Pzena Investment Management, Inc.

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0:35 Thank you, operator. Good morning and thank you for joining us on the Pzena Investment Management fourth quarter and full year 2021 earnings call.

I am Jessica Doran, Chief Financial Officer. With me today is our Chief Executive Officer and Co-Chief Investment Officer, Rich Pzena.

0:55 Our earnings press release contains the financial tables for the periods we will be discussing. If you do not have a copy, it can be obtained in the Investor Relations section on our website at www.pzena.com.

A replay of this call will be available for the next two weeks on our website. 1:13 Before we start, we need to remind you that today's call may contain forward-looking statements and projections.

We ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from today's comments. Please note that we do not undertake to update such information to reflect the impact of circumstances or events going forward.

In addition, please be advised that due to prohibitions on selective disclosures, we do not as a matter of policy, disclose material that is not public information on our conference calls. 1:49 Now, let me turn the call over to Rich, who will discuss our current view of the investing environment.

1:57 If a client asked me as 2009 began, just after the peak of the global financial crisis, what I thought our strategy would earn over the next 13 years. I would have and often did, express that I expected long-term returns to be in the low-double digits.

And as we sit here today, 13 years later, our large cap, US large cap focused value strategy earned approximately 13.5% per year gross. So it seems we could fairly state, we achieved our expectations.

2:34 And yet the post GFC era is known now as the anti-value period. The period where growth strategies outstripped value strategies buy record levels, and for a record period of time.

Many have question whether value investing even works anymore, or whether this time is actually different. 2:56 I've long been a fan of behavioral economists Daniel Kahneman and Amos Tversky.

In the 1974 paper, they described the human tendency to bias their decisions due to a force they called anchoring. Kahneman and Tversky found that even arbitrary numbers could lead participants to make incorrect estimates.

In one example, participants spun a wheel, to select a number between zero and 100. The volunteers were then asked to adjust that number up or down to indicate how many African countries were in the US.

Those who spawn a high number gave higher estimates while those who spawn a low number gave lower estimate. 3:44 In each case, the participants were using that initial number from the wheel as their anchor point to base their decision.

How does this tendency impact investors, investors are confronted with a myriad of investment choices to allocate their assets, always aim to achieve what they believe is their optimal outcome for the future and yet investors just like the participants in the wheel spinning exercise, are prone to biased decision making due to anchoring? 4:16 While our strategies generated 13.5% returns, which is nearly 100 basis points ahead of the Russell 1000 value index.

The Russell 1000 growth index earned just under 19.5% per year for the same post GFC period. But in terms of absolute dollars, an extra 600 basis points per year for 13 years resulted in a growth index portfolio nearly double the size of a portfolio invested in our strategies.

4:47 But as history and that’s the saying goes past performance does not guarantee future results. Of course, I don't know what the future will bring.

I do, however, recognize the danger of becoming anchored in the last 13 years estimates, to estimate last 13 years to estimate the most likely outcome for the next period. I also know that the cheapest segment of stocks continues to sell on average for the same multiples of earnings that they have for the last 70 years.

While the most expensive segment of stocks sells for the highest multiples ever recorded. 5:29 I know that the earnings yield on the cheapest stocks, averages in the low teens, while expensive stocks offer earnings yields of 2%.

I know that even in a world of supply chain disruptions, disruptive technologies, love affair with cryptocurrency that buying a portfolio of good businesses selling for low prices give investors an outstanding opportunity to earn attractive long-term returns today, as it has consistently in the past. 6:02 Before I turn the call back to Jessica, let me offer a few thoughts about our business.

As 2021 came to a close, we marked our fifth consecutive year of positive net close, and it was the eighth out of the last 10 years. In a world dominated by record outflows and active management and a challenged investing environment for a deep value strategy We're completely proud of this outcome.

6:31 We attribute this record to the reason most of our clients express when they asked why they hired our firm. We do not deviate from our deep value strategy that we have successfully executed for over 26 years.

As of January 1, we opened an office in Dublin, to accommodate the market reality in a post Brexit world. Our presence in Dublin will serve as a regulatory gateway to Europe and will enable us to operate without barrier throughout the year.

7:07 Last but not least, we added eight new partners, bringing our partnership to 63 members. Our new partners come from our HR, research and marketing groups, continuing our tradition of adding partners from every functional area within our firm.

Partnership is a found out foundational element of our culture and we believe that connecting our team to our clients outcomes is a crucial element of our commitment to excellence on behalf of our clients. I look forward to answering your questions.

And now we’ll turn the call back to Jessica.

7:45 Thank you, Rich. We've reported diluted earnings of $0.24 per share for the fourth quarter, compared to $0.27 last quarter and $0.22 per share for the fourth quarter of last year.

Revenues were $51 million for the quarter and operating income was $26.5 million. Our operating margin was 52% this quarter, decreasing from 55% last quarter and increasing from 45.7% in the fourth quarter of last year.

8:16 We reported diluted earnings of $1 per share for the full year of 2021 compared to diluted earnings of $0.52 per share for the full year of 2020. Revenues were $199.3 million for the year and operating income was $105.9 million, this compares to revenue of $138.6 million an operating income of $55.3 million for the full year of 2020.

Our operating margin was 53.1% for the full year of 2021, increasing from the operating margin of 39.9% for the full year of 2020. 8:57 Taking a closer look at these results.

Assets under management ended the quarter at $52.5 billion, up 3.3% from last quarter, which ended at $50.8 billion and up 21.2% from the fourth quarter of last year, which ended at $43.3 billion. The increase in assets under management from last quarter was driven by market appreciation including the impact of foreign exchange of $1.4 billion and net inflows of $0.3 billion.

9:30 The increase in the fourth quarter of last year, reflects $8.4 billion in market appreciation including the impact of foreign exchange and net inflows of $0.8 billion. At December 31, 2021, our assets under management consisted of $19.4 billion in separately managed accounts, $30.5 billion in sub-advised accounts and $2.6 billion in our Pzena funds.

Compared to last quarter separately managed account assets increased reflecting $0.3 billion in net inflows and point $0.3 billion in market appreciation and foreign exchange impact. Sub advised account assets increased reflecting $1.1 billion in market appreciation foreign exchange impact and $0.1 billion in net inflows.

10:21 And assets in Pzena funds decreased slightly due $2.1 million in net outflows. Average assets under management for the fourth quarter of 2021 were $51.5 billion, a decrease of 1.7% from last quarter, and an increase of 36.6% for the fourth quarter of last year.

Revenues decreased 1.3% from last quarter and increased 27.9% from the fourth quarter of last year. These variances primarily reflect the changes in average assets under management over the respective periods.

11:01 Our weighted average fee rate was 39.6 basis points for the quarter, compared to 39.4 basis points last quarter, and 42.3 basis points for the fourth quarter of last year. Asset mix across our strategies and distribution channels, as well as performance based fees are generally the primary contributors to changes in our overall weighted average fee rates.

However, changes in asset levels may also impact our fee rate. As the majority of our separately managed accounts passed management fees pursuant to a schedule in which the rate we earn on the AUM declines as the amount of AUM increases.

11:41 Our weighted average fee rate for separately managed accounts was 53.9 basis points for the quarter, compared to 53.4 basis points last quarter, and 55.7 basis points for the fourth quarter of last year. The increase from last quarter primarily reflects a shift in assets to certain strategies that typically carry higher fee, while the decrease in the fourth quarter of 2020 primarily reflects an increase in assets due to market depreciation as the rates we are in the majority of our fee schedules decline as the assets increase.

12:18 Our weighted average fee rate for sub advised accounts was 27.4 basis points for the fourth quarter of 2021, compared to 27.6 basis points last quarter, and 27.2 basis points for the fourth quarter of 2020. Certain accounts related to one client relationship have fulcrum fee judgments.

The fee arrangements require a reduction in the base fee if the investment strategy underperforms it's relevant benchmark or allow for a performance fee if the strategy outperforms its benchmark. 12:51 During the fourth quarter of 2021, we recognized the $0.9 million reduction in base fees related to these accounts.

During both the third quarter of 2021 and fourth quarter of 2020, we recognize $1 million reductions in base fees related to these accounts. These fees are calculated quarterly and compare relative performance over a three-year measurement period.

To the extent that three-year performance record of these accounts fluctuate relative to their relevant benchmark, the amount of base fees recognized may vary. 13:24 Our weighted average fee rate for Pzena funds was 71.7.

basis points for the quarter, increasing from 69 basis points last quarter, and decreasing from 89.3 basis points for the fourth quarter of last year. The increase from the third quarter of 2021, primarily reflects performance fees recognized in the fourth quarter of 2021.

While the decrease in the fourth quarter of 2020, primarily reflects an increase in performance fees recognized in the fourth quarter of 2020. 13:56 Looking at operating expenses, our compensation and benefits expense was $20 million for the quarter, increasing from $18.9 million last quarter and from $18 million dollars for the fourth quarter last year.

The increase in compensation and benefits expense in the third quarter of 2021 is driven by an increase in compensation and in the market performance of strategies tied to the company's deferred compensation obligations. The increase in compensation and benefits expense from the fourth quarter of 2020, reflects an increase in employee headcount and compensation.

14:32 G&A expenses were $4.5 million for the fourth quarter of 2021, Compared to $4.3 million last quarter, and $3.7 million for the fourth quarter of last year. The increase from last quarter and the fourth quarter of last year, primarily reflects an increase in professional fees and travel and entertainment expense.

Other income was $2 million for the quarter, reflecting the performance of our investments, and approximately $0.6 million in income related to our tax receivable agreements and an adjustment to our liability to selling and converting shareholders. 15:12 Turning to taxes, the effective rate for our unincorporated and other business taxes was 4.3% this quarter, compared to negative 5.4% last quarter, and 2.9% in the fourth quarter of last year.

The negative effective tax rate last quarter reflects the benefit associated with the reversal of uncertain tax position liabilities, and interest due to the expiration of the statute of limitations. We expect the effective rate associated with the unincorporated and other business taxes of our operating company to be between 3% and 5% on an ongoing basis.

15:50 Our effective tax rates for our corporate income taxes and other business taxes was 24.6% this quarter, compared to 24.2% last quarter, and 24.5% for the fourth quarter of last year. We expect this rate to be between 24% and 26% on an ongoing basis.

The allocation to the non-public members of our operating company with 78% of the operating company's net income for the fourth quarter of 2021, compared to 77.8% last quarter and 77.3% for the fourth quarter of last year. 16:30 The variance in these percentages is a result of changes in our ownership interest in the operating company.

During the quarter through our stock buyback program, we repurchased and retired approximately 301.6000 shares of Class A common stock and Class B units for $3.1 million. At December 31, there was approximately $41.3 million remaining in the repurchase program.

16:58 At quarter end, our financial position remains strong with at $81.1 million in cash and cash equivalents as well as $7.3 million in short-term investments. We declared a $0.53 per share year end dividends last night.

17:14 Thank you for joining us. We'd now be happy to take any questions.

18:02 Yes, that's Archambault. That's okay.

Good morning, just on the buyback, would you ever consider a special dividend? It means your stock is not the most liquid stock in the market and I just think the buyback just makes it just exacerbates the illiquidity as a special dividend ever been considered for your kids sitting on the cash that you have?

18:40 Hi, this is Jessica. Richard, are you there?

18:47 Sorry, I was on mute, I didn't realize it.

18:52 Okay. Great.

Go ahead.

18:53 I can go, I can answer the question. The, you know, the way that we think about our dividend is that, that we pay out the earnings at the end of the year.

So it’s almost always a special dividend. In the fact in, because we're not declaring a regular dividend, the cash balance that you see is – isn't really indicative of the excess cash that we have.

And if you look at our cash balances by quarter, the March quarter is the lowest cash balance. So effectively, because our regular dividend is $0.03 a quarter and the final dividend is $0.53, we're going to deplete most of that $0.81 million, that's on the balance sheet between the special dividend or the year at we don't call it that we call it a year-end dividend and paying bonuses, which get paid after the end of the year.

So if you actually looked, there's almost no excess cash. So the question is, could we divert the money we spend every year on stock repurchase, which I think is around $1 million dollars a year to a dividend?

I suppose we could do it. I don't think it moves the needle to the extent that you're thinking.

20:25 Right, right now. Okay.

And then secondly, Richard gets on the phone here. ESG sustainable funds, there's a new one coming out every day and it seems like, it's the flavor of the month and it's the new shiny object in the marketplace and clearly, it's a bit of a tidal wave in terms of the asset gathering over the last couple of years and I know, you've done extensive work on this knowing you from years ago and the things that Bernstein, is there a style bias and a sector bias and in this idea, where, my observation is, as you think about if rates are rising and growth continues to be out of favor, I mean, I operate in a small value world and the small growth disparity is pretty significant relative to small value.

That as if growth continues to underperform value over the next number of years that because of a rising rate environment, what does that imply for the sustainable funds that tend to have a growth bias?

21:43 You know, you're absolutely right. ESG, ESG is critical from the standpoint of being able to, to invest money in a way that matches your clients demands.

But it is more difficult to, to match an ESG strategy with a value strategy. Because there's a high correlation what what people want out of ESG and growth, like they want investment in new technologies to address some of the world's issues, particularly when you're talking about the environmental side, and then the zero carbon world?

So I think you're totally right. Right, when, when they're – when new – when technology and growth related strategies are winning.

It's easy to marry that with ESG and make it and when on both fronts. It's much more difficult when those technologies are actually over valued and having their values, correct, right.

We have a good – we can't as a true deep value investor that's committed to this to our philosophy, we can't invest in those companies, nor would we want to, because the valuations just don't make sense. So as they correct, we, I think, as you point out clear style bias.

Having said that, you can really marry ESG with value. And, and we've written extensively about it and putting – put listed some of those, we've published some of those papers on our websites, talk about how do you invest, for example, in energy, while still being conscious of the sustainability of these businesses?

I don't know that this is the appropriate forum to get into that. But I think I take your observation as being accurate.

24:14 Okay, very good. Nice to hear from you Rich, Thank you.

24:16 Yeah. Nice to talk to you, Wayne.

24:28 Good morning, Richard and Jessica, thanks for taking my questions. Maybe you could talk about any sentiment changes, you and the team are noticing from prospects towards deep value recently.

And has there been any noticeable changes in RFP activity from say a year ago?

24:52 You know, This, the I think, the way that I would answer that question is to say that the sentiment changes have been happening over the course of the last nine months, 10, maybe even a little more than that. In the things that you would have called, pre-RFP activity, meaning attendance at meetings, interest filling up rooms, when you want to talk about the value cycle, it's now starting to pick up and so we've had kind of a consistent pipeline throughout the last four or five years.

And I would say the trend is positive and it's still early, believe it or not, it's still early. But the returns profile for value in 2021 had a pause in the middle of it, which put – which I think, put a pause in that trend, which is now picking up and re accelerating.

So I would say it's, it's starting, but not a tidal wave.

26:22 Okay, okay. And does the recent market volatility that we've seen recently.

Does that help or hurt the speed of these searches? And maybe you could just touch on how your existing clients are reacting to the current environment and volatility as well?

26:39 We tend to be a, I guess what I would call more of a satellite manager than a core manager. So meaning the people who are investing with us have made a decision to put a portion of their portfolio in value, and they've generally done it on a fairly sophisticated basis.

So I don't really see anything, in fact, I think what we see is that, that they are behaving the way we would expect them to behave, and they're not really focused on us where we're outperforming. Now, the growth investments and that outperformance leads to the most sophisticated of these rebalancing away from us when we outperform just like they rebalance towards us when we underperform.

And, but that process today is, is, it's going on? Like it always goes on, and it's modest.

So I think the best way to answer your question is, it's pretty steady with our clients. There's no, there's certainly no alarm about what they have with us, that's for sure.

Whether they're alarmed about the market and worrying about should they do something different. I'm sure that's the case.

And I'm sure that's why some of the discussions with us picked up to just to talk about value. But generally they're not sharing their fears of market overvaluation or market volatility with us.

They're treating us as we should be, which is kind of the role that we are properly like filling the role that they've had us in their portfolio and the whole question is, whether they should up that from historically low levels, which obviously, we think they should, and encourage at every moment that we possibly can. So I still go back to the, I know what you're getting at.

I mean, we're waiting for this value cycle to unleash more asset flow to us, and I can say is where we're, we're seeing early stages of that.

29:22 Okay, that all sounds good. We saw news a few weeks back about potential interest by Pzena and building out a new credit business and making a higher for distressed debt manager, maybe you could talk about that initiative and how it fits into the strategy at Pzena?

29:42 Sure, we've always had, in the back of our minds, this idea that the extensive research that we do on companies and industries would be value – valuable to, high yield world and we always noticed it, in our from our own observations of the companies that we own, that when things get stressed in value, opportunities often pick up on the high yield side to, to, to buy depressed bonds and it's a very similar investment philosophy to be a research oriented, distressed and then if you go all the way to distressed high yield investor compared to investing in value equities. But anyways, so this has always been on the back of our mind – in our mind, about a year, maybe 18 months ago, we started thinking more seriously and strongly about how we would go about this and we looked around to see what firms there were on in the market, and what people there were that were available and we decided that really that making an acquisition here was not the sensible way to do this, given the valuations that existing in – in the asset man – in that segment of the asset management business and that the concentration in bigger firms and so we just decided to keep our ears open for high quality talent that we thought could help us build this from inside and Mark Karen that we hired on January 1, fit that bill.

31:45 Our plan, I'm going to say we don't have a highly detailed business plan, we're using this year to get ourselves established and to set up incubation of our own funds and get operationally set up. But with a kind of a minimal investment at this point in time.

And over the course of the year, we'll develop a plan, but I do think that the following our decision and the feedback that we've received, that we reinforced the decision that having an extensive research team, helping on the credit side is a pretty powerful combination that could have legs for us. But it's so premature and I think expect that we would get any asset flows from this, in the near-term is unlikely.

We have a long period of incubation and getting set up and staffing up even deciding to staff up before that happens.

32:59 Okay, yeah, that sounds interesting. Have you put a headcount number on how many people would be required?

It sounds like you can start to leverage existing research, but just curious to hear how…

33:11 Yeah, I mean, really, I mean, for this year – for this year, it's one.

33:18 Okay.

33:19 So we're not planning on adding anybody. But will that change in over the course of this year and into next maybe as we figure out what we want to do, but I don't think we're going to make a big headcount commitment, we're going to make a gradual headcount commitment, as we get more information.

So I can't even give you a number. But it's not it's not going to be more than a handful of people in the long run or in the medium-run, I should say.

33:54 Okay. Understood.

My last question here, rich, picking back up on the liquidity of the shares that the previous caller brought up? Can you just talk about any consideration to convert B shares to A shares?

34:11 There's, they're -- there, there's not a lot of consideration to convert B shares to A shares because, unfortunately, for the B shareholders, it's a taxable event, to convert B shares to A shares. So you can't just convert them, you have to pay taxes when you convert them that would mandate US selling shares.

So for us it would be do we want to do a secondary to expand to extend the liquidity of the company and it's always in our mind. The problem is we don't have very many B shareholders who have any interest in selling at the current valuation.

So it's a – it's a bit of a catch ‘22.

34:56 Okay, thank you for taking my questions.

35:00 Sure.

35:16 Great, thank you, operator, and good morning Richard and Jessica. Thanks for taking the question.

I guess, actually we’ll start on the distressed debts. Just really quickly, did you, I don't think I heard you say that thought, have you committed $1 amount?

And did you do that as of 1/1/22 or is that still down the road and if so, can you give us an idea how much money you're going to see that strategy was?

35:49 We didn't, we haven't seeded any money in the strategy. We're still trying to figure out seeding and sources of seeding some of it will come from the firm and some of it may come from the partners in the firm.

So it's not it's not massive. But I don't have a number for you now and it won't all be won’t all be from the firm capital.

36:18 Got it. Helped a lot.

I guess I asked him in part because wonder whether you're seeing opportunities currently in the distressed debt space. But it sounds to me like this is more of a long-term business plan, there are, as you say, a lot of synergies between that work and your current work and so it's more of a, you're taking a longer-term view building out potentially a tangential business with a lot of synergy for what you currently do.

36:47 Correct. We didn't have any thoughts of opportunistic investing as the reason to just do it now, this is exactly as you described.

36:57 Yep. Got it.

Got it. Well, to pick up on Sam's point about the value searches that occurred to me how, and we talked about this, it seems every quarter, but how long do you think value and in your experience through the decades, how does value have to outperform?

Before Interest really starts picking up in especially on a separate account side in value searches?

37:22 Yes, I mean, I'll look the average, if you look at the average length of the value cycles over the past, you can go back 100 years, it's around six years, something like that, the average length of time that value outperforms, when you look at these cycles, where, and so I'm guessing that the answer is something like 18 months to two years before the floodgates hit. And they actually tend to, to really build slowly and attendance.

Unfortunately, you get the biggest flows towards the end of the value cycle. So if you look at our last real cycle, which was post internet bubble, we got the first kind of movers about a year into the value recovery and we peaked inflows around four years in.

So I don't know if that will be the same this time, but it gives you a little bit of feel.

38:38 Yep, yep. It takes a while, doesn't it?

38:42 Yeah.

38:43 We have no question. Thanks for the color on that.

The last question I would have would be on the fees. And I wonder if you could talk a little bit, just peel the onion a little bit on the fee compression looks from our vantage point, like we're seeing a pretty fair amount of fee compression right in 4Q ‘21, 4Q ‘20.

In total fees collapsed by 270 basis points have been my numbers, right. And in the fourth quarter – to the fourth quarter prior year.

On the separate account side, it was like they dropped that 180 basis points, in Jessica's comments at some of it that was mostly if not entirely due to clients’ accounts, hitting break points, and not as opposed to a drop in your face fee rate due to competitive pressures. Could you comment on that?

39:37 Yeah.

39:38 Do I have that right?

39:40 Sure. I would say the biggest impact is mix.

So if you if you actually look at what's going on, we've had gigantic flows in our sub advisory channel, which is the lowest fee strategies because we have to share the fees with the advisor and of course, we get access to much, much bigger pools of money. So that's – that is the primary reason why our feeds.

So if you look at our overall things, they've been inching down. I don't have the numbers right in front of me, but we're just under 40 basis points, now we've been going down something like 1 basis point a year.

In average, there's, so you have to be careful with a couple of things. There's performance fees in there, that distort the numbers, especially in this anti-value period, because with our Vanguard relationship, we have fulcrum fees, which is effectively you can call it a negative performance fee.

We are in below our base fee. So we've been earning those negative fees for the last two, two and a half years.

40:59 And those should go away, especially if values continues to the negative shouldn't switch to a positive, the values should continue to outperform. So I think mostly what you're seeing is mixed shift.

There is some breakpoints, there's definitely fee pressure, but mostly we've seen fee pressure not causing us to have to lower our fee schedules but causing our clients and prospects to themselves shift into lower fee versions of our strategies and those are of our strategies. And those are, so it's breakpoints shifting to lower fee versions, meaning more diversified versions, basically and mix shift that's accounted for.

I don't want to say there's no fee pressure, there's definitely fee pressure. But, but we've done a pretty good job of keeping our fee schedules intact.

42:05 Got it? Thanks.

Final follow up would be do that will, ballpark? one basis point per year glide path?

Would you expect that to continue? Is that a way to think about?

42:19 I don't? I mean, like I will say, I think, yeah, I mean, look, if it really depends on the mix, unfortunately, I can't, it's hard to give you an answer.

If we had the kind of flows in sub advisory that we have had the last few years, which we would be thrilled with, by the way. You know, if you look at some of the glows, we've had, in some advisory, it's been the biggest source of our positive net flow, it has been more than 100% of our positive net flows have been from some advisory channel.

So those partnerships that we've set up, are, are working well, because you set them up, and then you have continuous positive flows. So if that was caused by that, we would be fine with it.

But I would say, so I don't know how to answer your question. I do think, we'll have a bit of a reversal from the performance fee question and we'll have and hopefully, access to two more separate account business.

But I will also tell you, that we – as we've gotten bigger, we've qualified to be in bigger searches. So our word when you get – when you get $100 million account and the fee structure is so different than when we get a $500 million account and we're getting more of the latter.

So they'll be at the lower end of our fee schedule and break points. 44:09 So you can call that a bad thing.

We actually are very happy with that. It's, we think it's margin, accretive.

The average size of your account is probably the biggest determinant of your operating margin and there's a lot of cost in getting a lot of small accounts, you could have higher fees if you did – higher basis point fees. But I think getting higher revenues is a lot more challenging.

So mostly, that's the dynamic you're watching. 44:41 So do I think, I think yes, there's going to be gradual erosion what?

We don't model one basis point a year, but we don't really know.

44:54 Got it? Thank you very much.

Appreciate the color.

44:57 Sure. Sure.

45:02 Thank you, Wayne. There are currently no more questions registered at the moment.

So I will pass back to the management team for their closing remarks.

45:14 Thank you, operator and thank you everyone for joining us on today's call. We look forward to speaking with you again.