Franklin Resources (BEN) 25 Oct 182018 Q4 Earnings call transcript

Company Profile

Participants

Unverified Participant
Gregory E. Johnson	Franklin Resources, Inc.
Thomas James Gahan	Benefit Street Partners L.L.C.
Richard Jan Byrne	Benefit Street Partners L.L.C.
Kenneth A. Lewis	Franklin Resources, Inc.
Glenn Schorr	Evercore ISI
Robert Lee	Keefe, Bruyette & Woods, Inc.
Michael Carrier	Bank of America Merrill Lynch
William Katz	Citigroup Global Markets, Inc.
Craig Siegenthaler	Credit Suisse Securities (NYSE:USA) LLC
Kenneth B. Worthington	JPMorgan Securities LLC
Brian Bedell	Deutsche Bank Securities, Inc.
Patrick Davitt	Autonomous Research US LP
Brennan Hawken	UBS Securities LLC
Daniel Thomas Fannon	Jefferies LLC
Alexander Blostein	Goldman Sachs & Co. LLC
Michael J. Cyprys	Morgan Stanley & Co. LLC
Sean Philip Peche	Ranmore Fund Management Ltd.

Call transcript

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Unverified Participant

Good morning, and welcome to Franklin Resources Earnings Conference Call for the Quarter and Fiscal Year Ended September 30, 2018. Please note that the financial results to be presented in this commentary are preliminary. Statements made in this conference call regarding Franklin Resources, Inc., which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially from any future results expressed or implied by such forward-looking statements. These and other risks, uncertainties, and other important factors are described in more detail in Franklin's recent filings with the Securities and Exchange Commission, including in the risk factors and MD&A sections of Franklin's most recent Form 10-K and 10-Q filings.

Operator

morning. Good Donna be is today. conference I and name your will operator My this in are all listen-only At participants a time, mode.

to turn As being a Mr. call Johnson, to begin. Greg recorded. is Chairman over the At this you CEO, reminder, time, I'd Johnson. this Mr. Franklin Resources' conference and may like

Gregory E. Johnson

as fiscal facets you significant year This marked our period of Well, thank today's to results. for good morning several discuss year call for we the business, continued company investment joining of and fourth reevaluated quarter and a invest These in to place firmly appropriate operating year, ongoing our to the strategic initiatives, in we investments income meet expanded and evolving but believe capabilities. have structures lower we client now contributed needs. to organizational this

$X.X buybacks, dividends than for investors also our and used that returned in to acquisitions capabilities. billion and to strategic enhance investment expand more through to addition We

also he's as about into performance Ken are Our products' global in me discuss performance heavy but macro and also global into BSP's Benefit Executive like previously flows, mix as and Head served equity special Securities, forward, some our is Tom today we at has we Deutsche With of in us here here seen Chief Rich the to Lewis, Mateo. on find their in Executive and of morning's team, Deutsche previously funds meeting and the Investment and number been funds beginning from San today's talented the New participation Gahan; and Officer and flagship these since his years. you welcome been with our is in guests our Securities weighed remarks. our we key Tom we've Americas. to I'd Corporate excited where in quarter-end with very October. Rich optimistic I'd Tom people with Tom Banking Officer, and acquisition of value-style dialing over like moving exciting served firm offices to BSP Street Byrne. CFO, in for announcement. Chief to to and Bank strong a is warm have a Executive Chief for extend this now to call Partners' of some Rich helpful. capacity York, President, in Officer to hope the of opening it Bank We're welcome on hand person

Thomas James Gahan

we're capabilities, umbrella prospects. while In core flows, forward We accelerating five we origination believe capabilities. improve have the of expanding our short, offer clients. will our importantly, and a to attractive with platform new their with risk-adjusted investors. distribution working to products returns platform, most long-term also tell investment opportunities. particular, All secular and and behalf entire join believe We with our of this team, we're credit combination the BSP this world-class Thanks, are partnership Templeton. happy capabilities super call you products join morning Franklin alternative will our to investment platform. building Greg. and We organization investment I to believe that on tremendous information our this our global for strategies the excited and both Franklin to In this that will serve to our that can Franklin's discuss partner. with combined to I the augment growth the perfect Franklin's our Franklin look Rich growth extremely team, be combine global the win-win is significant

endeavor. and acquiring investment the a this In that while of platforms, of confidence strengths give beneficial independence processes, maintaining will mutually successfully history addition, Franklin's long be the us

investor base. process will and Our the to team aligned mutually strong, team and delivering be best-in-class returns unchanged has incentives continue investment to our

team Greg, value with navigating well with partner. fortunate entire Jenny, In the markets future Thank style to Franklin's investment creation Franklin focus investors. long-term and conservative be feel opportunities you. our on for conclusion, as and Our mesh the will we

Gregory E. Johnson

Tom. Thanks,

So with to that, up like it questions. open your for we'd

Operator

now floor you. is open Thank questions. for The

Please Evercore first Glenn of Schorr ahead. go from coming question is Our ISI.

Glenn Schorr

about you? credit. mind Hi. growth So concerns Never are in much like Benefit I How too like the Street and private big there's I space.

I it right. ramp do there's if big a you think

– bigger you and a more So, more get what stretch, know Benefit a heat income institutional a income launching well? I it? have to big be I've a grew talk a this years Could fixed but brings of platform, Does public Franklin to little it parts Street? as never Franklin. Street towards what fixed I brings this little but question expand retail on you what the over we be pad great a platform. bit how given institutional might And of Street really about Benefit distribution Benefit Could which

Gregory E. Johnson

distribution, growing take globe, I network, Greg. with worldwide relationships a fixed institutions wealth Benefit some we think very Street concerned in about the third-party lien, looking And this rate, opportunity for income and are our This successful with is has characteristics exposure. that is would but that relied around class the attractive where relatively very asset I group rates, to I'll distribution on at the defensive think environment immediate with first us small have been floating that. this funds we more say distribution sovereign need

can end whether type growth retail space. channel this or closed worth a this then could and attractive channel, we play or see at our in interval as it's funds where of retail So, network net that the and high with we be funds a plug opportunity, institutional looking the explore clearly immediately the

is he additional demand for opportunity Rich So, and we think distribution turn any channels. I'll there our comments. if And to immediate has it

Richard Jan Byrne

Greg. Sure,

is way some Street sheet, but reach, balance mentioned in them the it's pedigree, global brings flow. Tom information think distribution, of things. at of his Benefit a it lot remarks, I and Franklin think we of

But institutions, think the extent risk-adjusted think footprint aid been we've at $XX just raised a of the around. really that they XX right on about it time to deliver brings, our of capital So if set our I We great that's our big side, as a said, broader on just information you as our But comes to footprint only the can products at generate would things it, or at ability deal far have products over to other you delivering some that our flow as number all the billion this isn't investors. attractive for that years sourcing add, we've that and alternative enough retail us. through to And the returns, the permanent have we the market retail Franklin the touch are really analyst strategies. our and in we two for all vehicles. we investors, returns

BDC filing, extent the mortgage tap we distribution those REIT. And massive listed here well. retail growth and Franklin, into publicly big We areas have a to as are can but the not at

Gregory E. Johnson

on. expand And maybe, Tom, could you

opportunity the categories. you more think we're where I can institutional this is having where demand we for the you of piece institutional think tactical space, is seeing final the in between full the have us, available and credit be platform mandates, different moving in

Thomas James Gahan

becoming right. having I what always more we're No, manage important opportunities demand and increased increased that think of investor are Yeah. seeing structures and that are changing products effectively take do. we for mean, definitely and combinations changing, is and that's more that commingled to we the I Markets of seeing demand flexibility constantly type our base. for constantly we're

Glenn Schorr

guys ridiculous, time? us on Okay. you looking good you us that but And record – show one know sound these and you final going can are about over to at tell how are performance thing, it's could anything you what

Gregory E. Johnson

but business reaction looked the Well, the And I think anybody we're like cycle, that we we, we high at in private not to think model was long/short also, very diligence it's their it's sectors initial we funds discussions. it's importantly, a think think And more part my it's the of of equity more position that benefit first we that talked business obviously, haven't in at any our is like credit structures the it's even I and the and other there's type due powder we sell dislocation. protection, do can think this lot dislocations, can funds, I downside first records. where different which debt, is call that the market. very a valuation, well. did That's dry you are there, private and yield, – get hey, important and know great late come to our And the just credit, more in. is, on fresh daily And as the you capital, redemptions to has into from looked market powder got that the reaction have have really put distressed, than and you about, you

and this is defensive now and versus leverage averages assets how for you others. in has think of global of done that that while of since with and on attractive. it industry the entire And coming than I positioned less nature looked products very the we fact captive, at crisis are have the groups and that lot So the a entrants cycle and also the new a well lower been doing very the was leverage the kind financial done through one of the the it, they've

Glenn Schorr

for appreciate it. of all Thanks right. All that. I

Operator

Thank you.

coming is question Please KBW. go ahead. next Our Robert from Lee of

Robert Lee

though a like little buying maybe incentive work their the kind Benefit and you reading kind XXX%. color stream. own of kind they're management only the any Great. not of margins? If you're profitability of it questions, Street current correctly, Kind any around may fee as you financially, my the to for taking entity, have bit color you into assuming stream around stand-alone drill more. fee and even I'm – going a of Thanks And have and buying I'm

Gregory E. Johnson

then Ken detail. the I'll and first Yeah. maybe I to take mean, turn part it on

same carry think existed that I before. percentages the carry the is

And goes of Franklin, a the of and Franklin. to carry team, to So carry goes XX% I the the to and none goes a think percentage majority the team, that XX%, that's the percentage and changed. to of –

numbers. in fees of important accretion performance still are And have yes, very deal. I'll the talk Ken for the and So, value this equation about the

Kenneth A. Lewis

Thanks, Sure. Greg.

that we when at next talked I in So neutral know this we commentary – about being year. looked and the deal

out when accretion. accretion, the about think to first thing talking point talking I about is we're GAAP we're

next it's we while in it going GAAP under so, range to that's GAAP on a time basis. see XX% neutral, X% do forward, basis accreting over the And year and

noncash accretive, some more were be I to of would you a it lot out items, which do. back If our peers know

Robert Lee

as of some Means... of terms think mean, we get to about I cash model to possible it in generation. that kind Is and it that? sense

Kenneth A. Lewis

Yeah.

Robert Lee

benefits tax next quarter. what it or see we'll ...is

Kenneth A. Lewis

XXXX will of And like until accretive Yeah, FY in all, second start neutral, then in quarter. be the the but year. we don't second this think to first we're should saying it's close, it

Robert Lee

size is earning not that's dry the fees all color is kind powder? fee generating? the any the And as of uncalled the yet what on And of capital of assets billion of $XX of kind kind

Kenneth A. Lewis

that's one talk to. so I'll Well, dry we can maybe think revenues, point I we powder. Rich disclosed you thing about will – have yeah, the rate run And

Richard Jan Byrne

Yeah. is vehicles, The our capital permanent We we that – billion, – is most structure over capital, et actually distressed we debt most life fund. in drawdown – two capital lever or we have funds, have it's our $XX in XX% meaning recent our fund, either that long of our flagship management, a cetera. funds under that our mentioned, as private

finished We not down still a have and have – amount of some actually so have we yet, their runway. other that fair funds in all capital well. powder I as drawing

Gregory E. Johnson

to in That's billion. $X billion $X $X billion dry,

Robert Lee

should it of a latest be Great. And down does – or the to next that your – you to, than stand? to looking expense I of business. thoughts year, wanted your kind about we the could year? X% number? back I core believe, what previously of Ken, patience ahead, end kind hold appreciate are – still less then I good Where for if mean, thinking what that's growth I maybe

Kenneth A. Lewis

That's right, Rob.

than ink market that that. on process up with go finished expenses last that our to was started ways So, with we sooner X%. recent accelerating X% budgeting that look that no and activity, in was that expense then, to I quarter we the August/September, we're get But the that dry to budget growth guidance the towards we And were process down. provided consistent to

we're think there opportunities that do do X% while we – we the projecting think X%, to to reduce expenses that budgets, So, grow more. to are

and should But even do longer cyclical little the – and seen take expenses, to of pull, for of said just it that. longer so, them, that we of than have, to P&L. a word have half little they're there the some And down all a we that benefits be we a these several caution little Having there, levers take expenses. to bit or are get nature perhaps because think things of quarter that, flat a – they do of these the next we through think the even more

Robert Lee

questions. my for Great. Thanks taking

Gregory E. Johnson

Thanks.

Operator

Thank you.

Our next of with Please America of your Bank is Lynch. Michael Carrier Merrill coming question proceed from question.

Michael Carrier

Partners. another guys. first on just Thanks, one Maybe Street Benefit question the

like the there's, team, coming wanted when of about to is or on think obviously, billion fees, the NAV? lot $XX sense, color. margin Just commitments any mostly maybe there's that for structural then the seems there's And I a like – in your market. it maybe like but get competition more Tom, just growth, that And like into management

the So, are at downside? kind of we is this in of just you and where guys some looking structure these how capital, how given deploying of are products cycle protect

Gregory E. Johnson

that. have can Rich if add. anything I'll Maybe And, in you you address to Tom, have end jump the at

Richard Jan Byrne

Thanks, Sure. Greg.

spreads There to been but a some there, class the debt. undoubtedly ask relative asset have tightened, One number estate, et there's products. players, is, to is alternatives, a private The couple remarks. We has probably we've seem that people everything read, competition cetera. around real PE the it's most within have been unallocated or of most more new about of one certainly

So, doubling to the – of almost And growing, remember, over would if here, ecosystem around run the part for thing projection we've chime spectrum. maybe risk-adjusted always relative is we documents, and that most still size market continuum the a we despite Tom and the see most somewhat that And in really weaker part credit we think the across shows years. spreads five tighter wants the the matters. sort It returns we're looking considerably for is only I across credit every that other seen next value. add, best

be competitors may there market. more So, in the

very less XX% formed is Some the this stats the business, really over matters of because mean, I Size is new billion. private of $X recently all funds teams. intensive size we at labor the a than matters. of looked debt. Size are

just you. research for You analyst of work have doing a lot

Oftentimes, we're lender. markets liquid have to. to You sell the only

matters as manages and teams, size also of it far monitoring, as that, size So, but all commitment.

really our $XX in up half the above, of even per Remember, is So billion, almost a we $XXX platform, debt, we're AUM, across $XX deal to, private million commit on market that and in size our some loan about need many means the or a it companies commitments doing deal. cases can average multiple middle of don't do $XX is need million that. banks aren't million. million, that And aren't $XX million, hundred the that $XX providers there, business $XX in million millions. company. EBITDA of believe They most out not, can there for part, that

see And what and at just our so, that's is time umbrella, us under make private the hopefully, much debt. consolidation. think Franklin job, us, doing better I you'll over And that for just

private bank a lot a have fundamental benefit we course, disintermediation, of the and lot the of strategies same that other same factors does Of which from debt.

Gregory E. Johnson

Tom, you... do anything? to you Are want add

Thomas James Gahan

just add can I Yeah, quickly.

private much We are equity how charged smaller going just with places undrawn actually further to and I that. more originating, a continue on better our opposed of the players management you a have echoing capital. investors. companies, can think with, they we position one of from mechanism But think separate cap the funds, teams, of technical we're think et can't in us us entire I style acquisitions, look, scale that just Rich's our committed comments important. I of more elevate can us transfer owners can as write think on combination people do question That's XX talking sort we we multiple direct who checks sort And of work. began of say, matters, underwrite we are sort that is we that can and with think your sponsors, cetera. and hundreds Franklin financial When is of That of dollars. underwrite to millions we more to structure, becoming that and fees

Michael Carrier

Thanks. quick And right. All Ken. maybe for a just follow-up

the Just buyback. active on on were you capital, guys so

transaction. this did You

of pace get a that change to know run of lot, you of just cash and Going been guys from a priority buybacks forward you rating? in a of this just but standpoint, terms guys kind a have sense. the you wanted anything generate I does ton have

Kenneth A. Lewis

did think And slowdown Sure. the buybacks I we see this quarter.

being – things trend, the would all have think I continued. equal, that's

Of course, now. that could right the market with offset be

you But are as and practices so, buyback our pretty think we consistent that we're know, our And acquisition opportunistic. practices. historical this with

look you acquisition. this this is year, If back XXX% we've after earnings year. this payout had what done the with of And tax we've reform consistent, almost

Gregory E. Johnson

this wasn't the It There's it. slowdown say perspective our program would answer management doesn't So, from little I is this and our of because quarter-to-quarter. I a just deal... affect capital relate wouldn't acquisition

Kenneth A. Lewis

Correct, right.

Gregory E. Johnson

...on buybacks. cash. There's cash for plenty of

Michael Carrier

Got it. Thanks a lot.

Operator

you. Thank

next Katz of Citi. Bill from question coming ahead. is Please Our go

William Katz

very to Thank on taking for much both transaction and parties. Okay. congratulations you the the question

peel Just sort one some I It down economics if some of wonder more level the just money upfront, on maybe here there's it. the just you could that, road. on back money like of sounds

Just to quantify that. to some of kind intangible bit and side how milestones of margin you some might might upfront a Maybe the we the about, in GAAP of improvement paid talking other about be, tie earn-outs that of when amortization. then neutral, and can trying talk and is the then on be and your back what what are little terms much

Kenneth A. Lewis

Sure.

years, this that attractive. are think will margin offset by over programs. next And business in I the be extremely the few retention largely

about Just $XXX deal a the considerations. itself, the we little million initial have bit

invest, of programs. vesting with proceeds. the after-tax mentioned next of as we individuals senior also majority employees fees, longer having years, XX% earlier, we in the accrue will participate will the And the six they vesting key the We more the the retention over the As performance still and will partners mentioned, periods. stagger

the think we and deferred the and the commitment loaded consideration is consider backend in the approximately half invest that's future funds carry. programs, you – of if the aligned and including total So to

so all And aligned think there. we that are interests the

Gregory E. Johnson

would just And add. I

buying one time. people point going I around. on like to deal deal stick structure I to and that key think put do, it's another us, the to any based thing think, employees the in this over ownership key are thing where to And of a much for that the sure the vesting allowed it's more of us you consideration the be company, was structure

and than probability this for been in we a incentives say think that just prior over vesting with there's six the higher structure, attractive staying, to I four because them years. altered. are been people case, It's the more would better of nothing's

Kenneth A. Lewis

management senior a six-year too And and a into non-solicit will over enter non-compete agreements period.

William Katz

And Okay. for that. business thank this question you as then follow-up follow-up my core – of well. My stands on sort the

the sales continue So when at dynamics, quarter-to-quarter gross I both to and weaken year-on-year. look they

bit? you little turmoil given terms of seeing sort trends around performance may in could kind quarter you has have that's October? And then the However, seen as into color any of any a sort you're continued given more bit just little give what color, of that a unfold of, maybe sort of intra-quarter improved the the

Gregory E. Johnson

I always growth. and tends rates we've setback back we've rising in assets, base outperform by, you for some the said of value favor, mean, and historically certainly, that before, and market I a as need would felt sell-off us, kind to with start that large value value of market in to Yeah. volatility get

and quickly, to the the look September/October, points overall turn up where last XX around the selling relative rising So, I where industry. flows at funds uncertainty, and global to in here, we top our have of think you weeks have would five picked peer if the universe still in immediate where positive basis it's kind the months. our competitive to bond, we groups performance against have probably in probably me, even our return a we it's macro, XXX environment you you last rates, And the fairly be close the have strongest had could global this

I standpoint fairly think a one could to that's turn flow So think that the quickly. me I from that

translate as relative think it time I see sales. to expect, in this still think a that Templeton, little numbers you'd with with Mutual, we to better bit market, would kind I others, of the have take but more

our I last at look where we the big driver. coming equities, had immediate And last financial think in of the decade you did is has and the in opportunity still the so crisis if it global the been well. bonds that's global what time out

story be that So, I think that attractive. will

Kenneth A. Lewis

that quarter. And pickup sales slight did U.S. said, last a see in we retail even

William Katz

you. Thank Okay.

Gregory E. Johnson

Thanks.

Operator

Thank you.

private Please question Suisse. Craig realized Our credit LLC from XXXX Credit ahead. in morning, perform of Credit and in Siegenthaler losses? terms Ken. Securities is Craig next Suisse (USA) Thanks. Greg, did How of Siegenthaler - coming Street's Good XXXX funds go Benefit

Gregory E. Johnson

it. let Rich take I'll

Richard Jan Byrne

Easy answer. Lehman the really weeks, years at it we We're exactly started old, the – I question a think XX around was to couple demise. so of right

we Street, So in at sphere. don't have crisis our the Benefit

Kenneth A. Lewis

look our reaction important CLOs or it's performed maybe classes think you CDOs. and and mortgage-related was global class again income understand first fixed disaster well, out, this asset global the at when really crisis, a the not of the the question, actually of same are I difference, CLOs. the point I crisis. Tom were performing And not top just these kind during financial to one financial during – And was maybe Rich, They're think but it

Gregory E. Johnson

to on Tom, you So, add that? want anything

Thomas James Gahan

mean, amongst of pretty our of losses competitors. environment, syndicated going cetera. the so zero there plenty from CLOs, in what's et loan are it's to out broadly Sure. on Obviously, been sort I a but marketplace, there With favorable we've had losses. credit inception virtually respect Yeah.

then, to CLO structures, returns back Since actual of the look gotten amazingly have you GFC, If are stronger. returns the strong. the the X.X, CLOs through

those to We we credit. the structures able Craig underwrite protect any going that - marketplace Okay. be downturn structures. CLO be the in the foreseeable Credit (USA) LLC Suisse Securities you. and are investors Thank way are believe weather still able in Siegenthaler very conservative in we that to to And

Richard Jan Byrne

Just quick Craig (USA) Securities here. add... a follow-up Suisse also I'll Credit Siegenthaler LLC -

Gregory E. Johnson

one quick had has one – Rich just We Wait. comment.

Richard Jan Byrne

a we behavior. in is where late market's exhibiting lot are of embedded the cycle question Maybe Yeah. in the the cycle Clearly, now.

take, construct. our Right structure. very senior strategies, give in capital private secured different or at across we're, now, debt platform, Loan-to-values you XX% of portfolios the If across our you'll XX%. platform see around are our a top look our

current In we're XX%. me, flagship, it's fact, in fund, under – our our excuse most investing now

So, a lot we've dry defensive. very portfolio powder. got think is We the of

Tom inception. gives point earlier capital our since a investment minimis de that about market decisions mentioned, – I long and And is the As not we've losses capital us ability to subject amount of life made make had the to the be of downturns most disciplined flows. during

downside. a this Credits downturn that (USA) fixed LLC forward So, is managing lots of very and Thanks, business. comprehensive. limited We're income upside it. have Securities to Craig for Credit generally and, Suisse frankly, are looking - guys, Siegenthaler

follow-up. appetite the end, quick another hurdle? around is longer one for Just dividend is repatriation What that a given no tax special just year

Kenneth A. Lewis

one quivers don't board changed of Yeah, I the that have we or out, is just think, And Greg as in nothing's that's decision, to a management dividend. pointed as capital regular it's think arrows look our and practices. policies I at. And the the really

Gregory E. Johnson

as Suisse consideration it Credit LLC and usually feedback Thanks, under get we (USA) on it So, be Siegenthaler do. we'd Securities would yeah, Craig - guys.

Operator

Thank you.

Our Ken from JPMorgan. next is ahead. Worthington of Please question go coming

Kenneth B. Worthington

my Good questions. and thanks for Hi. morning taking

Street to what liquidity balance investments does take acquisition? of up balance Benefit the Maybe Benefit step look underlying tranches up customers or then dry does And products of sheet that to should sheet So buy in a or balance when confident provide with sheet And sort the other extent the Street funds? do Franklin maybe customer have redeem? to investments here in with CLO first, Franklin liquidity, it how have this what provisions trading here? to kind with is liquidity what won't risk Franklin

Gregory E. Johnson

sound one our You of members. like board

any these think are private sheet or ask due here we've issues. is extensive key where of really, and And the I balance around equity-like potential right fixed. structure, these done when to at exactly liability looking investments, again, questions the diligence types the it's

have whether very have Act terms no you a that step-up debt a that it's have so you of years, XXXX years liquidity with in type REIT or daily a They're have could capital. don't Fund daily there the There BDC These vehicles the or private funds. liquidity. meet any issue. for seven of are seven redemption in You permanent other much, is

GFC, of there that at issuance. with hasn't any that really it's the felt really funds where been it – the have any on so, an the had side sheet don't If that the to instruments liability these that kind in a we And having sheet. the any liabilities, – the And around going again, issues balance And structure issue CLO looked were looked at whether partnership management put the related GFC. strongly We also companies of or to certainly carefully. through with we our have balance even

Kenneth B. Worthington

Okay. And all investments no Street there's in Benefit (XX:XX:XX)? the funds at

Gregory E. Johnson

there our If was hit that growth of a will X% treasuries. for than where, all that's time targets in us, any And but something of that's percentage It's it one assets at. be, our think and million million, we I $XXX if and wouldn't million pretty maximum of for out exceed. – view use small would in Yes, yes, size, that's looked the funds $XXX we sitting doubled think at be and our but of around would type grew a modeled we better that good we and normally $XXX the capital. do, somewhere

Kenneth B. Worthington

owner? then, to transferring the see a the lot from they new the selling, now do you've time the you and here? why along my here Okay, them guess, seller good, great. with of us can the history be are background (sic) Thank the so right you. little as why as you, represented, seller Provident for business if I economics on as is assumption a So, as Maybe, management. the [Providence] is in they And what's outlook owners give a the to

Gregory E. Johnson

that Tom, do one? you want to take

Thomas James Gahan

listen, one. partner with they're and from Yeah, great Providence a Sure. has us been day

complicated. business has become larger and Our more

of I needs partner. us this just and they're sort have given to on bringing be fund, do. to access of seed, natural We really different distribution to And determine partner they time about thinking pedigree, the what et fulfilled much of best that really new what that us growth help from at so for really global start in existing our capital equity needs successful new our time it private how sector-based was teams, distribution, capital sort cetera. a business a And do. products, could do long-term that, by was the mean, they couldn't to our for that and that we probably recognition, that sort is a jointly

Kenneth B. Worthington

Thank much. great. Okay, you very

Operator

you. Thank

Our Bank. Please Bedell next coming from question is Deutsche go of Brian ahead.

Brian Bedell

Good Great. folks. morning, Thanks.

Gregory E. Johnson

morning. Good

Brian Bedell

couple Benefit non-GAAP? then GAAP a some have long-term you the of think Ken, of or amount a could consideration. thought being on given if you Maybe mentioned the to guess, mentioned, But a be of also accretive. to you over $XXX you us tie on Financially, detail the in guys Street this good I of structure here I and terms half million, after on lot total comments component just I X% of questions that's XX% as think it. And carry the that in of sort the that.

out part versus trying a sense laid actual that just So, Franklin. – to if get cash carry by is significant of what a of

in also six-year you the a to four doubling time think mentioned assets I over timeframe.

X% the get financial of try to So that a all, just XX% wanted tie side to sense that if to, accretion. into on the first of

Kenneth A. Lewis

there. a Seems lot there's

where see begin on Let's that. to

What first in questions... could will of that And years. team – So, beginning, – is endeavor but majority saying I the interests, was the they're we're over different it's carry, align and was the that kind here. the it a of participating of long-term all, repeat will six neutral the time over some of is was I that why as you saying in their mentioned, components, –

Brian Bedell

no worries. Yeah, yeah, sure, yeah, yeah,

Kenneth A. Lewis

the ...or just repeat questions?

Brian Bedell

Yeah, no worries.

it. You're answering of part

talked you So four- you a in sort like some sounds sort of of And, five not to the is accretion? a as earn-out guess, XXXX, time, that contingent of – assets to incentive that consideration that goal X% cash to of teams, sort laid X% and it into the be be out? of going is retained more six-year about, doubling the that will but also coming mentioned as to I structure. we four of XX%, then carry do go years in like And timeframe like and see to typical by to the some XX% out you that the

Kenneth A. Lewis

years, horizon in numbers time it mentioned. I I was four as or all included GAAP, it about and my that of think, yeah, five was and my

backed the that. than So, accretion a be lot components, higher would if you noncash out the

Brian Bedell

amortization... Great. did the you give And sorry, then,

Gregory E. Johnson

Sorry. call – on No, that's next give those more we we'll quarter the on details said around. in

Brian Bedell

it. makes that then side... Yeah, growth Got on sense. And the

Kenneth A. Lewis

Yeah.

we'll So give line more guidance some individual closes, items. next when quarter it on

Brian Bedell

this to for with into need more I this institutional Okay, can particularly the would to have on And that more insurance guess, cross-sell mentioned your on credit. channels, liquid would just clearly sort you that's I of can – then, which side, plans idea as launching your it great. product of increasing extent And liquid. has although, what the sell think retail guess, they broadly, well, think be products? I obviously, do also have retail you structures you But I

Gregory E. Johnson

Yeah.

category. a interesting would was where the sitting around even why, general said, private will you this the that have do introduction. is structure away, interval is sovereign those just our had fairly be we going attractive traditional category quickly. interesting. or I we've it explore high things this attractive quality worth and we talk I to mean, fund retail insurance said, my – two just it and around all on for, came from account an about institutional all rising are neatly very rate think I the and was whether complicated fits in out more on I side least this not to And so it's and we a we're a fiduciary net natural and attractive at. think because felt and easy it a business. And relationships I again, absolutely way. is calls bank, retail at quick globe. see This structure. the hmm, boards interest having of and It's team consultant you category, the go one around look that whether and board – is fit. to endowment is with I that seen This side, think – first whether the yields by interest closed-end But team wealth educate an that if on into like channel are This credit. it was I get the have a and generalist that like, we think, story natural it's those a prospects on right a have you the already can we eliminating

Brian Bedell

That's great color. Thanks.

that Do next and (XX:XX:XX) have base the from, expense. to X% for on right? $X.XX that base one year, billion? growth that excluding expense distribution expenses, is I Ken, the sales the for growing X% Just you're

Kenneth A. Lewis

line. you and the the Yeah, I'm marketing number and sales giving excluding distribution

Brian Bedell

XXXX, for timers in one $X.XX That's fiscal there's there? billion other unless

Kenneth A. Lewis

but just I'm think that's you not Investor about – later. right, verify Relations I think that I with should

Brian Bedell

will so much. Yeah, Thank do. Okay. you

Operator

you. Thank

Davitt Please ahead. next is Research. Patrick go question Our from of Autonomous coming

Patrick Davitt

Thanks, to guys. through take investment processes? should BSP of an driven? just pipeline maybe indicate of gone to who, step process of and was back a these And the out kind this discussions, who for as banking there Could idea healthy went give you this the we that us there's deals you've evolution, similar

Gregory E. Johnson

Clarify BDC. did the that, you the how BSP. I – said oh, thought we

Okay.

Patrick Davitt

No, no. process play the did How BSP, Yeah. sorry. out?

Gregory E. Johnson

a team build and felt how our was members this continue business. to This meetings came was us we David, he's heard auction to long cultural alternatives highest thought not and and this because the together. fit. bidder. our Rich he Tom very of one going be to These relationship want – introduced fit, or working history of out guys a our his Tom book saying, interesting have right just of and an knew a knew want the This with and and to personally somebody And and we like board sell a from just was in Yeah. or would

Our people high days people their Merrill going yield Lynch in to back knew of many things. senior and

I know and to we the off long/short from So, business got benefit and understood nature just our credit reaction, to they're the where more like any the how in of late opportunities a in discussions the the conservative think many, were we and and the cycle first that and running distressed us start good downturn with we things comfortable any for a those of all for it's and future due because we raised business, and questions on about lot careful about. liabilities, that be And very very it this that's us the how. got diligence, to their did new wanted excited and a area we very capital, call all really around were

hard came, people, we're banks have, we we was So, it that just looks to can all attractive I an bumps bidding quality any has looked And like one point big be before, all. market that's it we've very I And grow. that this it's really feel is, business like I think and is area it's middle not a it corporate said can record, and at but deal at open a that's quality get and the think credit it's process – think a the how that back into but business some areas the market for this like there in environment. to and – think

Patrick Davitt

AUM? average you That's Great. kind I the of weighted I give just have range. quick imagine to helpful. this the Thanks. of missed a did five tenure seven-year in may one, it's And but earlier, then

Gregory E. Johnson

but the It really private that's debt is, side.

well. permanent I as there is think

Rich... maybe, So

Richard Jan Byrne

of Each our is strategies different. Yeah.

lock-up long years. debt, our private funds For funds, generally seven are

filed, capital the publicly the on think as permanent those On but They're and traded those moment, any listing the mortgage are plan we of vehicle. they're those REIT, not capital vehicles. and at BDC permanent

Patrick Davitt

you. Thank

Gregory E. Johnson

Thanks.

Operator

Thank you.

from UBS. Please coming ahead. is question Brennan of next Hawken Our go

Brennan Hawken

for the Thanks taking morning. Good Hi. question.

you is I this don't transaction. when embedded trends you to this, to the When assumptions credit assumptions? you a but those your Just what quick know you on accretion, assumptions on within – could think about your spoke year are BSP two us touched let one; spoke

Kenneth A. Lewis

launches are there that and growing future consistent slightly. Yeah. The assumptions fund are that launches would be with fund past

X% growth driving revenue. the was those that major and launches, fund X% or like X% assumption maybe or in So,

Brennan Hawken

Okay. And I'll...

Gregory E. Johnson

We didn't and are less. more say, for more the does looked – to but assumptions or year, we next look really credit downside like where the at are world think what we scenarios, for those today, I numbers

Kenneth A. Lewis

Right.

Brennan Hawken

that from that you where Okay, got the a with those would kind be of be are Ken's products going of tolerance to that given then, be response I is a before funds. to situation And leverage can that impaired it. And then loss existing some about the you not guys these core leverage And in to these? fact Thank or give business. leverage that maybe more made from launching might be is Franklin provider these the Franklin earnings you. reference a given assume would Franklin question, aligned bit you be of funds, the what an that us that used providing the to away to few idea staying But altogether? a stream there's there means in might your scenarios,

Kenneth A. Lewis

leverage We to don't the envision products. providing

Gregory E. Johnson

Yeah. leverage. I'll I'd say that we in the have Rich maybe have plans no providing address leverage. And the

Richard Jan Byrne

Yeah.

from side earlier than our was the vintages, in little well X.X but certainly our leverage leverage compared that. light times; run private funds relatively different. throughout are we've funds On Our even our will under substantially cycle, X in the BDC, lower it anywhere to debt peers many as vary different of and a to of More spaces, actually recently, X.X.

we those of are bank on basis our Franklin. across better don't street. – a are Sachs, advantage estate our our lot business, with Our real to in get them of Hopefully, will be, expect as In bilateral financing commercial And Goldman lenders relationships We of some et cetera. across But, enjoy warehouses even acquisition. that providers that post our envision in and and anything the private Wells, other lending doing take again, take out JPMorgan, of our no, warehouses. advantage products the take debt we you'd platform. a they CLO we with to banks

Brennan Hawken

Thanks. Okay.

Operator

you. Thank

of is Jefferies. from question go ahead. Fannon next Our Please coming Dan

Daniel Thomas Fannon

context given Thanks. what could I of couple your you just of fees if you also previous to some accretion have non-GAAP about are going years looked business? guess, then a on basis? this And the us assumptions, go-forward for performance over thinking a reporting give Ken, like

Kenneth A. Lewis

to we'll get closer the change may have wait enough analysis on regarding will This closing part just it year, see when to that. compelling hasn't our and make that, and be non-GAAP but that Well, disclosures, every that it. of frankly, been material to on a argument. We analyze we

include of fees terms or talking when significant historically, the fees, forward. performance wasn't a a it performance we accretion of going our don't projections part In significant of part about valuation calculation. We were

of question essence that's your there. So, probably I think the

Gregory E. Johnson

to need that this less and is touch expectation is just Tom, put not far you that they're upside. the could fees, around as in private more context, on on probable bit performance And where fee. you structure as maybe, equity-type Performance and little a a

Thomas James Gahan

investment, think when obviously, a debt the opportunities. marketplace equity plus private you Well, multiples it's of our is and say, and performance debt – that get to of than, Greg. different your I'd is product, Sure, back very goal you're reasonable money product earn you a can equity your say lending the for whereby debt while money private the about function the vehicles, private return. Yeah. the fees

sort of today. in terms to our returns we in do And of that. debt money to so, times And we're X.X, fund than multiples being if think to X.X about sort environment we credit interesting in we to anywhere X vehicles or generated debt of continue and you're a a about multiples of more or from out able historicals, potential market-leading multiples outliers at be in hope

Daniel Thomas Fannon

and just in kind this because business, quarter, fee XX the core the about fee for rate? of next think about we the a But, I of Great. how And should you follow-up, year outlook guess, I rate months, thinking mostly the the mix. decline next as just think assume Ken, then, about as

Kenneth A. Lewis

Yeah.

average the kind on, straight going reduced are was think assets lot I was the a that volatility. think lower of calculated And that it. factors daily to the of due funds under a the was one management, which that than monthly factor of I the

decrease seeing not over rate we're XXXX. in we're – forward, effective not a Going significant projecting significant fee a

Daniel Thomas Fannon

Thank you. Okay.

Operator

you. Thank

ahead. Alex from next coming question go of Blostein is Please Sachs. Our Goldman

Alexander Blostein

for taking guys, Thanks, the question. Hi.

in well this sort prior from whether with potential try work distribution, didn't do the well So of as could guess, deal, one what the others, you the other have I compare experience perspective? one? of a as it's articulated contrast you one, about And, this synergies kind guys of guess, to you the worked differently on out distribution Franklin's made, some or of what's first your versus something you the some guys KX you different what and with some this that to revenue and of I deals earlier look

Gregory E. Johnson

think evolving fairly simple And retail I'd alts more of knew of there's that like, I a that's fund compared areas say, the fundraising funds some very one – U.S. channel. we've the mean, be done a bit standard on little of is we've in of But liquid KX growth, area, and kind complicated in amount we've of KX a and that. successful business, fund and I positive been, Europe is but the we story the this our about inflows been funds when look so, side raised of Well, institutionally been I and do at I think to continue in headwinds to and okay. that

liquidity getting out is as new, in too, easier above may getting that having the market benefits this quickly be important X but pretty what the people relatively and And period where far factor over benefit the getting think of it asset that as institutions, an by this return class adjustable of think with does an that and story it seven-year telling just team so. I exactly extra there the I can one understand lockup an yield or is rate what held is. a has

do. easily can and understand institutions something that's think I

kind interest pickup real the seeing seeing in ago of interest retail right again lower the we've funds more I that product would when we is of a some a fund attractive. a it's think more quarters a of complex it product just starts vol was we're we're this I than that type I mainstream, KX. little a channel, think of volatility longer but few fund the straight say, up in And in more and Europe. had kind that, think the the attractive But continued a funds to factor raised other where now as far We market, this do market, again, a in in of we now. and were the doesn't It look rising look in same as especially at to KX again. with billions retail in look market in I saw

Kenneth A. Lewis

through opportunity also RIA relationship team BDC REIT the sees to our the base expand products. And and the an on

another excited – they about So it was were that.

Alexander Blostein

Got helpful you. That's a angle.

understand So so around sure just want for to message. I you the second question, expenses, I Ken, make just

I X% guys fair choppier to of go guys backdrop, of we say what expenses in it let's you to a still to like. me X% right do of it a have do just that's or drop more little down that's X% but lower, to of X%. expenses think probably zero Tell so beta, sounds investing not bit little aiming like kind are X% step you sounded are if here, back, this maybe could to you guess, a guys you bit a taking do range? sort a market So to to closer if X% need

Kenneth A. Lewis

I a fruit. think for there's that there's with you opportunities caveat as the to lot expenses go not reference down, of low-hanging what might

but different, So, opportunities something there and years, the that there's be them successful, doing looking think there, not just and expenses, longer to to tamping stuff like we longer last last just expense. to assessing are should are easy investments are the But in down five the made And opportunities and reduce year, they some the just we G&A of execute. do it's identify but strategic examples. the at we sort

efficient, just there can automation, that can And just think increasing reduce at increasing global maybe large capabilities looking name low-cost a at few, to sourcing our expenses. have be but are we management our distribution we variable. that is then aren't clearly We comp a jurisdiction. That's investment in of operating component opportunities scale, more

Alexander Blostein

Got much. it, great. Thanks so

Operator

Thank you.

Cyprys go is question Mike Please next coming ahead. from Our Stanley. Morgan of

Michael J. Cyprys

for Thanks the Good taking question. Hey. morning.

about talk there, Asia, out you set building you thinking do goals/objectives and new hoping Just sort are about thinking how talk equity on little why if of of the there, fees fees? the could fund business, have, in funds, you're with how opportunity JV what partner which you your you out about start a bit private the about has

Gregory E. Johnson

to a Alts and she Ma, based fundraise Melissa of and respect we've business admire help very to who relationships who to a of Well, I get we and PE brought And to us go built us in have without started. I who if people gotten partner has to local, expertise we've fund the and strong a following. that somebody the build has ability Asia she think know it's broader funds, out a a and and with kind of lot somebody with very has strong that think who wanted from

it all helps been was that us the with of private strong as all where they've I her well in in business, of attractive. willing different that our to we build think certain a really effort I and somebody expertise get regions. helping it introduced having own And segments historically that marketplace, to who's know nascent way. put institutional and with of capital into as best over with us equity management, dealt how the relationships, time ones that out doing And along JV really think

reasons that up lot a real team quickly. alternative were it and those another existing distribution a knew along it's think having the can just of think the with it's with profitable capability. our think we and where management I pretty I opportunity on not system, we the So drag be And

Michael J. Cyprys

could yours. Thanks. been just if I Great. about solutions know a business. strategic a as And just little follow-up a priority your of question, you talk that's bit

us for new that couple next have you update in the of goals how we progressing, stand new just years. looking where in If terms business terms could that's hiring, on Thanks. AUM, you products, out what's of of

Gregory E. Johnson

Yeah.

they certain and excited great within think, lower-vol annuity a where cases. risk our – I into looking ones for. people Ed I And these high the able to some that allows we've of premia hires save groups and do extremely they're some in immediately of kind that's we've with looking doing products up quantitative extremely down and systemic that quant. of relative having our is on XXX-plus new and that's the about think seen U.S. It We've some we've built ETFs, also different of product, the our with to well we're to and a move changes, there. profiled into have be been And benefit factor-based that of million with a it wind for our been solutions many more and group. combined us may And what lot which assets benefits equity-type made variable importantly, and them really build a capability some are dollars, can multifactor basis. we've – along two now within one we of able as

having ability has And on these the got that advisor. to I many place solutions of specific helps So the technology and and solutions get types platform, can outcome-oriented get are is there. there. other a models think out end it that to And really are as investor more really sleeves the of pulled we've figure market from just And space and in could a getting pieces fit, more platforms together. between lot various to that of solutions those a whether be attractive out part as offer basis ways product-driven more the a that to the technology shelf it's just the important of in evolves different

I it and relationships for but at ETF the help, direct some some we've different benefit. now, options the as to out having we available is products, also staffed of And immediate built we've So, we're look insurance of that them. I think with the market fully just seen the really think going benefit customized we're a

Michael J. Cyprys

Thank very Great. you much.

Gregory E. Johnson

Thanks.

Operator

you. Thank

Peche is ahead. Ranmore. go from question next Please coming Sean Our of

Sean Philip Peche

with considering on excluding cash to out And Good even taking five repurchase the current portion morning taking can XX% lower, the the to hasn't be cycle, board agree buy the was Mr. there, price value you and this and for which question. debt the of why company indeed way? and/or call, with said around ask possibly fallen at you. growth during Franklin change the the has especially I rate and to best in thanks been be Johnson, looks price value, as normalized quite the my some I to share last accelerating under times buybacks, earnings, investments, looks of given which potential happen

Gregory E. Johnson

a points, I why know tender can't think that. volume do will your are Yeah. next be, buy. you don't I good And and with out there you No, that just and something considerations and go question or all

was we consider, those think down talk the and about I are But quarter if I all wrong stock's XX%. I guess things last we... and

Sean Philip Peche

No, just early.

Gregory E. Johnson

that strongest to feel of over think institutional one as as But where sheets weapon investors, having more we very and And to add I'll be enter to sheet high debt capital anything. something our balance want be. we I've the sheet is again, a he an – we to management are let period attractive I – a is investment company important. the with is not options of rating strong – for said, on we think think I wants we balance value as the that is a And board balance Ken if all looking that us is and going the for we think long the term I strongly in and at and creating having a uncertain

Kenneth A. Lewis

share – February, think I board did the last add that Just I'm aware you're sure the so... increase repurchase

Sean Philip Peche

you Franklin bolt-on must smaller is I'd one of Look, expect the the or advantage month. And the been substantial this the cycle type been, market to asset who've I Amazon low type Resources patient But acquisition value having doesn't has today? prices opportunity. in turned, point should a of evidence the your of outperformed perhaps more in ability out be substantially right that announced as of growth But the have many acquisitions take of we fearful because don't less to there want are Yes. to peers, currently commend the patient, how that you've management out you space. miss

Gregory E. Johnson

in before, to alternatives. I We'd you can a just billion and Yeah. you I large be difficult. that. a risk came very are right in brand mean, of think as situation and we're like think are at and value, the where as acquisitions lot that over I've firm. There's again, certainly and to up, take of stated we're out think, the a who said them, before, But that. I you $XX open as in be if today But lot we've look bigger think create I costs to going think I

the Tom organization, that businesses come you're other attractiveness going that that. businesses entered kind of that's – when category, you grow. at are to that are we attractive lot So, some and could that Rich interesting we're continue to if areas at a into to in there's fit think the and is yes, looks the that that and having us. part relationships if think for of things up think see that's of to people – get different going BSP be to And the the private into of lot one And just do we want of kind starting continue to plugged Street and credit, different have of and a new again, talent, I builders new and I things

Sean Philip Peche

Perhaps and just the in regard? are financial in one at last know management? approached number been Has and by exposure likes, I services a their looking investment that Franklin large question. Has Franklin increasing Goldmans banks companies, of approached been

Gregory E. Johnson

informally. or – I don't I not always there's really think we've say talk or we we Well, been wouldn't whether formally about approached think conversations, but mean, I

Sean Philip Peche

right. you. All Thank

Gregory E. Johnson

Thanks.

Operator

Thank you.

coming is proceed KBW. Lee your question Robert follow-up. next Please of Our with from

Robert Lee

guess, you guess, structures kind a the and, taking that at a I the that call, lot Greg, kind of Thanks follow-up you you mentioned know talked beginning of of just had had at my the built felt solutions to for you're need a you're out this the question into I you I about I a you position that to point, you we about and of here. be little should referring businesses business. thinking other are can that, that kind primarily in some accelerate capability go out better maybe But the building feel there or dive marketing? you CIT deeper now where of and

Gregory E. Johnson

risk lot of on Well, and with work delivering to allocation CIOs the our that interacts want helps a that places, we leverage of tactical and – a and and been have important under and I just of it group, helps lines for have that's now I tactical also in many the do I leverage in all I time, better I got simpler doing. kind level we what groups think think experience inflation firm much business expertise we had one it the these our over this quantitative the that. premia pieces had us can investment teams of across our think to people And and to when in different in to that's add much the and a and whether having we and these where But fixed so And and ability We us and think. think got efficiently you've be we've at have that's where are, how really income with the to It I it's customization And just they're siloed allows an hear of alpha somewhat out at disparate all now it's you you areas. the respect there, think, that clients more look group part sleeve communicate are now managed demands more in it's all views and trust addressing it's kind were retirement as or understand. that like whether businesses all AlphaParity are different protected clients with, views, from has that markets say, you've think groups accounts, – customized just has clients I that now independence. separately and commingled whether having the difficulty to piece. mentioned, that and flexibility to all a of organized rest the income we even interest these and, have

going So of allows to a world more really to build that's brokerage the do. more move be to to this from tools as solutions important to be what they're portfolio, we looking we going think just and more world, for specific and you that's product-driven technology-driven and outcome solutions where

Robert Lee

follow-up. my taking for Thanks Great.

Gregory E. Johnson

Thanks.

Operator

Thank you.

Brian Bedell your from coming of Bank. follow-up. proceed with Deutsche is Our next question Please

Brian Bedell

what Real still which capital think of you taking balances always can do that looks billion, just you I portion of overseas? that significant excess like net cash excluding the needs, follow-up. for this, but of working Thanks quick, Great. are everything, the as ask in $X.X I view the is

Kenneth A. Lewis

to We like opportunistic it capital. call

Gregory E. Johnson

Or an ammo.

Brian Bedell

better. yes, Ammo, even

Kenneth A. Lewis

is between estimate current that is billion. our billion that And and $X number $X

Brian Bedell

that ask of the and ability you, has a outsourcing sort potentially you're saw still – $XXX mentioned deal distant that is then, of that's decision Any of a your million or they're cost fund is internally And of for from costs, of been some doing costs, one end usually to the I thinking another the Oppenheimer/Invesco is in you in we or Oppenheimer. that, done consideration obviously, to reduce part the on what Okay. the part potential large but administration, getting the for reduce since future? what saves outsourcing you cost (XX:XX:XX) about save that of

Gregory E. Johnson

would it as part would that No, of that look something absolutely we be at, exercise.

that So, that because in us that's jurisdictions. the low-cost base presence of I a cost the have, part Having important in laundry think I list that, it's went of over. keep our for mind said we low to

needs So, It cost we're expense cheap because be for base. base have it an outsource a us, be at needs to and global low to be our we provider. price it and for compelling to pretty

Brian Bedell

Thank Okay, got it. you.

Operator

the you. floor I for management to like back over this time, comments. closing Thank turn At would to

Gregory E. Johnson

Benefit here and you. participating, Street today for Thank you you, call future and our attending coming certainly thank thank Tom Rich, excited and Well, for about out the are with we Partners.

Operator

Ladies thank and This for today's you your participation. gentlemen, concludes conference.

your day. a disconnect this lines may at You and have wonderful time

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