretax, you're right. You'd pick up $2 per share for doing that.

Got it. Okay. Thank you very much. And I'm looking forward to see if you might be interested in dying some of the Delo River green for next season.

Always looking at sporting deagles.

Thanks. Thanks, Jordan.

Just start as a reminder, Our next question comes from Tommy McJoynt with KBW. Tommy, your line is now open. Please [indiscernible] Tough to follow-up some good Eagle's banter.

But a couple of the questions have been on various on various specific credits. So we had the UK Water California Wildfire. I'll ask about another one. With the Department of Government really going after in perhaps disrupting the D. C. Market. Can you talk about your exposure there, whether any public works projects or any municipalities around there that might be impacted?

Yes, I can't think of any significant exposure we have in the DC market. That would be subject to any potential issue relative to the government programs currently going on And when you look at the portfolio pretty clearly, we have a toll road maybe, but usage, so I'm not concerned about that. And we probably have the airport as well. [indiscernible] Dominic is broadly saying we don't have a ton of exposure we're concerned about. We obviously are some tangential exposure that's maybe there, but we're not sitting here really spending a lot of time at this point worrying about that right now.

Okay, got it. And you also called out the healthcare side. Can you remind me what's going on with healthcare facilities in terms of like why some are seeing the financial troubles? I guess I think about some of the the voluntary care procedures coming back that that would help the healthcare facilities. Can you remind me what's going on there?

Healthcare, remember, is an operating risk not really a financial risk. And you take the operating risk for a number of years, As we knew through COVID, there was a lot of pressure on all healthcare facilities in terms of loss of revenue, that seem to recover substantially once all the COVID restrictions were lifted and they started to get back healthy. Then the government threw a ton of money at it as well. That also made it a little bit better They've been facing high labor costs, which really put some pressure on it. But once again, these are operating risk type of things that get managed pretty we bring in consultants, we get involved in detail with any troubled credit and our experience has been exceptional in the healthcare area, But like anything else, if we downgrade a credit, we got to it through the reserve model. We have to do our possible scenario analysis and then allocate probabilities. And you wind up booking some losses that you never really realized.

Got it.

And then this last question just on the somewhat around the PREPA side of things. I guess my question is really focused on the political side. I mean, The U. S. Has seen a change in the White House, Puerto Rico saw a a change in leadership. In your view, has this changed political landscape been helpful to what might ultimately be necessary to get the backing to push PREPA toward a resolution? Or should we not read too much into the change in the political landscape?

Well, it could, but at the end of the day, they've got a lot on plates that they're trying to address. So I'm not expecting Puerto Rico to be one of their high priorities.

It could put some pressure on the FOMB which would be very helpful for us. But as we said, we're more than happy to play the litigation game Libby is a great example was a claim that they I think owed us back in the day, we claimed $26,000,000 to turn to $103,000,000 So if you want to play the long game, we're happy to play the long game We've had our rights terms of the revenue stream affirmed by the courts, they challenged it twice, they lost twice. So some days they're going to have to come to the table and pay the bill. And however long it takes, could the government help, absolutely. Are we trying to give some help? Sure. That's the nature of how we look at the business. We feel good about the new administration We think the governors when we try to get involved make prep a credit that can actually go into the market at some point in time. So therefore, that should help our cause as well. As I said, the courts have backed us up 100%. But the appeal court not the local court, of course, has backed us up 100%.

So we're very comfortable with our legal rights and we're going to continue pursue them as we did in Libby and let the chips fall where they may. Sounds good. Thanks, Donna.

This concludes the question and answer session I would now like to turn the conference back over to our host, Robert Tucker, for closing remarks. Thank you, operator.

Would like to thank everyone for joining us on today's call. If you have additional questions, please feel free to give us a call. Thank you very much.

This concludes today's conference call. Thank you all for attending. You may now disconnect your lines. Have a great day.