Prompt:
Human: I'll begin on Slide 3.
In the third quarter, we reported earnings per share of $1.30 and generated total revenue of $5.9 billion.
Our linked quarter pre-tax pre-provision net revenue growth of 2.7% was driven by continued momentum across our fee businesses, growth in average loan balances, and continued focus on expense management resulting in positive operating leverage.
We released $310 million of loan loss reserves this quarter, supported by our outlook on the economy and better-than-expected credit quality metrics.
Our book value per share totaled $32.22 at September 30, which was 1.5% higher than June 30.
Our CET1 ratio was 10.2% at September 30.
Slide 4 provides key third quarter performance metrics, including a return on tangible common equity of over 20%.
Slide 5 highlights strong trends in digital engagement.
On Slide 6, we are providing an initial information about our Business Banking and payment relationships, which we plan to update every quarter.
Our complete payments ecosystem is a competitive advantage for us and provides a number of cyclical and secular growth opportunities.
Over the next few years, we believe there is a significant potential to expand and deepen relationships within this ecosystem.
Our starting point is that, we have about 1.1 million Business Banking relationships, which we define as businesses with under $25 million in revenue.
Currently, about half of our payments customers of this size have a Business Banking product and just under one-third of our Business Banking customers have a payments product.
The opportunity is to both increase the number of Business Banking relationships and to deepen these relationships by connecting our banking customers with our payments products and services, and connecting our payments customers with our banking products and services.
As we discussed previously, we believe we can grow our small business relationships by 15% to 20% and related revenue by 25% to 30% over the next few years.
Average loans increased 0.8% compared with the second quarter, driven by growth in other retail loans, primarily installment loans, as well as growth in credit card and residential mortgages.
This growth was partially offset by lower commercial loan balances which was impacted by lower levels of PPP loans.
At September 30, PPP loan balances totaled $2.4 billion compared to $4.9 billion at June 30.
Excluding PPP loans, third quarter average loans grew by 1.8% on a linked quarter basis.
Turning to Slide 8, average deposits increased 0.5% compared with the second quarter and 6.4% compared with a year ago.
On both a linked quarter and year-over-year basis, we continued to benefit from favorable mix shift as average non-interest bearing deposits increased while higher cost time deposits declined.
Slide 9 shows credit quality trends.
Non-performing assets declined on both a linked quarter and year-over-year basis and our net charge-off ratio hit a record low of 20 basis points.
Our reserve release was $310 million this quarter, primarily reflecting strong credit quality metrics.
Our allowance for credit losses as of September 30 totaled $6.3 billion, or 2.1% of loans.
The allowance level reflected our best estimate of the economic outlook and trajectory of credit quality within the portfolios.
Slide 10 provides an earnings summary.
In the third quarter of 2021, we earned $1.30 per diluted share.
These results include a reserve release of $310 million.
Turning to Slide 11, net interest income on a fully taxable equivalent basis of $3.2 billion increased by 1% compared with the second quarter.
The growth was primarily driven by higher loan fees associated with the Paycheck Protection Program.
Excluding PPP-related fees, net interest income would have been stable, reflecting lower loan yields and the impact of change in loan mix, offset by the beneficial impact of core loan growth, lower premium amortization, and an additional day in the quarter.
Our net interest margin was stable compared with the second quarter.
Slide 12 highlights trends in non-interest income.
Compared with a year ago, non-interest income declined 0.7% as decreases in mortgage revenue and commercial products revenue more than offset strong growth in payments revenue, trust and investment management fees, deposit service charges, and treasury management fees.
On a linked quarter basis, non-interest income increased 2.8% reflecting higher-than-expected payments revenue and a 20% increase in mortgage revenue driven by growth in production volume and related gain on sale margins, as well as higher loan sales.
Slide 13 provides information on our payment services business.
Our payments business continues to benefit from improving economic conditions and spend activity.
In the third quarter, sales volumes for both our credit card and our merchant processing businesses exceeded the pandemic compared period in 2019, while CPS volume was about in line.
As expected, prepaid card volume declined in the third quarter as the impact of government-related stimulus continues to diminish.
The reduced prepaid volume resulted in a slight decline in credit and debit card revenue on a linked quarter basis.
However, corporate payment revenues increased by 13%, which was better-than-expected, driven by improving business spend activity.
Merchant processing revenue increased by 4.8% due to higher merchant and equipment fees, as well as higher sales volumes.
Turning to Slide 14, non-interest expense increased 1.2% compared to the second quarter.
This increase primarily reflected higher revenue-related compensation and performance-based incentives.
Slide 15 highlights our capital position.
Our common equity Tier 1 capital ratio at September 30 was 10.2%, which increased slightly compared to June 30.
At the beginning of the third quarter, we suspended our share buyback program due to our recent announcement that we have agreed to acquire MUFG's Union Bank.
We expect that our share repurchase program will be deferred until the second quarter of 2022.
After the closing of the acquisition, we expect to operate at a CET1 capital ratio between our target ratio and 9%.
As PPP winds down and we approach the end of the forgiveness period, we expect PPP fees to decline $60 million to $70 million in the fourth quarter compared with the third quarter.
Excluding the impact of PPP fees, we expect fully taxable equivalent net interest income to be relatively stable on a linked quarter basis.
We expect PPP to be immaterial to both net interest income and the net interest margin in 2022.
In the fourth quarter, we expect total payments revenue trends to continue to strengthen, driven by improving sales volumes.
However, the fourth quarter is typically seasonally lower than the third quarter, which affects linked quarter comparisons.
In the fourth quarter, we expect to see a seasonal increase in amortization of tax-advantaged investments of approximately $60 million, as well as some seasonal impacts in marketing and in business investments.
Credit quality remains strong.
Over the next few quarters, we expect the net charge-off ratio to remain lower than normal.
For the full-year of 2021, we expect our taxable equivalent tax rate to be approximately 22%.
I'll hand it back to Andy for closing remarks.
To summarize our third quarter results, we're positive on several fronts, highlighted by a solid growth in core loans, good fee revenue momentum, and strong credit quality.
We are finishing off the year in a strong position heading into 2022 and we're excited about the many organic growth opportunities we see across the franchise, supported by our continued investment in people, digital, technology, and data analytics.
Our three payments businesses will continue to benefit from the improved spend activity, particularly as consumer and business travel recovers toward pre-pandemic levels.
More importantly, we believe our secular growth initiatives aimed at connecting payments with banking provide a meaningful potential for market share gains over the immediate and longer-term.
Our Business Banking initiatives are still in the early innings but we're gaining traction and our partnership with State Farm continues to evolve and grow.
We are encouraged by the results we're seeing.
Aside from our organic growth opportunities, our recently announced acquisition of Union Bank provides a platform to achieve cost synergies, expand our distribution network in demographically attractive West Coast markets, and leverage our broad product set in leading digital capabilities across a loyal but underpenetrated customer base.
All of this will enable us to accelerate revenue and earnings growth, and continue to deliver the industry-leading returns on equity that our shareholders have come to expect.
We'll now open up the call to Q&A.
 Assistant:

Chosen response:
u.s. bancorp q3 earnings per share $1.30.
q3 earnings per share $1.30.
q3 revenue $5.9 billion.
us bancorp - allowance for credit losses declined $310 million during quarter given improving economic outlook and credit trends.
us bancorp - cet1 capital ratio increased to 10.2% at september 30, 2021.


Prompt:
Human: Ron Bernstein, Senior Advisor to Liggett Vector Brands, will join us during the Q&A.
Like many other companies, we are operating in the context of important and long overdue changes.
Recent events have demonstrated that systemic racism and social injustice continue to exist today.
We all have significant work ahead of us, as meaningful actions bring meaningful change.
We will hold ourselves accountable, and accountability is a priority for our company.
Now, to our second quarter results.
Nick will then summarize the performance of the tobacco business.
As of June 30, 2020, Vector Group maintained significant liquidity with cash and cash equivalents of $540 million, including cash of $61 million at Douglas Elliman and $218 million at Liggett, and investment securities and investment partnerships with a fair market value of $137 million.
The cash balances at Liggett include $132 million of deferred federal excise tax payments, which will be paid in the third quarter.
During the second quarter, our liquidity increased by $53 million from the issuance of 5 million shares of common stock.
We will be strategic with our liquidity and believe the current economic environment will present opportunities for investments yielding above-market returns.
Now, turning to Vector Group's operations for the three and six months ended June 30, 2020.
Vector Group's revenues for the three months ended June 30, 2020 were $445.8 million compared to $534.8 million in the 2019 period.
Our tobacco segment reported an increase of $18 million in revenues due to price increases and increased unit volume.
However, our real estate segment reported a significant decline in revenues due to the impact of the COVID-19 pandemic, as well as an unusual year-over-year comparison because of the acceleration of real estate closings in New York City in the 2019 second quarter.
This acceleration occurred in anticipation of the increase in New York State Mansion Tax on residential real estate on July 1, 2019.
Net income attributed to Vector Group for the second quarter of 2020 was $25.8 million or $0.16 per diluted share compared to net income of $39.3 million or $0.25 per diluted common share in the second quarter of 2019.
The Company recorded adjusted EBITDA of $76.5 million compared to $83.5 million in the prior year.
Adjusted net income was $28.7 million or $0.19 per share diluted compared to $43.2 million or $0.28 per diluted share in the 2019 period.
For the six months ended June 30, 2020, Vector Group's revenues were $900.2 million compared to $959.4 million in the 2019 period.
Our tobacco segment reported an increase of $48.3 million in revenues.
This contrasted with a decline in revenues in our real estate segment.
Net income attributed to Vector Group for the six months ended June 30, 2020 was $22.5 million or $0.14 per diluted share compared to net income of $54.3 million or $0.03 per diluted common share for the six months ended June 30, 2019.
The Company recorded adjusted EBITDA of $136.7 million compared to $133.2 million in the prior year.
Adjusted net income was $68.6 million or $0.45 per diluted share compared to $56.1 million or $0.36 per diluted share in the 2019 period.
For the six months ended June 30, 2020, Douglas Elliman reported $298.5 million in revenues, a net loss of $74.1 million and an adjusted EBITDA loss of $8.8 million compared to $404.8 million in revenues, net income of $4.7 million and adjusted EBITDA of $7.7 million in the first six months of 2019.
Douglas Elliman's net loss for the six months ended June 30, 2020 included pre-tax and non-cash impairment charges of $58.3 million and pre-tax restructuring charges of $3 million.
The COVID-19 pandemic continues to have a profound effect on the economy.
In response to the pandemic, state and local governments instituted restrictions on individuals and on the type of business that can operate, which directly impacted Douglas Elliman's and others' ability to do business in New York and its other markets.
As a result, in the second quarter of 2020, Douglas Elliman's revenues in the New York metropolitan area declined by 52% from the second quarter of 2019.
To address the impact of COVID-19, Douglas Elliman implemented a reduction of personnel by 25% in April 2020 and began consolidating offices and reducing other administrative expenses.
These expense reduction initiatives resulted in a decline in Douglas Elliman's second quarter 2020 operating and administrative expenses by approximately $20 million from the second quarter in 2019.
Third quarter cash receipts to date have shown improvement from the second quarter in all markets.
We believe the changes implemented at Douglas Elliman will provide long-term upside to the stockholders of Vector Group.
As Howard mentioned, Liggett performed exceptionally well in the second quarter despite the continued impact on the economy from the COVID-19 pandemic.
Year-over-year volume and market share increased during the second quarter, contributing to a 14.5% increase in tobacco adjusted operating income.
As I mentioned during our previous earnings call, we made various adjustments during the first quarter to address the health and safety of our employees and those with whom we do business.
These changes will remain in place throughout the second quarter.
I'm pleased to report, our tobacco business operations remain largely unaffected by the pandemic.
As the pandemic unfolded in March, there were some anticipatory wholesale, retail and consumer buying related to early concerns of the ongoing availability of cigarettes.
Those concerns proved to be unfounded, and we continued to ship product as usual throughout the second quarter.
The entire supply chain has operated normally to this point.
And importantly, our underlying year-over-year retail sales trends are strong.
As noted on previous calls, we are well into the income growth phase of our EAGLE 20's business strategy, and I'm very pleased with the results we have achieved so far.
We began increasing prices on EAGLE 20's in late 2018 and have grown volume, share and profit since then.
Our market programs and promotions have proven successful, and we remain optimistic about EAGLE 20's continued growth going forward.
I will now turn to the combined tobacco financials for Liggett Group and Vector Tobacco.
For the three and six months ended June 30, 2020, Liggett revenues were $312.5 million and $599.6 million respectively, compared to $294.5 million and $551.3 million for the corresponding 2019 periods.
Tobacco operating income for the three and six months ended June 30, 2020 was $79.3 million and $148.5 million respectively, compared to $68.7 million and $128.8 million respectively.
Tobacco adjusted operating income for the three and six months ended June 30, 2020 was $79.4 million and $148.5 million respectively, compared to $69.3 million and $129.5 million for the corresponding periods a year ago.
Liggett's higher year-over-year earnings resulted primarily from increased unit volumes and higher net pricing.
According to Management Science Associates, overall industry wholesale shipments for the second quarter were down 4.5%, while Liggett's wholesale shipments increased 1% versus the prior year quarter.
As we rightly [Phonetic] note, we believe retail shipments are a better indicator of industry trends than wholesale shipments, as various actions by manufacturers and wholesalers can impact trade volumes.
These effects are typically less pronounced with retail shipments.
For the second quarter, Liggett's retail shipments increased 0.2% over the prior year quarter, while industry retail shipments decreased 2.2% during the same period.
Liggett's retail share for the second quarter increased 11 basis points to 4.3%.
EAGLE 20's retail volume for the second quarter grew by nearly 7% compared to the prior year period, and it remains the third largest discount brand in the US.
EAGLE 20's is now sold in approximately 78,000 stores nationwide, and its growth continues to provide an effective volume and profit complement to PYRAMID and other Liggett brands.
Despite managed and anticipated volume declines, we remain pleased with the performance of PYRAMID.
The brand continues to deliver substantial profit and market presence for the company, has strong distribution and is currently sold in approximately 100,000 stores nationwide.
While our second quarter 2020 results had limited impact from smaller deep discount-focused companies, this market segment remains the industry's most active.
Various smaller companies create pricing pressure as they seek to undercut the market in targeted geographies.
Liggett has marketplace advantages relative to these companies, including the broad base of our distribution, our consumer-focused promotional programs and the executional capabilities of our sales force.
We are very pleased with our second quarter 2020 performance, particularly in light of the current macroeconomic environment.
Our results continue to validate our market strategy.
And as we look ahead, we remain focused on generating operating income from the strong sales and distribution base of PYRAMID, while delivering volume, share and profit growth from EAGLE 20's.
As mentioned earlier, we have implemented workplace protocols to meet or exceed state and federal guidelines, including employee health evaluations and social distancing.
We have in place protocols for rapid mitigation of any issues that may arise in connection with COVID-19 and are confident that we are well equipped to manage contingencies.
Finally, while we are always subject to industry and general market risks, we remain confident that we have effective programs to keep our business operating efficiently, while supporting market share and profit growth.
Vector Group has strong cash reserves, has consistently increased its tobacco unit volume and profits, and has taken the necessary steps to position its real estate business for future success.
We are pleased with our long-standing history of paying a quarterly cash dividend.
It remains an important component of our capital allocation strategy.
While we continue to evaluate our dividend policy each quarter, it is our expectation that the policy will continue well into the future.
 Assistant:

Chosen response:
compname reports q2 revenue $445.8 million.
q2 earnings per share $0.16.
q2 revenue $445.8 million.


Prompt:
Human: We are also excited to discuss Vector Group separating its businesses through the spin off of Douglas Elliman.
With me here today are Bryant Kirkland, CFO of Vector; Richard Lampen, Chief Operating Officer of Vector; Scott Durkin, President and CEO of Douglas Elliman Realty LLC; David Ballard, CTO of vector; and Nick Anson, President and COO of Liggett Vector Brands.
We also have Ron Bernstein, Senior Advisor to Liggett Vector Brands joining for the Q&A portion of the call.
We will then discuss the exciting news of our intention to spin-off Vector Group's real estate brokerage business, including Douglas Elliman and its cutting edge PropTech investments into an independent publicly traded company.
We also filed a Form 10 with the SEC.
Let me start with financial results.
At September 30, 2021 Vector Group's consolidated balance sheet remain strong.
We maintained significant liquidity with cash and cash equivalents of $524 million, including cash of $159 million at Douglas Elliman and $133 million at Liggett.
We also held investment securities and investment partnership interests with a fair market value of $214 million at September 30, 2021.
Now turning to Vector Group's consolidated results from operations for the three months ended September 30, 2021.
Vector Group's revenues were $652.6 million compared to $547.8 million in the 2020 period, the 104.8 million increase in revenues was a result of an increase of $125.7 million in the real estate segment, partially offset by a decline of $20.9 million in the tobacco segment.
Moving on to -- excuse me, net income attributed to Vector Group was $48.9 or $0.32 per diluted common share compared to $38.1 million or $0.25 per diluted common share in the third quarter of 2020.
The company recorded adjusted EBITDA of $116.5 million compared to $103.3 million in the prior year.
Adjusted net income was $52.6 million by $0.34 per diluted share compared to $38.3 million or $0.25 per diluted share in the 2020 period.
Moving on to the results for the nine months ended September 30, 2021.
Vector Group's revenues were $1.93 billion compared to $1.45 billion in the 2020 period.
The $478 million increase in revenues was a result of an increase of $500.4 million in the real estate segment offset by a decline of $22.5 million in the tobacco segment.
Net income attributed vector Group was $174.2 million or $1.13 per diluted common share compared to $60.7 million or $0.39 per diluted common share in the 2020 period.
The company recorded adjusted EBITDA of $355.1 million compared to $240 million in the prior year.
Adjusted net income was $194.3 million or $1.26 per diluted share compared to $106.9 million or $0.70 per diluted share in the 2020 period.
Moving on to the results for the last 12 months ended September 30, 2021.
Vector Group reported revenues of $2.48 billion, net income of $206.4 million and adjusted EBITDA of $44.8 million [Phonetic].
Turning to our tobacco business financial results.
Liggett continued its strong 2021 performance during the third quarter, delivering an increase in both retail market share and operating income.
Eagle 20's continues to deliver significantly higher margins, while Pyramid delivers both substantial profit and market presence and we continue to be pleased with the performance of our price-fighting brand, Montego, as we expand its distribution into targeted geographies across the country.
Based on Management Science Associates retail data, the discount category increased approximately 80 basis points in the third quarter from a year ago, now comprising 26.5% of the total market as compared to 25.7% for the same period last year.
As the deep discount segment continues to offer attractive value proposition for the consumers, we expect down-trading trends will continue for the foreseeable future.
As such, we remain confident that our value focused brand portfolio and broad distribution position us well to meet these evolving market demands and drive profitable growth.
I will now turn to the combined tobacco financials for Liggett Group and Vector Tobacco.
For the three and nine months ended September 30, 2021, revenues were $297.9 million and $895.9 million respectively, compared to $318.9 million and $918.4 million for the corresponding 2020 period.
Tobacco adjusted operating income for the three and nine months ended September 30, 2021 was $91.8 million and $273.9 million compared to $91.6 million and $240.2 million for the corresponding periods a year ago.
Through the first three quarters of 2021, tobacco adjusted operating income exceeded our full year 2019 figures, which was a record at that point in time.
Liggett's third quarter earnings increase was primarily the result of higher gross profit margins associated with higher pricing and promotional spending efficiencies, offset by lower wholesale volumes and higher Master Settlement Agreement expense.
As discussed in last quarter's conference call, we anticipated pressure on our third quarter wholesale volumes following a significant inventory increase at the end of the second quarter and we estimate approximately half of our year-over-year third quarter wholesale shipment declines related to a reduction in wholesale inventories.
In addition, significant reductions made to our net MSA expense in the third quarter of last year because of unusually strong third quarter 2020 industry volumes put additional pressure on our year-over-year earnings comparison.
According to Management Science Associates, overall industry wholesale shipments for the three months ended September 30, 2021 were down 11.8% compared to last year, while Liggett's wholesale shipments declined by 11.6% for the comparable period.
As we regularly note, however, we believe retail shipments are a much better indicator of underlying industry trends due to varying wholesaler buying patterns.
Liggett's retail shipments for the three months ended September 30, 2021 declined 6.1% from the year ago period, while industry retail shipments decreased 7% during the same timeframe.
As a result, Liggett's third quarter retail share increased to 4.22% from 4.18% in the corresponding period last year.
Sequentially, Liggett's retail share increased by 13 basis points in the third quarter over the second quarter.
In summary, we remain pleased with the operational and financial performance of our tobacco business.
Finally, while we always subject to industry regulatory and general market risks, we remain confident that we have effective programs and infrastructure in place to keep our business operating efficiently and delivering both market share and profit growth from our value-based brand portfolio.
Before Howard addresses the spin-off transaction, turning to Douglas Elliman's financial performance for the three, nine and last 12 months ended September 30, 2021.
For the three months ended September 30, 2021, Douglas Elliman reported $354.2 million in revenues compared to $208 million in revenues in the 2020 period.
Douglas Elliman reported net income of $25.1 million and adjusted EBITDA of $27.8 million in the third quarter compared to $11.8 million and $14.1 million in the year ago period.
For the nine months ended September 30, 2021, Douglas Elliman reported $1.02 billion in revenues compared to $506.5 million in revenues in the 2020 period.
Douglas Elliman reported net income of $82.2 million and adjusted EBITDA of $89.5 million for the nine months 2021 period compared to a net loss of $62.2 million and adjusted EBITDA of $5.3 million in the 2020 period.
The net loss in the 2020 period included pre-tax charges for non-cash impairments of $58.3 million and pre-tax restructuring charges up $3.3 million.
For the last 12 months ended September 30, 2021, Douglas Elliman reported $1.29 billion in revenues, $96.2 million of net income and $106.2 million in adjusted EBITDA.
In addition, Douglas Elliman reported closed sales of $47.7 billion in the last 12 months ended September 30, 2021.
Douglas Elliman's year-to-date results were driven by strong continued activity in all markets.
Both closed sales volume and revenues doubled from the comparable 2020 period.
We are particularly pleased with the continued strength of South Florida market as well as a rebound of the New York City market during the first nine months of 2021.
In addition, Douglas Elliman's gross margin or company dollar increased to $94.5 million in the third quarter 2021, up from $58.9 million in the third quarter of 2020.
For the nine months ended September 30, 2021, Douglas Elliman's gross margin or company dollar increased to $274.1 million or $154.8 million for the same period in 2020.
And as Douglas Elliman's revenues and gross margins significantly increased in 2021, we have discontinued certain expense reductions, which were implemented in the second quarter of 2020.
These include reductions to activity-based items such as advertising and discretionary compensation.
This team has substantial real estate expertise and a proven track record of driving growth.
We are very excited about this team because we have combined a strong management team from Vector with decades of public company management experience and a strong industry team from Douglas Elliman, which brings decades of real estate experience.
Moving to Page 4, let's discuss our plan to separate Vector Group's real estate brokerage business and it's PropTech investments into an independent publicly traded company.
We are doing this because we believe Douglas Elliman as a separate company will leverage its comprehensive suite of real estate solutions, industry leading brand name PropTech Investment Arms, New Valley Ventures LLC, and talented team of finding technology, marketing and communication employees to unleash its growth potential.
We are doing this now, especially given current trends in the large and growing U.S. residential real estate industry at a time when the size of our business has reached a critical mass, positioning us well to succeed in the market as a stand-alone company.
And of course, it will also be able to access the capital markets and widen its potential investor base, as well as use it pure play stock for M&A purposes and provide incentive opportunities for its key talent.
We expect this transaction to create significant value for all of Douglas Elliman's key stakeholders: developer, clients, brokerage customers, employees, agents and stockholders.
Specifically, we believe our presence in the most important primary luxury market in United States, our opportunities for continued growth, our diverse revenue streams, as well as our distinctive approach to technology will furnish a higher earnings multiple.
Moving to Page 5, this is planned as a tax-free spin-off of Douglas Elliman to Vector Group stockholders.
Upon completion, the new company called Douglas Elliman Inc will be a separate publicly traded company on the New York Stock Exchange under the ticker symbol, DOUG.
Douglas Elliman Inc will consist of the brokerage, New Valley Ventures LLC, DE property management, DE development and marketing, DE title, DE mortgage and portfolio as well.
The rationale for the spin-off is that Vector Group's two businesses tobacco and real estate operate in distinct markets and possess unique growth prospects and investment profiles.
As planned, Vector Group stockholders will receive one share of Spinco common stock for every two shares of Vector Group common stock held.
We also expect subject to Board approval that Spinco will initially pay $0.05 per share quarterly dividend to holders of Douglas Elliman common stock and if Vector were to continue its $0.20 per share quarterly dividend.
Doug's Board will consist of Dick Lampen and myself, as well as five seasoned public and private company executives who bring technology, legal and financial expertise: Ron Kramer, Wilson White, Lynn Mestel, Michael Liebowitz and Mark Zeitchick.
Now, let us turn to Page 6 for an overview of Elliman's business.
Founded in 1911, Douglas Elliman is one of the preeminent cutting edge residential brokerage companies in the United States.
Douglas Elliman is a leading real estate brand associated with luxury service and forward thinking that operates in premium markets, primarily those that are densely populated international finance and technology hubs, as well as many of the second and third home markets, which DEDM.
These markets offering housing inventory at premium price points.
With a brand name synonymous with luxury and its comprehensive suite of technology enabled real estate services and investments, focus element is well positioned to capitalize on the highly attractive dynamics in the U.S. residential real estate market.
As a stand-alone publicly traded company, Douglas Elliman will pursue profitable growth opportunities to create stockholder value through the expansion of its geographic footprint, adoption of cutting edge PropTech and investments in PropTech companies through New Valley Ventures continue to excel in its retention and recruitment of best-in-class talent, acquisitions Aqui-hires and operational efficiencies.
Douglas Elliman will also be able to directly and more efficiently access the capital markets and widen it's potential investor base.
Douglas Elliman has an attractive financial profile with a balance sheet strength of $200 million of net cash at significant operating leverage, currently Douglas Elliman has approximately 6,600 agents and for the 12 months ended September 30, 2021, it had gross transaction volume of $47.7 billion, revenue of $1.29 billion and adjusted EBITDA of $106.2 million.
Turning to page 7, Douglas Elliman is one of the largest residential brokerage companies in the New York metropolitan area, which includes New York City, Long Island, Westchester and the Hamptons and is sixth largest in the United States by sales value according to HousingWire.
Note, this is sixth among brokerage such as Realogy, Berkshire Hathaway and Compass, for example, all of which opposed to tens of thousands of agents compared to Elliman 6,600.
Since 2013 Douglas Elliman has expanded throughout Florida, California, Aspen and Snowmass, Colorado, Houston, Dallas and Austin, Texas and Massachusetts including Boston, Cape Cod, Martha's Vineyard and Nantucket.
The company can leverage Douglas Elliman's brand equity and earn credibility to expand its presence in new existing and adjoining markets and recruit best in class agents who recognize and trust the Douglas Elliman name, all contributing to increased market share.
An important point of differentiation for Elliman from Realogy and Compass is that the primary focus of our business is on the leading densely populated international finance and technology hubs, where housing inventory is at a premium price levels.
This is unlike these two competitors, one of whom is a multi-brand national franchise whose growth plans are less focused and include many markets through the country with these same demographics.
This results in Elliman having an average price per transaction substantially higher than our leading competitors.
This is important because the economics of the luxury market are attractive with commission rate strong, but also because we see the luxury market has more recession proof with drivers to our markets such as the continued migration to lower and lower tax states, the prevalence of remote working and a growth in millennials entering the housing market, who are generationally inclined to buying.
We believe this creates a large runway for us to continue to grow our business, not only in our existing, but in completely complementary markets as well.
Turning to Page 9 to review the investment highlights for Spinco.
The U.S. residential real estate market has highly attractive growth dynamics.
Elements comprehensive suite of real estate solutions provide some multiple revenue streams and opportunities to monetize our agent relationships.
Douglas Elliman is an industry-leading brand with a presence in most major U.S. luxury markets.
We have cutting-edge technology which support agent recruitment, retention and productivity.
We have a strong platform for continued and sustainable growth.
The stand-alone Douglas Elliman will have a balance sheet strength and significant operating leverage.
And finally, we have a seasoned management team with substantial real estate experience and a track record of driving growth.
Turning to Page 10, which highlights the attractive characteristics of the U.S. residential market.
Since the beginning of 2020, U.S. homeowner equity has grown 17.6% to $23.6 trillion.
New and existing home sales in the U.S. are forecast to grow to approximately 7.4 million units in 2022, up from 6.9 million units in 2021 and 6.5 million units in 2020.
This is occurring against the backdrop of low mortgage rates driving home sales and even with some increase next year likely still on a relative basis at very attractive levels.
This is accompanied by increased mobility, driven by a number of factors including the continued migration to low tax jurisdiction, as well as COVID related factors such as greater remote work flexibility leading to increased demand for greater space and second homes.
Douglas Elliman increasingly refers to buyers wanting multiple primary residents with their second and third residents having all the amenities and space they desire for a full-time residents.
Turning to Page 11, another contributing factor to long-term demand in the residential market arises from millennials, the largest population cohort, entering the housing market in large numbers as they hit family formation and peak homebuying age, making their first home purchases at an older age than prior generations, they now are an important and growing part of the demand and we anticipate them to prefer technology focused firm like Douglas Elliman.
This strong demand combined with low inventory has resulted in significant price appreciation in many sectors of the market, including in many of our luxury markets.
And finally agents continue to play a critical role in the purchase and sale of residential real estate, notwithstanding various agentless models like iBuying.
They represent a very small piece of the market ended approximately 90% of all residential transactions an agent is involved.
As real estate transactions are complex and agents help to facilitate the successful completion of the transaction.
Turning to Page 12, Douglas Elliman's comprehensive suite of real estate solutions provide for multiple revenue streams in addition to our residential brokerage business.
Our existing portfolio of ancillary real estate services allows us to enhance client experience and drive revenue and earnings growth, with an opportunity to accelerate growth via investments and acquisitions.
These other revenue streams include the Douglas Elliman development sales and marketing platform, which enhances Elliman's position in the luxury real estate segment, headed by Susan de Franca, an industry leader, the new development is sought after by well-known real estate developers as it offers expertise from project inception to close, including sales, leasing and marketing for new developments in key U.S. markets.
The firm ranks among New York City's and South Florida's most prominent marketing and sales firms with 75 in-house development professionals overseeing a $40 billion portfolio of buildings by such famed architects as Jean Nouvel and iconic brands, including the Waldorf Astoria, the St Regis and the Ritz-Carlton.
Through a strategic global alliance with Knight Frank residential, the world's largest privately owned property consultancy, Douglas Elliman new development benefits from immediate opportunities to market properties to international audiences.
With new development sales and marketing, unlike our principal competitors, Douglas Elliman employees a hybrid broker model, where our traditional residential real estate agents work in tandem with our Douglas Elliman new development professionals and leverage their extensive industry relationships for the benefit of our developer clients.
Our agents are able to market and sell high profile developments that enhance their brands and provide additional commission revenue potential.
We believe this model provides a competitive advantage to our new development business, while also increasing the attractiveness of the Douglas Elliman platform to current and prospective agents.
Our premium residential property management business, Douglas Elliman property management, provides a full range of fee-based management services for approximately 360 properties representing about 56,500 units in New York City.
Nassau County, Long Island City and Westchester County.
The buildings we manage provides an important source of referrals for our agents through our building specialist program, which allows designated edged agents to leverage the relationship trust developed by our property management team with building owners and tenants.
DE title services provides a wide, the full range of title insurance services to real estate buyers and financial institutions in New York and Florida.
Portfolio escrow, a leader in the California escrow market delivers all pertinent documents for recording to the appropriate county clerks office, the release of funds to the seller and any other agreed upon entity.
We look over the coming year to expand our title and mortgages businesses into additional of our markets.
Turning to Page 13.
Today, we believe Douglas Elliman is the preeminent luxury brand in the U.S. with an established reputation for luxury and trust built over the last century.
This is an important point of differentiation for us from our peers.
We have successfully leveraged Elliman's brand equity to expand from our historical focus on the New York metropolitan area into new and adjoining luxury markets throughout Florida, California, Massachusetts, Colorado and now Texas, places where our clients often have primary, second or third residences and where agents and clients recognize and trust the Douglas Elliman name.
Our brand recognition and agent credibility lead to a large referral network among Elliman agents who were provided ample opportunities throughout the year to connect in person at bespoke events including Art Basel, the Winter Equestrian Festival and the Hampton Classic.
These carefully curated events allow agents to develop personal and professional relationship and a mutual trust with each other's clients, looking to invest in multiple markets.
To build on this established brand presence, Douglas Elliman produces a tremendous amount of owned content on social media for its digital magazine Element Insider and it's quasi print magazine Elliman.
The firm also generates earned media via important news organizations including The Wall Street Journal, The New York Times, The Financial Times and CNBC to name a few, building a very high level of credibility in the real estate space, as well as targeted exposure of brand initiatives, exclusive listings, new development projects and closed deals.
Such important press coverage resonates with our clients as it showcases element agents and executives' thought leadership and contributes to a strong share of voice across all major markets in which we operate.
As you can see from the chart on the slide, Elliman is number one in earned media in each of its principal markets including New York City, Florida and Los Angeles.
And as a final point, we sponsor the Miller Samuel report, the gold standard of market research in the residential brokerage world.
Jonathan Miller is the most quoted and respected researcher and analyst in our business and our association with these reports builds a high credibility factor for our agents.
Turning to Slide 14, Elliman has a large and growing presence in most of the leading luxury markets in the United States.
Our 6,600 agents across the country are augmented by our exclusive relationship with Knight Frank with its international network with approximately 500 offices and 19,000 agents.
This is an invaluable relationship that is truly singular in the U.S. residential brokerage community and provides our agents with unprecedented global exposure to important buyers from around the world.
This is of particular importance today as our borders open to foreigners on November 9th.
And as you can see from the charts, our significant and growing market share in our principal markets and we are regularly one of the largest firms in New York.
Our focus on the major U.S. luxury markets is reflected in Douglas Elliman having substantially higher average transaction value than any of our major competitors, approximately 1.6 million year-to-date, materially higher than Compass and Realogy.
Starting on Page 15, you'll start to see that our general approach to real estate technology is leveraging best of breed technology, leveraging proven technology around legacy investments, as well as leveraging new early stage disruptive PropTech companies from New Valley Ventures.
This strategy gives our stakeholders access to fast and changing industry-leading technology, while enabling Douglas Elliman to benefit from traditional valuation growth of breakthrough PropTech companies.
Hiring technology talent to develop new products inside large companies such as Douglas Elliman is costly, takes longer to bring new technology to the market and rarely generates most cutting-edge solutions and then limits the value of the emerging product to the company's own usage.
Instead, we believe technology innovation is best fostered in smaller, purpose-built PropTech companies.
We operate a very open architecture technology infrastructure that allows for plug and play environment where new features and functionalities can quickly be added for the benefit of our agents and their clients.
This ensures our technology remain state of the art.
Vendor optionality is maintained and our costs are minimized.
By investing in early stage PropTech companies, Douglas Elliman can gain differentiation access into the innovative PropTech services, while benefiting from expected growth and valuation of these firms without the need to build or fully acquire them.
We anticipate that these investments will continue to provide us with unique access to cutting edge industry-leading technology, providing us with valuable technology system to improve the efficiency of Douglas Elliman's business, while also capturing some of the most valuable created combination of experience between a real estate industry and the PropTech companies which we partner with.
Our Douglas Elliman agent portal shown on this page powered by invent.
us is built on a native cloud SaaS infrastructure foundation that is designed to rapidly adjust and incorporate new initiatives and solutions.
The user-friendly portal incorporates automated and simplified workflows for our agents, interactions, expansive data rich dashboards and reports backed by artificial intelligence and integrated data assets.
The technology is completely plug & play and enabled, which supports our ability to quickly adjust our solution in concert with the digital transfer information happening in the PropTech industry today.
Turning to Page 16, leveraging this solution -- leveraging this strategy, we also can quickly incorporate innovative technology to meet our business requirements at a rapid pace.
Example in 2018 to 2020 on average, we were able to roll out about 2 to 4 major solutions needed to support our business in addition to just small changes that were required for our existing solutions.
Over the course of 2021, we've rolled out nine solutions that are target -- nine solutions and we target two more by the end of the year.
Solutions like mobile ready CRM, DIY marketing solutions, transaction management powered by rechat and others, AI integration powered by purlin, e-sign, online notary, DIY robust video abilities and expanding revenue opportunities by leveraging partners like Humming Homes for home services.
Turning to Page 17.
Our open architecture technology strategy allows access to fast changing industry-leading technology, while enabling Douglas Elliman reality to benefit from the potential adjacent revenue streams and valuation growth at the breakthrough tech firms.
Elliman is bringing innovation technology driven PropTech solutions to Douglas Elliman Reality and the greater real estate community through its New Valley Ventures subsidiary.
The investment approach and insurers at Douglas Elliman companies and its agents are on the cutting edge of the of the industry with new solutions and services that can easily be integrated into our technology foundation, while keeping us asset-light.
This includes access to exciting fast growing sectors in the PropTech space such as EV and green tech, which significantly align with our assets.
The PropTech companies we invest and benefit access to Douglas Elliman's operating business and distribution to grow their own business, while simultaneously driving Elliman's growth and competitive differentiation.
Another additional revenue stream example would be our white label homeowners engagement platform that supports long-term client relationships by providing clients' lifetime access to services that include home management, moving HVAC support, home insurance, change of addresses, and many more.
Our access to leading industry technology also enhances agent productivity, earning potential and satisfaction thus supporting effects to recruit and retain high performing agents through the appeal of more creative offerings and to the increase of our market share.
I now return return back to Scott to go through Page 18 and 20.
Moving on to Page 18.
Douglas Elliman has a strong platform for continued growth.
This involves growth in existing markets and in markets adjacent to where we are today, as well as entree into new markets.
In addition to organic growth through recruiting in our major markets, we have a number of very significant opportunities to grow our market share in adjacent markets, where the Elliman name is well known and trusted.
Some clear examples in New York, where we have a significant presence in New York City, Long Island and the Hampton, we are working hard to grow our business in Westchester County; Greenwich, Connecticut and in New Jersey.
Likewise, we are focused on scaling our business in Boston and nearby summer luxury market.
In Florida, we are building on our strength in South Florida from Miami to Palm Beach to increase our presence on the West Coast of the state and recently, for example, has had a significant growth in our Naples present.
And we have made a strategic decision to aggressively grow our current business in Texas.
This past summer, we restructured our relationship with our partners and are fully integrating the business with the rest of our operations.
We are actively recruiting top agents and talent in Houston, Dallas and Austin, and we believe Texas could be a major market for us in the future.
Texas is a low tax state and growing in importance as a tech hub, seeing significant in migration from California and other markets where we operate in.
There are a number of potential markets where our strength in the luxury segment could make these markets interesting.
These include as examples markets such as Nashville, Scottsdale, Denver, Las Vegas and San Francisco.
These are also examples of markets where there is also potential for new development sales and marketing business, which can be a good way for us to enter a new market.
In the aggregate, the 18 markets shown represent approximately $180 billion in transaction value, which would represent a 50% increase in our addressable market.
In terms of growth of our new development sales and marketing platform, this is very important as a part of our business.
Total revenues for this business was $66.7 million year-to-date and our pipeline is very strong.
We see a number of attractive opportunities to expand this business into new markets and are actively working to expand our presence in Texas.
And as discussed before, we have a real opportunity to expand our ancillary services, such as mortgage title and escrow to enhance client experience and stickiness, as well as to drive profitable revenue growth.
Turning to Page 19, a final key to our continued growth lies in the retention and the recruitment of agents.
We have a very high retention rate for our industry equal to approximately 90% of our revenue and our agents are long tenured with 87% of our revenue coming from agents who have been with us for more than three years.
While we have all the technological assets and leadership acumen of any major corporation, our agents and employees often describe our completely close-knit culture as family like and probably have agents who have called Elliman home for 10, 20 and even 30 years.
Forbes has ranked us is one of the best places to work several years running.
We are steeped in culture, rich in entrepreneurialism and work closely with agents to help develop very unorthodox, yet winning business plans that have led to some extremely successful initiatives that bring Elliman worldwide acclaim and recognition.
Such examples include the shows Million Dollar Listing Los Angeles, Million Dollar Listing New York and most recently Kendra Sells Hollywood.
Douglas Elliman has many of the most successful and most visible agents in the U.S.
We pride ourselves on our track record for many years of recruiting high profile best in class agents who are attracted to the strength of our platform and our brand.
As David mentioned before, we will continue to invest in compelling PropTech opportunity that will help propel our growth and competitive differentiation, as well as enable us to benefit from growing adjacent revenue streams and the potential growth in valuation of breakthrough tech firms.
It is very important for Douglas Elliman to have a strong financial profile that is commensurate with its luxury customers.
This strong financial profile will enhance Douglas Elliman's growth prospects as it expands and seeks merger and acquisition opportunities and related to valuation, we believe this position of strength should entitle DOUG to a higher earnings multiple.
Please turn to Page 22.
Page 22 provides a summary of the attractiveness of Douglas Elliman, strong operating performance with impressive revenue growth, disciplined expense management led by seasoned industry executives, healthy margins and limited capital expenditures that support strong future growth initiatives and a quarterly cash dividend from a balance sheet with $200 million of net cash.
Please turn to Page 23.
This slide shows our strong key performance indicators, a healthy number of principal agents, significant growth in transactions and transaction value and most importantly, an average sales price of $1.55 million per home over the last 12 months, well above the national average.
The reduction in principal agents from 2018 to 2021 is the result of cost reduction initiatives that began in 2019.
The fruits of our work from increasing revenues as well as expense reduction initiatives are demonstrated on page 24.
In addition to a healthy EBITDA margin of 8.2%, there is a solid conversion to free cash flow with low capital expenditures.
Please turn to pages 25 and 26, where the company's income statement and balance sheet are presented.
Now turning to page 27, a summary of the investment and some highlights are presented including Douglas Elliman operates in a highly attractive US real estate market.
Douglas Elliman is an industry-leading brand name that is associated with luxury.
Douglas Elliman has a seasoned management team with substantial Real Estate, technology and operating experience.
Douglas Elliman's technology creates a strong platform for continued growth.
Douglas Elliman's comprehensive solution for multiple revenue streams capitalizes on its monetization of its valued agent relationships and Douglas Elliman has a healthy balance sheet with significant operating leverage for expansion.
In summary, we believe Douglas Elliman's strong leadership team, technology and financial profile is commensurate with the profiles of its luxury customers.
Being a separately traded public company will enhance DOUG's strength, which along with DOUG's runway for expansion will increase its growth prospects as it expands and seeks M&A opportunities.
We are pleased with our long-standing history at Vector of paying a quarterly cash dividend.
It remains an important component of our capital allocation strategy and following the spin off, it is our expectation that our current policy of quarterly dividends of $0.20 per share will continue well into the future.
 Assistant:

Chosen response:
compname posts q3 earnings per share of $0.32.
q3 revenue rose 19 percent to $652.6 million.
q3 earnings per share $0.32.


Prompt:
Human: We appreciate your interest in Vulcan Materials and hope that you and your families continue to be safe and healthy.
I want to begin today's call by taking a moment to congratulate our team for their solid execution during the first half of the year.
Our performance through the first two quarters further demonstrates the strength of our aggregates-led business.
We expect the momentum we generated in the first half of the year to carry through the second half, and we reiterate our full year 2021 adjusted EBITDA guidance range of $1.38 billion to $1.46 billion.
For the first half of the year, our adjusted EBITDA increased by 7% and our aggregates cash gross profit per ton expanded by 5% through a combination of volume growth, higher pricing and improved operating efficiencies.
Adjusted EBITDA for the second quarter was $406 million, essentially unchanged versus the same quarter last year.
We achieved this result despite a $25 million headwind from much higher diesel and liquid asphalt costs.
Diesel costs rose by $15 million in the quarter.
Liquid asphalt costs were $10 million higher than the same period last year.
And together with wet weather, negatively impacted the profitability of our non-aggregate segments.
Even after considering the energy headwind, our aggregates cash gross profit per ton grew by 2% in the quarter due to our team's consistent execution of our four strategic disciplines.
With a 4% increase in aggregates volume in the second quarter and the market's current visibility to demand, the pricing environment continues to improve.
Freight-adjusted aggregates pricing increased 3% in the quarter, and the rate of growth improved sequentially throughout the quarter.
Adjusted for mix, freight-adjusted price improved 2.6%, twice the growth rate realized in the first quarter.
Along with improved volume and pricing, operating efficiencies and cost control helped to offset inflationary pressures.
Our total cash cost of sales increased by 4% in the quarter versus the prior year.
Excluding the diesel headwinds, cash cost of sales grew by less than 1%.
During the second half of the year, we will remain diligent and focused on controlling what we can control and on driving further improvements in our profitability.
The solid aggregates performance helped to offset reduced profitability in the non-aggregates segment.
Our second quarter non-aggregates gross profit declined year-over-year due primarily to the higher liquid asphalt cost, which I mentioned earlier, and lower volumes in both asphalt and concrete.
Wet weather impacted asphalt shipments while a shift in timing of projects, particularly in Virginia, resulted in lower-than-anticipated concrete shipments.
Turning now to the demand picture.
It has improved across our major end markets as well as geographies.
The residential end-use has shown continued strength with solid starts in single-family housing.
We've also seen an uptick in multifamily housing starts.
Now with respect to the nonresidential outlook, improvement continues in a number of leading indicators and we have begun to see month-over-month improvement in starts.
The strongest nonresidential sector continues to be the work related to e-commerce and technology infrastructure, but lighter traditional nonresidential demand is also recovering.
The level of highway starts remained healthy in the first half of 2021 as states got back to normal funding and budget levels.
On the broader subject of federal highway and infrastructure spending, we're encouraged by the progress made toward a Highway Bill with substantially higher funding over the FAST Act levels.
We've also seen an acceleration of starts in public infrastructure such as water and sewer treatment systems, airports and storm and flood control.
Before turning the call over to Suzanne, I want to briefly touch on our growth strategy and the recently announced agreement to acquire U.S. Concrete.
We have three paths to growth, and it's important to strike the right balance between these three in order to drive higher returns.
Those paths are organic growth, greenfields and M&A.
We always start with organic growth because it offers the most attractive and compelling value proposition on a risk-adjusted basis.
We have a unique and irreplaceable asset base spread across the most attractive geographies in the U.S.
Our four strategic disciplines are designed to accelerate our organic growth, and the benefits are clear as we expand our unit profitability.
We also have a long and successful history of developing and opening new aggregate locations, particularly in growth corridors where acquisition opportunities may be limited.
We like the flexibility that greenfields provide in regards to timing and pace of capital spending.
Our third growth engine is M&A.
U.S. Concrete is a great strategic fit for Vulcan as it naturally complements our existing aggregates business.
It also brings new geographic exposure to the company, expanding and diversifying our already strong footprint into the Northeast.
Along with my colleagues at both Vulcan and U.S. Concrete, I'm very excited about the potential for this combination.
It will allow us to further drive sustainable long-term shareholder value.
And I look forward to welcoming the U.S. Concrete team to the Vulcan family.
I'd like to begin by highlighting a few key areas to consider this quarter: our aggregates price realization, unit profitability, return on invested capital and balance sheet strength.
First, our ability to consistently deliver compounding price improvements is an important driver of our unit margins.
The current pricing environment is positive due to improving demand visibility and inflationary pressures.
We've seen attractive sequential improvement in pricing through the first half of the year, and we expect the momentum to carry over to the second half.
Clearly, these compounding price improvements, along with good operational execution, are having a positive impact on our unit profitability.
This quarter marked the 12th straight quarter of improvement in our trailing 12-month cash gross profit per ton.
For the trailing 12 months, cash gross profit per ton was $7.26, and for the quarter, it was $7.83 per ton, moving ever closer to our current goal of $9 per ton.
The next area of focus is our return on invested capital.
We are pleased with our improving returns.
And on a trailing 12-month basis, return on invested capital was 14.8%, an increase of 60 basis points compared to the prior year period.
This improvement was comprised of an essentially unchanged invested capital base and a 4% increase in trailing 12-month adjusted EBITDA.
And finally, we will continue to prioritize our balance sheet strength to create the flexibility and optionality necessary to support our capital allocation strategy.
At June 30, our net debt-to-EBITDA was 1.3 times, reflecting $968 million of cash on hand.
Our debt has a weighted average maturity of 15 years with no significant maturities in the near term.
It's important to note that even after the anticipated close of the U.S. Concrete acquisition, our balance sheet will be in good standing and we remain committed to maintaining our investment-grade rating.
Before turning the call back over to Tom, I do want to touch briefly on two housekeeping matters.
First, you will have noted an increase in our interest expense this quarter.
Concurrent with the announced pending acquisition of U.S. Concrete in June, we obtained a bridge facility commitment to support the deal.
Subsequently, we executed a $1.6 billion delayed draw term loan which will be used to fund the acquisition along with cash on hand.
Borrowings under that facility are due three years from the funding date.
And so this facility will be used as an interim measure prior to accessing the bond market at the appropriate time.
As a result, financing cost of $9 million for the bridge commitment was recognized as expense in the second quarter.
The final matter to mention is our effective tax rate.
And as a reminder, at the end of first quarter, we increased our expectation of the full year rate to between 23% and 24%.
That guidance is still applicable.
Our people are what makes Vulcan better every day.
I would be remiss if I didn't comment on the current COVID environment and the recent announcement by the CDC in response to the surge in the Delta variant.
We will continue to closely monitor the spread of the virus, ensuring the health and safety of our employees and their families.
We will continue to operate Vulcan for the long term.
This means keeping our people safe and healthy, staying focused on strong local execution, driving unit margin expansion and improving our financial returns.
 Assistant:

Chosen response:
compname reports q2 earnings per share $1.46.
q2 earnings per share $1.46.


Prompt:
Human: I'm joined on the call today by Michael Happe, president and chief executive officer; and Bryan Hughes, senior vice president and chief financial officer.
These factors are identified in our SEC filings, which I encourage you to read.
As always, we appreciate your interest in Winnebago Industries and taking the time to discuss our fiscal '22 second-quarter results.
I'll start the call with an overview of our performance during the second quarter and what factors are driving those results.
Winnebago Industries is built on our strong momentum and delivered robust results in the second quarter of fiscal 2022, capitalizing on sustained and elevated demand for our portfolio of premium products.
We grew revenues by 39% year over year to $1.2 billion, matching the previous sales record set last quarter.
Overall, our results were shaped by two key dynamics: first, sustained and powerful consumer demand drove higher unit sales compared to the prior year; and second, Winnebago Industries' successful execution of pricing actions to offset higher material and component costs.
Also, the Barletta pontoon boat business recently acquired this past August, contributed nine percentage points of growth, and continues to exceed our expectations and gain market share in the pontoon boat market.
I want to spend a minute talking about these drivers in more detail.
It all begins with the consumers' continued strong affinity for the outdoor lifestyle and in particular, Winnebago Industries premium brands.
Through our interactions with our consumers and feedback we receive from our dealers, consumers clearly recognize our products as being differentiated.
This differentiation is a result of our relentless focus on our golden threads of quality, service, and innovation.
Robust consumer demand is a powerful undercurrent that we believe will continue to propel our company's growth through the current fiscal year and beyond.
A recent RV industry association study confirmed that 51% of new RVers in the 2020 and 2021 time periods suggested that that reasons surrounding COVID were certainly the impetus for purchasing in RV.
We are confident though that many of these interest trends have become ingrained and that consumers will continue to invest in products that enable them to pursue their love for the outdoors.
Compelling data supports our thesis.
Our friends at the campgrounds of America cited a 16% projected increase in households camping through November of 2021 versus the same period in 2020.
Here are some other nuggets from the previously noted and recently released new RV owners survey conducted by the RVIA.
Contrary to some theory speculating on possibly low retention of 2020 and 2021 first-time RV buyers.
New purchasers are most likely to keep and use their current RV into 2022 and beyond.
With 50% already seeking an upgrade via new parts or a different RV altogether.
Six in 10 new millennial RVs, those who bought an RV for the first time in 2020 and 2021, already say they are likely to purchase another RV in the future.
As it relates to the growing popularity of flexible work, among new RVers 25% of millennials and 27% of Gen Xers stated that they used an RV for a place to stay while working as a reason for purchasing the RV.
Importantly, Winnebago Industries is already capitalizing on the sustained demand drivers.
Our second-quarter total unit sales grew year over year despite a tough comparison to the second quarter of fiscal 2021, which was nearing the height of the COVID-19-driven demand spike.
Strong attendance at the recent Tampa RV show and the Miami Boat Show resulted in retail sales that exceeded our expectations.
In fact, most of our retail shows this spring are seeing record sales for our brands.
This foreshadows a solid spring selling season that is historically reflected in our second-half results.
The combined tailwinds of societal trends, Winnebago Industries proven portfolio brand strength, and sharp execution spells great opportunity in the future for our business.
We remain confident that there remains strong engagement in the outdoors by consumers and Winnebago Industries is positioned to continue growing market share in both the RV and marine industries.
On a trailing three-month basis through January, our RV market share was 14.3%, up a full 100 basis points from 13.3% for the same period in 2021.
And in our marine segment, Barletta has now grown to be the fifth-largest pontoon boat company by market share at 4.6% on a trailing three-month basis through December, and recent retail results show them approaching and breaking the 5% barrier.
This is a meaningful improvement from just seven months ago when we completed the Barletta acquisition.
Speaking of Barletta, I am pleased to report that its differentiated pontoon portfolio has continued to perform above our expectations and exceeded the calendar 2021 performance targets we set when we announced the acquisition.
The second major driver of our revenue results was pricing actions.
The positive demand environment and the unique strength of our brands positioned Winnebago Industries well to take continued pricing actions to offset component and material cost inflation and preserve margin performance across our segments.
We began taking pricing actions ahead of inflation in the second quarter of last year.
As the spring selling season gets underway, we will continue to evaluate our pricing power as needed as a lever to offset higher materials and component costs while still balancing and driving market share gains.
This is a testament to the resiliency of the demand environment and the clear quality of our expanded product portfolio.
Our strong top-line performance was coupled with excellent operational efficiencies internally.
I tip my cap to the entire Winnebago Industries team for another quarter of net strong execution, which is especially appreciated these days as the supply chain remains volatile.
We continue to work collaboratively with our suppliers to get materials on time so we can get products out the door as efficiently as possible for our customers and dealer partners while not sacrificing quality and service.
Our motorhome business this past quarter probably faced the most significant supply chain constraints, holding that segment back from optimal performance in this period.
Our teammates efforts, though, enabled us at a consolidated level to power through the supply chain constraints and inflationary pressures that we continue to experience at levels comparable to the first quarter.
With our strong execution and pricing actions, Winnebago Industries delivered gross margin of 18.6% during the second quarter, equal to the great results last year.
A focus on operational excellence will continue to be a critical component of our strategy going forward, creating organic and flexible capacity, driving productivity and margin improvement opportunities, and ensuring industry-leading product quality.
Winnebago Industries robust backlogs have increased versus last year and are significantly higher than the second quarter 2020 period due to continued strong in consumer demand.
Keeping dealer inventories in all of our segments at acceptable levels throughout the fiscal 2022 year for our dealer partners is a key focus area for all of our teams.
And I am fully confident they will continue to rise to the challenge to meet the high retail and wholesale demand levels in a disciplined manner.
We are fortunate to have a world-class team of Winnebago Industries employees and strategic partners.
Working together, we remain uniquely well-positioned to continue capturing outsized growth and delivering value to all our stakeholders as more families take to the great outdoors.
As Mike mentioned, second-quarter revenues, including results for Barletta were $1.2 billion, reflecting an increase of 39%, compared to $839.9 million for the fiscal 2021 period.
Excluding Barletta, our organic growth for second quarter was 29%.
We were pleased to see that revenue growth was achieved in all three segments against a very robust 2021 comparison period.
Growth in total was driven by a combination of pricing actions and unit shipments.
We delivered another period of very strong profitability in the quarter, evidenced by meaningful growth despite a steep year-over-year comparison.
Gross profit was $216.6 million, representing an increase of 38%, compared to $156.6 million for the fiscal 2021 period.
Gross profit margin of 18.6% was equal to last year, driven by operating leverage and pricing offset by higher material and component costs as well as some operating inefficiencies caused by supply chain constraints and the associated inconsistencies in the deliveries of parts and subcomponents.
Operating income was $136.8 million for the quarter, an increase of 37% compared to $100 million for the second quarter of last year.
Our second-quarter operating income includes $0.5 million in acquisition-related costs and $4.6 million of incremental amortization of intangible assets related to the Barletta acquisition.
Fiscal 2022 second-quarter net income was $91.2 million, an increase of 32%, compared to $69.1 million in the prior-year quarter.
Note that fiscal 2022 net income includes $6.5 million of contingent consideration fair value adjustment, which is included in non-operating income related to the earn-out included in the deal structure associated with the Barletta acquisition.
You will note that we are removing this deal consideration in the calculation of adjusted EPS.
We are pleased to note that Barletta performance through the end of calendar 2021 as specified by the July 2021 purchase agreement will result in the full dispensation of $15 million which is the maximum payout for the first earn-out period tied to calendar year 2021 performance.
As stated previously, recall that we structured the earnout in such a manner that the multiple on this deal is further reduced as the earn-out that is paid increases.
Reported earnings per diluted share was $2.69, compared to reported earnings per diluted share of $2.04 in the same period last year.
Adjusted earnings per diluted share was $3.14, which represents an increase of 42%, compared to adjusted earnings per diluted share of $2.21 in the same period last year.
Now I'll turn to our segment performance, starting with our towable segment.
towable segment revenues were $646.6 million for the second quarter, up 47% over the prior year, primarily driven by pricing increases across the segment and unit growth of 13%.
Unit growth of 13% is especially strong given last year's 55% growth versus fiscal year 2020 for the same time period.
Segment adjusted EBITDA was $100.6 million, up 61% over the prior-year period.
Adjusted EBITDA margin of 15.6% increased 140 basis points over the prior year, driven by operating leverage and pricing, partially offset by cost input inflation.
Next, let's turn to our motorhome segment.
In the second quarter, revenues for the motorhome segment were $417.6 million, up 9% from the prior year driven by pricing increases across the segment.
Segment adjusted EBITDA was $46.1 million, representing a decrease of 10% from the prior year.
Adjusted EBITDA margin was a strong 11%, while a decrease of 230 basis points from the prior year.
In the current quarter, we experienced ongoing supply chain inconsistencies in the delivery of chassis and other key components that were disruptive to our operational flow and introduce inefficiencies into the environment as compared to very high productivity across our operations in the prior year.
While we expect such inefficiencies to be remedied in the longer term, they did impact the current quarter.
It should be noted that the pricing actions taken to date in the motorhome segment continued to outpace the inflationary impacts on our products.
And the pricing versus inflation equation is not a driver of the margin reduction versus last year.
Finally, let's turn to our marine segment.
In the second quarter, revenues for the marine segment were $97.3 million.
The retail trends for the Barletta and Chris-Craft businesses remain strong and dealer inventories remain low.
marine segment adjusted EBITDA of $13.0 million was $11.9 million higher than the same period last year, and adjusted EBITDA margin was 13.3%, 620 basis points higher than last year, reflecting the addition of the Barletta business.
Turning now to the balance sheet.
We continue to maintain a healthy liquidity position with approximately $327 million available, including an untapped ABL of $192.5 million.
Our leverage ratio is currently at 0.8 times.
From a capital allocation perspective, we continue to prioritize investment in our businesses to fuel organic growth.
On a fiscal year-to-date basis, capex spending is $43.4 million, which is three times higher than last year's year-to-date capex.
We continue to carry elevated inventory as a means of mitigating some of the supply inconsistencies that we encounter on a daily basis.
While this is a detraction from generating high cash flow in the near term, we continue to view this as a prudent action to support our operations and believe that this cash investment will liquidate in the longer term and be available for other capital allocation priorities as the eventual drawdown in working capital occurs.
During the quarter, share buybacks totaled $40 million, and on a year-to-date basis, we have bought back $59.6 million worth of shares.
As discussed previously, our dividend this year is running at a 50% higher than it was last year.
Combining share buybacks with dividends, we have returned a robust $115 million to shareholders on a trailing 12-month basis through the second quarter of fiscal 2022.
This is approximately four times the prior year's trailing 12-month period.
That concludes my review of our quarterly financials.
Mike, back to you.
In addition to delivering strong financial results and market share growth, Winnebago Industries continued our deep commitment to our corporate responsibility in our communities and for our shareholders.
At the January RV consumer show in Tampa, we revealed the e-RV, the first all-electric zero-emission motor home concept from a major RV manufacturing.
The e-RV concept vehicle is an entirely new all-electric zero-emission RV that incorporates an advanced drivetrain and battery package that also powers all the living area systems of the coach.
Designed by our advanced technology group for a new generation of RVers who want to preserve the natural world as much as they want to enjoy it, the e-RV combines all-electric operation with sustainable and innovative materials.
We look forward to talking more about the e-RV as we move closer to commercialization.
Our go-to-market version is sure to bring significantly enhanced features and capabilities than the concept model shown.
In addition to the exciting e-RV, our Advanced Technology Group is also actively engaged on electrification relevant to marine and RV towable products as we continue our legacy of innovation and explore new frontiers and outdoor lifestyle products for the benefit of our customers, investors, and communities.
Now turning to our outlook for the remainder of 2022.
I want to reiterate my confidence that the demand for outdoor lifestyle products and particularly Winnebago Industries brands will continue to be very robust.
Looking at the RV industry at a macro level, we believe wholesale shipments for the calendar year could be down low to mid-single digits percentage-wise, as compared to the record 600,000 units shipped in calendar 2021.
Backlogs remain elevated as supply chain constraints persist, which we expect to be an ongoing reality throughout 2022.
We will continue to work closely with our suppliers to mitigate issues as much as possible and provide our dealer partners with quality units to replenish their inventories.
We anticipate Industry towable inventories to recover to a new normal first and mid-2022, followed by motorized later this calendar year and for some brands into 2023, especially our Newmar brand.
marine inventories will be the last to recover, and it could be well into 2023 or beyond for that to happen.
From an RV retail sales perspective, we have mentioned previously, and still maintain that we expect industry RV retail sales in calendar 2022 will likely be the second highest on record.
More specifically, we believe retail sales will be down mid- to high single digits percentage-wise.
This level of retail sales, combined with the wholesale shipment perspective mentioned earlier, will bring total dealer inventories back to reasonable levels and reflect dealer turns that we believe are sustainable into the foreseeable future.
We also believe that dealers will be targeting inventory levels that will generate elevated turns versus historical times and higher operating profits.
As always, in this very dynamic industry, our enterprise will responsibly produce and ship product.
While we anticipate the supply chain constraints and inflation to continue, we will work closely with our suppliers to mitigate the impact of those forces as much as possible.
Most importantly, we will continue to match our production levels with confirmed dealer orders.
This enterprisewide mandate at Winnebago Industries is imperative within our business model and is especially important as the industry works to replenish but not overdrive dealer inventory levels.
In short, we are continuing to focus on executing our proven strategies and building on our strong momentum.
We are investing in the future of our business as well, with significant capital projects, especially related to new product line expansion, future innovation, and stronger customer intimacy tools.
The unique strength of Winnebago Industries brands will position us to keep winning in the positive demand environment.
And our employees' relentless hard work and dedication will allow us to deliver superior execution despite supply chain constraints and inflation, which we are constantly monitoring.
We have much to navigate and continued room for improvement.
I'd like to remind our investors of the significant progress we've made in the last five to six years.
Our trailing 12-month sales of $4.3 billion, compares to $976 million at the end of fiscal 2015.
Our fiscal year-to-date 19.2% gross margin, compares to 10.7% in fiscal 2015.
Our current three-month trailing RV share of 14.3%, compares to 2.9% at the end of 2015.
Our approximate working capital of 11% in this fiscal year, compares favorably to 20% in 2015.
Our leverage ratio is under one times for each of the last four fiscal quarters, and in the last 12 months, we have returned more than $100 million of cash to shareholders.
We are proud of our team's hard work, but we recognize the bar is high in the short term and in the long term, both in the marketplace, but with our shareholders.
We are confident that Winnebago Industries has significant headroom for sustained profitable growth across our portfolio and enhanced value creation for our end consumers, dealers, employees, and shareholders.
While we do not have any physical operations in the region and feel that we can manage any indirect supply chain implications, our thoughts are with the Ukrainian people, and everyone affected by this tragic situation.
As part of our commitment to corporate citizenship and to our values, Winnebago Industries has made a grant to the Center For Disaster Philanthropy and joined in support with the National Association of Manufacturers recent resolution condemning Russian aggression.
Like all of you, we sincerely hope for a peaceful resolution.
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Chosen response:
winnebago industries delivers strong second quarter fiscal 2022 results.
q2 adjusted earnings per share $3.14.
q2 earnings per share $2.69.
q2 revenue $1.2 billion.