I write this letter six months after joining our great company. I joined a company rich in history, a company that plays an important role in the global financial markets, one that values the strong partnerships it has with its clients across the globe and a company that has improved its own financial profile over the past several years. I will do my best to describe the company and cover the progress we have made over the past several years, but I will spend more time discussing what lies in front of us. I do want to caution that I am still in my early days at BNY Mellon, and while I will share my honest assessment of our strengths and opportunities, I am still learning and my thoughts will continue to evolve. Our management team is new and we are just beginning to explore the next chapter for BNY Mellon together.
Our company continued to produce reasonable financial performance in 2017. On a reported basis, our revenues increased 2%, expenses increased 4% and EPS increased 18%. The benefit of the new tax legislation in the U.S. and the severance, litigation and other charges in the fourth quarter affected the results significantly. While reviewing financial results, excluding certain items can potentially be self-serving (When someone says that to me, I always hear, "We would have been fine except for the bad things."), I do think it’s helpful to explain our numbers the way we judge our performance internally. We are going through a period of transition, and I am encouraging our leaders to take actions, both in 2017 and 2018, which will add cost in the short term, but will benefit us in the long term. As such, I do not believe including these costs reflects the full earnings profile of our company. With this knowledge, you must make your own determination, but it is how we think about these items.
Our Investment Services businesses showed mixed results for the year. Revenues increased 4%. Excluding the impact of the fourth quarter significant items, expenses were up 2%, which resulted in an adjusted pre-tax income increase of 8%.1 Our adjusted pre-tax margin was 36%, up from 35% in the prior year.1
Our Clearing and Treasury Services businesses both had double-digit revenue and pre-tax income growth, while our Corporate Trust business saw mid-single-digit revenue growth and strong double-digit pre-tax income growth. We saw more moderate performance in Asset Servicing, with revenue and pre-tax income growth in the mid-to-low-single-digit range and our Depositary Receipts business had a particularly weak year, with revenues down almost 20%.
Assets under custody and/or administration (AUC/A) grew to $33.3 trillion, an 11% increase from the prior year. New business wins were $1.0 billion of AUC/A, doubling our new business from 2016.
Investment Management continued to show improved financial performance. Adjusted pre-tax margin was 34% for the year, up from 32% in 2016, while pre-tax income grew 17%.1 Investment Management fees grew by 6%, performance fees grew by 57% and total revenue grew by 7%. Expenses grew by 3%.
Our assets under management grew by 15%. The increases in the capital markets and changes in foreign exchange rates drove approximately 75% of the increase. However, we did see positive net flows of $63 billion, a change from $23 billion of net outflows in the prior year. Flows into our liability-driven strategies of $50 billion were the largest driver, with $30 billion of inflows into our cash products also contributing significantly.
Our investment performance also continued to improve across our active strategies, with 87% of active assets under management above their three-year benchmarks and 77% above their five-year benchmarks for the fourth quarter.
While these results appear strong, we look beyond the headline numbers to evaluate our performance and believe we have more work to do – and more opportunity.
We like our business model because, among other things, we benefit from the long-term growth in the financial markets and broader global economic growth and we were clearly beneficiaries of these trends in 2017. Strong equity markets and increasing interest rates meaningfully contributed to our strong performance. While these benefits are very real, we do not view these gains as value the management team delivers to you in any given year. Over multiple years, we feel differently as we are constantly evaluating our business mix and making conscious decisions to scale back or grow in certain products or geographies – which should maximize the benefits of cyclical growth trends.
However, we know that you do not need to own BNY Mellon to benefit from stronger financial markets. We should provide you with above-market growth, driven by our ability to leverage this great franchise. This means expanding existing client relationships, adding new ones and adding new capabilities – all of which should increase our revenue stream. Smart capital management should also provide additional value – and we have been delivering meaningful value here. In 2017, we returned $901 million in common dividends and an additional $2.7 billion in the form of share buybacks. The yield on our dividend was approximately 2% and the buybacks represented another 5%, resulting in total capital returned to shareholders of 7%.
Having said that, we are focused on both continuing to improve our margins and on the opportunities we have to increase our organic revenue growth rate. Of the 4% of revenue growth in 2017, across the entire company, we estimate that 3% was market-driven and 1% was driven by organic activities. I can assure you that I talk about this internally and that we are focused on the clear opportunity we have for improvement.
While we have specific plans to do this, you should know that we made significant changes to our 2018 compensation plans for our senior executives, where non-market growth will drive a far greater proportion of their short- and long-term incentives. (See our 2018 proxy statement for more information.)
Asset Servicing is one of our most important businesses, where we provide global custody, fund accounting, integrated middle-office solutions and transfer agency services to a broad range of clients. It is important, not just for the quality of the business itself, but because it is generally the anchor in our relationships where we can provide many other BNY Mellon solutions to our clients. Our clients include alternative and traditional investment managers, insurance companies, pension funds and other asset owners. We provide support for a full range of products that support traditional equity, fixed income and cash products, as well as alternative investment and structured product strategies. Our business is global with about 61% of our revenue generated in North America, 28% from Europe, the Middle East and Africa (EMEA), and 11% from other parts of the world.
Our business model is strong. The majority of revenues are recurring, there are high switching costs to change providers and there are high barriers to entry. We have a very strong value proposition. In addition, our product breadth, geographic coverage and scale, our unquestioned financial strength and a strong reputation differentiate us.
Like most businesses, there is fee pressure, but we have meaningful scale with $33.3 trillion of assets under custody and/or administration. We constantly work to drive our unit costs down and extend the value we can deliver to our clients.
With the dramatic changes in the asset management business, we are in a position to use our scale and expertise to do more for our clients than ever. The work we are doing in technology through NEXENSM to create open application programming interfaces (APIs), consolidate and improve our portals and provide analytics will help these efforts.
Examples of our value-added services include enhanced platforms for alternatives and exchange traded funds (ETFs), markets solutions for collateral financing, liquidity and foreign exchange and data management and analytics solutions for performance measurement and attribution to provide insights that are aimed at improving our clients’ decision-making processes and outcomes.
Pershing is a gem and is the industry leader that offers a complete set of technology and processing solutions for retail and institutional broker-dealers, hedge funds and Registered Investment Advisors (RIAs). Most people, outside of those in the industry, think of us as a company that handles trading and execution, clearing and settlement, and custody and related services as well as financing. However, our business is much broader in that we provide core technology solutions, including broker workstations, client mobile applications and web services. In addition, a core part of our offering is access to our platform of investment products and investment solutions, as well as our strategic consulting services. We have more than 1,400 clients and our solutions and services are used by their 100,000 advisors and staff and 7 million accounts with over $1 trillion in client assets.
We are an attractive partner for many reasons. We have been the industry leader for years, and our great management team has done a wonderful job of continuing to add capabilities to our platform. Our solutions are the most comprehensive in the market, our financial strength matters to our clients and the access we give clients to the broader BNY Mellon platform is valuable and a true differentiator. Pershing is also a true differentiator for the rest of BNY Mellon.
Today, we are the primary provider of clearing for U.S. government securities. Being the primary provider was not a strategic goal, but a reflection of others’ decisions to exit the business and of our commitment to the business. We play a key role in the U.S. government securities market and it is important to us. We take our role extraordinarily seriously and we have done a series of structural things to ensure our safety and soundness. These include setting up a separate legal entity with independent board members, forming a client advisory council, and investing heavily in broker-dealer clearance technology, including a blockchain solution which could one day serve as a system to deliver a more resilient, high-capacity platform to all government clearing clients.
We also play the role as an agent in the tri-party repo market by managing collateral for broker-dealers and investors and by providing financing to our clients.
The role we play as a critical service provider for large financial institutions is a key entry point for a much broader relationship. As a result of this anchor relationship, we are often asked to provide other services for collateral, cash and liquidity needs.
We are one of the world’s largest trustees for corporate, municipal and structured credit securities. We act as an intermediary between debt issuers, investors and market infrastructure providers, and we provide a range of services, including custody, data analytics, tax reporting, remitting payments and representing bondholders in the event of default.
We serve as the trustee or paying agent on more than 50,000 debt-related issuances globally.
While this is a sizable business for us, it has underperformed for the past few years. We have a new management team in place and have a clear plan to improve our market positioning and financial performance. Our plan is simple and clear – increase our sales effort, fill in some technology gaps and leverage BNY Mellon relationships to increase our share of transactions.
We provide global payment, trade finance, payable/receivable management and liquidity management services for banks, corporations and broker dealers. We offer a full suite of cash management products in North America and focus on U.S. dollar payments and trade finance outside of North America.
We clear $1.7 trillion in U.S. dollars on a daily average basis.
Our Markets business is an important partner to the rest of the company. We offer a series of products and services across a range of trading, securities finance, collateral management and liquidity services to a full range of financial institutions, asset managers, governments and corporates. We focus our business on serving clients that do business with BNY Mellon elsewhere in the firm.
We believe that our expertise in foreign exchange, securities finance, collateral management and liquidity services are among the best in the business. We also believe that our unique position of working extensively with both the buy side and the sell side gives us a unique opportunity to use that "network" to connect both sides with solutions that provide operational simplicity and favorable pricing that others cannot match.
We have been slow to adapt some of our businesses to the opportunities in electronic platforms, especially foreign exchange, but our new leadership team is working hard to close those gaps quickly.
We believe we have substantial opportunities to increase our ability to deliver solutions to our clients and increase our own profitability without materially changing the risk profile of the company.
We connect issuers with the capital markets, and we are the administrator for over 800 sponsored depositary receipts programs globally. We issue, service and provide administrative and investor relations support (e.g., dividend distributions). We must be diligent about the individual companies and types of programs we bring into our portfolio and how we structure these transactions since many come from emerging markets. Based on the number of programs we sponsor, we have well over a 50% market share that covers every region, including Europe, Middle East and Africa, Asia Pacific and Latin America.
Our business has suffered in the past year as we made a conscious decision to not price match competitors and not compromise our structural standards. Consequently, in those cases, we were not awarded the business.
We are one of the world’s largest asset managers, with $1.9 trillion under management, and we have a high-quality and growing wealth management business. We operate under multiple brands around the world, including Insight, Newton, Walter Scott and Alcentra and others. Just recently, we combined our three largest U.S. brands – Standish Mellon, Mellon Capital Management and The Boston Company – into one multi-asset company. We offer a comprehensive suite of strategies across these brands including equity, fixed income, liability driven investments, real estate and cash products.
We have focused on increasing our margins and have made significant progress over the last few years under Mitchell Harris’ leadership.
We are focused on the strategic shifts we are seeing in the asset management landscape and shifting our business accordingly.
Investors moving from actively managed to passively managed investment strategies is one of those trends we have watched carefully to position ourselves appropriately.
Today, we are a well-diversified asset manager with a significant active book, a strong position in cash and more than $300 billion in passive assets under management. We are not one of the top three passive managers battling for share, and are not looking to chase asset growth where the economics simply do not make sense. We want to be able to serve our clients’ needs across the full spectrum of investment strategies. As such, we seek to offer our clients all types of passive products and structures (e.g., ETFs, smart beta, enhanced indexing and indexing) to meet those needs. Importantly, we also use passive products as an important part of the foundation for creating multi-asset solutions where we see increasing client demand. As a result, we are continuing to invest.
Additionally, we see opportunities on the servicing side of our business for servicing ETF assets. We already have a good-sized ETF servicing business and have made additional investments in talent and technology to enhance our capabilities to better serve our clients’ needs and expand our presence in this growing asset class.
Investment management structure
People (including ourselves), commonly refer to our asset management structure as a collection of boutiques. I don’t particularly care for the word "boutique." My dictionary has three definitions for boutique – all of which start with "small." Insight has $791 billion under management. Our U.S. asset manager has $560 billion under management. I don’t consider those small.
People also ask me regularly what I think of the "boutique" strategy. Multi-strategy asset managers of size have dedicated teams focusing on driving strong investment performance in the strategies for which they are responsible. We have the same. The difference between our model and others is that we have a multi-branded approach with very strong business managers – not just portfolio managers – running our different strategies. Branding is a tricky thing. What’s important is that we make the right business decision, not a decision based on vanity. Where we believe a separate name has distinction in the marketplace and has more brand equity than a corporate name, why would we want to change it?
What is important is whether we are getting the efficiencies that are possible with an integrated asset management model, and, while we have not done a great job at this historically, we are focused on it and getting better.
In summary, we think our operating model should drive clear accountability and focus while allowing us to gain appropriate efficiencies.
Our business is one that benefits from long-term secular growth trends in financial assets and demographics and continued globalization of the financial markets. Asset values and transaction volumes drive the majority of our revenues. These naturally grow with economic and related financial market growth. We also play a critical role in the capital markets infrastructure. We perform many services that our clients do not want to – or cannot perform themselves. We leverage our subject matter expertise and scale in businesses where technical proficiency is critical. To give you a sense of our scale, with $33.3 trillion of AUC/A, we service a significant percentage of the world’s invested assets, we clear $1.7 trillion per day of U.S. dollars, and we settle $1.2 trillion in securities each day.
While we have strong competitors in all of our businesses, we have a unique mix of capabilities which we feel are unparalleled.
I find the label many put on us as a "trust" bank as peculiar. On the one hand, it’s appropriate in that we are a bank and we need to have the unfettered trust and confidence of our clients given the significant role we play for them. To ensure we are in the best position to serve our clients, it is critical that we are viewed unquestionably as a strong and trusted counterparty. And, traditional "trust" banking is a part of what we do. But on the other hand, we are so much more than a traditional trust bank.
We are a bank, but we are different from most other banks in the world. Roughly 70% of our revenues are generated from our servicing businesses, 20% from our Investment Management businesses and just 10% from trading and traditional lending. We do not have the same risk characteristics as other banks and the majority of our revenues are recurring in nature – as long as we serve our clients well.
We are well capitalized, have a lower risk balance sheet for a bank and are viewed as a trusted counterparty. I’ve said several times in this letter that this is both strategically important for us and a differentiator. Through the worst parts of the financial crisis, we continued to provide support to our clients and that benefits us today. Our balance sheet is primarily driven by client deposits and our assets comprise predominantly high-quality liquid assets and cash. The majority of the securities we hold are AAA/AA-rated, and we have very little term credit exposure. The way we earn net interest spread (21% of our revenues1), is also different from other banks, as a significant portion of our net interest income represents income on deposits that are directly linked to our servicing businesses.
Our businesses generally involve long sales cycles and typically have multi-year commitments. This is good for us in our processing businesses where we are usually the largest incumbent, but it makes it difficult to take share from others. We know that if we serve our clients well, they will not want to take their business elsewhere.
In addition to the consistency of our business and our low risk profile, the economics of our businesses are attractive. We believe that we should be able to grow revenues faster than expenses over time – while continuing to make the necessary investments for the future – and we should be able to achieve that growth with very little incremental capital. In 2017, our pre-tax margin was 34% and our return on tangible common equity (ROTCE) was 23%.1
If we were starting our company today, we could be considered to be a software as-a-service (SaaS) technology company with a bank subsidiary. Now, that’s not really fair because we don’t just provide software as a service, we also effectively provide the associated operations outsourcing – and we do that with people – many people. Nevertheless, at our core, we are a SaaS provider.
As time goes on, our technology platform becomes more important and the cost to do the operations outsourcing will decline if we do our work well. As an example of the opportunities to automate the physical work, we still receive approximately 22,000 faxes per day that we then physically re-input. If we can automate the many manual processes, we will reduce costs, but also materially improve quality through lower error rates and reduced processing time. This is one example, but we have many others like this. While we are a long, long way from changing this in its entirety, we will make progress year by year on our quest to become more of a SaaS provider – that is in an entity called a bank and one that uses its information to provide a growing list of value-added services.
Given the significant role we play in the global financial markets, we are heavily regulated. We do believe that strong regulation is necessary to ensure the safe and consistent functioning of the financial system and we are subject to intense and expensive regulatory oversight and requirements in multiple jurisdictions across the world. We devote enormous resources to comply with all necessary rules and regulations, and we spent far more over the last several years. Much of this is not only important to satisfy our regulators, but we do believe this has made us a stronger company. However, we believe that it is healthy to re-examine how these regulations have been implemented to see if they are achieving the expected outcomes. We believe that there are opportunities to revisit some aspects of certain regulations that have resulted in unintended consequences for some market participants. We are hopeful that the regulatory compliance requirements placed on us will be revised to reflect our business – without reducing the embedded safety and soundness of our company and the broader financial system – but we would expect any changes to occur over multiple years.
I have been amazed at the strength of our client relationships around the world. These relationships were built over decades, by multiple individuals at many levels and are centered on a few simple principles. First, we stand for honesty and integrity. We provide quality services, priced fairly and we are there for our clients in good times and challenging ones. We listen to their needs, but we also strive to be a thoughtful partner with the goal of making them more successful.
Relationships like these are invaluable and we are in debt to the many people who built these before us.
We work every day to re-earn these relationships and I personally will do all I can to ensure this continues, but more importantly, to ensure we conduct our business according to the same values that define us.
We are different from most of our direct competitors in that we serve both the buy-side and the sell-side. Through our Asset Servicing business, we are often a critical partner for asset owners and the custodian of significant amounts of assets on their behalf. Through our Clearance and Collateral Management business, we offer government clearing and tri-party repo where we hold significant amounts of cash and collateral. Because we have such significant relationships with both sets of clients, we are in a unique position to provide securities lending, collateral optimization solutions and liquidity management opportunities beyond what others can effectively provide.
Our unique set of businesses also provides opportunities to serve clients in ways others cannot. For example, we provide a fully integrated transfer agency, sub-transfer agency, subaccounting, custody and solutions where we manage and control all parts of the business in the U.S. We believe that this is a significant advantage for us.
We also serve those clients with a combination of Treasury Services, financing, Pershing and loan servicing through Corporate Trust. These relationship extensions are valuable both for the client and BNY Mellon.
As we look at our performance, we set our sights on being even better than we are today. We are proud of our significant progress and we are motivated by the opportunities in front of us. We need to increase the rate of organic growth and we can still drive more efficiencies across the company. We can be an even better partner for our clients and that will ultimately translate to better financial performance for us. Below are two questions I get a lot:
Do we need to change our strategic direction to achieve improved results?
The simple answer is no. We like our businesses and think the opportunity exists to do more with them.
Do we need to change our financial profile?
Beyond the increase in technology spend we expect in 2018, the simple answer is no. We do not think we need to increase our risk profile or alter the basic financial profile of the company to accomplish our growth objectives.
We understand that capital management is one of the most significant decisions we make, and we remain committed to continuing to use that resource wisely.
We have paid approximately $10 billion to shareholders in the form of common share repurchases and dividends on a cumulative basis from 2015 to 2017.
We continue to believe that we should pay a fair dividend and hope to continue to increase it from today’s level commensurate with our increase in earnings power.
When considering our capital allocation strategy, we must first ensure that our capital meets, or exceeds, the requirements and expectations of our regulators, rating agencies, clients and counterparties.
We then will continue to compare the returns of investing organically in the company, pursuing mergers and acquisitions, further increasing dividends or buying back our stock. Ultimately, we will pursue the path of highest return to our shareholders.
As I said earlier, our goal (and we think it’s achievable) is to provide above-market returns by building an ever more profitable client franchise, and we believe we have the platform to do just that. We will push ourselves to search for smart ways to use our capital internally to achieve this goal, but the ultimate decision of investing internally or returning capital to shareholders will be driven by a conservative, fact-based analysis.
Our biggest opportunity in the short term is doing what we do today, but doing it better for our clients.
In our processing businesses, we provide critical services to our clients. Any error we make is felt by our clients, so we must do all we can to deliver the highest-quality work.
That is easier to say than to do and there are several reasons for this. Our company is the product of many mergers over the years and much work has been done to merge and update systems, but we still have more to do. Multiple systems are expensive for us, but they also make the operational environment much more complex. We need to continue to make investments in our core network and technology to improve our technology architecture to make our service more reliant and resilient.
We have made progress but are adding significant resources to close the gaps more quickly. In the fourth quarter, we announced that we will be increasing our technology investments in 2018 over 2017 levels and a significant part of the spending is expected to be directed toward investments in our infrastructure.
We are alleviating some of the cost and compliance challenges placed on our clients, including increased regulatory requirements and the increasing need to be more efficient. The advancement of technology has been increasing our clients’ expectations of us and that of their clients to improve the speed of information delivery, ease of use and ability to access information anytime, anywhere and on any device, while at the same time, increasing the need for safety and resiliency. We have been improving our processes and applying automation tools, such as robotics for routine processing, as well as using artificial intelligence for more advanced applications to derive data insights. These tools are increasing efficiency, reducing costs and improving speed and accuracy, which benefits us and our clients. And, our work progresses as we continue to invest in our technology platform and capabilities to advance and enhance our client service.
We are very much a client-driven organization, as I discussed earlier. I love the fact that we are great listeners, but we can be too inconsistent and too reactive at times. We must always work to be more solutions-driven on behalf of our clients.
We have implemented a consistent and rigorous process to review entire industries and significant clients, with participation from all parts of our company. By doing this, we are not relying on informal, internal relationships to ensure that we are not missing opportunities to match our skills with our clients’ needs. The internal process is important for us to deliver consistently for our clients. Given the depth and breadth of our relationships, we have an enormous amount of knowledge about our clients, issues they and their industries are facing and how they are thinking about them, and we need to apply that knowledge.
When we talk about what we hear from our clients, we cannot just repeat what we hear and react in a vacuum. We can provide expertise and real value when we synthesize all of those comments together across our client franchise, then within an industry and then by client and deliver products and solutions that we have available to help them. At times, we should take what we learn and figure out where we can create an offering that solves a pain point for them. Once we learn something in one part of the world or industry, we can often apply it to help clients in other parts of the world.
We continue to improve our client-facing technology and add data-driven capabilities across the company. Examples include:
As I said earlier, we will differentiate ourselves over time through our technology platform, both in the quality of what it delivers day in and day out, but also through the platform it provides. We have the ability to continue to move closer to being a full-service provider of technology services for our clients (as we have done in Pershing) by extending our own capabilities, purchasing them from the outside or partnering with others. We also can continue to move into “adjacent” services as we have done in our Asset Servicing business with data management, fund accounting, middle office and markets.
Our people and our culture are our strength. My goal is to preserve what has made us so strong, but at the same time recognize where we can adapt and evolve to become even stronger. We have wonderful people who are true experts who love delivering for clients every day. We will augment this great strength with additional digital talent from outside the company and we will work in partnership to move our business forward.
We will balance the short and the long term as we decide where to devote resources. We understand that our short-term success gives us the ability to invest for the long term, but we are committed to looking beyond the next quarter and the next year. We have a great business and great opportunity and we will not be shortsighted when we allocate resources. We will invest prudently but with a view towards achieving both short- and longer-term success.
Lastly, we will move with a sense of urgency. The world is changing drastically and that creates risks and opportunities, but we must move quicker than we have done in the past to ensure we mitigate the risks and capture the opportunities.
You should know that our board is very involved in your company. They meet regularly with numerous members of management at multiple levels and have a firm understanding of our opportunities, risks and challenges. They focus on our strategy and business performance but also focus on our risk, controls, compliance, technology agenda, talent and culture. They are independent and clear with me and other members of management regarding their thoughts, priorities and expectations.
I would like to thank Nick Donofrio, who retired from the board on September 30, and John Luke, who will not stand for reelection. Nick served the company for 18 years and John for 21 years. We are grateful for their advice and counsel and the many contributions they made to the great evolution of our company.
I also want to thank Gerald Hassell, who retired from the board at the end of 2017. Gerald worked tirelessly for all 44 years of his professional life at this company. He had a relentless focus on our clients and cared deeply about those working with him at the company. As Chairman and CEO, he led this company with the dignity and character that defines our moral compass today. I personally want to thank Gerald for the partnership he has shown me since I joined in July. I am grateful for what he has done for the company, but also for me personally and wish him well in his retirement.
Charles W. Scharf
Chairman and Chief Executive Officer
1Financial results referenced for the total Corporation are calculated on a non-GAAP operating basis, which excludes merger and integration, litigation and restructuring charges for all periods. Also excluded from 2017 results are the fourth quarter 2017 significant items which included an estimated net benefit related to the Tax Cuts and Jobs Act ("U.S. tax legislation") and severance and other charges. In addition, revenue amounts are reflected net of net income attributable to non-controlling interests of consolidated investment management funds and expense amounts, the pre-tax operating margin percentages exclude amortization of intangible assets.
For the Investment Services and Investment Management business line results, the expense and pre-tax income amounts exclude the amortization of intangible assets and the fourth quarter significant items, which included severance, litigation and other charges. The pre-tax operating margin for Investment Services business also excludes the amortization of intangible assets and the provision for credit losses. The pre-tax operating margin for Investment Management business excludes the amortization of intangible assets, and the provision for credit losses and reflects distribution and servicing expenses net of revenues. For a reconciliation of these non-GAAP measures, see pages xxx-xxxiii of our 2017 Annual Report.
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