Prompt:
Human: I'm joined today by Ron Tsoumas our Chief Financial Officer.
Let's begin with the business highlights on Slide 4.
Our discussions of year-over-year comparative results should be viewed in this context.
For illustration, our sales on a weekly run rate basis and excluding favorable currency translation were up 8% from the prior year.
We share this to give investors insight on how we view the underlying strength of our business, which clearly improved year-over-year.
While the top line was strong, we do have some headwinds to gross margin in the quarter.
Supply chain disruptions led to additional costs such as premium freight as well as to factory inefficiencies.
Moving forward, these challenges will linger and be joined by demand disruptions caused by the ongoing semiconductor and potentially other material shortages, some of which are related to the recent extreme weather events in the US.
This is driving a level of near-term uncertainty that can be seen in our wide guidance range for the fourth quarter.
However, none of these issues are systemic and we expect most to be resolved by the middle of this calendar year.
Our confidence in the situation improving is evidenced by our decision to give an early indication of our anticipated sales for fiscal 2022 of over 10% organic growth.
In addition, as the commercial vehicle market continues to rebound, our sales mix is expected to further improve gross margin.
Turning to our Automotive business.
We continue to see strength in demand.
Our sales in EV grew and we had a strong Awards for Power, Lighting and User Interface programs in the quarter.
Last quarter we reported that sales into EV applications were over 9% of consolidated sales and were expected to be in the high single-digits for fiscal 2021.
This quarter, EV sales were over 12% of consolidated sales and we now expect that number to be over 10% for fiscal 2021.
Furthermore, our healthy pipeline of EV programs now gives us visibility to project that this percentage will be in the mid-teens in fiscal 2022.
Methode's combination of user interface, LED lighting and Power Distribution Solutions is a winning formula in EV and positions us well for continued growth in this exciting market.
Regarding our balance sheet.
We generated over $80 million in free cash flow and significantly reduced our net debt in the quarter.
The debt reduction was driven by the full repayment of our $100 million revolver draw from March of last year.
We continue to have ample liquidity and our net leverage ratio was now near zero.
The strength and flexibility of our balance sheet allows us to consider multiple paths to invest in the business in order to drive growth and ultimately shareholder return.
In addition to the COVID-19 pandemic, we faced a growing impact from a semiconductor shortage in the quarter.
While the COVID-19 situation is improving, the ongoing operating issues from it remain.
In regard to the chip shortage situation, the impact of Methode in the third quarter was minimal, however, we do anticipate a financial impact in our fourth quarter and beyond as a result of the aforementioned issues as well as other potential supply chain disruptions.
Moving to Slide 5.
Methode had its best quarter of this fiscal year for booked awards.
These awards continue to capitalize in key market trends like vehicle electrification, LED Lighting in Auto and Sensors in e-Bikes.
The awards identified here represent a cross-section of the business wins in the quarter and represent over $50 million in annual business.
In vehicle electrification, we won awards for busbar, power distribution and user interface programs.
We continue to win programs with OEMs globally in auto, commercial truck and even charging station applications.
In non-EV LED Lighting, we were awarded programs for several auto applications.
We also continue to participate in the growth of e-Bikes, which utilizes our proprietary Magneto-elastic technology.
Lastly, we won two sizable awards for User Interface programs with international automotive OEMs. For the first three quarters of the fiscal year, Methode has booked orders of over $150 million in potential annual sales.
We continue to build on our foundation for organic growth.
Regarding the anticipated roll off of our largest auto program, while we can't comment on our customers' timing, we are pleased that our strong new program bookings over the last several quarters has put us on a track in aggregate to replace the sales from that program.
We are also pleased to protect that our sales from any single customer is expected to drop below 25% from a high of approximately 50% four years ago, all while we continue to grow our top line.
We are definitely making progress on reducing both customer and program concentration.
Turning to Slide 6.
I would like to elaborate further on our footprint in EVs.
As I've shared with you before, Methode has become uniquely qualified three-pronged solution provider for EVs.
Those solutions includes, User Interface, LED Lighting and Power distribution.
The architecture of EV is generally divided into two parts.
The Top Hat and the Skateboard.
The Top Hat is essentially a body of the vehicle and varies from model to model.
The Skateboard is the chassis or framework of the vehicle.
As many of you know this type of vehicle architecture is a game changer with EVs, as it can be standardized and leveraged across multiple models and platforms.
On the Top Hat, Methode offers its traditional vehicle solutions of User Interface and LED Lighting, along with some EV specific solutions such as charging ports.
These charging ports are fairly complex and include features such as actuators and lighting, in addition to the power connection itself.
On Slide 7, we show Skateboard.
This is where Methode leverage its unique combination of auto grade manufacturing operations, our Auto pedigree and Power distribution expertise to supply various busbars, connectors and battery disconnect units to the EV OEMs. We are also gaining traction with sensor solutions for By-wire systems and battery monitoring.
However, it is in the Power distribution where the largest content growth opportunity lies.
Historically, our participation with Power products and internal combustion vehicles was minimal.
In EVs it is quickly growing as -- and has reached approximately half of our product sales for EV applications.
Consequently, Methode has a clear opportunity to incrementally grow our content per vehicle with the transition to EVs.
The additional content in EV could range from 20% to over 100% of our current content on an internal combustion vehicle.
As I've said in the past, EV is a definite organic growth tailwind for Methode.
To conclude, given the recent supply chain challenges and the ongoing pandemic situation, I am extremely pleased that our strategy and our team were able to deliver at the high end of our previous guidance, generate significant free cash flow and win substantial new program awards in the quarter.
Please note that the third quarter of fiscal year '21 contains 13 work weeks, whereas the third quarter of fiscal year '20 had 14 work weeks.
Third quarter sales were $295.3 million in fiscal year '21 compared to $285.9 million in fiscal year '20, an increase of $9.4 million or 3.3%.
The year-over-year quarterly comparisons included a favorable foreign currency impact on sales of $9.7 million in the current quarter.
On a weekly run rate basis and excluding the foreign currency impact, net sales were up a solid 7.6%, compared to the same quarter of fiscal year '20.
The increase was due in part to higher sales of Electric and Hybrid Vehicle Solutions.
Third quarter net income decreased $9.3 million to $31.9 million or $0.83 per diluted share from $41.2 million or $1.09 per diluted share in the same period last year.
In addition to one week less of production activity in the current fiscal quarter, the decrease was primarily due to premium freight and factory inefficiencies resulted from supply chain disruptions due to COVID-19 and to a lesser extent increased tariff expense and product sales mix.
Also contributing to the decline was lower other income of $2.5 million and higher income tax expense of $1.8 million.
Third quarter gross margins were lower in fiscal year '21 as compared to fiscal year '20, mainly due to premium freight and factory inefficiencies resulted from supply change disruptions due to COVID-19 and the mentioned tariff expense and product sales mix.
Fiscal year '21, third quarter margins were 24.6% as compared to 27.7% in the third quarter of fiscal year '20.
The premium freight and other expenses resulting from inefficiencies in the supply chain that were experienced in the third quarter are expected to continue in the fourth quarter.
However, we do not believe these issues are systemic and based on our knowledge at this time, it will gradually be resolved in the fourth quarter with lesser impact to the first quarter of fiscal year '22.
Third quarter selling and administrative expenses as a percentage of sales decreased 50 basis points year-over-year to 11% compared to 11.5% in the fiscal year '20 third quarter.
The fiscal year '21 third quarter percentage was attributable to lower compensation expense, lower travel expense and restructuring costs, partially offset by higher stock-based compensation expense.
The decrease in compensation expense was primarily related to the benefit of restructuring actions taken in the first quarter of fiscal year '21.
While we anticipate an increase in the SG&A percentage on a go-forward basis due to a full year of LTIP amortization on the restricted stock units and more normal travel expense, we expect the future SG&A expense percentage to be more in line with our historical norms, which is still yield and efficient flow-through from gross margins operating income.
Regarding our restructuring activities the third quarter expense was $700,000 and the year-to-date third quarter expense was $8.3 million.
The company currently expects an additional restructuring expense of $200,000 in the remainder of the fiscal year, resulting from the previous quarters actions.
The vast majority of the restructuring took place in the first half of the fiscal year.
In addition to the gross margin and SG&A items mentioned above, two other non-operational items significantly impacted net income in the third quarter of fiscal year '21 as compared to the comparable quarter last fiscal year.
First, other income net was lower by $2.5 million, mainly due to lower government assistance between the comparable quarters.
Second, income tax expense in the third quarter of fiscal year '21 was $4.6 million or 12.6% as compared to a tax expense of $2.8 million or an effective tax rate of 6.4% in the third quarter of fiscal year '20.
The 12.6% effective tax rate for the quarter was less than the estimated tax rate due to the benefits of some tax planning enacted in the third quarter, which was retroactively applied to the first quarter of the current fiscal year.
We expect to benefit from the third quarter tax planning in the current fourth quarter, which will result in an estimated fourth quarter effective tax rate of 15%, down from the previously guided rate of 17%.
Shifting to EBITDA, a non-GAAP financial measure.
Fiscal year '21 third quarter EBITDA was $51.3 million versus $58.7 million in the same period last year.
EBITDA was negatively impacted by the higher costs I previously noted.
We reduced gross debt by $103 million in the third quarter, resulting from the full repayment of the $100 million precautionary draw we initiated in March 2020.
Since our acquisition of Grakon in September 2018, we have reduced gross debt by $113 million.
Net debt, a non-GAAP financial measure decreased by $108.9 million in the third quarter of the fiscal year '21 as compared to the fiscal year '20 year-end from $134.8 million to $25.9 million.
We ended the quarter with $218.7 million in cash.
Our debt to trailing 12 month EBITDA ratio, which is used for our bank covenants is approximately 1.3.
Our net debt to trailing 12 months EBITDA ratio was 0.1.
Free cash flow, a non-GAAP financial measure, which effective in fiscal year '21 is defined as cash provided from operating activities minus capex.
For the fiscal year '21 third quarter, free cash flow was $82.8 million as compared to $6.7 million in the third quarter of fiscal '20.
The strong free cash flow performance was driven by an approximately $40 million favorable change in working capital in the quarter.
While this level of working capital execution is not likely to be sustainable, especially as we navigate through supply chain challenges, we anticipate continuing our history of consistently generating predictable cash flows, which will allow for ample funding of future organic growth, inorganic growth and return of capital to the shareholders.
In the third quarter of fiscal year '21, we invested approximately $4.9 million in capex as compared to $8.1 million in the third quarter of fiscal year '20.
The lower third quarter capex was simply due to timing as opposed to any conscious effort to curtail capex.
We approved capex during the quarter that was not reflected in the cash flow statement as the actual outlay for these improved expenditures will occur in future reporting periods.
We have a strong balance sheet and we'll continue utilizing it by continued investment in our businesses to grow them organically in the future.
In addition, we continue to actively pursue opportunities for inorganic growth.
As Don mentioned in his remarks, we are providing revenue and earnings per share guidance for the fourth quarter which is subject to disruption at any time due to a variety of factors including direct and indirect impacts from the ongoing COVID-19 pandemic situation, the semiconductor supply shortage and potential challenges from supply disruption resulting from the severe weather experienced in the US in mid-February.
The revenue range for the fourth quarter is between $270 million and $300 million.
Diluted earnings per share range is between $0.60 and $0.82.
The wide range is due to the uncertainty from the supply chain disruption for semiconductors and other material on both Methode and its customers.
Factors that could result in us moving toward the higher end of the sales rate include higher sales due to lesser supply disruption to us and/or our customers, which would result in higher demand for all our products.
Lesser disruption would also minimize the cost of sales impact from premium freight, factory inefficiencies and to a lesser extent tariffs and other logistic factors such as port congestion.
Don that concludes my comments.
Catherine, we are ready to take questions.
 Assistant:

Chosen response:
compname reports q3 earnings per share $0.83.
q3 earnings per share $0.83.
q3 sales $295.3 million.
sees q4 earnings per share $0.60 to $0.82 including items.
sees q4 sales $270 million to $300 million.


Prompt:
Human: We will reference this information during today's call.
Today's earnings call will begin with Ward Nye, whose remarks will focus on the state of our business in light of the Coronavirus pandemic, the actions we have and are taking and the strength of our positioning to manage the current environment.
Jim Nickolas will then review our first quarter 2020 financial results and liquidity position, and then Ward will provide some closing comments.
A question-and-answer session will follow Ward's closing remarks.
First and foremost, we hope that you and your families are and remain safe and healthy as we confront the challenges and uncertainties presented by COVID-19.
I also want to extend my sincere gratitude to our Martin Marietta team.
I'm tremendously proud of how everyone is working together to manage through this unprecedented time and how the character of our employees has shown through.
Day after day, Martin Marietta employees are safely and resolutely meeting the critical needs of our customers.
They're also supporting their local communities in both large and small ways donating vital supplies and equipment to healthcare workers and first responders, helping neighbors by picking up groceries and ensuring our colleagues are well cared for and safe.
Our team has shown great courage, determination and resilience as we successfully meet our stakeholders' needs while never losing sight of our core values of safety, integrity, excellence, community and stewardship.
These values define us and our character.
We look at these foundational principles to guide our daily and long-term actions and decisions, particularly during difficult times.
Martin Marietta remains open as an essential business.
That designation means we're continuing to provide heavy building materials and services to our customers even in those areas with shelter-in-place orders.
Communities across the nation must maintain their vital infrastructure and we're working hard to support that objective in a safe, efficient and responsible way.
Through the end of April, our workforce, operations and supply chains have seen little disruption.
We believe this is largely due to our company's decisive steps early to respond quickly to this pandemic, our domestic focused approach to sourcing supplies and materials and our expanded safety procedures, all of which are designed to protect Martin Marietta employees and the organizational health of the company.
During this pivotal time, our focus is threefold: communication, resource management and business continuity.
We've implemented new robust protocols and practices, including remote working, social distancing and enhanced equipment and facility cleaning, consistent with guidelines for the Centers for Disease Control and Prevention and the medical professionals who partner with the industrial hygienist familiar with our operations.
These protocols were updated on an ongoing basis as public experts provide additional guidance.
We also established a COVID-19 Planning and Communications task force, canceled all nonessential business travel and in-person meetings and established contingency plans with respect to staffing, and we've been actively engaged enterprisewide to enhance the substance and frequency of our communications to ensure the flow of the most accurate and timely information about our operations, thus enabling our employees, customers, suppliers and other stakeholders to stay fully informed.
Our operations teams have shown considerable agility, flexibility and perseverance while keeping our business running smoothly.
Among other things, they've taken timely and responsible steps to clean and disinfect their facilities, while carefully screening necessary third-party visitors to minimize any COVID-19 exposure.
Additionally, for our colleagues that typically work in doors in close proximity to one another, we're utilizing a combination of social distancing as well as work-from-home protocols.
Our employees are dutifully meeting their job responsibilities and remaining fully accessible.
Importantly, whether working at an operating site, an office or remotely, our employees are empowered and encouraged to look out for one another.
With our team's safe and employee engagement high, we can be attentive to our other stakeholders, our customers, suppliers, creditors, shareholders and communities as we have an essential business to run.
Jim will discuss these results with you shortly.
Let me first say that we're proud of these results, which underscore our commitment to operational excellence and to our disciplined strategies.
While we had a promising start of what we believe would have been a record-setting 2020, we recognize this year will now be filled with an unprecedented level of uncertainty as the COVID-19 pandemic and related economic and societal outcomes continue to unfold.
Accordingly, while we remain confident in the fundamental strength and underlying drivers of our business, we have withdrawn our 2020 full year guidance issued back in February.
We've not yet seen contractors and customers delaying or canceling building projects in a material way.
While we typically do not comment on intra-quarter trends, these are atypical times.
We're making an exception and as highlighted on our supplemental information slides 13 and 14, we are sharing preliminary April shipment and pricing trends to provide greater transparency as to what we're now seeing in a COVID-19-impacted month.
Specifically, for the month of April, aggregate shipments remained elevated in most areas but did not match the near-record April 2019 volumes.
We saw notable growth in North Texas, Colorado and Indiana.
Cement shipments continue to be strong and are currently trending close to prior year levels.
The one notable exception is oil well cement shipments as demand continues to decline due to volatile and historically low oil prices.
Ready mixed concrete shipments are also trending near April 2019 levels, even as some homebuilders temporarily pause construction activity.
April revenues for the Magnesia Specialties business are $10 million lower than the comparable prior year period.
Demand for our lime and periclase products has slowed dramatically as steel-producing customers temporarily idled their facilities in response to the COVID-19-induced shutdown of certain domestic auto manufacturers beginning in mid-March.
In terms of April pricing trends, aggregates pricing improved mid-single digits over April 2019 as announced increases were broadly implemented earlier in the year.
Cement pricing is up, even with several competitors announcing plans to delay price increases until June 1.
Prior to the COVID-19 outbreak, we were highly confident in realizing the full announced increase of $8 per ton implemented April 1, given overwhelming market support in a tight Texas cement environment.
Ready mixed concrete pricing is slightly higher than April 2019 levels.
We'll have a clearer picture of ready mixed concrete pricing trends for the remainder of the year as the phased reopening of the Texas and Colorado economies unfold.
Though ours is a basic and durable industry, it does not mean that we're immune to the disruptions caused by the pandemic.
Our economy is interconnected and dislocations in consumer behavior or other industries may impact Martin Marietta.
As such, looking beyond April, we anticipate product demand will soften in the coming months, with the private sector feeling the effects sooner than the public sector.
The timing, duration and extent of weaker demand levels are presently unknown.
Infrastructure, particularly for aggregates-intensive highways and streets, is expected to be the most resilient of the company's three primary end uses in the near term.
The vast majority of state departments of transportation are operational and continue to advertise and award projects.
Nonetheless, we expect many state DOT budgets will face temporary headwinds from lower fuel taxes, tolls, user fees and other related revenue collections as much of the nation has been sheltered in place.
The impact of lower funding levels is expected to become more meaningful in the second half of 2020, absent congressional action and will vary considerably among the states.
Florida DOT, for example, has accelerated over $2 billion of critical transportation projects to leverage construction efficiencies resulting from lower vehicle traffic, including closing additional travel lanes and performing more daytime hours work.
To help mitigate state DOT funding risks, industry representatives are actively engaging with Congress to address surface transportation in the Phase four emergency relief and economic recovery COVID-19 legislation.
The first recommendation is the federal backstop of nearly $50 billion in immediate flexible funding to offset the estimated 30% loss in state transportation revenues over the next 18 months.
The second recommendation is the passage of a comprehensive major surface transportation reauthorization package.
We believe our industry is better equipped than in recent history to execute on an infrastructure build given the backlog of fully designed projects.
Nonresidential construction activity on existing projects has broadly continued in most regions.
However, many commercial projects and the engineering or planning stages are being delayed or canceled, particularly for office, retail and hospitality.
Some industrial activity, on the other hand, is not expected to experience significant near-term disruption from COVID-19, warehouses, distribution centers and data centers are expected to perform relatively well in the current environment, as businesses increase e-commerce activity, secure regional supply chains and become more reliant on cloud and network services.
Similarly, large energy sector projects along the Gulf Coast of Texas that are already under way are expected to continue.
The residential market is expected to experience the most rapid and perhaps steepest decline from the impacts of COVID-19 as unemployment and general economic instability of home buyers and home developers to delay plans.
However, in contrast to the Great Recession, we do not anticipate a prolonged period of reduced residential activity.
Today's housing inventories remain near all-time lows despite notable population gains in Martin Marietta states and to benefit from historically low interest rates.
As we prepare for the secondary effects of the economic fallout from the Coronavirus, we rely on our values-driven culture.
As I emphasized earlier, the safety, health and well-being of our employees, customers, communities and other stakeholders remains our top priority.
With established protections in place to accomplish this, we're focused on our business priorities of generating cash flow, preserving liquidity and adjusting costs to align with product demand.
Our team has developed extensive plans for a variety of economic scenarios, and we're ready to implement them with immediacy and integrity as warranted.
In addition to strengthening our balance sheet through a timely $500 million bond offering in early March, we've cut nonessential costs, reduced capital spending for discretionary projects and implemented hiring restrictions.
We're tightening our belts and aligning our capacity with demand consistent with our commitment to being prudent stewards of shareholders' capital.
We will reevaluate these actions as visibility improves.
Having the right strategy, making the right decisions at the right time, and being able to safely execute them does matter a lot.
And Martin Marietta will do just that.
We're well positioned geographically, financially and otherwise to successfully manage through today's unprecedented environment and emerge more resilient and capable.
First, Martin Marietta has a much stronger geographic and competitive position today compared with any previous downturn in our more than 25 years as a public company.
This is noteworthy, considering we navigated through the Great Recession and remain profitable throughout, never suspended or cut a dividend and emerged with a healthy balance sheet.
Today, we continue to generate record profitability on aggregate shipment levels much lower than our peak volumes in 2005, and with a geographic footprint that we've not only considerably expanded but also improved.
Moreover, we continue to thoughtfully execute on our strategic plans, carefully positioning our business through aggregates-led expansion in high-growth markets with attractive fundamentals and leveraging strategic cement and targeted downstream opportunities.
These strategic plans not only provide Martin Marietta with new growth platforms, but also opportunities to expand our footprint to complement existing operations and build critical mass.
We now have leading positions in 90% of our markets, up from 65% a decade ago, which supports favorable pricing trends, economies of scale and cost flexibility.
Second, we have experienced teams with decades of collective industry knowledge and expertise.
Together, their leadership and contributions have produced strong and sustained financial returns for Martin Marietta and our shareholders as recently demonstrated by our one, five and 10-year cumulative shareholder return performance.
This is largely the same leadership team that successfully formulated our operational response and prudently addressed our business needs during the Great Recession, the most challenging economic environment our industry ever experienced.
In uncertain evolving times, proven cycle tested leadership and experience is critical.
In brief, Martin Marietta has the right strategies, priorities, experience and teams to responsibly manage us through these challenging times.
I will briefly highlight our first quarter results as well as provide a summary of our financial and liquidity positions, both of which support our near- and long-term strategies.
As detailed in today's release, our first quarter financial and operational performance exceeded our expectations, particularly considering the record-setting prior year quarter that benefited from carryover work from an extraordinarily wet 2018.
On a consolidated basis, total revenues increased 2% to $958 million, a first quarter record.
Gross profit was relatively flat.
Selling, general and administrative expenses improved 10 basis points as a percent of total revenues.
Diluted earnings per share was $0.41 and adjusted earnings before interest, taxes, depreciation, depletion and amortization, or adjusted EBITDA, decreased 6% to $149 million.
The Building Materials business achieved record first quarter revenues.
Across our geographic footprint, product demand trends remain strong, even in the Texas and North Georgia markets that experienced record or near-record precipitation levels.
Aggregates, cement and ready mixed concrete pricing also improved, with all divisions contributing to the solid growth, a testament to the strength of our markets, and the disciplined execution of our locally driven pricing strategy.
Building Materials gross profit improved slightly.
Key takeaways include the following: aggregates product gross profit decreased $5 million, largely due to our quarterly update of inventory standard costs.
Our per ton production costs have been trending downward over the last 12 months as cost control measures and operating efficiencies have their desired effect.
All else equal, this would result in higher operating margins going forward.
But in this quarter, it also resulted in a $4 million expense as we reflected the lower cost in our updated inventory valuation.
In contrast, during the first quarter of 2019, we recorded an $11 million inventory valuation adjustment to reflect the higher production costs experienced during the weather-impacted year in 2018.
While this cumulative $15 million year-over-year inventory standard variance reduced quarterly product gross margin by 260 basis points, lower unit production costs will provide future benefits.
Cement product gross margin expanded 1,170 basis points driven by improved cost absorption from higher production levels as well as increased shipments to the San Antonio, Austin and Houston markets.
Pricing gains, combined with lower maintenance and energy expenses also contributed to the improved margin.
Gross profit for the ready mixed concrete business declined $9 million.
Pricing improvements and double-digit shipment growth in Colorado were more than offset by lower Texas volumes from record rainfall, delaying projects in the Dallas/Fort Worth area as well as increased raw material costs.
For the Magnesia Specialties business, product revenues decreased 13%, consistent with expectations as chemicals customers continue to reduce inventory levels for reasons unrelated to COVID-19.
Notably, product gross margin improved 500 basis points despite lower revenues, driven by ongoing cost control measures and lower energy costs.
We still currently anticipate the destocking trend of our chemicals customers to be transitory in nature.
Our consolidated results included several items that affect comparability with the prior year quarter.
To provide additional clarity, we included a slide in the Q1 2020 supplemental information posted on our website that provides a normalized view of pre-tax earnings with the items affecting comparability removed from both current and prior year quarters.
In addition to the aggregates inventory standard adjustments discussed earlier, these items also included $6 million of other nonoperating expenses to finance third-party railroad maintenance in exchange for a federal income tax benefit of approximately $7 million, which drove the low-income tax rate for the first quarter 2020.
Lastly, we incurred a noncash expense of $2 million to implement a new paid time-off policy for our employees.
As you will see on slide five, first quarter 2020 earnings before income tax, absent items affecting comparability, improved $15 million.
Moving on now to our capital structure.
Throughout our history, Martin Marietta has operated with a growth mindset, while maintaining a healthy balance sheet to preserve our financial flexibility.
As a result, we have ample liquidity for the foreseeable future.
Given today's environment, that is an enviable place to be.
We will continue to balance our long-standing, disciplined capital allocation priorities to maintain that flexibility.
Our priorities remain value-enhancing acquisitions, prudent organic capital investment and the opportunistic return of capital to shareholders through dividends and share repurchases, all while maintaining our investment-grade credit rating profile.
Our approach is intended to ensure our cash flows are sufficient for a range of scenarios.
In today's uncertain environment, that range of scenarios is broader and actions to enhance cash flows and preserve liquidity are even more important.
Before the extent of the economic disruption became better understood, we repurchased 211,000 shares during the first quarter.
Since then, we have temporarily paused share repurchases.
We will continue to closely monitor the situation and as circumstances change, we will revisit this pause in our share repurchase program.
To further bolster cash flows, as Ward mentioned, we are reducing our capital spending for discretionary projects.
We now estimate full year capital expenditures will be $325 million to $350 million, down from our original guidance of $425 million to $475 million.
We demonstrated our ability to pull back on capital spending in safe and prudent ways that did not damage the business in the long run during the Great Recession.
We are doing that again now as appropriate.
We've strengthened the company's balance sheet and cash position with our timely bond offering in early March, issuing $500 million of 10-year senior notes at a 2.5% coupon.
Proceeds will be used to repay the $300 million of floating rate notes that mature later this month, with the bulk of the remaining cash preserved on the balance sheet.
Looking forward, as you can see in our supplemental information slides, after satisfying the May repayment, we will have no additional bond maturities for more than four years.
We are confident in our liquidity position.
Net cash, combined with the nearly $760 million available on our existing revolving facilities, provided total liquidity of approximately $880 million at the end of the quarter.
Additionally, at 2.3 times net debt to the consolidated adjusted EBITDA, we remain well within our target leverage ratio of two to 2.5 times at the end of the first quarter.
In summary, we are pleased with our solid first quarter performance and enhanced liquidity.
In regards to our 2020 full year guidance, we will reinstate earnings guidance once we have sufficient visibility to do so.
That said, we remain confident that the attractive underlying market fundamentals and long-term secular growth trends in our key geographies, both of which underpin the company's record 2019 performance and strong first quarter 2020 results, remain intact and will be evident once again as the U.S. economy stabilizes and recovers.
Martin Marietta is well positioned geographically, financially and otherwise to responsibly navigate today's extraordinary environment and drive sustainable long-term growth and shareholder value as we move forward.
We have thoughtfully developed and consistently executed on our strategic plans positioning our business as an aggregates leader in attractive high-growth geographies, aligning our product offerings to leverage strategic cement and targeted downstream opportunities and prudently allocating capital while maintaining financial flexibility.
In doing so, we have built a business that is durable, resilient and stronger than ever.
 Assistant:

Chosen response:
martin marietta withdraws 2020 outlook in light of covid-19 uncertainty.
withdraws previously-issued full-year 2020 guidance in light of covid-19 uncertainty.
shipments and pricing increased across majority of building materials business in q1.
qtrly earnings per share $0.41.
martin marietta materials - while co is not immune to impact of covid-19, believe co is well prepared to meet current & coming challenges.


Prompt:
Human: Ward and I will begin today's earnings call with a discussion of our full year operating performance.
Jim Nickolas will then review our 2020 financial results and liquidity position, after which Ward will discuss market trends and our 2021 outlook.
A question-and-answer session will follow.
We sincerely hope that you and your families remain safe and healthy.
By all accounts, 2020 was extraordinary for Martin Marietta.
We're proud to have extended our long track record of financial, operational and safety excellence, particularly in a year filled with unprecedented disruption.
Martin Marietta set new performance records, delivering our most profitable year and the best safety performance in our company's history.
These impressive results demonstrate our resilient business model and our team's commitment to Martin Marietta's vision and successful execution of our proven strategic operating analysis and review or store plan.
As noted, today's discussion focuses on our full year results and 2021 outlook.
Before doing so, I'll highlight a few notable takeaways from our record-setting fourth quarter.
Importantly, we achieved solid shipment and pricing growth across all product lines as construction activity stabilized from the spring and summer months when we saw a greater impact from COVID-19.
These top line improvements, along with our steadfast focus on cost controls, resulted in 7% growth in consolidated total revenues; 20% growth in adjusted earnings before interest, taxes, depreciation and amortization or adjusted EBITDA; and a 40% increase in diluted earnings per share.
For the full year, we established new records for products and services revenues, profitability and adjusted EBITDA.
Specifically, full year consolidated products and services revenues increased to $4.4 billion.
Consolidated gross profit increased 6% to $1.3 billion.
Adjusted EBITDA increased 11% to nearly $1.4 billion, and diluted earnings per share was $11.54, an 18% improvement.
Martin Marietta's 2020 results marked the ninth consecutive year of growth in these financial metrics.
Operating our business safely sets the foundation for our long-standing financial success.
Martin Marietta's industry-leading safety performance continues to trend near or exceed world-class safety levels.
We achieved a 25% reduction in total reportable incidents across the enterprise in 2020, and for the fourth consecutive year, we achieved a companywide world-class lost time incident rate.
These superior financial and safety results are directly attributable to the dedication and agility of our nearly 9,000 talented employees.
I'm extraordinarily proud of how our team managed the challenges and disruptions caused by the pandemic, while remaining focused on being good wingmen, working safely and efficiently together and seamlessly meeting our diverse stakeholders' needs.
With that overview, let's now turn to our full year operating performance.
Aggregate shipments declined 2% to nearly 187 million tons, reflecting anticipated lower infrastructure shipments in portions of North Carolina, reduced energy sector demand and headwinds from COVID-19 disruptions.
However, in line with broader macroeconomic trends, full year aggregate shipments to the residential market increased, benefiting from healthy single-family housing activity.
Aggregates average selling price increased 4% on a mix adjusted basis, in line with our expectations.
Importantly, all divisions contributed to this solid growth, a testament to this product line's resilient pricing power and our leading market positions in attractive geographies.
The disciplined execution of our locally driven pricing strategy, along with attractive underlying market fundamentals will continue to support sustainable pricing growth moving forward.
Our cement operations established new records for shipments, which increased 2% to nearly four million tons.
Large project activity supported underlying product demand in both North and South Texas throughout the year, offsetting weakness in the energy sector.
Pricing increased 3% on a mix adjusted basis, demonstrating the resilient price fundamentals of core products in the state of Texas.
We expect our cement business will continue to benefit from favorable shipment and pricing trends, supported by tight supply and healthy demand in Texas, diversified customer backlogs and April 2021 price increases.
Turning to our targeted downstream businesses.
Ready mixed concrete shipments increased 3%, excluding shipments from acquired operations and from our Southwest division's former concrete business in Arkansas, Louisiana and Eastern Texas, which we divested in January 2020.
Concrete pricing increased 2%.
Our Colorado asphalt and paving business established a new record for asphalt shipments, increasing 15% to three million tons.
This growth reflected solid underlying product demand together with carryover work following a weather challenged 2019.
Asphalt pricing increased nearly 3%.
We concluded 2020 with the highest full year adjusted EBITDA margin in Martin Marietta's history.
Driving this achievement was our Building Materials business, which delivered record products and services revenues of $4.2 billion, a 1% increase, and record product gross profit of $1.2 billion, a 7% increase.
Our Upstream Materials businesses, namely, aggregates and cement, established all-time records for both full year product revenues and gross profit.
Aggregates product gross margin expanded 130 basis points to 30.6%, a new record, and unit profitability improved 8%.
These accomplishments, which resulted from strong pricing gains, disciplined cost management and lower diesel fuel costs demonstrate the cost flexibility and resiliency of our aggregates-led business.
The Cement business benefited from the planned kiln maintenance outage that occurred through the end of 2019.
The timing of that outage resulted in some expenses being recognized in 2019 versus early in 2020.
More importantly, that and other capital investments have dramatically improved our cement operations.
We achieved 90% kiln reliability this year, up from 82% in 2019, which facilitated increased throughput and fixed cost absorption at both our Midlothian and Hunter plants.
These factors, combined with mix adjusted pricing strength and lower fuel costs contributed to the 510 basis point improvement in cement product gross margin to 37.8%.
Our targeted downstream businesses also delivered solid full year financial results.
Ready mixed concrete product gross margin increased 10 basis points to 8.4% as pricing growth offset higher raw material costs.
Asphalt and paving achieved gross profit of $60 million and a 100 basis point improvement in gross margin, driven by double-digit revenue growth.
Our Magnesia Specialties business returned to revenue and profitability growth during the fourth quarter.
The 12% top line improvement in the quarter, however, was not enough to offset demand declines experienced earlier in the year.
As a result, full year product revenues decreased 12% to $221 million.
We anticipate fourth quarter strength in line with chemicals demand to continue in 2021, now that steel utilization has rebounded from last summer's COVID-19-driven trough and our cobalt customers are resuming activity.
Impressively, product gross margin improved 80 basis points to 40.6% as we proactively responded to lower shipments with effective cost control measures.
Turning now to cash generation, capital allocation and liquidity.
Martin Marietta ended 2020 with the strongest cash generation in our history.
Operating cash flow of $1.05 billion increased 9%, driven by earnings growth.
We continue to balance our long-standing disciplined capital allocation priorities to responsibly grow our business while maintaining a healthy balance sheet and preserving financial flexibility to further enhance shareholder value.
Our priorities remain focused on value-enhancing acquisitions, prudent organic capital investment and the consistent return of capital to shareholders while maintaining our investment-grade rating profile.
For 2020, we invested $360 million of capital into our business and returned $190 million to shareholders through both an increased dividend and the first quarter repurchase of 211,000 shares of our common stock.
In August 2020, our Board approved a 4% increase in our quarterly cash dividend, underscoring its continued confidence in our future performance and continuing Martin Marietta's track record of dividend growth.
Since our repurchase authorization announcement in February 2015, we have returned more than $1.8 billion to shareholders through a combination of meaningful and sustainable dividends as well as share repurchases.
We ended 2020 with a debt-to-EBITDA ratio of 1.9 times, slightly below our target leverage range of two to 2.5 times, which offers us the flexibility to pursue accretive investment opportunities.
Our solid balance sheet, combined with $1.1 billion of availability on our credit facilities, provides the financial strength for Martin Marietta to respond to, then execute on disciplined capital allocation priorities and continue profitably growing our business.
Looking ahead, we believe 2021 will be a year in which we see a return to a more normalized state as underlying demand fundamentals reset and the nation's economy regains momentum.
We remain confident in Martin Marietta's attractive business drivers and are encouraged by accelerating long-term secular trends across our three primary end-use markets and key geographies.
We expect these trends to drive construction-led aggregates intensive growth.
Infrastructure activity, particularly for aggregates-intensive highways, roads and streets, continues to prove resilient.
With the One year extension of the Fixing America's Surface Transportation Act, or FAST Act, at current funding levels, state and local governments have the visibility needed to plan, design and award transportation projects through the 2021 construction season.
Importantly, estimated fiscal 2021 lettings for our top five departments of transportation, or DOTs, are currently above or near prior year levels.
Keep in mind, our top five states: Texas, Colorado, North Carolina, Georgia and Florida, are disproportionately important to us, representing 71% of our 2020 Building Materials business total revenues.
Additionally, DOTs were recently granted nearly $10 billion of targeted relief as part of the Coronavirus Response and Relief Act passed in December 2020 to help offset pandemic-driven transportation revenue shortfalls.
This funding assistance has the benefit of no state matching requirements.
Based on preliminary estimates, over $2 billion of this assistance will be apportioned to Martin Marietta's top five states.
Over the medium to long term, we anticipate voter-approved state and local transportation measures and passage of a comprehensive federal transportation program package to promote multiyear growth in product demand.
In November 2020, voters sent a powerful message of support for state and local transportation investment, approving 94% of ballot measures, the highest ever approval rating.
These initiatives are estimated to generate an additional $14 billion in onetime and recurring transportation funding, of which 82% is in Texas, our top revenue-generating state.
Bipartisan support exists for new surface transportation legislation aimed at increasing funding levels not seen in over 15 years, with both the United States House of Representatives and Senate previously advancing proposed bills.
We believe this 117th Congress creates a path toward advancing a notable increase in funding over the FAST Act.
We're optimistic that agreement on a new bill could be reached this summer, generating meaningful benefits in 2022 and beyond.
We expect increased infrastructure investment to provide volume stability and drive aggregate shipments in that end-use closer to our 10-year historical average of 43% of our total shipments.
For reference, aggregate shipments to the infrastructure market accounted for 36% of 2020 shipments.
Nonresidential construction should continue to benefit from accelerating e-commerce and remote work trends that require increased investment in heavy industrial warehouses and data centers, particularly in our key metros of Dallas/Fort Worth, San Antonio, Austin, Denver, Des Moines, Indianapolis, Charlotte and Atlanta.
Importantly, this type of construction tends to be more aggregates-intensive than light commercial construction due to the size, scale and structure of these projects.
Light commercial and retail construction will remain comparatively challenged until COVID-19 vaccines are more widely distributed.
Over the longer term, light nonresidential activity will benefit from the attractive collateral effects of strong single-family residential trends.
Aggregate shipments to the nonresidential market accounted for 34% of 2020 shipments.
Single-family housing is poised for multiyear growth returning to more normalized levels during this economic cycle.
We believe Martin Marietta's leading southeastern and southwestern footprint positions the company to be a notable beneficiary of these trends given underbuilt conditions, favorable population and employment dynamics, land availability, mild climates and lower cost of living in these regions.
Single-family housing is two to three times more aggregates-intensive than multifamily construction, given the ancillary nonresidential and infrastructure needs of new suburban communities.
Aggregates to the residential market accounted for 24% of 2020 shipments.
In summary, we're confident in the fundamental strength and underlying drivers of our business.
As disclosed in today's release, we've returned to providing full year annual guidance.
We currently expect 2021 aggregates shipment growth to range from up 1% to up 4%, reflecting single-family housing strength, expanded infrastructure investment and heavy industrial projects of scale that will support our near-term shipment levels.
We remain confident that our favorable pricing trends are sustainable, supported by improved contractor confidence and healthy customer backlogs.
For 2021, we expect annual aggregates price increases, which become effective from January one to April 1, to increase in a range of up 3% to up 5%.
Combined with contributions from our Cement, Downstream and Magnesia Specialties businesses, on a consolidated basis, we expect adjusted EBITDA of $1.350 billion to $1.450 billion.
Keep in mind, when comparing this guidance range to prior year, we're not anticipating the same level of nonrecurring gains from land sales and divested surplus assets as seen in 2020.
To conclude, we're proud of our 2020 record financial results and industry-leading safety performance.
We're also extremely optimistic about our future.
Due to our work over the last several years, Martin Marietta is uniquely well positioned to capitalize on the emerging growth trends that are expected to support steady and sustainable construction activity over the long term.
Importantly, the disciplined execution of our strategic plan, coupled with our pricing discipline, operational excellence, prudent capital allocation and adherence to robust health protocols will continue to enhance Martin Marietta's solid foundation for enduring success.
As we move forward, we have the resources, team and capabilities to drive value-enhancing growth.
We're confident in Martin Marietta's opportunities to build on our successful track record of strong financial, operational and safety performance and remain focused on delivering superior returns for investors while meeting and exceeding our commitments to our other stakeholders, including our customers, employees and communities.
 Assistant:

Chosen response:
martin marietta materials inc - qtrly total revenue $1,179.6 million versus $1,100.4 million.
martin marietta materials inc - remains well-positioned to capitalize on emerging demand in 2021 and beyond.


Prompt:
Human: I'm Dan Glaser, President and CEO of Marsh McLennan.
Joining me on the call today is Mark McGivney, our CFO; and the CEOs of our businesses, John Doyle of Marsh; Peter Hearn of Guy Carpenter; Martine Ferland of Mercer; and Nick Studer of Oliver Wyman.
Marsh McLennan had another outstanding quarter.
Our third quarter results reflect strong momentum across all of our businesses.
Our continued strength represents a combination of the current environment as well as impressive day-to-day execution across the firm.
Although there continues to be uncertainty and volatility in the macro economic and geopolitical environment, we are seeing solid demand for our differentiated advice and solutions.
Even as COVID-19 continues to pose risks in many parts of the world, vaccine rollouts are having a positive impact.
We are taking advantage of opportunities to add to our deep venture world-class talent.
At the core of our business is a focus on our colleagues and we are dedicated to Marsh McLennan being an exciting and dynamic place to work for outstanding people.
And we continue to innovate and leverage the collective strengths of our organization to help clients address their most pressing concerns, including climate, diversity and inclusion, the future of work, cyber and digital strategies.
As we have discussed, 2021 represents Marsh McLennan's 150th year, and success over such a long period of time requires constant innovation and investment to deliver sustained growth and profitability.
I'd like to discuss just a few recent examples of how we are innovating to develop new unique client solutions.
Nick Studer leads our firmwide climate initiative.
We view climate as a significant opportunity, and we are well positioned to help clients with this critical issue.
In October, Oliver Wyman launched a Climate Action Navigator, drawing on insights from across the company.
This product helps public and private sector leaders plot a path through climate science, identifying emissions at the industry and regional level and quantifying the effects of multiple different carbon reduction technologies and actions.
We believe these tools will give business and government leaders vital insights to achieve their long-term climate goals and be a significant enabler of the transition to low carbon climate resilient investment in the corporate sector.
Mercer recently launched Skills-Edge, an innovative platform allowing employers to determine the most important skills for their future and design a talent strategy to assess, acquire, and retain them.
Skills-Edge provides quantitative insight into the demand and value of skills and supports both employees and organizations in rapidly reskilling for the future of work.
And just last week under the leadership of John Doyle, we launched our Cyber Risk Analytics Center.
This brings together cyber risk data and analytics expertise across our firm and provides clients with a comprehensive assessment of their cyber threats, existing and future controls, and the potential economic impact.
We are one enterprise, and these are just a few recent examples of how we bring together a leverage, knowledge and capabilities across the firm to offer comprehensive solutions to our clients and address their most pressing concerns.
We are a growth company as demonstrated by our track record.
Growth doesn't just happen.
It takes consistent vision, alignment, commitment and execution.
Since closing our acquisition of JLT, we've grown our total consolidated revenue by 27%, our adjusted earnings per share by 34% and our colleague base by 22%.
Achieving and sustaining growth requires consistent reinvestment in the business.
We always strive to balance delivering results in the short-term while investing for the long-term.
In 2021, we generated year-to-date adjusted earnings per share growth that is higher than any annual period in over three decades while at the same time investing for the future and making a significant press on hiring.
We grew our headcount year-to-date by nearly 5,000 or around 7%, mostly organic adds with an emphasis on client-facing roles.
We expect this influx of talent will drive growth, add to our capabilities and enhance our ability to serve clients.
Now let me provide an update on current P&C insurance market conditions.
Many of the factors that drove the market to harden over the last few years continue, suggesting an inflection to a soft market is unlikely in the near-term.
The Marsh Global Insurance Market Index showed price increases of 15% year-over-year consistent with second quarter.
This marks the 16th consecutive quarter of rate increases in the commercial P&C insurance marketplace.
Looking at pricing by line.
The Marsh market index showed global property insurance was up 9%.
Global, financial and professional lines were up 32% driven in part by a near doubling in cyber rates, and global casualty rates were up high single-digits on average.
As a reminder, our index skews to large account business.
However, small and middle market insurance rates continue to rise as well.
although less than for large complex accounts.
Measured and moderate rate increases in global property catastrophe reinsurance witnessed in the first half of 2021 could persist throughout the remainder of the year, reflecting adequate capacity offset by elevated global catastrophes, concerns around real and social inflation, and a continuation of large individual risk lawsuits.
2021 marks another year of significant catastrophe losses.
Hurricane Ida generated material losses in both the Southeast and Northeast.
This is in addition to a record level of flood losses in Europe, flooding in China and the continuation of wildfire losses in many parts of the world.
Marsh McLennan remains focused on helping our clients navigate these challenging market conditions and making a difference for them in the moments that matter.
Now let me turn to our terrific third quarter financial performance.
We generated adjusted earnings per share of $1.08, which is up 32% versus a year ago, driven by strong top-line growth and continued low levels of T&E.
Total revenue increased 16% versus a year ago and rose 13% on an underlying basis, the second consecutive quarter of record underlying growth in over two decades.
Underlying revenue grew 13% in RIS and 12% in Consulting.
Marsh grew 13% in the quarter on an underlying basis and benefited from strong new business and renewal growth.
Guy Carpenter grew 15% on an underlying basis in the quarter continuing its string of excellent results.
Mercer underlying revenue grew 7% in the quarter, the highest in over a decade.
Oliver Wyman grew underlying revenue 25%, the second consecutive quarter in excess of 20%.
Overall, the third quarter saw adjusted operating income growth of 19% and our adjusted operating margin expanded 10 basis points year-over-year.
Given our excellent third quarter and year-to-date performance, we are on track for a terrific year.
We expect to generate the best underlying revenue and adjusted earnings per share growth in over two decades and expand margins for the 14th consecutive year.
Our entire organization is on its front foot, focused and aligned, and this is evident in our excellent results.
Our results were outstanding with record third quarter revenue, second consecutive quarter of double-digit underlying growth, margin expansion, and significant earnings growth.
Highlights from our third quarter performance included a second straight quarter of 13% underlying growth in RIS, with 13% in Marsh and 15% in Guy Carpenter, and a second consecutive quarter of 12% underlying growth in Consulting, with 7% of Mercer and 25% at Oliver Wyman.
Growth in adjusted earnings per share exceeded 30% for the second quarter in a row.
Consolidated revenue increased 16% in third quarter, $4.6 billion, reflecting underlying growth of 13%.
Operating income in the quarter was $740 million, an increase of 37%.
Adjusted operating income increased 19% to $759 million and our adjusted operating margin increased 10 basis points to 18.5%.
GAAP earnings per share was $1.05 in the quarter and adjusted earnings per share increased 32% to $1.08.
For the first nine months of 2021, underlying revenue growth was 10%.
Our adjusted operating income grew 21% to $3.4 billion.
Our adjusted operating margin increased 120 basis points and our adjusted earnings per share increased 28% to $4.82.
Looking at Risk and Insurance Services.
Third quarter revenue was $2.7 billion up 17% compared with a year ago or 13% on an underlying basis.
Operating income increased 21% to $403 million.
Adjusted operating income also increased 21% to $469 million and our adjusted operating margin expanded 20 basis points to 20.4%.
For the first nine months of the year, revenue was $9 billion with underlying growth of 11%.
Adjusted operating income for the first nine months of the year increased 20% to $2.5 billion with a margin of 30.3%, up 80 basis points from the same period a year ago.
At Marsh, revenue in the quarter was $2.4 billion of 17% compared with a year ago or 13% on an underlying basis.
Growth in the quarter was broad-based driven by nearly 40% new business growth and solid retention.
U.S. and Canada delivered another exceptional quarter with underlying revenue growth of 16% and international underlying growth was 9%, Latin America grew 12%, its best growth since the fourth quarter of 2015, Asia-Pacific was up 9% and EMEA was up 8%.
For the first nine months of the year, Marsh's revenue was $7.3 billion with underlying growth of 12%.
U.S. and Canada underlying growth was 14% and international was up 9%.
Guy Carpenter's third quarter revenue was $314 million, up 15% compared with a year ago on both a GAAP and underlying basis.
Growth was broad-based across geographies and specialties.
Guy Carpenter has now achieved 7% or higher underlying growth in seven of the last nine quarters.
For the first nine months of the year, Guy Carpenter generated $1.7 billion of revenue and 10% underlying growth.
In the Consulting segment, revenue in the quarter was $1.9 billion, up 13% from a year ago or 12% on an underlying basis.
Operating income increased 45% to $404 million.
Adjusted operating income increased 15% to $350 million.
The adjusted operating margin was 18.9% in line with the margin in the third quarter of 2020.
Consulting generated revenue of $5.7 billion for the first nine months of 2021, representing underlying growth of 9%.
Adjusted operating income for the first nine months of the year increased 25% to $1.1 billion and the adjusted operating margin expanded 180 basis points to 19.6%.
Mercer's revenue was $1.3 billion in the quarter, up 7% on an underlying basis, the highest result in over a decade.
Career grew 13% on an underlying basis, reflecting the continuing rebound in the global economy and business confidence.
Wealth increased 6% on an underlying basis, reflecting strong growth in investment management and modest growth in defined benefit.
Our assets under delegated management grew to nearly $400 billion at the end of the third quarter, up 24% year-over-year benefiting from net new inflows and market gains.
Oliver Wyman's revenue in the quarter was $610 million, an increase of 25% on an underlying basis.
This represents the second consecutive quarter of more than 20% growth as demand remains strong across most geographies and practices.
For the first nine months of the year, revenue at Oliver Wyman was $1.8 billion, an increase of 21% on an underlying basis.
Adjusted corporate expense was $60 million in the third quarter.
Foreign exchange had a negligible impact on earnings in Q3.
Assuming exchange rates remain at current levels, we expect FX to be a modest headwind in the fourth quarter.
Our other net benefit credit was $69 million in the quarter and we expect it will remain at this level in the fourth quarter.
Investment income was $13 million in the quarter on a GAAP basis and $12 million on an adjusted basis, and mainly reflects gains on our private equity portfolio.
Interest expense in the third quarter was $107 million compared with $128 million in the third quarter of 2020, reflecting lower debt levels in the period.
Based on our current forecast, we expect interest expense in the fourth quarter to be similar to the amount in the third quarter.
Our adjusted effective tax rate in the third quarter was 24.4% compared with 26.5% in the third quarter last year.
Our GAAP tax rate was 24.2% in the third quarter, down from 30.3% in the third quarter of 2020 which was impacted by some unusual item.
Through the first nine months of the year, our adjusted effective tax rate was 24.4% compared with 24.6% last year.
Based on the current environment, we continue to expect an adjusted effective tax rate between 25% and 26% for 2021 excluding discrete items.
Given our year-to-date performance, we are on track for an outstanding year.
Looking specifically at the fourth quarter, keep in mind the comparisons become more challenging given the rebound in growth in the fourth quarter of 2020.
We also continue to build for the long-term by investing in hiring.
While we are excited about the future benefits these investments will deliver, they come with upfront costs we absorb in the short-term.
That said, we've consistently demonstrated our ability to deliver exceptional results today while investing for the future and expect we will continue to do so.
Turning to capital management or balance sheet.
We ended the quarter with $10.7 billion of total debt.
Our next scheduled debt maturity is in January of 2022 when $500 million of senior notes mature.
We continue to expect to deploy at least $3.5 billion of capital in 2021, of which at least $3 billion will be deployed across dividends, acquisitions and share repurchases.
The ultimate level of share repurchases will depend on how the M&A pipeline develops.
Our cash position at the end of the third quarter was $1.4 billion.
Uses of cash in the quarter totaled $665 million and included $272 million for dividends, $93 million for acquisitions and $300 million for share repurchases.
For the first nine months, uses of cash totaled $2.6 billion and included $750 million for dividends, $566 million for acquisition, $734 million for share repurchases and $500 million for debt repayment.
We had a remarkable third quarter positioning us well to deliver strong growth in both revenue and adjusted earnings in 2021.
And operator, we are ready to begin Q&A.
 Assistant:

Chosen response:
marsh mclennan q3 earnings per share $1.05.
q3 adjusted earnings per share $1.08.
q3 earnings per share $1.05.
q3 revenue rose 16 percent to $4.6 billion.


Prompt:
Human: Joining me on the call today are Mike Hennigan, CEO; Maryann Mannen, CFO; and other members of the executive team.
We invite you to read the safe harbor statements on Slide 2.
Actual results may differ.
Before we get into our results for the quarter, we wanted to provide a brief update on the business.
During the second quarter, we saw gradual improvements in the demand for our products as the rollout of COVID vaccinations and the removal of mobility restrictions have led to more economic activity and increased demand for transportation fuels.
That said, we're close to the end of the summer driving season, which is typically our strongest part of the year.
Gasoline demand is currently 2% to 5% below 2019 levels, with the West Coast still lagging at about 10% down.
Diesel demand continues to hold up well and is flat to 2019.
Despite the growing levels of personal passenger traffic, we continue to see an absence of the longer-haul international flights and business travel.
Overall, jet demand remains down nearly 30% below pre-pandemic levels.
The full return of aviation fuel demand will likely still take some time, particularly with the recent increasing spread of the COVID-19 variants.
As we head into the second half of the year, we remain hopeful but cautious in the recovery and so we'll remain focused on the elements of our business within our control.
Slide 4 highlights progress on our strategic priorities for the quarter.
First, on May 14, we closed the sale of our Speedway business to 7-Eleven.
In conjunction with the close, we announced our plans to return $10 billion of sale proceeds to shareholders through share repurchases.
As part of our commitment to quickly return capital, we immediately launched a modified Dutch auction tender offer in which we were able to repurchase nearly $1 billion worth of shares.
Second, we continue to take steps to reposition our portfolio.
Dickinson reached full design capacity during the quarter.
At approximately 180 million gallons per year, Dickinson is the second largest renewable diesel facility in the United States.
At Martinez, we're progressing detailed engineering and permitting to convert that oil refinery to a renewable diesel facility.
Based on our progress and discussion with feedstock suppliers, we're confident in the time line we have set to begin producing renewable diesel in the second half of 2022, with approximately 260 million gallons per year of capacity.
Additionally, we expect to reach full capacity of approximately 730 million gallons per year by the end of '23.
Third, we continue to keep a diligent focus on cost and capital in a challenging commodity business such as ours, being a low-cost operator ensures we will remain competitive.
We have continued to challenge ourselves to examine all aspects of spend, and as a result, have delivered incremental progress.
In the first half of 2021, our operating results reflect our goal to reduce overall refining cost structure by $1 billion.
Importantly, I want to note that in June, we published our two annual ESG-related reports.
Our sustainability report provides an in-depth look at the company's sustainability approach and performance consistent with the reporting guidance from SASB and GRI.
Our perspectives on climate-related scenarios follows guidance from TCFD and analyzes the company's resiliency relative to climate scenarios put forth by the IEA.
On Slide 5, I would like to take a moment to go over some of the ways we're challenging ourselves to lead in sustainable energy.
From a strategic standpoint, our focus is to balance the needs of today while investing in a sustainable energy diverse future.
That includes strengthening resiliency by lowering our carbon intensity and conservative natural resources, developing for the future by investing in renewables and emerging technologies, and embedding sustainability and decision-making in all aspects of engagement with our people and many stakeholders.
We currently have three companywide targets many of our investors know well.
First, a 30% reduction in our Scope 1 and Scope 2 greenhouse gas emissions intensity by 2030.
Second, a 50% reduction in midstream methane intensity by 2025.
And lastly, a 20% reduction in our fresh water withdrawal intensity by 2030.
The evolving energy landscape presents us with meaningful opportunities for innovation.
We've allocated 40% of our growth capital in 2021 to help advance two significant renewable fuels projects.
In late '20, we began renewable diesel production at our Dickinson, North Dakota facility, second largest of its kind in the United States and are progressing the conversion of our Martinez, California refinery to a renewable diesel facility.
Finally, to demonstrate our focus on making sustainability pervasive in all we do for executives and employees, we link a portion of the annual bonus program to an ESG metric.
We recently introduced a diversity, equity and inclusion component to these metrics as well, making us the first U.S. independent downstream company to link improving diversity to compensation in the same way we led the industry in linking GHG intensity reductions to our compensation last year.
Safety in our operations is another key to sustainable operations.
In 2020, our teams demonstrated strong safety and environmental performance, including a nearly 40% reduction in the most significant process safety events and a 40% reduction in designated environmental incidents over 2019.
Our personal safety performance continues to be better than industry average for the U.S. refining and midstream sectors.
Slide 6 provides a summary of our second-quarter financial results.
Adjusted EBITDA was $2.194 billion for the quarter.
This includes the results from both continuing and discontinued operations.
Cash from continuing operations, excluding working capital, was $1.535 billion, which is approximately $1 billion increase from the prior quarter.
And for the first time in nearly 18 months, we generated ongoing operating cash flow that exceeded the needs of the business, capital commitments, as well as covered our dividend and distributions.
Finally, we returned nearly $1.4 billion of capital to shareholders this quarter through dividend payments and share repurchases.
The close of the Speedway sale marked a significant milestone in our ongoing commitment to strengthen the competitive position of our portfolio.
So we wanted to call out some of the key points on Slide 7.
We received total proceeds for the sale of Speedway of $21 billion.
Based on our tax basis, our cash taxes, current and deferred, will be approximately $4.2 billion, which is lower than our original $4.5 billion estimate.
We have accrued for this on the balance sheet.
In addition, we had closing adjustments of approximately $400 million.
Therefore, the after-tax proceeds from the sale will be $17.2 billion.
To be clear, this number is higher than our initial $16.5 billion estimate.
On Slide 8, we present an overview of the use of the proceeds.
Since the close of the transaction, we have reduced structural debt by $2.5 billion and purchased approximately $1 billion of stock.
In the post-tender period, we did not repurchase any incremental shares in light of a couple of regulatory constraints: first, a post-tender cooling off-period; and second, our routine quarterly restricted period in the lead up to the release of our earnings information.
That said, not repurchasing during that limited window is not indicative of any deviation from our commitment to complete within 12 to 16 months.
Consistent with that commitment, as Mike mentioned earlier, we are commencing the next steps to complete the remaining $9 billion return of capital.
Specifically, we are entering into an open-market repurchase program that will allow us to buy for a period of time, including when the company may have information that otherwise precludes us from trading, and we will provide updates on the progress during our earnings calls.
Slide 9 illustrates the progress we have made, lowering our cost structure.
Since the beginning of 2020, we have made a step change in our refining operating cost and decreased our overall cost profile by approximately $1 billion.
While there is quarter-to-quarter variability, our refining operating cost in 2020 began at $6 per barrel and are now trending at a quarterly average of roughly $5 per barrel for 2021.
We have applied the same cost discipline framework that we use for refining operating costs to our corporate costs as well.
There may be variations in these corporate costs quarter to quarter.
We believe we have lowered our overall cost structure by more than $100 million, and we are committed to challenging ourselves every day on ways to reduce expenses.
As you know, natural gas is a variable cost in operating a refinery.
These costs have recently increased nearly $1 per MMBtu, and we anticipate this being a headwind for the third quarter.
While our results reflect our focus on cost discipline, every day, we remain steadfast in our commitment to safely operate our assets and protect the health and safety of our employees, customers and the communities in which we operate.
As we have shared with you previously, our cost reductions should be sustainable, not impact revenue opportunities, and in no way, jeopardize the safety of our people or our operations.
Slide 10 shows the reconciliation from net income to adjusted EBITDA, as well as the sequential change in adjusted EBITDA from first-quarter 2021 to second-quarter 2021.
Adjusted EBITDA was more than $600 million higher quarter over quarter, driven primarily by refining and marketing.
As we previously mentioned, this quarter's results include the impacts of closing the Speedway sale.
Here, you can see the $11.7 billion pre-tax gain on the sale reflected in the adjustments column of $11.6 billion, which includes other adjustments of $79 million for impairment and transaction-related costs.
The $3.7 billion financial tax -- excuse me, financial tax provision reflects the net impact of cash taxes and deferred tax impact.
The resulting $8 billion gain on sale is reflected in our quarterly net income.
Slide 18 in our appendix walk through the specific impacts of the Speedway sale across the three financial statements.
Moving to our segment slide results.
Slide 11 provides an overview of our refining and marketing segment.
The business recorded the second consecutive quarter of positive EBITDA since the start of the COVID pandemic with adjusted EBITDA of $751 million.
This was an increase of $728 million when compared to the first quarter of 2021.
The increase was driven primarily by higher refining margins, especially in the Mid-Con region as that region's cracks improved 57% from the first quarter.
Also contributing to the improved results was higher utilization, which was 94% for the second quarter versus 83% in the first quarter.
It's important to recall that we idled two high-cost refineries in 2020.
If adjusted to include that capacity idled in 2020, utilization would have been approximately 78% in the first quarter of '21 and subsequently increased to 89% in the second quarter of '21.
Operating expenses were relatively flat with the previous quarter despite the increase in utilization, reflecting the team's commitment to cost discipline despite rising variable cost.
Slide 12 shows the change in our midstream EBITDA versus the first quarter of 2021.
Our midstream segment continues to demonstrate earnings resiliency and stability with consistent results from the previous quarter.
Here again, the team continues to make excellent progress executing on the strategic priorities of strict capital discipline, lowering the cost structure and portfolio optimization.
By the end of 2021, we estimate that MPLX will have decreased their structural cost by $300 million.
Slide 13 presents the elements of change in our consolidated cash position for the second quarter.
It reflects both our continuing and discontinued operations.
We have also specifically called out items related to the Speedway close.
Within continuing operations, operating cash flow before changes in working capital was $1.5 billion in the quarter.
Changes in working capital were flat this quarter.
Increasing crude prices provided a source of more than $500 million, which was mostly offset by the large receivable balance with Speedway becoming a third-party customer and typical seasonal refined product inventory builds.
During the quarter, MPC decreased debt by $3.3 billion.
Additionally, MPLX reduced third-party debt by approximately $800 million during the quarter.
With respect to capital return, MPC returned $380 million to shareholders through our dividend and repurchased $981 million worth of shares using Speedway proceeds.
At the end of the quarter, NPC had $17.3 billion in cash and higher returning short-term investments, such as commercial paper and certificates of deposits.
On Slide 14, we provide our third-quarter outlook.
We expect total throughput volumes of roughly 2.8 million barrels per day.
Planned turnaround costs are projected to be approximately $195 million in the third quarter.
The majority of the activity will be at our Robinson and Mandan refineries in the Mid-Con region.
As we have previously mentioned, our turnaround activity is back half-weighted this year.
Other operating expenses are coordinated to occur during these time periods as well.
And so you are seeing the impact in our guided cost trends for the third quarter.
Total operating costs are projected to be $5.05 per barrel for the quarter.
Distribution costs are expected to be approximately $1.3 billion for the quarter.
Corporate costs are expected to be $175 million, consistent with the second quarter and reflecting the approximately $100 billion -- $100 million, excuse me, in cost that have been removed on an annual basis.
We will be prompt for additional questions.
We will now open the call to questions.
 Assistant:

Chosen response:
commencing next steps towards completing remaining $9 billion return of capital over next 12 to 16 months.
r&m segment income from operations was $224 million in q2 of 2021, compared with a loss of $1.5 billion.
martinez facility is expected to produce 260 million gallons per year of renewable diesel by second half of 2022.


Prompt:
Human: These risks, uncertainties and other factors are detailed in our Form 10-K filings with the Securities and Exchange Commission.
With that, I'll hand the call over to Nish.
Ken will then provide a quarterly financial review and give more texture on the strength we're seeing in the demand trends across our portfolio.
After that, we'll start the Q&A session.
So let's start with quarterly results.
Our revenue was $340 million, up 12% overall and 3% on an organic constant currency basis.
Our core organic product revenue increased 9% and driven by growth across our fire service and industrial PPE segments, partially offset by lower fixed gas and flame detection business, which was impacted by supply constraints.
Looking more closely at the quarterly comparison, I want to note that our 2020 third quarter benefited from higher pandemic-driven demand for air-purifying respirators.
In the current quarter, we saw our APR business return to more normal levels, which was a headwind to overall growth.
I noted on our second quarter call that our order book was strengthening, and that continued to be the case in the third quarter.
As an example, our backlog has increased $50 million, year-over-year.
Notably, the backlog across our gas detection as well as our firefighter apparel is trending at record levels.
Overall, our business remained healthy in the quarter, but supply chain disruptions in electronics and, to a lesser degree, labor shortages, did have impact on our delivery capabilities for some products.
In addition, our quarterly profitability was impacted by variable compensation resets and higher selling commissions along with discretionary costs as business conditions improve relative to last year.
Lastly, in this inflationary environment, pricing continues to be a key area of focus for us.
We implemented off-cycle increases to help mitigate higher input costs, and we continue to evaluate pricing as market conditions evolve.
With that as a backdrop, there are three key takeaways from the quarter that support my confidence in the outlook for MSA and our ability to navigate this environment.
First, our strong balance sheet provides plenty of capacity to invest in organic and inorganic growth opportunities.
Two, the MSA brand continues to be a pillar of strength.
I'm grateful that our customers see value in our products, and have been patient in waiting on delivery.
We're not experiencing any significant cancellations of orders.
And three, the engagement level of our associates and their passion for the mission of MSA has never been greater, adding fuel to our dedication of protecting the lives of workers throughout the world.
So first, let me talk about inorganic growth.
We completed the acquisition of Bacharach in a quarter and are making good progress in our efforts to integrate Bacharach into the MSA organization.
Recent milestones include the completion of a number of key initiatives that will help us meet financial targets that we've discussed with you on past calls.
Ken will provide more detail on the excellent progress we're making with Bacharach.
And with our net debt to trailing EBITDA below two times, we continue to evaluate additional inorganic growth opportunities, staying focused on how we can continue to create value for our customers and our shareholders.
Second, we remain very well positioned as the technology leader in safety.
We continue to invest in new product development to drive organic growth while providing our customers with innovative market-leading solutions to address their challenges of protecting their employees, and increasing productivity.
The most recent example of this is the new connected work platform, our team unveiled at the National Safety Congress earlier this month.
With the many complexities associated with implementing a world-class safety program, the value of technology that drives both compliance and efficiency by simplifying safety procedures, and remotely connecting safety managers to our employees has never been more important.
This connected services platform will help customers create safer and more efficient work environments through reliable and actionable data in real time.
The new offering is a powerful hardware, software combination.
It features a new wearable cloud-ready gas detection device, the ALTAIR io4 that enables a broad range of capabilities not previously available with unconnected devices.
With direct cellular connectivity, real-time location, live gas readings and automated compliance reporting.
This platform provides work site managers with new safety insights and added peace of mind.
Another element of MSA's connected work platform is a safety subscription that extends warranty coverage, and provides automatic and ongoing software upgrades.
With this subscription, safety managers have a convenient way to stay on the forefront of safety innovation and on budget.
This new connected technology platform is a great example of the market-leading work being done by our engineering, marketing and sales teams to drive productivity for our customers.
MSA was recently recognized as a 2021 top workplace by the Pittsburgh Post-Gazette.
What makes this award particularly gratifying is the fact that it's based exclusively on employee feedback.
For 2021, we also earned the New Ideas Award.
The award is based on having the highest positive response rate to the prompt question, new ideas are encouraged at this company.
These recognitions are reflective of the truly special culture we have at MSA.
Associate engagement is always important to us.
And it's especially inspiring to know that this kind of sentiment exists at a time when we faced a myriad of challenges associated with the pandemic.
We're executing a number of strategic programs to position MSA for continued success, and none of that happens without attracting, developing and retaining the brightest talent, and these recognitions will certainly help us on that front.
I'll start the discussion with financial highlights centered around revenue, profitability and cash flow.
Revenue growth was healthy in the third quarter with core revenue growth of 19%.
This included 9% growth in organic core revenue on a constant currency basis.
We're seeing robust customer demand, especially in the Americas segment.
However, the persistent electronic component shortage, and labor challenges to a lesser extent, have impacted our ability to fulfill orders and is driving backlog to record levels.
Adjusted operating margin was 15% in the quarter, which was down year-over-year driven by -- driven primarily by variable compensation resets and higher selling commissions and discretionary costs.
These costs are resetting from an abnormally low base in 2020.
Cash flow performance was very healthy in the quarter and continues to support ongoing investment in growth opportunities and return of capital to our shareholders.
We're managing working capital well, and that resulted in strong improvements in quarterly cash flow.
Now let's take a closer look at the financial results in the third quarter.
I'll start with a focus on revenue.
Quarterly revenue of $340 million was up 12% overall and 3% on an organic constant currency basis.
While our noncore business was off considerably on the lower level of APR revenues, it was encouraging to see core product revenues up 19% with 9% organic growth in the quarter.
We are seeing robust demand in the Americas segment, while revenue in the International segment is being impacted by the prevalence of COVID-19, resulting in a very uneven economic recovery across those regions, with particular weakness in the emerging markets in the International segment.
The quarterly book-to-bill was above one times in the quarter.
While order pace strengthened throughout the quarter, supply chain constraints around electronic components, and labor availability to a lesser extent, are impacting our ability to deliver in certain areas.
This has resulted in backlog increasing approximately $50 million year-over-year at the end of the quarter.
It's difficult to predict how long the supply chain challenges will last, but at this point, we expect that the constraints around electronic components will persist well into 2022.
Gross profit was 42.9% of sales in the quarter compared to 43.4% of sales in the prior year.
Gross profit margin was negatively impacted by 120 basis points for deal-related costs and amortization.
Excluding this, gross profit margin was up a healthy 70 basis points compared to a year ago.
We have implemented off-cycle price increases to offset inflation, we're seeing in electronic components, resins and other materials.
That said, the timing difference between pricing going effective and persistent cost inflation resulted in a tough price cost environment in the quarter.
We continue to evaluate pricing opportunities and have another price adjustment in Q4 in North America and early next year in international.
SG&A expense of $87 million was up $23 million from a year ago on a reported basis.
I want to spend a moment to dissect that amount as there are a lot of moving pieces in the quarter.
To level set, Q3 2020 SG&A of $65 million was abnormally low due to favorable compensation-related adjustments and the lack of discretionary spending.
The key drivers of the year-over-year increases are: First, we had an increase of approximately $10 million of expense from the acquisitions of Bacharach in Bristol, of which about $6 million will be recurring going forward; second, variable compensation resets and higher selling commissions added $6 million compared to last year; lastly, Discretionary costs are up $3 million associated with the increase in customer-facing activities.
Our quarterly adjusted operating margin was 15%, down 260 basis points from a year ago.
Looking at our segment performance, the Americas margin was 19.4%, down 160 basis points year-over-year.
The higher SG&A costs, I discussed previously had a significant impact on the segment.
International margin was 11.3%, down 290 basis points year-over-year.
International margins were impacted by lower organic revenue and higher SG&A on the drivers, discussed previously.
Our quarterly effective tax rate was 31.5% on a GAAP basis.
Adjusting for nonrecurring transaction costs and other restructuring matters, the effective tax rate was 24.7% in the quarter.
Turning to cash flow and the balance sheet.
Quarterly free cash flow was $36 million, well above 100% conversion.
While overall working capital performance was strong, and improvements in receivables.
We built some inventory in the quarter, which aligns with our backlog.
We continue to execute on a balanced capital allocation strategy.
In the third quarter, we completed the acquisition of Bacharach and the buyout of our joint venture interest in China.
In the quarter, we borrowed a net $282 million of debt to fund our corporate development activity, funded $17 million of dividends to shareholders and invested $11 million in capex.
We finished the quarter with cash of $117 million and net debt of $495 million or 1.8 times adjusted EBITDA.
While we continue to take a measured approach on M&A, our strong balance sheet provides ample capacity to continue to invest in organic and inorganic growth opportunities.
Before moving on, I want to provide an update on Bacharach now that we have had a full quarter of contribution.
The integration effort is progressing as planned, and the teams are working well together.
Bacharach contributed about $15 million of sales in the quarter, in line with what we communicated when we closed the acquisition earlier this quarter.
The Bacharach business is contending with many of the same electronic component challenges we are experiencing at MSA.
Looking forward, we're pleased with the order book and backlog, and are focused on driving conversion to sales.
We continue to expect earnings accretion from the acquisition in line with the range we previously discussed.
In the quarter, we had a noncash adjustment to the product liability reserve, which resulted in just about $9 million of additional expense compared to a year ago.
This increase is a result of an increase in the number of asserted cumulative trauma claims pending against our subsidiary, MSA LLC
We continue to monitor developments and filing rates.
We will be conducting our annual review process in the fourth quarter, which we expect to be finalized with our 10-K filing early next year.
As we look ahead, we continue to operate in a very dynamic environment.
Supply chain is the largest variable for us.
Raw material availability as well as the cost of those inputs can be difficult to predict.
To put it in perspective, we had $11 million lower revenue versus 2019 this quarter.
The backlog is up well over $70 million versus the same period in 2019.
We're laser-focused on executing initiatives to mitigate the impact of the supply chain challenges on our business, both on the top line and the margin profile.
It is clear that the economic recovery is progressing, and we see good strength in our Americas segment.
COVID-19 continues to have an impact on the world to varying degrees.
We are seeing the impact in our International segment, where the demand recovery has taken a little longer.
Over the course of the year, we have continued to invest in organic and inorganic growth programs that enhance our position as the safety technology leader.
I'm proud of our team's unwavering commitment to our mission, our business and our customers.
We've recently launched innovative new products and services with the ALTAIR io4 and MSA+ service and enhanced our gas detection product suite with the acquisition of Bacharach.
And to finish it out, we remain committed to investing in growth and profit improvement programs that will drive value and best position MSA for long-term value creation.
For all of us at MSA, safety is our mission, our passion and it's our purpose.
It goes to our associates who work at our Cranberry Township production facility and corporate center.
This team recently surpassed a remarkable 10 million hours without a lost time incident.
This means it's been more than five years since we've had an LTI at our Cranberry Township campus.
While the balance of 2021 will continue to present us with various challenges, I have tremendous confidence in our strategy and the team we have executing it.
Our business has demonstrated, its resiliency through a number of economic cycles today our products, people and passion position us to manage through this current cycle.
As I've communicated to our global workforce, I believe we are positioned extremely well as the leader in safety technology, ready to emerge as an even stronger organization in 2022 and beyond.
At this time, Ken and I will be glad to take any questions you may have.
Please remember that MSA does not give guidance.
 Assistant:

Chosen response: q3 revenue rose 12 percent to $340 million.