Kathleen Waller - IR Ramon Ruiz-Comas - President and CEO Bobby Garcia - COO Amílcar Jordan - CFO Liliana Rivera-Corcino - Corporate Controller

Chris Carter - Credit Suisse Peter Costa - Wells Fargo Securities

Hello and thank you for standing by. Welcome to the Triple-S Management Fourth Quarter 2014 Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Kathleen Waller with AllWays Communicate. Please proceed.

Thank you, Brett. Good morning, everyone. Welcome to today's fourth quarter and yearend 2014 earnings conference call. With us today are your hosts, Ramon Ruiz-Comas, President and Chief Executive Officer; Bobby Garcia, Chief Operating Officer; and Amílcar Jordan, Chief Financial Officer. Also in the room is Liliana Rivera-Corcino, Corporate Controller. I'm sure all of you have heard the Safe Harbor statements before, but we still need to get this housekeeping issue out of the way. Each quarter, Triple-S management executives will provide their current view of the company's future. This means that they will share forward-looking information with you. As you know, these statements can be affected by risks and uncertainties involved in the business. Despite management's best efforts, what actually happens maybe materially different from what you hear on today's call. To get a better understanding of why this may occur, please look at the company's Safe Harbor section in today's news release and in the company's periodic filings with the SEC. In addition, the information shared on this call should be considered current only as of today. After today, please use this information for your reference only and remember that the company assumes no responsibility to update it. This call is being webcast. Shortly after it ends, you will find an archived version on the Investor Relations page of the company's website at www.triplesmanagement.com. If you don't have a copy of today's news release already, you can either find one on the company's website or you can call me, Kathy Waller, at 312-543-6708, and I will get one to you immediately. In addition, we can always make sure you're on our distribution list going forward. With that, I'd like to turn the call over to Ramon. Ramon, please go ahead. Ramon Ruiz-Comas: Thank you, Kathy. I want to welcome everyone to this morning call. I will first provide an overview of our fourth quarter results and then briefly comment on recent corporate development. I will then hand the call to Bobby Garcia, our COO to discuss our strategic transformation efforts. Amílcar Jordan, our CFO, will then offer more in-depth analysis of our quarterly performance. Following our former remarks, we will answer any questions you may have. Let me start by saying that we're pleased with the performance of all our lines of business except Medicare Advantage. The MLR is steadily improving in our commercial business while membership has declined, reflecting our discipline on the riding approach. We also witnessed solid profitability increase in our other insurance operation. The life insurance segment post a nearly 40% jump in operating income for both the three months period and the year while the Property & Casualty business doubled its quarterly operating profit and recorded a nearly fivefold gain for all of 2014. We post pro forma net income of $2.8 million or $0.10 per diluted share versus pro forma net income of $3 million or $0.11 in 2013. On a GAAP basis our net income was $26.5 million or $0.98 per diluted share versus a net loss of 97,000 in the same quarter last year. I think it is very important that I take a step back and have you all understand the landscape in Puerto Rico and why it is so difficult to operate and predict the future with gliding. As we have mentioned in the past, the Puerto Rican economy enter recession in the fourth quarter of fiscal year 2006. The commonwealth gross national product contract every fiscal year between 2007 and 2011. In fiscal year 2012 and 2013, the GNP grew by 0.9% and 0.3% respectively. According to the latest projection from the Puerto Rico Planning Board the GNP was expected to grow in fiscal year 2014 and 2015 by 0.1% and 0.2% respectively. However, the monthly economic indicators for fiscal 2014 suggest that the final annual GNP figures may end up being lower than expected. Looking at the employment picture, from fiscal year 2000 to fiscal year 2014, total employment declined at an average annual rate of 0.9%. During fiscal 2014, total employment fell by 2.2% when compared to the prior year. For the first quarter of fiscal year ending June 30, 2015, total employment decreased by 3.3% year-over-year. In terms of the financial condition of the general form of the Government of Puerto Rico, the projected deficit was reduced from $2.8 billion in 2009 to $664 million in 2014. For fiscal 2015, the Government is not projecting the deficits. Unfortunately, the preliminary general fund budgetary revenue for the first three months of fiscal 2015 were approximately $36 million below expectation. The budget does not consider any debt financing as a sort of funds. On October 14, 2014, the Puerto Rico Health Insurance Administration award the contract for the Government Public Health Insurance Plan to five company whereby the insurance model will change from a third-party administrator model to a managed care organization model in which the risk will be borne by the insurance company. The per member per month premiums under the new contract represent a 10% average increase when compared with the '15 premium. This contract will become effective April 1, 2015. If the premium exceeds the real estimate for this program, the forecast deficit for 2015 will increase to approximately $115 million. The Government is contemplating the implementation of an ambitious tax reform initiative during the second quarter of 2015, whereby they will reduce marginal income tax rate, rebuild their gross profit tax and shift tax system from taxing work to our taxing consumption. Second, they will drive a material increase in general fund tax revenue size to match their projected increases in budgetary expenses for their five year forecast period and they would like to remove taxing efficiencies that affect hindrance to economic growth. Based on these factors, we don’t expect that economy will improve in 2015 and that the workforce decline will continue through the rest of this year. Assuming that the government's projection regarding the impact of proposed tax law of change and expenditure reductions are both achieved, we may see new infrastructure projects in 2016 and election year, which will be beneficial to the economy creating additional jobs and reducing unemployment. Given this context, as well as the changing landscape in healthcare delivery, we engaged a leading management consulting firm in the third quarter of 2014 to help us embark on a strategic transformation of the company. We have completed the resigned work and accordingly implementing the first phase of this project. Bobby Garcia, will be providing more information about this effort shortly. We were successful in our effort to reduce our administrative expense during 2014. Net of the increase in the Medicaid expansion cost when we had three new regions in October 2013 and the implementation of new taxes and regulatory fees we saw a decline of approximately $6 million in the first quarter and $27 million for 2014 when compared to the year ago period. During 2015 and 2016, we will continue with our effort to reduce operating expense. This will include a review of our procurement process and other measures aimed at generating a regional efficiency throughout the organization. In terms of our businesses the America advantage market in Puerto Rico continue to face major macro challenge, reflecting the schedule decrease in premiums annually through 2017 as mandate by their Affordable Care Act. If CMS does not make any change to their scheduled premium decrease, current benefit provided to that population will need to revised. Furthermore, the ACA insurer fees continue to increase and there is no information to suggest that the U.S. law income subsidy will be up like the Puerto Rico or that order is proportionate burden placed on the Puerto Rico market by regulation will be addressed. Overall, the America advantage business continue to be affect by higher pharmacy cost due to their emergence of their Chikungunya epidemic and our rather significant diabetic membership, reflecting lower risk or revenue they may experience an $11 million year-over-year premium reduction. Even though the America strength remains flat, pharmacy cost increased at a rate of approximately 5%. On a positive note, effective December 31, 2014, Triple-S has successfully complete renovation process with the MA contract that were maintained under their brand of Triple-S Salud were transferred to American Health now known as Triple-S Advantage, consolidating all contract under administration of America advantage product under one entity. In addition, effective January 1, 2015, we decide to exit the stand-along PDP product as higher pharmacy cost continue to put pressure on our financial results. Not early we had a successful open enrollment period during which we were able to substantially replace the 13,000 PDP members we had as of the end of the 2014 with new membership in our dual and non-dual eligible products. An important step to our building MA organization and improving its performance with the appointment of Madeline Hernandez to role of President and CEO of Triple-S Advantage, which we highlighted in our last conference call. Madeline is a seasoned executive with more than 20 years of experience the majority of Triple-S in health plan operations, provided networks and clinical and pharmacy management, with expertise in strategic planning, pricing negotiation, financial reporting and MA business is crucial to fortifying our operational capabilities and competitive position. Madeline brings stability and leadership to the business and she has already enact change. Our main focus in MA is now on the following five areas. First pursuing a robust revenue management strategy to ensure that member conditions are properly identified and capture in submission to CMS. As for our 2015 strategy, we review and renew the contract with them on their more profitable terms in which we institute aggressive focused efforts to conduct total check reviews for inclusion of the appropriate goals in route to CMS. Second, improving plan performance our members of the structure are mentioned by the CMS Star Rating System throughout more robust reporting tools and thus improve targeting effort. Third streamlining informational flow within the organization, providing the IPAs and PCPs with the necessary tools to make better more informed efficient for the business as [indiscernible] target key organizational profits for automation to strong financial and compliance controls. Fourth, reorganizing our PCP and IPA network to maintain the group that has skills to manage the risk assumed by them to increase their size and reduce their possibility that these entities are not able to assume the risk of losses associated with their business assigned. And fifth negotiating some contract with select service providers with the intent to reduce operating expense and operating expense. Moving on to the commercial sector, we continue to pose modest membership declines in this business by strategic design. As mentioned in the past, we've been willing to sacrifice market shares to enhance profitability in this business. The commercial MLR experienced 770 basis point improvement when compared to last year fourth quarter and 430 basis points when compared to all 2013. On the Medicaid front, we’re preparing ourselves for the transition to renew our risk contract effective April 1, 2015. We do not expect any significant issues on our side and we have complete the running risk review according to our plan and our government timetable. In addition, we're working to minimize the impact of downsizing, necessitate by the reduction in the number of regions we serve from eight to the two we were award in this part. As we see it 2015 will be a difficult year. However, we believe that by focusing and investing all our energy and resources in the strategy to delineate above, we should be able to further improve the company profitability. Taking into consideration the revenue increase that will result from the change in the Medicaid contract to our risk model, we're targeting 2% to 3% ratio of net income to premium revenue in 2017 to 2018. Given the challenge that we have described, including the local government fiscal situation, the language in local economy and their certainly surrounding the government tax reforms legislation, we have chosen not to provide 2015 guidance. Regarding our use of capital, we commenced our $50 million stock repurchase program on November 10, 2014. During the quarter we bought back $5.3 million or approximately 230,000 shares of common stock and have remained active in the market. As I have said before, while we will remain prudent and disciplined with our capital deployment plans going forward, we will not hesitate to take advantage of opportunities that are accretive to future earnings. I will now turn the call over to Bobby to give you a brief of our strategic confirmation program.

Thanks Ramon and good morning everyone. It’s a real pleasure to join the call today. Since this is my first time addressing many of you, let me briefly introduce myself. I assumed the COO role at Triple-S little over a year ago in Summer 2014 and before then, over six years with the company, I've worked closely with Ramon the Board and the Management Team just start every factor of the business. Before joining Triple-S my old executive positions in several companies over the years, some large and some small, public and private and across different industries with both administrative and P&L responsibilities. As Ramon mentioned earlier, we’ve engaged a leading management consulting firm to help us develop and launch a multi-year strategic transformation program. Our goal is to better position Triple-S to thrive in a fast changing healthcare market. We’re confident this effort will deliver significant value to our customers and shareholders by improving our medical and administrative cost structure, positioning us for profitable growth in our core and adjacent markets and building a lien and agile organization with a stronger talent pool. We completed our roadmap in December and are currently implementing the first phase of this program centered on organizational excellence. We believe in having a lean highly functional organization as a first step toward delivering on our cost improvement and growth objectives. Within the scope and organizational excellence, we’re focusing on four things. First is centralizing support and operating functions across business units to take advantage of our scale in this market. Second, developing functional excellence to better partner with providers and deliver consumer engagement. Third is optimizing spans and layers across the organization. Finally but importantly, is to upgrade our talent and build capabilities to catalyze this transformation. It's going to be a challenging but rewarding journey for us and I look forward to sharing more specific information on our plans in the coming months. With that, I’ll hand the call up to Amilcar, so he offer some more in-depth analysis of our financial performance. Amílcar Jordan: Thank you, Bobby and good morning. We reported medical of $26.5 million or $0.98 per share for the quarter ended December 31, 2014, compared with a net loss of 97,000 for the same quarter last year. The result for the quarter include some non-recurring items including net realized gains of $11.1 million on the sale of investment securities and a $14.5 million income tax benefit, which I will describe in more detail later. Our regional results for the quarter reflect consolidated operating revenues of $565.2 million, which were $28.2 million or 4.8% lower than the same quarter a year ago. This decrease resulted mainly from a $27 million reduction in premium revenue mostly in managed care. Quarterly operating revenues in our Life segment were up to $2.8 million, while those in our Property and Casualty segment fell be $2.8 million. Consolidated claims incurred for the quarter declined $31 million or 6.6% driving down the reported consolidated loss ratio to 83.5%, a decrease 550 basis points. The consolidated loss ratio was positively impacted by 130 basis points improvement in the managed care MLR. The loss ratio of the property and casualty segment also reflected improvement decreasing by 530 basis points, while the loss ratio of the Life segment increased by 10 basis points. Consolidated operating expenses for the quarter were $300,000 higher after including $6.4 million in health insurance provider fees that became effective at the beginning of this year. The operation implemented several cost containment initiatives since the beginning of the year, that have built to offset the impact of the health insurer provider fee premium taxes and expenses associated with the three additional regions that it begun serving under the American program in the last quarter of 2013 and a $2.2 million impairment charge related to intangible assets resulting from the previous acquisition of our consolidated interest in a health clinic. As part of this initiative, the corporation lowered its headcount by 9.2% and experience result shows in most advanced categories in 2014. The consolidated operating expense ratio for the quarter increases 110 basis point when compared with the year ago period, mostly resulting from the reduction in premium revenue. The income tax benefit for the quarter reflects an increase of $11.7 million. The tax benefit was driven principally by the enactment of a local law that provided a temporary preferential tax rate in capital asset transactions during the last quarter of 2014 together with the execution of our crossing agreement between the group of corporations that comprise GTS under Puerto Rico Department of Treasury in connection with this law. These events allow the corporation to benefit from the enacted lower tax rate until we asses different taxes upon the changes in the tax base of some assets and tax reviews that we realized. For the year ended December 31, 2014, net income increased $9.7 million or 17.4%. While the revenues were lower, consolidated claims incurred were $88.6 million below those of 2013 resulting in a 120 basis point improvement in the consolidated loss ratio. The reduction in claims expense was partially offset by a $61.5 million decrease in gross revenues, mostly driven by lower membership in our commercial managed care business and lower volume in our property and casualty segment. Operating expenses grew by $19 million reflecting the impact of the health insurer provider fee, premium taxes and the realization of Medicaid reviews for the full year, partially offset by the cost reduction initiatives mentioned earlier. Annual results were also affected by non-recurring items already discussed, a $15.6 million increase in realized gains on the sale of investment securities and a $1.5 million reduction in the income tax expense that mostly resulted from the tax benefits recorded in the first quarter. This tax benefit was partially offset by $6.3 million increase in the income tax expense resulting from a change in the local tax laws, which increased the capital gains tax rate from 15% to 20% in the third quarter of 2014. Let me focus now on our results by segment. Managed Care premium for the three month period was $463.4 million, down $26.7 million or 5.4% year-over-year, primarily reflecting the decline in commercial membership and lower medical risk of revenue, partially offset by premium increases in the commercial business. Commercial premium revenues were down $15.5 million or 6.7%, resulting from the reduction in membership. Fully insured and operated commercial membership fell by approximately 10% or approximately 45,000 members over the past 12 months. This membership contraction has largely been seen in our rated groups, including several accounts in the government sector and individual account products, reflecting both pricing sensitivity and attrition in existing accounts as a result of the Island's challenging economic situation, partially offset by slight increases in our metal products. The impact of the lower membership on premium revenues was partially offset by a 4.1% price in the average commercial PMPM premiums. The increase resulted from pricing adjustment for claim trends and the new fleets associated with their healthcare reform. Total medical member month enrolment increased by approximately 16,000 members or 5% from last year, primarily resulting from a higher standalone PDP membership, which carries a lower PMPM premium. Notwithstanding the membership increase, medical premiums were down by approximately $11.1 million, due to lower PMPM premiums, which fell 8.5% year-over-year reflecting lower risk of revenue, the scheduled 2014 decrease in premiums mandated by Affordable Care Act and a change in membership mix. Managed Care Segment claims for the three month period were down $29.8 million or 6.8% year-over-year. The segment's MLR was 87.2%, reflecting a 130 basis points improvement from the same period a year ago. The Commercial MLR for this quarter was 84.2%, 770 basis points lower than a year ago, primarily due to favorable prior period reserve developments. Excluding the effect of prior period reserve developments and all related adjustments this metric increased 20 basis points when compared to last year. The Medicare MLR was 90.2%, 430 basis points higher than last year. Excluding the effect of prior period reserve developments and risk cover adjustment, this metric increased 860 basis points, largely reflecting higher pharmacy cost, lower quarterly risk of revenue and some nonrecurring adjustments resulting from some of the avoided contracts. Our medical claims payroll worked $249.2 million as of December 31, 2014, a decrease of $34.2 million from December 31, 2013. The number of days claims payroll was 56 as of end of 2014 and 66 as of end of the 2013. Fourth quarter managed care operating expenses were $1.7 million lower than those of the prior year. As previously mentioned, expenses in 2014, reflect the impact of the health insurer provider fees, that became effective at the beginning of this year. Excluding this item, operating expense has reflected of $6.1 million reduction. This decline reflects a result of the cost containment initiatives implemented in 2014. Operating expenses in this segment experienced a slight sequential increase of $1.2 million or about 1% and the operating expense ratio increased by 20 basis points, mostly driven by the reduction in premium revenues. Our Life Insurance segment generated operating income of $6.5 million compared with $4.6 million in the same quarter of last year. The increase in operating income was raised by growth in premium revenue and lower operating expenses that were partially offset by higher claims incurred. This improvement reflects the additional life concert on major medical health premium acquired through the Atlantic Southern purchase effective on November 2013. Our Property and Casualty Insurance segment, which remains under pressure because of the soft commercial market achieved operating income of $2.5 million, about twice that of a year ago. The higher Property and Casualty operating income primarily resulted from the segment's improved loss ratio, which fell 530 basis points together with a $1.2 million or a 11% reduction in operating expenses. Turning briefly to cash flow, for the year ended December 31, 2014, net cash generated by operating activities amounted to $38 million. As of the end of 2014, our balance sheet continues to look strong with an investment portfolio of $1.2 billion and gross unrealized gains of $117.9 million. The investment portfolio includes $35.2 million in our relations of the Commonwealth of Puerto Rico. With gross unrealized gains of $138,000, total capital amounted to $856 million compared to $785 million at the end of 2013. We will now proceed to a Q&A session.

[Operator Instructions] Our first question today comes from Ralph Giacobbe of Credit Suisse. Please go ahead.

Hi, thanks good morning. This is actually Chris Carter on for Ralph. How are you guys? Just first question on the net margin target, I think you guys said 2% to 3% by 2017 to 2018 is that right? Amílcar Jordan: Yes.

Okay. I just want to make sure I am at the right base. So if I look at your pro forma net income, I am coming up with around 1.8% for 2014, is that the right starting point? Amílcar Jordan: No. That’s why I explained that you need to consider going forward that right now the Medicaid business is on ASO contract. So going forward after April 1, 2015, the revenues are going to increase by a significant amount. Therefore you need to compare the ASO business to our rate of business you will see in the PMPM that we disclosed in prior press release.

Got it. okay. All right and then just continuing on the long-term target, what in your mind what are the biggest drivers to kind of getting into that 2% to 3% target over the coming year's? Amílcar Jordan: I’ll tell you the following. I think that we're focused into three -- I always say, we're focused in the three areas. As Bobby mentioned, we're focusing the organization in order to be more effective and efficient and I’ll say putting the organization at a point that we can better serve our community and our members. So we look efficiency and total expense -- in the Medicare Advantage I’ll say, I explained all the things that we are doing during 2015. I think that it will take the whole 2015 to work in this area. Therefore we see that we're going to work in by way to initiatives where we can see and increase -- I’ll say a better relation of revenue to the condition of the members. So that’s an area that we see as an opportunity. Also by providing more information to the IPAs and the provider network, we look for opportunity to become more efficient. The reduction in the IPA and increase in the size that will help them to assume I’ll say, to refigure more risk, therefore reducing the possibility that the losses that they have we need to absorb it because they don’t have the financial capability to assert those losses. So Madeline is a person that has been working with the company for more than 20 years -- in the industry for more than 20 years and in my case, I have worked with Madeline for more than 25 years. So I know her. I know her capabilities and I know that she is very focused in dealing with the different issues that we have in Medicare Advantage and establish a plan that even though there might be no change to the proposed reduction in premium, we have a plan that will mitigate the effect of those reductions. It's going to be tough. It's not going to be easy, but with proper focus in different areas, we feel comfortable that we're going to be achieving those goals for the year 2017, 2018.

Okay. And then just a couple more if I could. Just on the Medicaid contract, I know that's starting in April are you still comfortable with the terms and the rates just given the continued economic pressure. And then second, how are you guys thinking about profitability potential in year one? Ramon Ruiz-Comas: I’ll say we feel comfortable with the proposal that we submit. Our proposal considers the projections that we have about costs. So at this point, there is nothing that will tell me that the estimate that we use to prefer our proposal has a significant barrier. So we feel comfortable that taking into consideration, the information that we have today, our proposal we expect to realize the projected benefit that we did when we submit the proposal. And as we have mentioned, remember that in this contract, the government established that this type of contract the net income to premium should be up to 1.5% of revenue and anything over 1.5% of revenue will be shared with the government 50% and 50%. So that will say -- I think that I told you 1.5 it was 2.5 before tax, excuse me, it was 2.5 before taxes that are the terms that the government provide in the contract.

Okay. And then just last one PNC business, it looks like you had another strong quarter a pretty good year, any updated thoughts there on the sale? Ramon Ruiz-Comas: I’ll say as we have mentioned, this is something that is an opportunity arrived, we will evaluate any opportunity very seriously and if it is convenient to the company and to the shareholders, that's something that we will properly analyze.

Okay. Thank you very much. Amílcar Jordan: May be, I think that I want to assure, I think that with the plans that we have in the -- to taking care of the situation in Medicare Advantage, I feel very comfortable that Madeline will be able to handle it properly.

Okay. Great, thank you.

[Operator Instructions] The next question is coming from Peter Costa of Wells Fargo Securities. Please go ahead.

Hi everyone. Let's explore the Medicare Advantage loss ratio a little bit more. I think I understand the pharmacy cost issue and the rate pressure issue and those things have been with you all year, but it looks like your performance actually deteriorated in the fourth quarter in Medicare Advantage compared to how you were doing the rest of the year. What it specifically the cause in the fourth quarter to deteriorate? You mentioned some contract adjustments I believe. So I am kind of -- if you could quantify that a little bit and are those the same contract adjustments that one of your competitors had problems with in Puerto Rico regarding uncompensated care for hospitals? Amílcar Jordan: No, I’ll say may be Peter, we don’t provide those type of details or maybe in overall yes, we have an increasing pharmacy costs. Also I’ll say we mentioned that in terms of the revenue, we have a reduction in the revenue taking into consideration the condition of the patient. So there was higher utilization and then as part of innovation of the contract to Triple-S advantage, I’ll say we make an evaluation of the collectivity of some account receivable that are part of the capitation agreement that we have for providers. And therefore we make an adjustment taking into consideration that this provider we're not going to be providing any more service to Triple-S Salud, which was a contracting entity. So we prefer to be conservative in terms of assuming that the way that we can collect those amounts is going t o be difficult, therefore we decide to make the adjustment for the end of the quarter.

So how substantial was that adjustment at the end of the quarter? Ramon Ruiz-Comas: I don’t have here the information. I can come back to you and try to give it you. Okay.

Okay, I appreciate that if you could. And then given that one of your members is having difficult -- one of your competitors is having difficulties in the Puerto Rico market with the Medicare Advantage product, and you are as well, do you see a changed environment next year, or is there any opportunity for you to perhaps combine those membership either buying out your competitor or selling some of your Medicare Advantage membership? Is that something you've considered or can we talk about strategically… Amílcar Jordan: I feel that -- we fell comfort that we can improve the financial performance. The way I'll say it Peter, we're responsible, so we will use our capital the way that is more accretive to our shareholders. So we got rid also of the PDP business that I’ll say we didn’t see opportunity to improve because of the increase on the pharmacy cost. So we feel that taking the responsible measures where we will focus in improving on the writing that's something that could happen in the future. What we understand is that based on environment, I’ll say market conditions right now, 2015 is going to be a difficult year and that’s why I say like that. But we're working in these areas or in these areas where we think that we have opportunity and we can improve the financial result of that business. That is a good business and I’ll say in the case of Puerto Rico, we have a higher percentage of Medicare -- people that qualify for Medicare. Therefore, we think that that business is profitable and we're looking forward to improve the financial results and we will feel that we can do it.

Okay. Let's move on to commercial loss ratio a little bit. If we adjust the loss ratio for prior period development it was actually up 20 basis points as you pointed out to 87.5% from 87.3% in the quarter. And the fourth quarter a year ago was sort of a tough quarter for you guys in terms of the number of things that was sort of off of the tough quarter. It seems like it didn't improve much despite your pricing actions and improvements in terms of moving some membership away. Can you talk about why you are comfortable that things are going the right way there and how much improvement we should be seeing… Amílcar Jordan: I think that we have -- in some things that we have been looking at is we have been able to continue to I’ll say improve the portfolio. We are managing the portfolio, focusing more in terms of underwriting. I’ll say the increase in the pharmacy cost was higher than we were expecting. In the case of USBI we have seen improvement. Therefore, I think that we're going in the right direction. I’ll say the thing is that right now we think that because of the financial condition in Puerto Rico it has been tough to transfer those price increases that we need to transfer. But as we've mentioned before, we're more focused in achieving our underwriting results. Also we're working, reviewing the medical policies. That's one thing that we're working as we speak and also we're creating a new preferred network or imaging. So we feel opportunity that we can reduce cost in those areas. So what we have seen was that at least the degradation that we will stop and yet I understand what you're telling me that even last quarter, last year was tough. We have an increase of 20 basis point, I'll say that is not significant and what we've seen when we look at the business or the whole year, we have seen an improvement and with this initiative that we're taking, I think that we will continue to improve. And we have order in each of these where as far as the strategy that we have in terms of making some joint ventures with some providers, that's something that we're looking forward in the coming future.

Okay. Moving on to your PBM arrangement, pharmacy has come up in both businesses, Commercial and Medicare as being the tough area for you and it's so important in Puerto Rico, can you explain to us again if you thought about moving to a larger PBM given that the rate pressures and cost pressures in the PBM business seem to be… Ramon Ruiz-Comas: I will say Peter, that's something that -- that contract we'll sign I think for three years. So we're in the second year of that contract. In my view, that's something that we will look at, but we need to be very careful. I'll say, last time that we went to larger company, that had a larger PBM, they were not -- their prices were higher than the PBM that we have here in Puerto Rico and they didn't have to compromise with us. So one of the things that we're dealing and we're working as we speak is that the biggest, I'll say, the biggest challenge that we have is with a specialty pharmacy. So that's something that we have been working to try to make better contracting with those specialty pharmacy, but that has been an area that has increased significantly in the quarter.

Yes. Ramon Ruiz-Comas: But the answer to you, yes we will consider companies in the space as long as they're waiting to provide us good pricing and transfer of their competitive advantage that they have because of the amount of members that they have in the U.S. Our experience up to this moment is we don't have -- we don't have -- they were not willing to reduce their price, even though they had more capabilities to provide us a better pricing.

Okay. And just two more details, can you tell us what cash was at the parent and then, what do you expect for tax rate this year maybe before the reform happens and then if reform happens, what will be afterwards. Amílcar Jordan: I'll say normally we use -- I'll say tax rate -- I'll say a normalize tax rate if tax rate is about between 22%, 25% and I'll say that has been our experience.

And that will stay the same. Amílcar Jordan: That will be a normalized tax rate. Remember that depending on the income from where it comes, because in the case of the health insurance the tax rates are high in the case of life insurance where you pay is minimum tax, which effective rate is about 18%. And in the case of Property & Casualty, I'll say is around -- is around 25%. 20% - 25%.

And I just want to be clear, those will stay the same even if there is the tax reform that you talked about from the government. Is that correct? Amílcar Jordan: Yes.

Okay. And then the cash at the parent?

Is around $16 million.

$16 million. Amílcar Jordan: $16 million.

Thanks guys. Amílcar Jordan: Okay.

There no further questions. I'll turn the conference back over to Ramon Ruiz-Comas for closing comments. Ramon Ruiz-Comas: Thank you all for participating on our call today. We appreciate your time and interest in our company and look forward to seeing many of you at upcoming conference. Thank you.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.