Prompt:
Human: These are important to review and contemplate.
As everyone on the call today is aware, business environment uncertainty remains heightened due to COVID-19.
These items include shutdown impacts for many areas of the economy, changes to consumer purchasing habits potential for a disruptive supply chain and various other economic factors.
This means that results could change at any time and the forecasted impact of risk consideration to the best estimate based on information available as of today's date.
Additional information concerning risk factors and cautionary statements are available on our most recent SEC filings and the most recent Company 10-K.
I'll now hand it over to our CEO, Ron Lombardi.
And let's start on Slide 5.
Our proven business model continues to set us up for long-term success and the strong earnings performance and a stable topline year-to-date results is continued evidence of this as we have raised our full year revenue and earnings targets.
The business strategy we have in place is a highly adaptable one, which positions us to create value during the pandemic.
Our strategy of offering consumers a wide range of easily accessible brands they know and trust continues to work.
The ongoing objective is to grow categories while connecting with consumers over the long term.
We'll share one example of this long-term strategy, Compound W on the next slide.
Despite the long-term nature of these investments, we are also quick to target near-term opportunities.
This important nuance allows us to adjust our brand-building strategy in real time finding additional ways to deliver brand growth.
For example, as discussed the last two quarters, we have focused on prioritization on where consumers are shopping.
A result of this is that we are winning big in e-commerce where we've seen triple-digit growth and many of our brands actually have a higher share in the channel compared to brick and mortar.
Meanwhile, our nimble business continuity efforts continue to do well during COVID-19.
We continue to work strategically with our manufacturing partners to ensure consistent service levels in this dynamic supply environment.
Finally, our consistent operating model and disciplined capital strategy continue to reward shareholders.
We anticipate solid earnings and free cash flow growth for the full fiscal year, which continues to increase our capital allocation optionality.
So, to recap, our business positioning remain solid and our strategy of delivering consistent results as we close out our fiscal year.
Utilizing our brand-building toolkit and taking time to understand consumer insights, the goal is to drive long-term growth for our leading brands.
Shown on the page we have Compound W, which is a great example of this objective.
It's a brand with a long history with consumers and we've invested steadily behind it through a wide range of tools over time.
One tool used is innovation.
All of our brands operate with a multi-year pipeline of product development concepts to ensure we continue to match the needs of consumers.
Compound W NitroFreeze is a great recent example with its extreme freezing technology that is not found in other OTC treatments.
We are also connecting with consumers, as they think about treatment with content that helps explain their wart treatment options.
For example, during the pandemic, we've reminded consumers of the ability to treat warts effectively at home and the solutions Compound W offers.
The result of our investment behind Compound W is clear.
We have a trusted source for retailers for insights into the wart category and how to drive long-term category growth.
This has enabled our brand to continue to gain shelf space and share.
Our results have been solid.
Over the last five years, Compound W has grown at a double-digit compound annual rate.
That's free outpacing category growth and solidifying its number one market position with consumers as a preferred brand for wart treatment.
With that, I'll now hand it over to Chris to review our financial results.
Q3 revenue of $238.8 million declined 1.6% on an organic basis versus the prior year, which excludes the effects of foreign currency.
By segment, North American revenues were down 2%.
Several segment categories grew with the largest increases in Women's Health and Oral Care.
As expected, however, these gains were offset by lower Cough and Cold as well as motion sickness and head lice as these categories faced declines in incidence levels and usage rates related to changes in consumer behavior due to COVID-19.
Our international segment increased approximately 2% after excluding the effects of foreign currency.
The increase was primarily attributable to higher sales of Hydralyte in Australia as certain shelter at home restrictions were lifted related to COVID-19.
As a reminder, due to its distributor model, the timing of international segment orders can be difficult to predict as can the uncertainty around pandemic-related restriction.
Adjusted EBITDA declined approximately 6% in the quarter versus the prior year, primarily driven by the timing of A&M spend.
EBITDA margin remained consistent with our long-term expectations in the mid-30s.
EPS for the quarter was $0.81 per share, flat to the prior year as a result of lower interest expense from debt pay down, offsetting the lower revenue and A&M timing.
For the first nine months revenues were down 90 basis points.
Our diverse portfolio has enabled a stable revenue performance with strength in many brands in our portfolio, helping to offset COVID-19 impacted categories.
Our broad channel diversity continues to help drive revenue performance as we experienced strong triple-digit consumption growth in the e-commerce channel year-to-date, as consumers continue to shift to online purchasing.
Total company gross margin of 58.2% in the first nine months was largely flat to last year's adjusted gross margin of 57.9% and has been stable across quarters.
This was in-line with our expectations and we continue to anticipate a gross margin of about 58% for the remainder of the year.
Advertising and marketing came in at 15.9% of revenue in Q3 and 14.8% for the first nine months.
We still expect A&M for the full year to be you just under 15% as a percent of sales as we continue at a normalized rate of spend in the fourth quarter.
G&A expenses were flat in Q3 down for the first nine months of Fiscal 2021 versus the prior year [Indecipherable] largely to disciplined cost management.
For the full year, we anticipate G&A expenses to approximate 9% of sales and remain below prior year in absolute dollars.
Lastly, we realized strong 15% earnings per share growth for the first nine months of Fiscal 2021 versus the prior year.
Lower operating costs, lower interest expense and lower share count were all factors to the growth.
In the quarter, we generated $43.5 million in free cash flow, which, as expected, was lower than last year due to both timing of working capital and CapEx investments.
For the first nine months of Fiscal 2021, free cash flow of $159.2 million grew over 3% versus the prior year.
We continue to anticipate full year 2021 free cash flow at or above prior year levels.
At the end of Q3, we had approximately $1.5 billion of net debt, which equated to a leverage ratio of 4.2x.
During the quarter, we repurchased approximately $9 million in shares opportunistically leaving the remainder of our cash generation on the balance sheet in anticipation of a potential bond refinancing event in Q4 to opportunistically capitalize on the attractive debt rate environment.
The cash accumulation was temporary to the quarter.
There has been no change to our strategy of prioritizing debt pay down as our primary use of free cash flow.
With less than two months to go, in our fiscal year, we are confident with our business performance and objectives and are increasing our outlook for both sales and EPS.
For the full year Fiscal 2021, we now anticipate revenues of approximately $935 million.
For Q4, we anticipate consistent trends to what we have realized over the past few quarters.
However, the period will face a unique comparison to the prior year as we experienced a significant lift in March of 2020 as consumers stocked up on items as a result of COVID-19.
We now anticipate adjusted earnings per share of approximately $3.22 for Fiscal 2021.
Disciplined cost management and the benefit of our capital allocation strategy and debt reduction continue to drive a solid earnings growth.
These attributes to translate into free cash flow as well and we continue to anticipate free cash flow of $207 million or more, which is at or above the prior year's level.
We continue to prioritize debt reduction while balancing other disciplined capital allocation efforts to drive shareholder value.
Looking ahead, we continue to have confidence that our business is well-positioned heading into Fiscal 2022.
We will begin to lap the effects of COVID-19 that began in the spring of last year, while our long-term brand building strategy continues to set us up for long-term success.
We continue to target 2% to 3% long-term organic sales growth, which translates into mid to high single-digit earnings growth driven by our stable and solid financial profile and disciplined capital allocation strategy.
It's a proven strategy and we remain confident in its ability to drive value for stakeholders.
 Assistant:

Chosen response:
compname posts q3 revenue $238.8 million.
q3 revenue $238.8 million versus refinitiv ibes estimate of $231.5 million.
q3 non-gaap earnings per share $0.81.
q3 earnings per share $0.81.
raising full-year fiscal 2021 outlook for revenue and earnings per share.
sees 2021 revenue approximately $935 million.
sees 2021 adjusted e.p.s. approximately $3.22.


Prompt:
Human: pb.com and by clicking on Investor Relations.
Additionally, we have provided slides that summarize many of the points we will discuss during the call.
These slides can also be found on our Investor Relations website.
We got off to a solid start to the year with every business making an important contribution to the quarter.
Overall, revenue at constant currency grew 14% and every business improved their EBIT performance.
For the second consecutive quarter, SendTech improved EBIT on a year-to-year basis.
As I mentioned before, the transformation of SendTech from a business in secular decline to a business well positioned to capture new value in the shipping market is one of the most impressive transformation I've ever seen.
The business has leveraged digital technologies to transform our offerings and our go-to-market strategy.
SendTech's platform is built on IoT technologies that are delivered on a fast chassis and this business is very well positioned going forward.
Our Presort business continued with the momentum we saw at the end of last year with both revenue and EBIT improving on a year-to-year basis.
Global Ecommerce revenue at constant currency grew 40% for the quarter and EBIT margins improved nearly 400 basis points on a year-to-year basis.
Importantly, profit performance improved throughout the quarter as our labor model continued to mature and pricing changes kicked in.
In the month of March, Domestic Parcel Services per unit labor cost delivered the best performance compared to any quarter since second quarter of last year.
We expect unit labor cost to continue to improve and transportation and automation efficiencies are primarily still in front of us.
Transportation cost remain high in both our Ecommerce and Presort businesses.
So further insourcing our transportation, as well as the deployment of automation will benefit both businesses.
A lot of opportunity in front of us as we continue to invest in areas that will yield future productivity benefits.
We also made several important additions to our Global Ecommerce team.
While I'm sure the team will continue to evolve, we have a group of professionals and consultants guiding our business who have built business to consumer networks centered on induction to the USPS system.
Cash performance for the quarter was also relatively strong compared to prior year off of an improved working capital performance.
The team continue to demonstrate strong operational discipline.
We also executed a successful refinance in the quarter.
There are two objectives to the refinancing.
First, we wanted to push out the maturities, further decreasing our refinancing risk.
Secondly, and more important in my perspective, we created strategic flexibility.
We achieved both those objectives.
I've described four chapters of transformations, quick wins, sustained investment, revenue growth and finally, profitable revenue growth.
Last quarter, I said we are poised to enter that fourth chapter, profitable revenue growth.
It's hard to call the first quarter an inflection point given the nominal EBIT increase but revenue and profit did increase and are very much like our position going forward.
Each business is poised to continue to make progress during this year and for that matter, going forward beyond this year.
All in all, I'm quite pleased with the quarter.
It turned in another strong revenue performance and improved EBIT across each segment compared to the prior year.
As the revenue compares get more difficult as the year goes on, growth will inevitably moderate but the trend is quite clear and are very much like the way we are positioned.
Before I get into the details of the quarter, this being my first earnings call with the team, I want to share with you a few thoughts on what attracted me to Pitney Bowes.
The first thing that attracted was the growth trajectory.
Now that I have had a chance to go deeper into the business, I am confident that we are on the right path of achieving what Marc referred to as the fourth chapter of our transformation, which is profitable revenue growth.
The second item is culture.
I can feel a true sense of team, pride and passion for continuously innovating and winning in the marketplace.
These are concepts that you cannot necessarily teach, they are ingrained and I consider them to be imperative to our success.
And last, what I did not realize or quickly learned is how much technology is deeply needed in everything we do.
It's not as evident when you look at the business from a distance, but I believe it's one of the major enablers to the company's transformation.
Now, let me turn to our first quarter results.
Revenue was $915 million and grew 14% over prior year.
Adjusted earnings per share was $0.07 and GAAP earnings per share was a loss of $0.18.
GAAP earnings per share includes a $0.22 loss on the refinancing of our debt as well as a $0.02 loss from discontinued operations and $0.01 on restructuring charges.
Free cash flow was a net use of $1 million and cash from operations was $66 million, both an improvement from prior year due to favorable working capital changes largely around the timing of accounts payable and accounts receivable along with improved collections.
This was partially offset by lower customer deposits at our PB Bank.
During the quarter, we paid $9 million in dividends and made $4 million in restructuring payments.
We invested $43 million in capex as part of our plan to drive future operational efficiencies.
We ended the quarter with $697 million in cash and short-term investments.
Total debt was $2.4 billion.
We took several actions during the quarter to refine our capital structure along with reducing overall debt by $126 million from prior year.
These actions further reduce refinancing risk with the reduction of our near-term bond maturities.
We also improved the pricing up and substantially paid out our term loan B, improved our covenants which provides us greater strategic flexibility and extended the duration across our capital structure.
When you take our finance receivables and cash into account with our debt, our implied operating debt is $690 million.
Looking at the P&L, starting with revenue versus prior year.
Business services grew 28%, equipment sales grew 12% and rentals were flat to prior year.
We had declines in Support Services of 4%, supplies of 10% and financing revenues of 14%.
Gross profit was $299 million and gross margin was 33%, which was down from the same period last year largely due to the mix and shift of the portfolio, but is an improvement from the fourth quarter.
SG&A was $238 million or 26% of revenue.
This is an improvement of $10 million and 5 points respectively from prior year.
Within SG&A, corporate expenses were $57 million which was up about $14 million over prior year largely due to benefits recognized last year around employee variable-related costs and a sales tax credit.
R&D was $11 million or 1% of revenue and down slightly from prior year.
Adjusted EBIT dollars were $50 million, which was a slight improvement over prior year.
Adjusted EBIT margin was 5%.
Interest expense, including finance interest was $37 million.
Our tax provision on adjusted earnings was a benefit of about $400,000 and includes a benefit associated with an affiliate reorganization.
Compared to prior year, our tax provision benefited earnings per share by about 1.5%.
For purposes of determining adjusted EPS, shares outstanding are approximately $179 million.
Let me now turn to each segment's performance starting with Ecommerce.
Revenue for the segment was $413 million and grew 40% over prior year.
Revenue continues to benefit from the strong demand along with the pre-pandemic comparison.
Volumes grew year-over-year across all lines of service.
Domestic Parcel Services volumes grew 23%, Cross Border volumes were more than doubled and our Digital Services volumes grew 36%.
EBIT was a loss of $26 million and EBITDA was a loss of $8 million.
Compared to prior year, EBIT improved $3 million and EBIT margin improved nearly 400 basis points.
We made progress through the quarter where earlier on we were still dealing with the receivable of peak holiday season.
We continue to work to improve service levels in our Domestic Parcels Network balancing cost and quality which are all headed in a positive direction.
As with the industry, we all continue to see relatively high transportation costs and a competitive labor market.
However, as we move through the quarter, our Domestic Parcel Network improved parcel process per hour by approximately 45% as our labor model continued to mature.
Margins continue to be healthy in our Digital and Cross Border services.
Of the $26 million EBIT loss in the quarter, we saw a loss of $4 million in March and reported positive EBITDA for the month.
Within our Domestic Parcel Service, our initiatives to improve productivity are still largely in front of us.
As we have discussed in the past, investments will include new automated sorters along with streamlining our processes to improve productivity.
We placed one new sorter in a high volume site in the first quarter and expect to roll out more over the next 12 to 24 months.
In addition, we are implementing modern sortation processes in each of our facilities before the upcoming holiday peak season this year.
This investment and related productivity actions are expected to more than double our [Indecipherable] process per hour our over time.
In addition, our transportation team continues to execute on the strategy of migrating outsourced lane into our own PBC.
In the first quarter, we insourced several of these lanes with more plans for the second quarter, all which will improve cost and service.
We also brought in third-party industry expertise to help support our execution in the area of transportation.
We believe that optimizing our transportation will yield significant productivity benefits.
Finally, we are in the process of opening two new sites and upgrading another which we expect to have completed prior to the peak season.
This will allow us to handle volumes more efficiently and deliver deeper into the USPS network.
Ultimately, we expect transportation and labor productivity along with optimizing final mile solutions to be critical drivers in obtaining our long-term e-commerce margins.
We expect these to account for approximately 75% of the margin improvement.
Our Presort Services saw the momentum from the second half of 2020 continue into the first quarter.
The business turned in a solid performance growing revenue, EBIT and EBIT margin over prior year.
Revenue was $143 million and grew 2%.
Overall, average daily volumes were flat to prior year where First Class Letter Mail declined 2%, Marketing Mail grew 11% and Marketing Mail Flats and Bound Printed Matter grew 30%.
EBIT was $19 million and EBIT margin was 13%.
EBITDA was $27 million and EBITDA margin was 19%.
EBIT and EBITDA improved from prior year due to both revenue growth and lower expenses.
We have been able to maintain double-digit margin in the Presort Business even as we continue to invest in our talent and equipment.
Compared to prior year, we improved pieces fed per labor hour by 4% resulting in 85,000 less processing hours.
Within SendTech, we also picked up on the momentum from the second half of 2020 as we continue to soften the decline in our revenue and maintain strong EBIT margins.
Revenue was $359 million and declined 3%.
We continue to differentiate ourselves in the market with our end-to-end mailing and shipping offerings to enterprise and small office providers that are attractive to both existing and new clients.
We have a growing revenue stream around office shipping that carries with it high margins approaching that of our legacy mailing business and a software business.
And like the legacy mailing business, the shipping opportunity in SendTech provides multiple paths for us to add profit and revenue like supply, financing and professional services.
SendTech's shipping related revenues grew at a low double-digit rate to approximately $30 million in the quarter.
The number of labels printed through our shipping offerings grew over 40% and paid subscriptions grew approximately 80%.
Additionally, we are seeing good growth in shipping volumes that our US clients are financing which grew nearly 80% over prior year.
These positive metrics show that our clients are adopting and using these new offerings as they see the value it brings to their business.
Equipment sales grew 12% over prior year driven by strong placement of our SendPro C, which include a large government deal and we continue to see good placements of our new central mail station, multipurpose device.
It is important to point out that like others, we have experienced transportation issues related to our supply chain.
We have been able to properly manage our inventory and grow our equipment sales despite these challenges and it is an area that we are closely monitoring.
We are also keeping a close eye on the semiconductor industry and are looking to mitigate any potential second half supply shortage by repositioning our solutions as necessary.
We turned in a strong EBIT performance of a $114 million which represents growth of $8 million over prior year and is the second consecutive quarter of EBIT growth.
EBIT margin was 32%, which improved 250 basis points over prior year.
EBITDA was $122 million, EBITDA margin was 34%, both improving over prior year.
As you may recall, prior year included an increase to our credit-loss provision to reflect macroeconomic conditions resulting from COVID-19 in connection with the application of the CECL accounting standards.
One other point that I would like to make is that this team has done a tremendous amount of work, not only to transform its products and offerings, but also its channel.
Today, about 80% of all US sales transactions are happening through our web or inside sales channel.
This has allowed our field team to concentrate on larger enterprise deals and this has been a great contributor to maintaining the very healthy margins that we see in this business.
I am pleased with the performance of our key trend in the first quarter.
We entered the year with good momentum and continued to concentrate on the opportunities in front of us, and we expect to make good progress throughout the year.
As discussed during our last earnings call, we continue to expect annual revenue at constant currency to grow over prior year in the low to mid-single digit range making this our fifth consecutive year of constant currency revenue growth.
We also continue to expect adjusted earnings per share to grow over prior year.
Free cash flow is expected to be lower from prior year primarily due to specific items which benefited 2020 such as higher customer deposits, lower finance receivable and lower capex, which are not expected to continue at the same level in 2021.
Within our segments, we expect Global Ecommerce revenue growth to be stronger in the first half compared to the second half as the revenue comparisons will get more difficult as we move through the year.
We also expect e-commerce to demonstrate significant profit improvement and deliver positive EBITDA for the full year.
Within SendTech, we expect the momentum we saw in the second half of 2020 and first quarter to continue, particularly around our shipping capability and new multipurpose devices and help partially offset the decline in reoccurring related revenues.
We also expect the improvement in volume trends we saw in Presort in the second half of 2020 and first quarter to continue through 2021.
There are a few headwinds to be aware of on a year-to-year basis that will partially offset the overall business unit improvements.
In 2020, we recorded write [Phonetic] insurance proceeds.
In 2021, we expect higher employee-related costs as it relates to variable compensation.
Additionally, we expect a higher tax rate in 2021.
Looking at the timing through the year, our portfolio continues to shift to markets that are growing particularly around shipping.
As a result, the fourth quarter will continue to be our largest quarter of the year for revenue and earnings.
For the second quarter, we expect revenues to grow in the mid to high single-digit range.
Similar to first quarter, we also expect adjusted earnings per share to grow modestly over prior year.
That concludes my remarks.
 Assistant:

Chosen response:
q1 adjusted earnings per share $0.07.
q1 gaap loss per share $0.18 including items.
q1 revenue rose 15 percent to $915 million.
full year 2021 expectations are consistent with what was communicated last quarte.


Prompt:
Human: Joining us today are Patti Poppe, our Chief Executive Officer; and Chris Foster, Executive Vice President and Chief Financial Officer.
These statements are based on assumptions, forecasts, expectations and information currently available to management.
We also encourage you to review our quarterly report on Form 10-Q for the quarter ended September 30, 2021.
This quarter, we delivered non-GAAP core earnings of $0.24 per share.
We are reaffirming our 2021 non-GAAP core earnings per share guidance of $0.95 to $1.05, and we no longer expect to issue equity in 2021.
We continue to see rate base growth of 8.5% and longer-term earnings-per-share growth of 10%.
Chris will provide more details on the financials in just a bit.
As you saw at Investor Day, our experienced team is driven and focused on delivering clean energy safely every day.
We have a very sophisticated and continually improving PSPS algorithm year-over-year.
In fact, when we backcast our current model to the previous utility caused fires between 2012 and 2020, we would have prevented 96% of the structure damage had the current model been in place.
This year, we also implemented enhanced power line safety settings to address wildfire risk we faced from extreme drought conditions.
In fact, since the end of July through mid-October, we saw 46% decrease in CPUC reportable ignitions in high fire threat districts and an 80% reduction in ignitions on enabled circuits.
These enhanced safety settings make our system and our customers safer.
We're delivering on the 2021 wildfire mitigation plan with our lean operating system and deploying it across the entire Company to deliver predictable outcomes for customers and investors.
In addition to quarterly operational, financial and regulatory updates, I'd like to spend some time on the work done and the changes made since 2019 that make our system safer and more resilient.
Let's start on slide 4, with how we've improved our PSPS program since 2019.
In 2019, we had seven events that impacted over 2 million customers.
Since then, we've installed approximately 1,300 weather stations, 500 high definition cameras and over 1,100 sectionalizing devices to better pinpoint exactly where we need to initiate PSPS.
Our 2021 PSPS algorithms are informing -- are informed by more granular weather forecasting and we're using Technosylva software to incorporate machine learning into our fire spread modeling, so we can better predict where the risk is on our system in real time.
Our continuous improvement approach applies to addressing safety risks while minimizing disruption to our customers.
As you can see on slide 5, our model shows that by backcasting our new 2021 PSPS algorithm on to 2012 through 2020, we would have prevented 96% of the structure damage from fires caused by overhead electrical equipment in our service area.
As you know, this year, we experienced extreme drought conditions in our service area.
Due to these conditions, we saw fire spread on non-red flag warning days.
We assess these risks and identified where we needed to focus.
Guided by former CAL FIRE and local fire authority personnel who now work for PG&E, we implemented additional wildfire mitigation in our high fire threat areas.
You can see the results of our safety focus on slide 6.
We've compared the data since we implemented our enhanced powerline safety settings against the most recent three-year averages.
What we've seen is a 46% reduction in CPUC reportable ignitions in our high fire threat districts from the end of July through mid-October.
On the specific circuits where we first implemented the enhanced powerline safety settings, we've seen an 80% decrease in ignitions over the same time period.
We're working hard to reduce the customer impact from these new necessary protocols.
We've optimized our protective device settings on all circuits that have enhanced powerline safety settings and we've adjusted our circuit restoration procedures.
These enhancements are making outages smaller and faster to restore, while still removing the ignition risk.
We're communicating transparently, our commitment to preventing fires of consequence to communities where enhanced powerline safety settings are in place.
Let me make it real with one story.
On Monday, October 11, we initiated a PSPS event that affected about 20,000 people.
The wins came in as forecasted, and in 33 instances, outside of the PSPS zones and the highest wind areas, our lines automatically de-energized due to the unpredictable disturbances and potential risk was mitigated.
We know our protocols are working.
We will continue to work around the clock to make these solutions less disruptive to customers and know that we are keeping them safe while we do that.
Our experience since implementing these settings in late July will serve as an important guide for our 2022 planning.
As we continue to keep people safe each day, I want to talk a bit about the risk reduction work we've completed since 2019.
Let's start on slide 7 with our enhanced inspection.
As you can see, we're on track to complete our enhanced inspections on 0.5 million assets in 2021 in our high fire threat areas.
These inspections are scheduled to be conducted every year on all assets in Tier 3 and every three years for all assets in Tier 2.
At the bottom of this slide, you'll see a couple of points on our routine inspection program.
We get a lot of attention internally, but really isn't well known outside of PG&E.
As you can see in the green box, we conduct vegetation management inspections across our entire system annually and in high fire threat areas, we patrol those conductors twice a year.
In 2021, we plan to complete 1800 miles of enhanced vegetation management work, combined with what we completed in 2019 and 2020 adds up to over 6,000 miles by the end of this year.
While we are focused on keeping people safe with inspections and vegetation management, we're also focused on the longer-term hardening of our system.
In the last three months, we've made great progress against our multi-year 10,000 mile undergrounding program.
Our engineering team is scoping out the work as you'll begin to see in our 2022 wildfire mitigation plan.
Our goal is to engage the entire community around the imperative of undergrounding and we are succeeding.
We are engaging stakeholders through undergrounding advisory group with representatives from environmental groups, labor, telecom, consumer advocacy groups, county tribes among others.
And we're gathering ideas on innovations in engineering, equipment and construction from the world's best through our RFI process.
We're continuing to work on system hardening as you can see here and we'll provide an update on how we're thinking about that work as we further develop our undergrounding program.
As a sneak peek, I'll share one project we completed this year.
In September, we completed undergrounding powerlines in Santa Rosa, which resulted in 11,000 customers who will no longer be impacted by PSPS.
This is one of many projects.
This is the right solution for our customers in that area and that's why we did it.
Simple solutions based on customer needs.
As I mentioned, more to come on our undergrounding plans as we move into early 2022.
At PG&E, effective implementation of our wildfire mitigation plan is enabled by our lean operating systems, which we're deploying across the entire Company.
These brief 15-minute huddles provide daily visibility on the metrics that matter most, help us identify gaps and quickly develop plans to support our teams closer to our customers giving us control and predictability of our operations.
As you know, this summer, we were challenged by the Dixie fire and the impact of fire had on all of our customers.
I'll repeat what we said since Investor Day, our actions around Dixie were those of a reasonable operator and we're confident in the framework created by AB 1054.
AB 1054 resulted in a wildfire fund to provide liquidity for resolved claims, a maximum liability cap for reimbursement by investor-owned utilities and enhanced prudency standards when determining that reimbursement amount.
We're reflecting that view in our financial statements which show a gross charge of $1.15 billion.
We booked an offsetting $1.15 billion receivable that reflects our confidence to recover costs.
As I highlighted, PG&E is working hard every day to deliver clean energy safely.
We're building on the mitigation programs we started in 2019.
We're staying nimble to respond to current conditions.
And we are improving our performance enterprisewide.
For example, our team just last week responded to an atmospheric river weather event that included among the highest rainfall totals observed in a 48 hour timeframe ranging from 16 inches at Mount Tam [Phonetic] to 5 inches in downtown Sacramento.
The strongest wind gust recorded was 92 miles per hour from Mines Tower in Alameda County with at least a dozen other locations experiencing gust greater than 69 miles per hour.
Even in the face of these difficult conditions, we completed our work without any serious safety incidents while returning service to 632,000 of the 851,000 customers impacted within 12 hours.
I am very proud of the safe and rapid response of our team.
Now, I'll hand it over to Chris to cover financial and regulatory items.
As Patti referenced earlier, our financial plan remains on track and is supported by a regulatory construct [Phonetic].
I'll cover the highlights first, then go into more detail.
Today, we are announcing [Phonetic] that we no longer see a need for equity in 2021.
We are reaffirming our non-GAAP core earnings per share guidance for this year and we anticipate issuing our 2022 guidance on our Q4 earnings call.
Additionally, we are seeing progress on recoveries related to prior wildfire risk reduction investments to help the balance sheet.
Let's start with the share count used for Q3 2021 and year-to-date GAAP and non-GAAP core earnings per share.
We're in a GAAP loss position for both Q3 2021 as well as year-to-date 2021 due to our grantor trust election this quarter.
As a result, we're required to use basic shares outstanding to calculate both GAAP earnings per share and non-GAAP core earnings per share for Q3 and year-to-date.
Our full year guidance as always assumed a GAAP positive year and our full year non-GAAP core earnings per share of $0.95 to $1.05 per share, reflects our fully diluted share count.
So there is no impact there.
I'll start with our Q3 result.
We continue to be on track for the 2021 non-GAAP operating earnings per share of $0.95 to $1.05.
This is calculated using our fully diluted share count I just mentioned, consistent with our assumption when we initiated guidance.
Slide 9 shows our results for the third quarter.
Non-GAAP core earnings per share for the quarter came in at $0.24.
We recorded a GAAP loss of $0.55 including non-core items.
This quarter, we recorded a $1.3 billion charge we've previously guided to as a result of our grantor trust election.
As you recall, this charge is expected to reverse over time as the Fire Victim Trust sells shares.
Moving to slide 10.
As Patti mentioned, we took a $1.15 billion charge this quarter for the Dixie fire.
We also recorded a $1.15 billion of offsetting receivables.
And the receivables reflect our confidence to recover cost based on the facts of information available to us today.
And as a reminder, we recognize a receivable if we believe recovery is probable under the applicable accounting standard and due to the fact currently available, we're not yet probable for recovery of amounts exceeding insurance for the 2019 Kincaid and 2020 Zogg fires.
Therefore, we hasn't recorded offsetting receivables for either of those fires.
On slide 11, we show the quarter-over-quarter comparison for non-GAAP core earnings of $0.24 per share for Q3 2021 versus $0.22 per share for Q3 2020.
EPS increased due to $0.03 of growth in rate base earnings, $0.02 from using basic share count as a result of the GAAP loss I mentioned earlier and $0.01 from lower wildfire our litigation costs, partially offset by $0.01 decrease due to timing of taxes that will net to zero over the year.
We expect a stronger fourth quarter due to timing of the regulatory revenue and efficient work execution.
Moving to slide 12.
We are reaffirming our non-GAAP core earnings per share of $0.95 to $1.05.
On the debt side, we expect to complete an initial AB 1054 securitization transaction this month, for $860 million.
Our separate rate neutral securitization has also been approved by the CPUC.
And once we resolve the final legal steps, we anticipate will start issuing bonds early next year.
Now some updates on regulatory matters.
I'll specifically highlight important filings reflecting both our focus on timely cost recovery for historical spend and our focus on the planet supporting California's clean energy future.
Turning to slide 13.
At the end of the third quarter, we've requested cost recovery for approximately 80% of the unrecovered wildfire related costs on our balance sheet.
And we already have final decision, settlement agreements or interim rates for roughly 60%.
In September, we filed a settlement agreement for our 2020 wildfire mitigation and catastrophic event application.
Our request was $1.28 billion comprised of prior wildfire expense including costs that were incurred in 2018.
Given some of these cost predate the wildfire mitigation plan construct, we feel that settlement of $1.04 billion is a reasonable outcome.
Most recently on this front, in September, we felt the recovery of $1.4 [Phonetic] billion of additional wildfire mitigation and catastrophic event costs.
Most of the costs were incurred last year, and under our proposal, most of the revenue will be recovered in 2023 and 2024.
You should expect to see similar filings in the coming years as we seek timely recovery of any incremental spend in these areas.
Next, I'll cover a brief update on our cost of capital application.
In late August, we filed the cost of capital application for rates starting in January 2022.
The request was filed off-cycle as a result of the disconnect between lower interest rate and the increase in cost of capital for California utilities as seen from higher interest costs and equity issuance costs.
At this stage, we'll follow the recent direction by the administrative law judge and for our materials that would have been included in the cost of capital adjustment mechanism advice letter by next Monday.
The filing will include calculations of the ROE, cost of debt and the resulting overall return on rate base from the operation of the adjustment mechanism.
DOJ's order asked to submit the relevant information into the cost of capital proceeding rather than requesting us to file an advise letter.
Our focus on triple bottom line of people, planet and prosperity is also not slowing down.
Just last week, we filed for key transportation electrification investment and we'll accelerate technology adoptions for underserved communities, and of course support California's greenhouse gas reduction goals.
EV Charge 2 is an extension of our fully subscribed and successful EV Charge Network Program.
We are requesting a total revenue requirement for roughly $225 [Phonetic] million from 2023 through 2030.
This phase of the program will provide the infrastructures to support 16,000 new charging ports which is just scratching the surface to meet the demands of our customers.
Till [Phonetic] today are driving nearly 20% of the electric vehicles in the country.
We are proud to serve the largest base of customers owning and purchasing EVs in the US.
I'll close by reiterating that we are delivering against the financial plan for 2021.
Our focus continues to be on addressing the critical need to reduce wildfire risk in the near term, while running the business effectively to the long term.
We're investing in needed [Phonetic] wildfire mitigation and we've eliminated our 2021 equity need.
We'll continue to focus on improving our balance sheet while making the right investments to deliver clean energy safely to our customers.
With that, I'll hand it back to Patti.
Every day, we are more and more excited about the future we're creating here at PG&E.
We can see the difference that's been made and the value to be unlocked.
We continue to reduce wildfire risk and we're encouraged by the protections we have in place for our investors and the hometowns where we live and operate.
Our 2021 PSPS protocols are the right solution on high wind days, and our enhanced powerline safety settings are necessary and effective and reductions ignitions and the resulting damage, given our current drought conditions.
We're focusing our work to make our system safer every day.
We're adapting based on what we learn so we can best serve our customers and you, our investors.
We'll deliver on the financials and we'll continue to implement the necessary processes to run a high performing utility.
Jenny, please open the line for Q&A.
 Assistant:

Chosen response:
pg&e corp - recorded gaap losses were $0.55 per share for q3 2021.
recorded gaap losses were $0.55 per share for the third quarter of 2021.
non-gaap core earnings were $0.24 per share for the third quarter of 2021.
2021 earnings per share guidance adjusted for gaap earnings to a range of $(0.12) to $0.07 and reaffirmed non-gaap core earnings of $0.95 to $1.05 per share.


Prompt:
Human: Today's presenters are Chris Martin, Chairman, President and CEO; and Tom Lyons, Senior Executive Vice President and Chief Financial Officer.
Now I'm pleased to introduce Chris Martin, who will offer his perspective on our second quarter.
As we begin the summary of our second quarter, it is our sincere hope that you and yours are safe and healthy.
Second quarter earnings were impacted by COVID and CECL as the provision for loan losses and expenditures related to providing a safe environment for our customers, employees took priority as we phased our staff-back-to-office process and afforded our customers full branch access.
On a positive yet related note, we had expenses for the planned acquisition of SB One of $683,000 during the quarter and look to complete the closing tomorrow.
We remain comfortable with our capital structure and balance sheet strength.
Our capital ratios continue to be strong, given our business mix and risk management processes.
In view of our capital and pre-tax pre-provision earnings expectations, the Board approved a $0.23 cash dividend.
Net income for the quarter was $14.3 million or $0.22 per share.
Net interest margin decreased 23 basis points linked quarter to 2.97% as the impact of lower rates and higher cash balances was partially offset by lower deposit costs and above-average growth in noninterest-bearing deposits.
The impact of PPP loans on our margin was two basis points.
And we continue to experience a reduction in our all-in cost of deposits to 41 basis points for the quarter ended June 30, 2020, versus 62 basis points from the trailing quarter.
Borrowing costs also improved to 1.31% from 1.80% in the trailing quarter.
The decrease in earning asset yields of 45 basis points linked quarter reflects falling benchmark interest rates on adjustable rate loans, accompanied by modest growth in new originations at lower rates and the $403 million in PPP loans.
And of the PPP loans, we are assuming that approximately 75% to 80% will be forgiven once the government provides the vehicle and forms to complete this.
The impact on our net interest margin from the short end of the curve is now largely behind us, but historically low long-term rates will continue to put pressure on asset yields as our loan and investment portfolio is repriced at lower coupons.
The loan pipeline remains robust at $1.3 billion, and activity continues to provide us with growth potential as payoffs have added during COVID.
We are also placing interest rate floors on most of our commercial loans.
Residential mortgage originations have spiked as rates hit historical lows and neighborhoods experience an upsurge in activity with more individuals working from home and assimilating to the new work environment, which we see as continuing well into the future.
Unlike some banks, we did not experience a high level of line draws during the course of the economic shutdown as line usage remained at 36%.
We view this as indicative of the stability of our customer base and their assurance in our capacity to support their funding needs.
Now Tom will go into more details on loan deferrals.
But suffice it to say, the initial phase of 90-day deferrals peaked at approximately $1.3 billion or 16.8% of the loan portfolio.
This has been reduced to $395 million or 5.1% of loans.
This includes second deferrals to date of $343 million.
The increase in deposits is difficult to parse as much of the growth can be attributed to PPP loans, along with stimulus checks from the government.
But in any event, significant growth in noninterest-bearing deposits helped reduce our funding costs.
Noninterest expense declined during the quarter due to decreased deposit-related fees as much of our market was under the stay-at-home executive orders, which impacted debit card revenue due to reduced volumes.
Wealth management income was also affected by the market declines in the value of assets under management, which has since recovered.
On the noninterest expense front, the majority of the $5.6 million increase was due to CECL and the credit loss expense for off-balance sheet credit exposure of $5.3 million in the quarter.
We also had increases in data processing expenses related to our digital platform improvement, along with transaction costs associated with the SB One acquisition.
Asset quality improved, and we experienced net recoveries for the quarter.
Our allowance for credit losses now stands at 1.11% of total loans from 0.76% at December 31, 2019.
The provision in the quarter was significantly impacted by Moody's baseline economic forecast, including a negative shift in the outlook for commercial real estate.
Exposures to hotels, retail, restaurants and skilled nursing facilities are under heavy scrutiny.
On June 30 June 30 reported credit metrics remained remarkably stable given the ongoing level of economic stress, as borrowers were aided by the impact of government stimulus and loan modification and deferral programs.
We envision continued pressure on credit as we anticipate the continuation of a challenging business environment due to the pandemic.
And we anticipate meeting all of our cost saves from the combination of SB One Bancorp, which closes tomorrow, and all of them we'll provide to our customers and our employees while also increasing long-term growth and stockholder value.
Now Tom will provide more detail on our financial results.
As Chris noted, our reported net income was $14.3 million or $0.22 per diluted share compared to $24.4 million or $0.38 per diluted share for the second quarter of 2019 and $14.9 million or $0.23 per diluted share in the trailing quarter.
Earnings for the current quarter were again adversely impacted by elevated provisions for credit losses under the CECL standard and the recessionary economic forecast attributable to the COVID-19 pandemic.
In addition, we incurred costs specific to our COVID response, including supplemental pay for customer-facing employees, PPE equipment and security costs and costs related to the upcoming merger with SB One.
Core pre-tax pre-provision earnings were $35.9 million, excluding $16.2 million in provisions for credit losses on loans and commitments to extend credit, $1 million of COVID costs and $683,000 of professional fees related to the SB One merger.
This compares with $36.4 million in the trailing quarter, excluding provisions for credit losses, and merger-related charges and $42.7 million for the second quarter of 2019.
Our net interest margin contracted 23 basis points versus the trailing quarter and 45 basis points versus the same period last year.
As declining market interest rates, cash collateral pledged against that and money swaps, excess liquidity and PPP loans all produced lower earning asset yields.
To combat margin compression, we continue to reprice deposit accounts downward.
This deposit rate management, coupled with a continued emphasis on attracting noninterest-bearing deposits, resulted in a 21 basis point decrease in the total cost of deposits this quarter to 41 basis points.
Noninterest-bearing deposits averaged $1.8 billion or 25% of the total average deposits for the quarter.
This was an increase from $1.5 billion in the trailing quarter with a sizable portion of that growth attributable to PPP and stimulus funding.
Noninterest-bearing deposit levels remained elevated at $1.9 billion on June 30.
Average borrowing levels increased $92 million, and the average cost to borrow funds decreased 49 basis points versus the trailing quarter to 1.31%.
We will continue to thoughtfully manage liability costs as the rate environment evolves.
Quarter end loan totals increased $294 million versus the trailing quarter as growth in C&I, CRE, multifamily and residential mortgage loans was partially offset by net reductions in construction and consumer loans.
The growth was largely driven by PPP loans, which totaled $400 million at June 30.
Loan originations, excluding line of credit advances, totaled $774 million for the quarter.
The pipeline at June 30 was consistent with the trailing quarter at $1.3 billion.
Pipeline rate has increased 26 basis points since last quarter to 3.43% at June 30.
Our provision for credit losses on loans was $10.9 million for the current quarter compared with $14.7 million in the trailing quarter.
The decrease in the provision reflects the significant reserve build required in the trailing quarter, and CECL model estimates for life of loan losses as impacted by the ongoing severe economic forecast.
We had annualized net recoveries as a percentage of average loans of one basis point this quarter compared with annualized net charge-offs of 16 basis points for the trailing quarter.
Nonperforming assets declined to 37 basis points of total assets from 39 basis points at March 31.
The allowance for credit losses on loans to total loans increased to 1.11% or 1.17%, excluding PPP loans from 1.02% in the trailing quarter.
Loans with short-term COVID-19 payment deferrals declined from their peak of $1.31 billion or 16.8% of loans to $395 million or 5.1% of loans.
Loans and deferral consists of $52 million that are still in their initial deferral period and another $343 million that have been or are expected to be granted a second 90-day deferral.
Included in this total are $130 million of loans secured by hotels with a pre-COVID weighted average LTV of 53%, $124 million of loans secured by retail properties with a pre-COVID weighted average LTV of 66% and $25 million of loans secured by restaurants with a pre-COVID weighted average LTV of 59%.
Of the $912 million of loans that have concluded their deferral period, $380 million have resumed regular contractual payments with the majority of the remainder expected to resume payments at their August one due date.
Noninterest income decreased $2.6 million versus the trailing quarter to $14 million as reductions in deposit and wealth fees resulting from consumer restrictions from COVID mitigation efforts and volatile asset values and lower swap fee income was partially offset by greater bank loan life insurance benefits and gains on sales of real estate owned.
Excluding provisions for credit losses on commitments to extend credit, COVID-related costs and acquisition-related professional fees, noninterest expenses were an annualized 1.86% of average assets for the quarter.
These core expenses decreased $4.4 million versus the trailing quarter.
The decrease in core expenses versus the trailing quarter was primarily attributable to $1 million of executive severance and normal first quarter increases and compensation and related payroll taxes recognized in the trailing quarter.
And increased deferral of salary expense related to PPP loan originations in the current quarter.
This improvement was partially offset by increased FDIC insurance costs as the remaining $267,000 in small bank assessment credit was utilized in the current quarter.
Our effective tax rate decreased to 20.6% from 26% for the trailing quarter.
As a result of reduced forecast of taxable income in the current quarter, and an adverse discrete item related to the vesting of stock compensation in the trailing quarter.
We are currently projecting an effective tax rate of approximately 23% for the balance of 2020.
We'd be happy to respond to questions.
 Assistant:

Chosen response:
compname reports q2 earnings per share $0.22.
q2 earnings per share $0.22.


Prompt:
Human: Today's presenters are Chairman and CEO, Chris Martin; President and Chief Operating Officer, Tony Labozzetta; and Senior Executive Vice President and Chief Financial Officer, Tom Lyons.
Now it's my pleasure to introduce Chris Martin, who will offer his perspective on the third quarter.
Provident's third quarter results were strong, and we believe the business climate is promising as we look into Q4.
Earnings of $0.49 in the quarter exceeded last year's results by 32%.
And performance was augmented by several factors, including an improving economy as it continues to decline out of COVID restraints, better credit metrics and the achievement of earnings acceleration from the acquisition of SB One.
The quarter was marked by growth in net interest income and a strong return on average assets of 1.11% and return on average tangible equity of 12.04%.
Based on their confidence in our earnings outlook, our Board approved an increase in our quarterly cash dividend to $0.24 per share, representing an increase of 4.3%.
And during the quarter, we also repurchased approximately 630,000 shares of our common stock at an average price of $22.04 per share.
Our capital position is strong and comfortably exceeds well capitalized levels.
As Tony and Tom will detail in their remarks, we are dealing with excess liquidity, not unlike many other financial institutions.
We have diligently deployed a portion of that liquidity into securities, but obviously, loan growth would be our preferred investment.
We anticipate the Fed will commence tapering their quantitative easing purchases in the fourth quarter, which we hope will result in a steepening of the yields curve.
This always takes a while to make an impact, but would signal positive economic outlook, and a moderate amount of inflation would be positive for the bank.
With a fairly neutral interest rate, risk position, excess liquidity and stable low-cost deposit funding, we continue to be well positioned to benefit from a rise in interest rates, while remaining well protected if rates remain low.
The focal point for Provident was our loan growth ex-PPP, which contributed to increased net interest income, and our strong quarter end loan pipeline, which reflects customer confidence and provides positive momentum for respectable growth going into the fourth quarter.
In terms of pricing, the weighted average rate on our loan pipeline has increased, reflecting movement in the treasury curve.
The market remains aggressive and our lenders face competition on rates from banks and on structure from nonbanks.
In spite of the challenging environment, we win deals because of our relentless focus on delivering a best-in-class customer experience.
Our core deposit growth continues to be strong in both the consumer and commercial areas, and our cost of deposit remains one of the best in our markets.
And we're also seeing growth in the wealth management and insurance businesses, and we'd expect that organic growth to continue.
Asset quality improved and charge-offs were negligible as the economy continues to improve.
And core operating costs are well controlled as reflected in our adjusted noninterest expense to average asset ratio of 1.85% and an efficiency ratio of 54.5% for the quarter.
I remain highly enthusiastic about the prospects within our markets and the drive and motivation of our banking teams will continue to spur growth and enable us to continue to deliver long-term shareholder value.
With that, I'll ask Tony to add more context.
I would like to share with you thoughts about our performance of our key lines of business and areas of focus.
Based on certain trends that we are observing, we believe the economic outlook for the fourth quarter and leading into 2022 looks promising.
This supports improved growth and continued solid profitability for the remainder of the calendar year.
Our commercial lending group continues to demonstrate strong productivity.
In the third quarter, we closed $514 million of new loans, an increase of 29% from the prior quarter.
While prepayments adjusted for PPP are down from the prior quarter, they remain higher than we desire.
Of note, nearly half of our commercial loan prepayments were driven by the sale of the underlying business or asset.
In addition, our line of credit utilization percentage remains roughly 28% compared to the historical average of approximately 40%, which equates to about $190 million of potential additional outstanding loan balances.
Nevertheless, our production exceeded the pressures of the current operating environment, and as such, we grew our commercial loan portfolio, excluding PPP, at an annualized rate of 9.4%.
Notwithstanding our significant loan production and the fierce competition, at quarter end, our pipeline remains robust at approximately $1.6 billion.
The pull-through adjusted pipeline, including loans pending closing, is approximately $1 billion.
Of note, our expected pipeline rate increased 12 basis points from the last quarter.
We project good pull-through, and if prepayments are stable, we should meet or exceed our loan growth expectations for the remainder of the year.
We continue to experience good growth in our core deposits, particularly noninterest-bearing demand, which grew at an annualized rate of 12% and presently comprise 24% of our total deposits.
Our total cost of deposits for the quarter declined three basis points to 23 basis points and is among the best in our peer group.
While we are in a rate and liquidity cycle that has driven margins lower throughout the industry, our growth and low-cost deposit franchise continue to drive value, which is demonstrated by our continued increase in net interest income.
We continued to grow fee revenue, largely through Beacon Trust and SB One insurance.
Adjusting for nonrecurring items related to the SB One merger, SB One Insurance increased its operating profit 10% from the same quarter last year, driven largely by a strong retention ratio of 96.4%.
Beacon Trust also had good performance, with assets under management increasing approximately 17% to about $4 billion, and revenue increasing 16% over the same quarter last year.
As I have mentioned in the past, both Beacon Trust and SB One insurance are value-add for our clients and the bank.
We are seeing increased opportunities and referrals among all of our lines of business, which make our growth prospects more exciting.
Looking forward, our focus is to enhance our asset mix and deploy more of our excess liquidity, which should improve our margin, and more importantly, grow net interest income.
Our fee-based businesses are important to us, and we want to accelerate their growth and strengthen the synergies with the bank.
Lastly, we have a number of initiatives that will modernize certain business processes that are aimed at reducing friction and improving the digital journey for our employees and customers.
As we accomplish our goals, we will increase our franchise value and improve our total return to our shareholders.
Our net income for the quarter was $37.3 million or $0.49 per diluted share compared with $44.8 million or $0.58 per diluted share for the trailing quarter.
Earnings for the current quarter included $2 million of provisions for credit losses on loans and off-balance sheet credit exposures, while the trailing quarter benefited from $8.7 million of net negative provisions.
Pretax pre-provision earnings were a quarterly record $52.1 million or an annualized 1.55% of average assets.
Current period earnings featured record quarterly revenue, including record net interest income and noninterest income.
While we did experience modest net interest margin compression as a result of ongoing elevated liquidity, earnings on the $166 million increase in average interest-earning assets partially offset the impact of declines in yields and lower PPP income.
Income recognized from PPP loan forgiveness fell $402,000 versus the trailing quarter to $2.5 million, and remaining PPP -- deferred PPP fees totaled $3.2 million at September 30.
Meanwhile, funding costs fell as average deposits increased and average borrowings declined.
Average noninterest-bearing deposits increased $74 million versus the trailing quarter and the total cost of deposits declined 3 basis points to just 23 basis points.
Pull-through adjusted loan pipeline at September 30 was consistent with the trailing quarter at $1.1 billion, and the pipeline rate increased 12 basis points since last quarter to 3.4%.
Excluding PPP loans, period-end loan totals increased $153 million or an annualized 6.4% versus June 30.
Loan growth occurred primarily in the CRE category.
Our provision for credit losses on loans was $1 million for the current quarter compared with the benefit of $10.7 million in the trailing quarter.
Asset quality metrics, including nonperforming loan levels, early stage and total delinquencies criticized and classified loans and all related ratios improved versus the trailing quarter.
We had net charge-offs of $1.9 million or an annualized 8 basis points of average loans this quarter.
Nonperforming assets decreased to 51 basis points of total assets from 62 basis points at June 30.
Excluding PPP loans, the allowance represented 0.85% of loans compared with 0.88% in the trailing quarter.
Noninterest income increased to $23.4 million, helped by income recognized from a $3.4 million reduction in contingent consideration related to the earn-out provisions of the 2019 purchase of registered investment advisor, Tirschwell & Loewy.
We became subject to the interchange fee limitations of the Durbin amendment this quarter, which reduced revenue by $1.1 million compared with the trailing quarter.
Excluding provisions for credit losses on commitments to extend credit and merger-related and COVID expenses in 2020, operating expenses were an annualized 1.85% of average assets for the current quarter compared with 1.84% in the trailing quarter, and 1.92% for the third quarter of 2020.
The efficiency ratio was 54.51% for the third quarter of 2021 compared with 54.12% in the trailing quarter and 56.2% for the third quarter of 2020.
Our effective tax rate was 25.7% versus 25.4% for the trailing quarter, and we are currently projecting an effective tax rate of approximately 25% for the remainder of 2021.
We'd be happy to respond to questions.
 Assistant:

Chosen response:
compname reports q3 earnings per share of $0.49.
q3 earnings per share $0.49.


Prompt:
Human: Joining me on the call today are Jon Moeller, currently Vice Chair and Incoming President and Chief Executive Officer as of November 1; and John Chevalier, Senior Vice President, Investor Relations.
The July to September quarter provides a good start to the fiscal year, putting us on track to deliver our guidance for organic sales growth, core earnings per share growth, free cash flow productivity and cash returned to shareholders.
We experienced the full impact of rising commodity and transportation costs this quarter, but healthy top-line growth and strong cost savings kept earnings per share growth nearly in line with the prior year.
Earnings growth should improve sequentially through the balance of the fiscal year as price increases go into effect and productivity programs ramp up.
So moving to first quarter results, organic sales grew 4%, volume contributed two points of sales growth, pricing and mix each added one point.
Growth was broad-based across business units with nine out of 10 product categories growing organic sales.
Personal Health Care up double-digits; Fabric Care grew high-singles; Baby Care, Feminine Care and Grooming up mid-singles; Home Care, Oral Care, Hair Care and Skin and Personal Care organic sales each up low-single-digits.
Family Care declined mid-singles comping very strong growth in the base period.
Organic sales were up 4% in the U.S. despite 16% growth in the base period.
On a two year stack basis, U.S. organic sales are up 20%.
Greater China organic sales were in line with prior year due to strong growth in the base period comp and due to intra-quarter softness in beauty market growth.
On a two year stack basis, organic China -- China organic sales are up 12% in line to slightly ahead of underlying market growth.
Focused markets grew 4% for the quarter and enterprise markets were up 5%.
E-commerce sales grew 16% versus prior year.
Global aggregate market share increased 50 basis points.
36 of our top 50 category country combinations held or grew share for the quarter.
Our superiority strategy continues to drive strong market growth and in turn share growth for P&G.
All channel market value sales in the U.S. categories in which we compete grew mid-single-digits this quarter and P&G value share continued to grow to over 34%.
We are up more than a point and a half versus first quarter last year.
Importantly, the share growth is broad-based.
Nine of 10 product categories grew share over the past three months with the 10th improving to flat versus year ago over the past one month.
Consumers are continuing to prefer P&G brands.
On the bottom line, core earnings per share were $1.61, down 1% versus the prior year.
On a currency neutral basis, core earnings per share declined 3% mainly due to gross margin pressure from higher input costs, which we highlighted in our initial outlook for the year.
Core gross margin decreased 370 basis points and currency neutral core gross margin was down 390 basis points.
Higher commodity and freight cost impacts combined were a 400 basis point hit to gross margins, mix was an 80 basis points headwind, primarily due to geographic impacts.
Productivity savings, pricing and foreign exchange provided a partial offsets to the gross margin headwinds.
Within SG&A, marketing expense as a percentage of sales was in line with prior year level for the quarter, increasing more than 5% in absolute dollars, consistent with all-in sales growth.
Core operating margin decreased 260 basis points.
Currency neutral core operating margin declined 270 basis points.
Productivity improvements were 180 basis points help to the quarter.
Adjusted free cash flow productivity was 92%.
We returned nearly $5 billion of cash to share owners, $2.2 billion in dividends and approximately $2.8 billion in share repurchase.
In summary, in the context of a very challenging cost environment, good results across top-line, bottom line and cash to start the fiscal year.
Our team continues to operate with excellence and stay focused on the near-term priorities and long-term strategies that enabled us to create strong momentum prior to the COVID crisis and to make our business even stronger since the crisis began.
We continue to step forward into these challenges and to double down our efforts to delight consumers.
As we continue to manage through this crisis, we remain focused on the three priorities that have been guiding our near-term actions and choices.
First is ensuring the health and safety of our P&G colleagues around the world.
Second, maximizing the availability of our products to help people and their families with their cleaning, health and hygiene needs.
Third priority supporting the communities, relief agencies and people who are on the front lines of this global pandemic.
The strategic choices we've made are the foundation for balanced top and bottom line growth and value creation.
A portfolio of daily use products, many providing cleaning, health and hygiene benefits in categories where performance plays a significant role in brand choice.
In these performance-driven categories, we've raised the bar on all aspects of superiority, product, package, brand communication, retail execution and value.
Superior offerings delivered with superior execution drive market growth.
In our categories, this drives value creation for our retail partners and builds market share for P&G brands.
We've made investments to strengthen the health and competitiveness of our brands, and we'll continue to invest to extend our margin of advantage and quality of execution improving solutions for consumers around the world.
The strategic need for investment to continue to strengthen the superiority of our brands, the short-term need to manage through this challenging cost environment and the ongoing need to drive balanced top and bottom line growth, including margin expansion, underscore the importance of ongoing productivity.
We're driving cost savings and cash productivity in all facets of our business.
No area of cost is left untouched.
Each business is driving productivity within their P&L and balance sheet to support balance top and bottom line growth and strong cash generation.
Success in our highly competitive industry requires agility that comes with the mindset of constructive disruption, a willingness to change, adapt and to create new trends and technology that will shape the industry for the future.
In the current environment, that agility and constructive disruption mindset are even more important.
Our organization structure yields a more empowered, agile and accountable organization with little overlap or redundancy flowing through new demands, seamlessly supporting each other to deliver against our priorities around the world.
These strategic choices on portfolio, superiority, productivity, constructive disruption and organization structure and culture are not independent strategies, they reinforce and build on each other.
When executed well, they grow markets, which in turn grows share, sales and profit.
These strategies were delivered -- were delivering strong results before the crisis and have served us well during the volatile times.
We're confident they remain the right strategy framework as we move through and beyond the crisis.
Moving on to guidance.
We will undoubtedly experience more volatility as we move through this fiscal year.
As we saw this quarter, growth results going forward will be heavily influenced by base period effects along with the realities of current year cost pressures and continued effects of the global pandemic.
Supply chains are under pressure from tight labor markets, tight transportation markets and overall capacity constraints.
Inflationary pressures are broad-based and sustained.
Foreign exchange rates add more volatility to this mix.
We have also experienced some short-term disruptions in materials availability in several regions around the world.
Our purchasing, R&D and logistics experts have done a great job managing these challenges.
These costs and operational challenges are not unique to P&G, and we won't be immune to the impacts.
However, we think the strategy -- strategies we've chosen, the investments we've made and the focus on executional excellence have positioned us well to manage through this volatile -- volatility over time.
Input costs have continued to rise since we gave our initial outlook for the year in late July.
Based on current spot prices, we now estimate a $2.1 billion after-tax commodity cost headwind in fiscal 2022.
Freight costs have also continued to increase.
We now expect freight and transportation costs to be an incremental $200 million after-tax headwind in fiscal '22.
We will offset a portion of these higher costs with price increases and with productivity savings.
As discussed last quarter and in the more recent investor conferences, we've announced price increases in the U.S. on portions of our Baby Care, Feminine Care, Adult Incontinence, Family Care, Home Care and Fabric Care businesses.
In the last few weeks, we've also announced to retailers in the U.S. that we will increase prices on segments of our Grooming, Skin Care and Oral Care businesses.
The degree and timing of these moves are very specific to the category, brand and sometimes the product form within a brand.
This is not a one-size-fits-all approach.
We're also taking pricing in many markets outside the U.S. to offset commodity, freight and foreign exchange impacts.
As always, we will look to close couple of price increases with new product innovations, adding value for consumers along the way.
As we said before, we believe this is a temporary bottom line rough patch to grow through, not a reason to reduce investment in the business.
We're sticking with the strategy that has been working well before and during the COVID crisis.
Our good first quarter results confirm our guidance ranges for the fiscal year across all key metrics.
We continue to expect organic sales growth in the range of 2% to 4%.
Our solid start to the fiscal year increases our confidence in the upper half of this range.
We expect pricing to be a larger contributor to sales growth in coming quarters as more of our price increases become effective in the market.
As this pricing reach the store shelves, we'll be closely monitoring consumption trends.
While it's still early in the pricing cycle, we haven't seen multiple changes in consumer behavior.
On the bottom line, we're maintaining our outlook of core earnings-per-share growth in the range of 3% to 6% despite the increased cost challenges we're facing.
Foreign exchange is now expected to be neutral to after-tax earnings compared to the modest tailwind we estimated at the start of the year.
Considering FX was a modest help to first quarter earnings, we're projecting it to be a headwind for the balance of the year.
In total, our revised outlook for the impact of materials, freight and foreign exchange is now a $2.3 billion after-tax headwind for fiscal '22 earnings or roughly $0.90 per share, a 16 percentage point headwind to core earnings per share growth.
This is $500 million after-tax of incremental cost pressure versus our initial outlook for the year.
Despite these cost challenges, we are committed to maintaining strong investment in our brands.
So while we are not changing our core earnings per share guidance range, please take note of these dynamics as you update your outlook for the year.
We'll face the most significant cost impacts in the first half of the fiscal year as pricing goes into effect, as savings programs ramp up and as we begin to annualize the initial spike in input costs, earnings growth should be sequentially stronger in the third and fourth quarters of the year.
We are targeting adjusted free cash flow productivity of 90%.
We expect to pay over $8 billion in dividends and to repurchase $7 billion to $9 billion of common stock.
Combined, a plan to return $15 billion to $17 billion of cash to share owners this fiscal.
This outlook is based on current market growth rate estimates, commodity prices and foreign exchange rates.
Significant currency weakness, commodity cost increases, additional geopolitical disruptions, major production stoppages or store closures are not anticipated within the guidance ranges.
To conclude, our business exhibited strong momentum well before the COVID crisis.
We've strengthened our position further during the crisis, and we believe P&G is well positioned to grow beyond the crisis.
We will manage through the near-term cost pressures and continued market level volatility with the strategy we've outlined many times and against the immediate priorities of ensuring employee health and safety, maximizing availability of our products and helping society overcome the COVID challenges that still exist in many parts of the world.
We'll continue to step forward toward our opportunities and remain fully invested in our business.
We remain committed to driving productivity improvements to fund growth investments, mitigate input cost challenges and to maintain balanced top and bottom line growth.
 Assistant:

Chosen response:
compname reports qtrly earnings per share of $1.61.
q1 (not q4) earnings per share $1.61.
qtrly grooming segment organic sales increased four percent versus year ago.
qtrly fabric and home care segment organic sales increased five percent versus year ago.
maintains fiscal year 2022 guidance.
qtrly beauty segment organic sales increased two percent versus year ago.
qtrly organic sales increased 4%.
qtrly health care segment organic sales increased 7%.
qtrly baby, feminine and family care segment organic sales increased two percent versus year ago.
qtrly core earnings per share $1.61.
current fy 2022 outlook estimates headwinds of $2.1 billion after-tax from higher commodity costs.


Prompt:
Human: As Jonathan said, this is Todd Leombruno, chief financial officer speaking.
I'd like to direct you to Slide No.
Reconciliations for all non-GAAP financial measures are included in today's materials.
As usual, today, Tom is going to begin with highlights of the quarter and a few comments on the company's transformation.
Two comments before we begin today.
First, as a reminder, regarding the pending Meggitt acquisition, we are still bound by the requirements of the U.K. Takeover Code in respect to discussing certain transaction details.
And secondly, we are announcing a date and time change to our upcoming virtual investor day due to a scheduling conflict with another company's investor day.
Our meeting will now be held on Tuesday, March 8 from 9 am to 12 pm Eastern.
It will be a virtual event.
And among the topics that we'll cover will be the release of our new long-term financial targets.
I want to start with the title of this slide, which is exceptional execution in a challenging environment.
When you look at the performance of the company in aggregate, safety, sales growth, the margin expansion, EPS, it was an extremely strong quarter.
This is against arguably one of the most difficult operating environments that we've all faced in our careers when you add up the cumulative effect of inflation, supply chain challenges and the Omicron virus.
Let's start with the first bullet.
Focus on safety continues.
It is our No.
We're leveraging our high-performance teams, the combination of the natural work teams that we have in our plants and warehouses as well as the Star Point teams and Kaizen.
And it's really this combination, this team structure plus Kaizen, that is driving an ownership culture within the company.
So ownership of safety, but also ownership of quality, cost, delivery and engagement.
Sales growth was 12% year over year.
Organic growth was 13%.
It was nice across all the external reporting segments as well as every region participating.
Total sales was a second quarter record as well as total segment operating margin.
EBITDA margin was 18.2% as reported or 22.7% adjusted.
It was 180 basis points.
It's a big move versus prior year.
Robust demand environment continues.
We had over 90% of our end markets in the growth phase, which we're very excited about.
And this execution, what you're seeing, is really the cumulative effect of win strategy 2.0 and 3.0 driving this kind of performance.
When you add the strategy changes on top of the portfolio, things we've done, adding those great acquisitions that we've done over the last number of years and the powerful secular trends that I'm going to talk about here momentarily, we see the future has much longer cycle and more resilient and faster growing.
So if you go to the next slide, Slide 4, I've touched on this before.
This kind of frames all of our thinking and our strategies for the company to around trying to achieve these three key drivers.
Living up to our purpose, that higher calling, that North Star that we're driving for, to be great generators and deployers of cash, to be a top quartile performer versus our proxy peers.
If you go to Slide 5, which is the little expression that a picture is worth a thousand words, this kind of sums up how the company has changed over the last number of years.
We've updated this slide for FY '22 numbers.
And I'm going to just reframe this slide for you.
On the left-hand side is adjusted EBITDA, adjusted earnings per share and on the right-hand side is adjusted EBITDA margin.
So if you look on the left and you go to FY '16, so we worked real hard as a company for 100 years to get to $6.99 EPS.
And then the last six years, we've grown it by 2.5x to a little over $18 in our current guide.
If you just look at the gain that we've had since the pandemic, FY '20 to FY '22 guide, it's almost another $6 just in those two years.
It happens to be and I don't think it's coincidental, that we launched win strategy 3.0 at the beginning of FY '20.
And you can see what it's done to propel performance.
If you look on the right-hand side and we don't guide on EBITDA margin, but we put in our EBITDA margin year to date to 22.4%.
If you look at that from FY '16 to that, it's 770 basis points improvement, just remarkable improvement.
Really the how behind these results, it's been our people, portfolio changes that we've done and has been, again, a cumulative effect of win strategy 2.0, 3.0.
So if you go to the next slide, give you a quick update on the Meggitt transaction.
We continue to make progress.
There's really four main work streams that we're working.
There's two, the economic and national security review that we're working on with the U.K. government.
I would characterize those as constructive and positive and on track.
And then the antitrust and FDI filings are proceeding as we had anticipated.
We're still anticipating a Q3 calendar 2022 close and we're really excited about this.
This is obviously a compelling combination.
It doubles the size of our aerospace business, highly complementary technologies.
And we're at the beginning of a commercial aerospace recovery with great synergies as we put these two companies together.
Again, coming -- bringing this on with everything else we've been doing, a much longer cycle, less cyclical, faster growing company.
And then on Slide 7, in addition to the strategic acquisitions that we've been making, we are uniquely positioned with our eight motion and control technologies to benefit from the four secular trends that you see on this page.
Now I touched on aerospace and the recovery and momentum of Meggitt plus Parker.
But if you look at electrification, ESG, digitization, what you have here are long-term multiyear growth enablers and content growth for us is going to grow, both onboard as well as infrastructure.
And we're excited that this is going to be a big part of what we'll talk about at investor day and we look forward to sharing more about these secular trends on March 8 with you.
I'll ask everyone to move to Slide 9 and I'll start with our FY '22 Q2 results.
As Tom mentioned, this was just an outstanding quarter.
Just another reminder that our operations leaders are really driving the company to significantly higher levels of performance.
Our sales increased 12% versus the prior year.
We did hit a record level of $3.8 billion.
Tom mentioned this, but organic sales were very healthy at 13%.
Currency was about a one point drag on sales.
That's how we got to the 12% reported sales increase.
Demand just remains robust.
Our backlogs are healthy.
Growth remains very broad-based across all of our industrial businesses.
If you look into the aerospace business, commercial demand continues to trend positive.
And we talked about this before, but the acquisitions of CLARCOR, LORD and Exotic continue to outperform our expectations.
When you look at the segment operating margins, it's a Q2 record on an adjusted basis.
We did 21.6% segment operating margin.
That's 120 basis points improvement from prior year.
And our teams are really managing through the well documented supply chain issues, the inflationary environment.
I really just want to commend them on our team's swift actions to manage these costs and inflationary actions, still while achieving record sales in the quarter.
Tom mentioned this, but adjusted EBITDA margin was 22.7%.
That's up 180 basis points from last year.
Both our adjusted net income and our adjusted earnings per share has improved by 29% versus prior year.
Net income is $582 million or 15.2% return on sales.
And adjusted earnings per share was $4.46.
That's $1.01 increase versus the prior year of $3.45, just a really solid quarter.
If we jump to Slide 10.
This is just a bridge on adjusted earnings per share and I'll just detail some of the components that generated the $1.01 increase in EPS.
And as you can see really, operating execution is the major driver in this increase.
Adjusted segment operating income did increase by $132 million.
That's 19% greater than prior year.
And that really accounts for 80% of the increase in our earnings per share this quarter.
We did have some other favorable items that was $0.19 favorable.
There were some currency gains that were favorable.
We did sell a few facilities that we restructured.
Those closed in the quarter.
And we do have reduced pension expense versus prior year.
All of that added up to $0.19.
And then you could see the other items on the slide that all netted to $0.04 favorable.
But really, the story here is just a very strong operating quarter.
If we go to Slide 11, I'll make a few comments on our segment performance.
Tom mentioned those secular trends.
We are seeing growth from those trends across our segments.
Every single one of the segments has a record adjusted segment operating margin this quarter.
We did maintain a cost-price neutral position.
We're very proud of that.
Incrementals were 32% versus prior year.
And I just want to remind everybody, that is against a headwind of $65 million of discretionary savings that we had in the prior year.
If you exclude those discretionary savings, our incrementals were 48%.
So really fantastic performance across the board from our teams.
It really highlights the power of the win strategy and really demonstrates our ability to perform through this current climate.
If you look at orders, orders are plus 12 and really the demand continues to be robust across our businesses.
Just a little color on Diversified Industrial North America, sales reached $1.8 billion.
Organic growth in that segment was 15% versus prior year.
And listen, we're really pleased with the performance in this region.
We've talked a lot -- I've read -- I know everyone is familiar with the well documented supply chain issues.
Tom mentioned the Omicron spike.
We are not immune to that.
But we did keep operating margins at a very high level of 21.3% in this segment and we're proud of that.
Order rates continued to be very high at plus 17.
Our backlog is strong.
And Tom mentioned this, 91% of our markets are in growth mode.
So great things in the North American businesses.
Industrial international is a great story.
Sales are $1.4 billion.
Organic growth is up 14% in this segment.
And I want to note that across all the regions within our International segment, organic growth was mid-teen positive in every region.
So really robust activity there.
Maybe more impressive is the adjusted operating margins, 22.4%.
This is an increase of 210 basis points versus the prior year.
And certainly, we have volume.
We've talked a lot about our growth in distribution internationally.
We are benefiting from some product mix.
And really, the team is doing a great job controlling cost.
And this has been a really long-term effort over a long period of time from that team.
So I'm really happy that they're able to put up these continued high level of margin performance.
Order rates there were plus 14%, ample backlog and really solid international performance.
If we look at aerospace systems, really continued signs of a rebound there.
Sale were $618 million.
Organic sales are positive at almost 6%.
And we did see very strong demand in our commercial OEM and MRO markets.
Great margin performance here as well.
Operating margins have increased 270 basis points that finished the quarter at 20.7%.
And again, I just want to remind everyone that, that is still at pre-COVID volume levels.
So great margin performance from our aerospace team.
Aerospace orders on a 12-month rolling rate did decline 7%.
But one item I want to make clear for everybody is we did have a few large multiyear military orders in the prior period that really created a tough comp just in aerospace.
If we exclude those orders, aerospace orders would be plus mid-teens positive.
So we're seeing continued signs of steady improvement in aerospace.
Our order dollars in aerospace in the quarter were at the highest level they've been in the last three quarters.
So great quarter out of aerospace.
But if you really look at the segments, it's really outstanding operating performance.
We've got positive growth, strong order dollars, robust backlogs, record margins and really just solid execution across the board.
So great segment performance.
If I take you to Slide 12 and talk about cash flow on a year-to-date basis, we did exceed $1 billion in cash flow from operations.
That is 13.3% of sales.
Free cash flow is $900 million or almost 12% of sales.
And conversion on a year-to-date basis is now 107%.
We still continue to diligently manage working capital across the company.
We really are just responding to these increased demand levels that we have.
The working capital change did improve in the quarter as we forecasted.
In the quarter, it was a 1.9% use of cash.
Versus last year, it was a 4.1% source of cash.
So for the full year, I just want to reiterate, we continue to forecast mid-teens cash flow from operations and free cash flow for the full year will exceed 100%.
If we go to Slide 13 now, I just want to make a few comments on our capital deployment activity.
I'm sure many people have seen this, but last week, our board approved a dividend declaration of $1.03 per share.
That is fully supportive of our long-standing 65-year record of increasing dividends paid.
And I want to give an update on the Meggitt financing.
We continue to make progress on our financing plan.
Our plan is flexible.
I did mention on the last call that we secured a deal contingent forward hedge contract in the amount of GBP 6.4 billion.
Accounting rules require us to mark those contracts to market.
That impact in the quarter was a non-cash charge of $149 million.
We booked that in the other expense line and we are treating that as an adjusted item.
We now have $2.5 billion of cash deposited in escrow to fund the Meggitt transaction.
That is listed on our balance sheet as restricted cash.
And that was funded from a combination of commercial paper and some cash on hand.
A result of that, our gross debt-to-EBITDA ended up being 2.7 times in the quarter.
Net debt was 2.5 times.
If you account for the $2.5 billion of restricted cash, net debt-to-EBITDA would be 1.8.
Full year adjusted earnings per share is raised by $0.75.
We did guide to $17.30 at the midpoint last quarter.
We have moved that to $18.05 and that is at the midpoint.
We've also narrowed the range.
Range is now $0.25, up or down.
And sales is also raised.
We're raising the midpoint to a range of 10% at the midpoint.
We've got a range of 9% to 11%.
And the breakdown of that sales change at the midpoint is organic growth is 10 and a half percent.
Currency will be about one point unfavorable.
And of course, there's no impact from acquisitions.
As Tom said, we don't expect Meggitt to close in our fiscal year.
If we look at the full year adjusted segment operating margin, we're also raising that 20 basis points from the prior guide.
Full year now, we expect that to be 22.1% at the midpoint.
There is a 20 basis point range on either side of that.
And corporate G&A and other is expected to be $656 million on an as reported basis, but $435 million on an adjusted basis.
So of course, there's a couple of adjusted items in there.
The acquisition-related intangible assets, that is a standard adjustment, the realignment expenses standard adjustment, the lowered cost to achieve standard adjustment.
But we are adjusting these transaction-related expenses for Meggitt.
Year to date, we've got $71 million worth of transaction costs and of course, that $149 million non-cash mark-to-market loss that I just mentioned.
We're going to continue to adjust for the transaction-related expenses as they are incurred.
If you look at tax rate, tax rate is now going to be slightly lower than what we had forecasted just based on first half activity.
We expect that to be 22% now.
And finally, guidance for the full year assumed sales, adjusted operating income and earnings per share all split, 48% first half, 52% in the second half.
And just a little bit more color, Q3, FY '22 Q3 adjusted earnings per share guide, we have at $4.54.
So with that, Tom, I'll hand it back to you for closing comments and I'll ask everyone to go to Slide 15.
We've got a highly engaged team around the world living up to our purpose, which is enabling engineering breakthroughs that lead to a better tomorrow.
You've seen what 3.0 has done, as I referenced in that earnings per share chart, describing our current performance that's going to drive our future performance.
It's the early days of win strategy 3.0 and I would characterize it as having long legs, lots of potential ahead with win strategy 3.0.
The portfolio transformation continues.
We've acquired three great companies, are in the process of a fourth that will make us longer cycle and more resilient.
And if you put that on top of the secular trends that I highlighted, we feel very, very positive about the future.
So it's been our portfolio changes.
It's been the strategy changes.
But it really starts with our people, 55,000 team members that are thinking and acting like an owner, so 55,000 owners that are driving this transformation.
And then I'm going to hand it back to Todd for a quick comment just to set up the Q&A before we get started.
Jonathan, I just want to want to ask the participants of the call just as a reminder to ask one question, follow up if needed and then jump back into the queue just so we can try to get everyone on the call to to have a shot at answering a question.
We do appreciate your cooperation.
 Assistant:

Chosen response:
q2 adjusted earnings per share $4.46.
q2 sales rose 12 percent to $3.82 billion.
qtrly orders increased 12% for total parker.
fy22 guidance assumes organic sales growth of approximately 10% to 12% compared with prior year.
for remainder of this fiscal year, we expect positive demand trends to continue.