{ "schema_version": "modality-revision-space-v1", "study_id": "modality_revision_v1", "warning": "No provisional model labels or source audio paths are included.", "items": [ { "study_item_id": "MR-0001", "partition": "development", "call_id": "1703663", "exchange_index": 23, "question": "And on pricing, do you think we're at an inflection point here with the kind of improvement you've seen in merchant pricing is sustainable? Again, you seem to be getting the pricing at lower rates than you've historically needed to get pricing.", "answer": "Don, I heard your question and I was trying but not answering it. You know that we don't like to make any comments on pricing, considering the nature of our industry. So you need to let me off the hook on that one.", "duration_s": 15.900000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0001.mp3" }, { "study_item_id": "MR-0002", "partition": "locked_confirmatory", "call_id": "2048567", "exchange_index": 17, "question": "That's fair. My follow-up, just wanted to talk on the elective procedure volumes you guys mentioned. It was interesting. You said in North America, you're seeing 80% to 85%, 90% of pre COVID. Some of the checks we've did, it sounds like that rate is reflective of some of the kind of specialty hospitals, but like the big hospitals were more like in the 75% range. And I'm just curious at how you kind of view -- is that -- is that geared toward more a specific type of facility? And how is that looking now with what's going on in Florida and some of the places that are having flare ups again?", "answer": "Yes. So our prepared remarks may not have been as clear. So we see the China hospitals up at around 90%. And the U.S. hospitals, we're getting back. I think our numbers would, quite frankly, agree with yours at the end of the quarter in the sort of 70%, 80% range. We get pretty good data from our Censis software business of stabilization [indiscernible] have the understanding of what the procedures are, but we have a think that continues to get back as we get through the quarter, but we don't see it to 100% even through the end of the third quarter, I don't think. Still a long way to go between now and then, but we definitely think it continue to see -- we really get the data by day. And we are seeing -- we're seeing continued improvement through July as well. So we think things will continue to [indiscernible]. But as you said, it is a little bit of type of facility-dependent.", "duration_s": 52.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0002.mp3" }, { "study_item_id": "MR-0003", "partition": "development", "call_id": "1833988", "exchange_index": 21, "question": "Great, I think the Yankees would say is still early.", "answer": "I was waiting for that come back. Appreciate it.", "duration_s": 5.639999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0003.mp3" }, { "study_item_id": "MR-0004", "partition": "development", "call_id": "1636754", "exchange_index": 9, "question": "I guess I'll talk about the railroad acquisition. Just make sure I fully understand this. so as number doing a sales are we here that the original presumably, I'd say 100% student lending, that goes on your balance sheets? And that I guess a new balance sheet growth $20 million this year of revenues? And then another just continue to deliver on as you grow that and kind of what size or target balances would you expect over the next year to something?", "answer": "Things in perspective there a little bit that Laurel Road originated about $1.2 billion in total or was this past year. And I would say that the credit quality and the nature of those loans, and more importantly, the nature of those relationships, we think, are consistent with our target customer base and we're very excited about that. And it goes beyond the student loans as well that they've already implemented a mortgage-lending capability and if you look at other products they can add to that offering as well. And so it really is more of a relationship strategy for us than just the student loan origination. So we do believe that we'll continue to have the opportunity to put those on balance sheet, and we'll see that annuity to continue to build as that portfolio continues to mature and develop over the next couple of years.", "duration_s": 48.22000000000003, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0004.mp3" }, { "study_item_id": "MR-0005", "partition": "development", "call_id": "2272386", "exchange_index": 21, "question": "Okay. Yes, good. And a quick follow-up for me is just on RealNet the network of networks for real-time payments, pretty exciting. Can you -- and I know this is an area you guys have always been on the forefront of. Could you just describe in more detail like what RealNet will enable you to do that you haven't been able to do before or that's differentiated from what others can do around money movement around the world?", "answer": "Yes. Lisa. Thank you. I was hoping someone was going to ask. So", "duration_s": 4.360000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0005.mp3" }, { "study_item_id": "MR-0006", "partition": "development", "call_id": "1885573", "exchange_index": 6, "question": "That's great to hear. And obviously doing really well on the merchant -- I mean, on the management solutions side as well. And just last question on that point. Just given the tight labor market, any thoughts -- incremental thoughts on kind of where we are in the economic cycle? How you think about things like labor participation rate? How much slack there might be left in that? And [indiscernible] you guys to run on the small business side?", "answer": "Yes. I think we're still feeling pretty strongly about how the market is -- how the market outlook is. The optimism still -- it bounces around a little bit, business optimism, but what we're seeing is the wage increases are the highest, as I said, since 2011, from small businesses under 50 employees. This is what's in that watch. And the hours worked are up also for the highest in 3 years. So we look at that as demand for the employees. So the business is -- the toughest thing for small, in particular, small, but midsize businesses right now is, I can't find the people to finish -- to get the work done for the demand I have that, to me, points to a pretty strong economy still, and that's how it feels to us when hours work there up and the wages are up. It's because, hey, I've got the demand and -- from client, from customers that want that. So I think that's very good. The tariffs and the trade issues. We've seen impact roughly 1/3, maybe 25% to 1/3 of small businesses. Most of those are much more regional. And so they're not going to be impacted by that. \nThe third, 25% or third that are impacted by tariffs and so forth, have a harder time, but most small businesses are not impacted by that.", "duration_s": 78.32999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0006.mp3" }, { "study_item_id": "MR-0007", "partition": "locked_confirmatory", "call_id": "1833877", "exchange_index": 28, "question": "I want to follow up on Robert's questions on bookings activities. Specifically on towers, though, is the backlog of business side that commenced up year-over-year and maybe provide some color from our year-over-year end quarter over quarter perspective in 3Q? Than I have a follow-up question.", "answer": "Yes. Just to clarify, Brandon, you're asking third quarter of 2019 over third quarter of 2018?", "duration_s": 6.300000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0007.mp3" }, { "study_item_id": "MR-0008", "partition": "locked_confirmatory", "call_id": "2048567", "exchange_index": 12, "question": "Got it. That's helpful. And then I guess, Jeff took my question on Vontier timing, so I'll ask a different one. On the 4 buckets that you're kind of breaking down the business in these days, obviously, those are shifting around a little bit as the businesses are separated. But does this current environment give you any kind of thought into how to manage M&A amongst those buckets? I mean, do we just kind of -- should we expect mostly buckets 1 and 2? Or are there room for maybe some more cyclical or copy assets that would have been later in this current environment, but maybe still attractive for Fortive?", "answer": "Yes. I think it's a great question. I think, obviously, using the groupings as we have them, we clearly have, I think, demonstrated a propensity over the last several years to be grow -- the lion's share of our M&A deployed into mostly Group I and Group II. So I think that would -- I would say the trend is going to -- that trend will continue. \nThat said, there are certain situations, I would say Proof Technic as a deal we did last year for Fluke, which had both a service and an instrument aspect to it that was really important to our overall Fluke digital offering. So in that case -- and we got it at a very, very high ROIC. \nSo I think what you'll find is if we do make some of those decisions that are in Group III or Group IV, they're going to tend to be ones in which we'd see the returns very high. But I would say, if you said, let's talk about the lion's share of our capital allocation over the next several years, it's really going to be in building in those groups that are articulated in I and II, and they're focused on things like condition monitoring, facilities management, health care enablement and health, safety and environmental, the places where we deployed the lion's share of our capital over the last 4 years.", "duration_s": 78.36000000000013, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0008.mp3" }, { "study_item_id": "MR-0009", "partition": "development", "call_id": "1784885", "exchange_index": 20, "question": "But the timing is in the guidance for this year?", "answer": "It's not in the back half. The outlook we gave into '20 and beyond.", "duration_s": 4.599999999999909, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0009.mp3" }, { "study_item_id": "MR-0010", "partition": "locked_confirmatory", "call_id": "1692960", "exchange_index": 27, "question": "Do you expect this to be like a cost-saving benefit over time or are you already seeing it or do you expect to see that play out over time?", "answer": "I don't -- we don't have it baked in at this point. So right now, I think it's too early for us to be talking about savings. But we're looking at year's productivity and being able to have greater insights and how we manage the business. And so we'll see how that works out over time.", "duration_s": 19.300000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0010.mp3" }, { "study_item_id": "MR-0011", "partition": "development", "call_id": "1777155", "exchange_index": 13, "question": "Sure. What was the full year mix of thermal and met in your export in 2018? And what did that look like in the second quarter?", "answer": "Generally, commitment is about 55% to 65% is met, and we were in that ballpark in the second quarter. Similar to where we were last year. It was okay, the net steam mix was pretty consistent. We had a little bit more mix towards Baltimore in the second quarter of this year.", "duration_s": 25.26000000000022, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0011.mp3" }, { "study_item_id": "MR-0012", "partition": "locked_confirmatory", "call_id": "1957381", "exchange_index": 4, "question": "The $50 million -- okay, I get it. Okay. And then one follow-up. Could you give us a breakdown of your fixed versus variable cost structure, ideally for both", "answer": "It's not a meaningful metric in consolidation. If there's follow-up -- because the operating companies are so different in their profile, I think I'd recommend that you get back with Andrey for some follow-up questions there.", "duration_s": 13.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0012.mp3" }, { "study_item_id": "MR-0013", "partition": "development", "call_id": "1642903", "exchange_index": 23, "question": "But the current based on what you know today, the resources 4 to 5 years on that?", "answer": "Right. At that roughly 200,000-barrel a day peak. At a 4-rig level, at a 4-rig level. Let me be clear about that.", "duration_s": 8.740000000000236, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0013.mp3" }, { "study_item_id": "MR-0014", "partition": "locked_confirmatory", "call_id": "1899125", "exchange_index": 21, "question": "So your that longer-term evidence. I know you're not specific to the yield range on that is that you guys historically talked about 2%, 3% growth. And I'm just wondering, given that you've been coming in ahead of that the last couple of years, even outside of the added drivers. Is it fair to think that if you came in at the range where you've been growing yields for the last 3 years, that there would be upside to that 2025 number?", "answer": "Sure. So first, as Richard says, we're we're not just trying to hit the ball, we're trying to swing through the ball. And if you look at -- or in my commentary, I think what we're looking for here is to leverage the investments we're making, to have moderate yield growth and continue to have good cost to someone.", "duration_s": 22.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0014.mp3" }, { "study_item_id": "MR-0015", "partition": "development", "call_id": "2354077", "exchange_index": 9, "question": "Okay. Great. And then bigger picture, can you provide some more commentary around what you're seeing from an institutional capital perspective and the appetite to put capital to work in strips today? And maybe touch on your appetite to monetize assets if approached by your capital partners for more today?", "answer": "I missed the beginning of the question. I'm sorry. Can you mind just repeating that?", "duration_s": 3.019999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0015.mp3" }, { "study_item_id": "MR-0016", "partition": "locked_confirmatory", "call_id": "1909330", "exchange_index": 17, "question": "A quick question on the potential -- the 75 basis points of occupancy headwind for 2020. How much if any of that was already reflected in the year-end, 93% level?", "answer": "In the percent commenced?", "duration_s": 1.300000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0016.mp3" }, { "study_item_id": "MR-0017", "partition": "locked_confirmatory", "call_id": "2042728", "exchange_index": 7, "question": "So the $50 million or the $13 million, that's kind of baked in the cake. And based on your intentions, Rich, when we exit 2020, how much more annualized structural do you think you will have gotten out annualized? So not necessarily all in 2020 by the time we exit 2020. Incrementally, just do...", "answer": "No, I know where you're going. But let's give us another quarter because we've got some more of other actions in the pipeline. And when we get to the end of Q3, we can kind of give you some color on where we're tracking on the $50 million for 2021. But it's a bit premature right now.", "duration_s": 15.100000000000136, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0017.mp3" }, { "study_item_id": "MR-0018", "partition": "development", "call_id": "1833005", "exchange_index": 28, "question": "Okay. So we kind of thinking 18 months is the right way to be thinking about that, Shelley?", "answer": "Sure.", "duration_s": 0.42000000000007276, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0018.mp3" }, { "study_item_id": "MR-0019", "partition": "development", "call_id": "1828794", "exchange_index": 38, "question": "Okay. So no change. Okay. And then can you just talk a little bit further about cancellations of your products in the marketplace this quarter that we just finished and the early part of the quarter. Is it -- is that trend materially different for your various products in the U.S. and Europe than it was in the last quarter.", "answer": "It's Phil. It was a little bit weaker. We certainly saw a few more cancels in terms of the number of clients that canceled as well as cancellations within the core client base. But it wasn't a material difference versus Q4 of last year.", "duration_s": 13.66000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0019.mp3" }, { "study_item_id": "MR-0020", "partition": "locked_confirmatory", "call_id": "1703766", "exchange_index": 18, "question": "I'm trying to understand the comments about manufacturing costs going down a little bit in Q1 versus Q4 and then the back half improvement and juxtaposing against last year in a seasonally atypical period where margins decline in Q2 from Q1. You might have answered it, but I'm still a little unclear. Should we expect Q2 manufacturing margin to be higher than Q1 and then further improvement in the second half?", "answer": "No. What it will be is comparing to the comps for the last year, if you look Q1, obviously, this year was lower as a result of the tariff and freight costs. We expect those to moderate as we go through -- there'll be similar impact on Q2 because obviously those increases weren't fully in effect for most of Q2 last year and then obviously will moderate in the second half of the year.", "duration_s": 27.820000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0020.mp3" }, { "study_item_id": "MR-0021", "partition": "locked_confirmatory", "call_id": "1706145", "exchange_index": 28, "question": "Shane, I guess this question would be for you. From what I can tell the Saver Fare appears to be more mechanical and less dynamic today. First, am I correct in that characterization? And then is there potential to be more dynamic here and how do we think about what that could mean for revenue as we look forward here?", "answer": "Yes, Daniel, right. I think we've gone out initially with a pretty sort of flat approach. We really since we based on how far people are traveling and I think that's really what the industry has gone out with and more are less has docked with. I think there is we're starting to us the same question you just asked me. Is there a way to get a little smarter at the flight level to move the buyer around. Our goal with this would be classifiable at pretty low price. We would love to sort of maximized economics by getting a lot of people into the main cabin for that's the better product. And so we want to make that buy attractive to folks over time so we are very motivated to figure out how to get more dynamic as you say with this but this is probably a couple of quarters away. We really do need a little history before we start changing that goal a lot.", "duration_s": 54.98000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0021.mp3" }, { "study_item_id": "MR-0022", "partition": "locked_confirmatory", "call_id": "2051537", "exchange_index": 15, "question": "Great. And then, Steve, in the first quarter call, you talked about a cash flow sensitivity for every dollar move in oil was in the -- roughly in the $50 million to $60 million range. Is that still a good proxy to use? Or has that improved?", "answer": "No, that's still a pretty good proxy to use every dollar around probably close to the $60.", "duration_s": 7.179999999999836, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0022.mp3" }, { "study_item_id": "MR-0023", "partition": "locked_confirmatory", "call_id": "1765944", "exchange_index": 19, "question": "Okay. Helen, just based on the guide, it looks slack intangible assets and amortization is expected to fall off in the fourth quarter. Just wondering if I'm thinking about this correctly?", "answer": "Sorry, that you expect it to fall off you said?", "duration_s": 2.1200000000003456, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0023.mp3" }, { "study_item_id": "MR-0024", "partition": "development", "call_id": "1787203", "exchange_index": 13, "question": "Okay. Sounds good. And then it looks like Epoxy contracts in the U.S. settled down a little bit in July. I'm just wondering, are you expecting margin compression in Epoxy in the third quarter? Or do you think you will make that up with cheaper", "answer": "This is Pat again. I think we had price increases out there in May, and we got modest improvement traction on that pricing that you saw in the chart there from the index in that May, June time frame. No question with the lackluster demand in Asia and in Europe. We're seeing pressure on the margins, but we're also not seeing the -- any major increases in raw material costs. So we think margin should be pretty stable here as we go into the second half of the year in North America.", "duration_s": 37.600000000000136, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0024.mp3" }, { "study_item_id": "MR-0025", "partition": "development", "call_id": "1647101", "exchange_index": 11, "question": "Okay. So do you have any number you could share on what the ultimate NAV benefit is assuming you hit your still plans on an after-tax basis?", "answer": "Nick, this is Kevin. I mean, I think it's all premature. At this point, we've yet to even commence marketing. So we'll see over time what happens in terms of the sells we be close, not only this year but in succeeding years when most of the sale activity would occur. If you take Matt's comment about $150 million pretax value associated with the residential or condo portion, you just have to apply kind of a tax rate to that, which for rough numbers assume 1/3 is taxes and then the balance call it $100 million, is what we would hope to achieve on a pro forma basis in terms of net profit after taxes to our shareholders when all is said and done when we finally sell everything out. But we're early days in this, and we'll see what happens when we go down the path and market this and see if this is a path we ultimately want to pursue and then so what comes from that effort.", "duration_s": 52.679999999999836, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0025.mp3" }, { "study_item_id": "MR-0026", "partition": "locked_confirmatory", "call_id": "2326894", "exchange_index": 10, "question": "Raj, you guys impressively raised your dividend 25% to $1.10. And if we think about the historical 50% to 60% targeted payout ratio, this would imply EPS of $7.33 to $8.80 versus the formal guidance of $7 to $7.50. Can you help rectify that a little bit? Is it just conservatism reflected in the formal guidance?", "answer": "Okay. Great question. Let me start with, when you think about how we look at our dividend, the 50% to 60% is our target range, right? But at this point, given where we are with our cash on the balance sheet, we felt pretty good about going to the higher end of that range.\nSo as you pointed out, if you look at 60%, then we're right. It's closer to the middle of our guidance. So if you take the middle of our guidance, we're basically at 61% payout. So that's not that -- I would argue that's not that different from the 50% to 60%, especially given we're sitting at a $1.2 billion cash flow, and we expect to still generate significant free cash flow.\nAnd at the end of the day, when we look at our business model, this bill only -- the proposed dividend or the dividend that we actually announced this morning, only it's up about 50% of our free cash flow. So we feel really good about where we are.\nAnd also, just remember, the target is over time. We had a year where we're below the target. So think of this as a way to kind of make up for a little bit of that.", "duration_s": 61.559999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0026.mp3" }, { "study_item_id": "MR-0027", "partition": "development", "call_id": "2064936", "exchange_index": 4, "question": "Okay. And then just a follow-up on leasing. Spreads are obviously quite healthy this quarter. I'm just wondering how much of that was due to discussions that were kind of already in place ahead of COVID-19 issues and then kind of expectations on leasing volumes and spreads into the back half of the year? [indiscernible]", "answer": "Yes. This is Dave Jamieson. So in terms of our spreads this quarter, the majority of those leases were pre-COVID negotiated leases that were in process at the time prior to the pandemic hitting. So obviously, it should quite well. As it relates to a go-forward basis, I've said consistently in the past, it's always dependent on the population on a quarter-by-quarter basis. So it can vary fairly dramatically, one by the number of deals you do and, two, by those deals that qualify as a comp spread. That said, our below market portfolio enables us to absorb a bit of a cushion if there is a slight decline and still get that positivity out of a new lease that is executed. So we do feel good and comfortable going forward that we still should have some momentum. \nI'd also note that on the leasing side, the essential retailers, primarily grocers, off-price, et cetera, are really looking to expand during this opportunity where they see new vacancy that might come to market with great real estate. They want to make sure that they capture those opportunities to expand their market share. So the demand side will be there. We've seen it already with our anchor occupancy, obviously, holding flat year-over-year, which is quite positive. And on the small shop side, it was referenced -- you referenced the bankruptcy and as bankruptcies, and as those spaces do become available, it does give us that chance to upgrade into a more well capitalized retail tenant. So that is -- could be another positive on a go forward.", "duration_s": 98.03999999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0027.mp3" }, { "study_item_id": "MR-0028", "partition": "development", "call_id": "1644425", "exchange_index": 16, "question": "Looking at that 8th & Hope transaction, it was described as an arbitrage. And I'm just wondering, it looked like you bought all the stock in the last week of the quarter. Was it conceivable that you guys could actually sell the asset and buy the stock in a 1-week period? Or were you contemplating that maybe throughout the entire quarter?", "answer": "Yes. Hey, Wes. It's Mike. Yes. I guess we hoped to buy the stock if we could. If we didn't buy the stock, we thought that, that rates had increased to a point that there was still positive arbitrage just kind of smaller refinance, for example. So it was going to be positive arbitrage no matter what happened, in our view. But obviously, the opportunity to buy the stock back was the better outcome and we're pretty excited about it.", "duration_s": 25.360000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0028.mp3" }, { "study_item_id": "MR-0029", "partition": "development", "call_id": "1734704", "exchange_index": 16, "question": "And did you -- I mean I think we were all surprised by the strength in the first fiscal quarter. I mean did you -- is some of the weakness just potentially you saw some stockpiling you didn't see happening in Q1 that -- yes.", "answer": "No, no, no. I think as I said earlier, we were sitting here again in February thinking the quarter, this quarter evolved [as it was]. What we didn't anticipate was how quickly the pharma business slowed down in China and then as well as the lack of recovery on the food side. And then there seem to be this whole small molecule side in U.S. and Europe. So it really was a tale of the latter part of the quarter. We saw nothing unusual -- we can't point to anything unusual relative to our Q2 results.", "duration_s": 38.91999999999962, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0029.mp3" }, { "study_item_id": "MR-0030", "partition": "locked_confirmatory", "call_id": "1973669", "exchange_index": 19, "question": "Okay. Is there any way to just contextualize what you mean by as normal in April, whether as it relates to comps last year, if there was -- what type of delayed demand from late 2018 impacted April or you're talking normal seasonality? Or is there anything to help contextualize what April will like?", "answer": "What I would tell you is it was -- it's fairly normal compared to prior April. Yes. And that the spillover from fourth quarter of 2018, that was really a first quarter impact last year. So that really has no bearing on what we're talking about for April.", "duration_s": 22.139999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0030.mp3" }, { "study_item_id": "MR-0031", "partition": "development", "call_id": "1833834", "exchange_index": 33, "question": "Just wanted to follow-up on the China Fluids discussion. Can you help size maybe the benefit that you've had from this pre-buy? I don't know how to call it, but there are regulatory changes.", "answer": "No. I can just tell you that our estimates for Q3, we did better than we would have thought in terms of timing. Whether we can squeeze out some more growth in Q4, it remains to be seen. But we consider to be a headwind going into '20 just because some of the end of the transition. But I can't size it.", "duration_s": 21.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0031.mp3" }, { "study_item_id": "MR-0032", "partition": "locked_confirmatory", "call_id": "1973669", "exchange_index": 5, "question": "And just one quick, just a clarification. Illinois, California, you cited them as seeing increase in demand overall. How much of that was private versus public?", "answer": "So in California, it's across -- California has been -- in the first 4 months, has been good shipments across all 4 end markets. Illinois is more on the public side, both infrastructure with O'Hare work, toll roads. And then, as you know, we've got new funding coming on in Illinois for highways.", "duration_s": 24.12000000000012, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0032.mp3" }, { "study_item_id": "MR-0033", "partition": "locked_confirmatory", "call_id": "1784810", "exchange_index": 3, "question": "Mike. If you can follow back up on the Georgia IRP process and just altogether understanding the CapEx budget. I think guys have historically done solar and followed up after the fact that in reflect to that in your outlook, but how do you think about the cadence of reflecting the latest IRP developments here? And how do you think about your own participation in subsequent RFPs and those about now?", "answer": "Julien, what's the point of the question is? How did we work with them on that?", "duration_s": 3.660000000000082, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0033.mp3" }, { "study_item_id": "MR-0034", "partition": "locked_confirmatory", "call_id": "1973669", "exchange_index": 17, "question": "If you just take a step back and think about the business mix from a higher level, you mentioned backlogs or some of the maintenance-type work and state lettings and obviously, you've got some ongoing projects in both the commercial and residential space. But when you try to contextualize this internally or when you do your stress test, what percentage of your revenue mix do you really think is at risk from a macro perspective over the next, let's say, 3, 6 and 12 months?", "answer": "Again, I'm sorry not to give you a clear answer to that because I just don't think there is a clear answer right now on it. We just -- we don't know the short-term or long-term impact of the shelter in places. And it's a very dynamic situation. Even today, as people start to lift it, we don't know what that means. We don't know on the private side. Again, we continue to see res. Homebuilders come back and build subdivisions. We see a few projects here and there postponed in the non-res sector. So on the private side, it's really going to depend on, is -- do these postponements get to be meaningful? So far, they have not. Or does what we have booked, does it postpone. Again, which we have not seen much of that at this point. So again, so far, so good, but I just don't think we have clear information either on the public side or the private side to predict that either short-term or long term.", "duration_s": 64.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0034.mp3" }, { "study_item_id": "MR-0035", "partition": "development", "call_id": "1704896", "exchange_index": 25, "question": "Great. And then maybe just one quick follow-up on that. So when you do put your -- when you come in and do the integration side of the work if it's not on top of logics, I mean, how does the mix on that project look for Rockwell? Because I would think -- maybe not -- there's obviously going to be multiple projects and they're all going to look differently, but can you just talk about the mix impact that you see in some of those projects?", "answer": "Sure. In general, it's going to be around the Rockwell average. And so the software is very profitable. When there's the delivery, that's more labor-intensive. That's going to be a little bit below our average. But regardless of whether we're providing the logics and the drives and so on along with the software and services, just add bucket. The Information Solutions and Connected Services has profitability about the Rockwell average and it has a higher degree of recurring revenue than the Rockwell average.", "duration_s": 33.98000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0035.mp3" }, { "study_item_id": "MR-0036", "partition": "development", "call_id": "1635649", "exchange_index": 12, "question": "Kevin Blair, just a clarification question for you on the revenue outlook. Does the 5.5% to 7.5%, does that bake in the cost of the Tier 2 instruments?", "answer": "It does include some level of Tier 2 instruments in there.", "duration_s": 6.849999999999909, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0036.mp3" }, { "study_item_id": "MR-0037", "partition": "development", "call_id": "1890919", "exchange_index": 36, "question": "Just a quick 1 again on coal. You said that you probably hit the worst of it in 1Q and then things kind of normalize from there if the benchmark stays where it is. Given your -- the kind of take-or-pays you have on the volume side and kind of the way the contracts reset. If the benchmark stays where it is for, let's say, the next 3 to 5 years, like forever, is all of the core impact going to be isolated in 2020? Or is there like another leg to come in 2021?", "answer": "Oh my gosh, Ravi. Coal benchmark stay here -- that's not going to be happy.", "duration_s": 10.660000000000764, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0037.mp3" }, { "study_item_id": "MR-0038", "partition": "development", "call_id": "1778699", "exchange_index": 28, "question": "I guess my question is did this just come about? Or you've been working on it for a little while? Or what was the genesis of it?", "answer": "This particular case, the gas detection business when we made the acquisition of Scott's safety, this was part of our strategy at the time of the acquisition. So this was -- we've talked about on portfolio how we think about complementing our organic priorities with acquisitions that leverage our fundamental strengths. Scott Safety was one of those that moves us into high-value space and personal safety marketplace. Gas detection, we identified that earlier, that wasn't part of our strategy and now we're acting on it.", "duration_s": 34.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0038.mp3" }, { "study_item_id": "MR-0039", "partition": "development", "call_id": "2037794", "exchange_index": 1, "question": "Right. Okay. All right. That's helpful. And then separately, Bill, I just want to see if you can give us an update on your thoughts around the potential deployment of the BlackRock Capital, if your thought process has changed at all since you completed the sale of the stake and if you could just give us just how you're thinking about ultimately putting that to work.", "answer": "Yes. No real changes. We're going to be patient here. I think, like I said in my script, it's -- we're in pretty early innings here to see how this all plays out. The fiscal payments that the government has put out, plus what the Fed's done, is -- effectively masked what are some pretty severe underlying problems in the economy. And depending on how fast that comes back and/or the government keeps providing stimulus, it'll tell us how much of that capital we need in the first place, and secondly, what the opportunities will be to deploy it. So we're going to be patient. \nThe strategy of trying to pursue bank-like acquisitions to help us expand our national franchise remains the same.", "duration_s": 57.75, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0039.mp3" }, { "study_item_id": "MR-0040", "partition": "development", "call_id": "1913086", "exchange_index": 1, "question": "Okay. Thanks, Doug. So organic growth at the RemainCo at Ecolab was up 3%, excluding ChampionX. I'm wondering if you could provide that for operating margin. Operating margin was up 60 basis points in total, I think is what you said. But what would that have been up excluding ChampionX?", "answer": "In fourth quarter?", "duration_s": 0.9400000000000546, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0040.mp3" }, { "study_item_id": "MR-0041", "partition": "development", "call_id": "1643972", "exchange_index": 37, "question": "Just a quick one here. You mentioned on liquidity it's strong, and you don't have very high cash needs to your balance could you quantify what your minimum cash level, is that you're comfortable running with?", "answer": "Yes, we're kind of said, while playing out the revitalization program, I think [ 750 ] is probably a good area, anything above that, we're pretty comfortable.", "duration_s": 9.480000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0041.mp3" }, { "study_item_id": "MR-0042", "partition": "locked_confirmatory", "call_id": "1902228", "exchange_index": 13, "question": "Got it. Then just a quick one on acquired revenue, how should we think about any contribution from -- you said a small contribution in Q4, any contribution from the 2 acquisitions in the 2020 number?", "answer": "Yes, we've just rolled it in into the total. And I think the comment I gave was it was far less than 1% in the fourth quarter. I don't really see that changing for the balance of -- that I have visibility to in 2020?", "duration_s": 10.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0042.mp3" }, { "study_item_id": "MR-0043", "partition": "locked_confirmatory", "call_id": "1909330", "exchange_index": 28, "question": "And then Amazon is opening a low-cost grocery store format in 2020 as an alternative to Whole Foods and Amazon Go. Will your properties see any of these openings? And if so, any store details you're comfortable sharing?", "answer": "Just as we answered that question last quarter, we're unable to talk about anything at this point.", "duration_s": 5.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0043.mp3" }, { "study_item_id": "MR-0044", "partition": "development", "call_id": "1717515", "exchange_index": 24, "question": "I wanted to follow up on the last question in this question, understanding that the heavy lifting on the disposition side is behind you, but given the stronger pricing demand and lower rates, you just outlined, Ross, I'm curious, how likely is it that we could seek and go be a bit more aggressive in selling assets this year? Perhaps not close the level of last year, obviously, but just curious how the improved demand and pricing environment make play a role into your thinking of dispositions?", "answer": "Yes. We're certainly pleased with the demand and the execution. But we're very focused on staying within the $200 million to $300 million that we've outlined. So we have the capital plan in place that really puts us in a position over the next few years of where we want to be to fund all of our [indiscernible] on the development in Signature Series and to continue to focus on balance sheet. So while they may change for the better on the dispositions over the course of the year, we're going to stay on track with what we've outlined. I think the other thing I'll add is if you look at how the portfolios really transformed, [indiscernible] point of that how is it really starting to shine, a 2.9% same-site NOI growth last year were also really strong start this year. The portfolio is producing the things that we would expect it to produce. So when we're going through the the disposition analysis, we're really looking where risk was? And where we sort of downside risk and that's we want to move out of those markets and those assets. The portfolio was very, very strong today, and it's producing levels that we think are really consistent and long-term growth looks.", "duration_s": 75.18000000000029, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0044.mp3" }, { "study_item_id": "MR-0045", "partition": "development", "call_id": "2065334", "exchange_index": 5, "question": "And then the other thing, just in terms of the phasing of the benefits to profits from the restructuring efforts that you've already taken? How should we think about that phasing in the back half? \nAnd then as we think about -- I know that you mentioned annualizing it in 2021. But in the back half, that should be an offset we would -- I would assume, to some of the other headwinds that you're seeing. But you're saying that the other headwinds will be more than that?", "answer": "Sorry, your question is on the savings, how are they going to phase in. Was that your question?", "duration_s": 4.279999999999973, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0045.mp3" }, { "study_item_id": "MR-0046", "partition": "development", "call_id": "1833988", "exchange_index": 5, "question": "Okay. Just -- I guess, a follow-up on that a little bit further. Are there contract shifts in the intermodal and coal side that might account for part of the? And I guess in terms of the PSR impact, sometimes you make big changes too, as an example in Chicago, the terminals you're using and you can cause some initial disruption to the customer, but then obviously you hope to run better in the future. But is there an impact from contracts or kind of initial disruption from PSR?", "answer": "Yes, Chris, I'll take that mix of questions. The short answer is in terms of design of our network in the intermodal space, there has been small single-digit impact on intermodal volume from rationalizing a low-volume lanes, low-density lanes. That made sense in the book of business, it still makes sense. And when you aggregate that back up to the entire railroad, it's really largely an asterisk. \nWhen you get into the other parts of your question about contracts, we don't talk specifically about customers but I -- but we did call out both in the first quarter and I think Kenny mentioned it again this quarter that we did have a [ coal ] contract change hands that's impacting this year to a degree and we haven't talked about any other contracts besides that.", "duration_s": 53.74000000000024, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0046.mp3" }, { "study_item_id": "MR-0047", "partition": "development", "call_id": "1712053", "exchange_index": 22, "question": "And then Jeff, you had mentioned that in your guidance, assumes that the Sprint T-Mobile deal is approved, if it's not approved, does that mean that those numbers are higher or lower?", "answer": "Well, we don't know. I mean we have to see what comes. I mean it's hard to -- we don't really know what the plan B is if there is one.", "duration_s": 13.919999999999845, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0047.mp3" }, { "study_item_id": "MR-0048", "partition": "development", "call_id": "2352893", "exchange_index": 21, "question": "And so what would be the yield differential between joint ventures and on balance sheet development?", "answer": "Yes. That's a great question. We spent some time talking about that in some real-life examples. So I'm going to ballpark some of these numbers and would ask you to stick with me for a minute and Alex can sort of supplement that. But paying promote does not have a terribly material impact on the yield even in a fairly successful deal. So we thought about a deal where the unlevered IRR of the deal was something like 11% or 12%. And I believe it changed the acquisition yield for EQR from 5.4% to 5.2% cap rate. It had a -- that's not 0, 20 basis points is real, but it -- when you think about the fact that EQR doesn't have to carry all that overhead doesn't have dead deal cost, doesn't have failed deal cost and could be expert capital allocators. I mean we all learned about some costs in business school, but it's still really hard to let go of a deal you've worked on. \nWhen you're in our position as a capital allocator, not as only a developer, you're in a better position to pick and choose the opportunities that suit us best. Alex, do you have anything? I would just add that the developer is typically a really small part of the equity -- overall equity. Typically, 5% to 10%, we're 95% to 90%. So that's why it doesn't really change the return to us as much as you might think.", "duration_s": 74.34000000000015, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0048.mp3" }, { "study_item_id": "MR-0049", "partition": "development", "call_id": "1718461", "exchange_index": 22, "question": "So you haven't changed your expectation in terms of the contribution from Microsoft is that correct?", "answer": "Based on 1 quarter Q2 guide, no, we'll have to see the second half, again [Indiscernible] will know better. Does that make sense.", "duration_s": 12.629999999999654, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0049.mp3" }, { "study_item_id": "MR-0050", "partition": "development", "call_id": "1793250", "exchange_index": 35, "question": "Automation Solutions, Dave. The China continues the investment incurred and that's been helping a lot of companies there in cycle. But what are some of the within AS that have been made before better than you thought in that region? And, which are the ones that are losing some steam versus your expectations? I have a follow-up after that.", "answer": "So you're talking about China specific, Deepa is that what you said?", "duration_s": 2.9600000000000364, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0050.mp3" }, { "study_item_id": "MR-0051", "partition": "development", "call_id": "1699403", "exchange_index": 51, "question": "Shelley, another one for you. If we think about the first quarter, you -- now a little bit more pricing pressure being put on carriers. You had some weather, probably very poor utilization, rising fuel prices, I think, in February. Do you think that the carrier base in ICS, is that sensitive to those items as they were? Meaning, do you think you could see some carriers start folding or is that way too early in the process to be thinking about that?", "answer": "I don't know if I could answer for that. One of the efficiencies that we're driving through the platform is just helping the carrier find the right load for the right track at the right time. So for them getting the right load in the system. So today, they're having a hunting package and trying to find a load that would fit them. The elimination of empty is solicited [indiscernible] to the Truckload report. We recorded the highest in the industry, the highest percentage [ empty ] in the year 2018 at 12% over a 15-year period. There just makes no sense when you have technologies that can create a match. So for us, the change that's happening on prices is a direct result of helping them find better loads. Certainly, the market's readjusting so the spot rates that were out there at onetime, hopefully, those couriers haven't built a complete model on spot. I know we certainly don't. But the platform isn't just about -- it's not really about bidding the rates against each other, it's really about creating the most efficient way to move that good, and that's by finding the right carrier at the right time.", "duration_s": 62.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0051.mp3" }, { "study_item_id": "MR-0052", "partition": "locked_confirmatory", "call_id": "1703486", "exchange_index": 41, "question": "I want to circle back to the productivity measures on Slide 10. Just that '19 to '20, '20 to '21 ramp sort of 15% gains in T&E productivity after the 2019 period. One would think that most productivity programs like you've get a front-end loaded benefit, not a back-end loaded benefit. What specifically is going to change after this year that's going to get you that material shift in T&E productivity into 2021?", "answer": "Well, Mike talked about iterations of TOP21 with more to come in 2020 and '21 after we implement the first phase of TOP21 this year. So that's what's behind the further increases in T&E productivity in the out years. I will say this, our overall strategy is to take away the work and then push labor productivity, but we want to make sure the activity is out of the network before we work on the labor productivity side of things. So for that reason, T&E productivity is a little bit back-end loaded.", "duration_s": 34.23999999999978, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0052.mp3" }, { "study_item_id": "MR-0053", "partition": "development", "call_id": "2036725", "exchange_index": 4, "question": "Okay. Because I'm thinking, all right, you've got the inverse of the right-hand column could be construed as what should be expected to become delinquencies over time. And I'm wondering, as a follow-up question, you mentioned during the prepared remarks that if your assumptions are realized that you could be basically close to fully reserved for this cycle. Maybe you could give us a sense as to which assumptions you're talking about because I know you're expecting an outcome that's worse than your base case. So I was just a little confused about what I should assume your base cases and what assumptions you're pointing to that, if realized, you're done on the reserving?", "answer": "Sure. So first of all, there are a lot of assumptions, given, as I said, the visibility is still quite low. So assumptions around the economic outlook, and I'll come back to that, assumptions around consumer payment behavior and then assumptions around stimulus. \nSo going back to the economic outlook, we have 5 different scenarios. We did lean in more heavily to the downside scenarios relative to what we would have otherwise done. Even the Fed has put equal weight on downside scenarios and their base case. So we certainly thought having a conservative bias there was the prudent thing to do. \nAnd so as you look at that Slide 5, that is just the base case. So you can see there exiting this year just under 11%. When you then look at the weighted outcome of unemployment across the 5 scenarios, we end up with double-digit unemployment through the first half of 2021 versus what you see on Page 5 there is just the base case, which shows some improvement relative to the fourth quarter getting down to just under 8% by the end of 2021. Betsy, so I just clarify, the base case, if you took Morgan Stanley's estimates or Mike Feroli's or JPMorgan or the Fed estimates for their base case, that is basically the base case. Embedded in that are all these assumptions about stimulus and PPP and all these other things, but that is the base case, and we're reserved more than that. So therefore, if the base case happens, we may be overreserved. I hope the base case happens.", "duration_s": 99.51999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0053.mp3" }, { "study_item_id": "MR-0054", "partition": "development", "call_id": "1833249", "exchange_index": 2, "question": "Okay. And if I could just ask one more. On the expense side or at least the operating leverage side, I know you expect -- you're still confident in positive operating leverage for the year for '19. Can you just talk about your expectations for '20 in terms of the magnitude you may be looking to achieve for the year?", "answer": "Hey, John, it's Rob. Yes, absolutely. For 2019, we feel very good. We've run with positive operating leverage all year, and we expect to complete that for the full year. 2020, it's premature. We haven't started our budgeting process yet. So we haven't worked through it all. So don't have anything for you this morning on that. But we'll get to it later in the year and certainly, on our fourth quarter earnings call.", "duration_s": 22.019999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0054.mp3" }, { "study_item_id": "MR-0055", "partition": "development", "call_id": "2036829", "exchange_index": 9, "question": "So a 10-second summary, your $28.5 billion of reserves, as we stand here at July 14, reflect all that -- the 8% contraction in Mexico, some spending come off, some spike in cases and everything else that's out there now. It's not like the first quarter where you had all this new information. The $28.5 billion is your best estimate now for your future losses under CECL?", "answer": "Yes. And then the one correction I would make to that, Mike, is it's not again, we closed in our view is as of the quarter end. It's as of June 30. But again, the models are very sensitive to unemployment. They're insensitive to GDP. And as we went through last quarter, as we were doing different flashes, those numbers moved around. So again, the models are sensitive to those inputs. And my guess is as those inputs continue to change, there'll be variation. But absolutely as of quarter end, we are comfortable with where we set those and the reserving around that.", "duration_s": 36.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0055.mp3" }, { "study_item_id": "MR-0056", "partition": "development", "call_id": "1704896", "exchange_index": 33, "question": "Hopefully, I'm live again. I was asking outside of auto bringing down your full year organic guide by about 50 basis points, are there any end markets that look materially better or worse with implicit in your full year outlook versus how they looked a quarter ago?", "answer": "Justin, I would say no. There's always some puts and takes that move a little bit, but it's really auto that was the big mover of all our verticals.", "duration_s": 7.420000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0056.mp3" }, { "study_item_id": "MR-0057", "partition": "development", "call_id": "2267021", "exchange_index": 1, "question": "That's a perfect segue to my follow-up question, Hassane or that, Thad, either one of you guys. The utilization, I think that you said is that 85% already. It's good to see that back to normal levels. Can you talk about some of the drivers of gross margin going forward? The product optimization you just mentioned Hassane is an obvious one, but I assume that's going to take a little bit of time to bear fruit. So the second quarter gross margin is showing a nice pop, is that simply the utilization rising again? And kind of what are the steps to get that gross margin from the 36.5% to 37% up to your target range with before handle?", "answer": "Yes. Look, we have launched a gross margin initiative corporate wide. So there's not a single pop that caused the margin in Q2 that we guided to. It's really across the board. Of course, some of it is utilization, but we have a laser focus on cost optimization within the supply chain. We have been talking strategically with our customers about some of the cost increases that we have seen and how we pass some of those on. There is operational efficiencies that we have been doing. We've seen some of that start in the first quarter. And that's why I called it the favorable and sustainable moving forward, that's kind of where you're going to see us clicking up. Utilization will get better over time. But more importantly, where the lift for gross margin is going to be is what I mentioned in the prior answer, as we start shifting more of our internal capacity to higher gross margin products and offloading the, call it, the legacy or the harvest product line, that's going to create a mix shift to the higher gross margin. That will come, of course, with better utilization.", "duration_s": 71.46000000000004, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0057.mp3" }, { "study_item_id": "MR-0058", "partition": "locked_confirmatory", "call_id": "1651258", "exchange_index": 11, "question": "Okay. And just on some entertainment, Star Wars, DISNEY PRINCESS 2019 outside of being a big movie year for you, anything you're planning to do differently that you're able to talk about on those 2 properties?", "answer": "I think Star Wars did have a difficult year as you compared Solo to Last Jedi film from 2017. We were very excited about what Lucas Film and Disney have put together for the year a difference is going to be well supported with new entertainment and also experiences this year for the first time. We're going to be delivering innovation and marketing programs directly to kids. We have GalXC and Avengers, which will support, which is a kid-focused initiative wish you were short content on their Star Wars YouTube channel. There's also new entertainment experiences because is an all-new TV series with executive producer by John Barber the conditionally plus. Will also seeing an opening of a major new theme park land with Galaxies Edge, which is both in Anaheim and in Orlando, and then, we get to the end of the year with the movie Star Wars: Episode IX, which debuts in theaters in December and that impact from the film and all of our efforts will reach across both 2019 and 2020. So we're really excited about a full year effort, lots of really good product, very innovative products throughout the year corresponding to the entertainment. And then, Princess no sorry", "duration_s": 80.14000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0058.mp3" }, { "study_item_id": "MR-0059", "partition": "development", "call_id": "1772982", "exchange_index": 19, "question": "Okay. That makes sense. My second question is kind of high level, Jim. You've seen precision reloading implemented a couple of times, either directly or from a distance. And each time, it's led to a fairly significant service disruption, which once gotten through, it becomes a weapon and a tool to improve service, but there's always that initial phase of service disruption.\nI'm hearing from Lance and perhaps chime in. And looking to do at this time without having the service disruption. What is going to happen? I mean 10% workforce reduction. These kinds of things lead me to believe that our customers going to be affected. Can you help me get comfort that the comfort -- that the customer's not going to be affected with this time in terms of this movement to PSR?", "answer": "Walter, the history, you're correct. So let's not rewrite history. That's the way, there was a lot of noise. I was involved with some of it and there were some noise. What we're doing here is we're trying to keep the noise down as much as possible, being really smart about how we do it. Listen, I had a plan the first day I showed up, I wanted to park 500 locomotives. I didn't park 500 locomotives per state. I said let's work through this in a systematic way. We make it more efficient. We look at the touch points. We see where we are.\nI had a plan with Proviso from when I used to work at another company, CN, okay. In Chicago, I went to visit Proviso. I didn't like that yard when I was on the other side. So it was going to happen, but we did it at the right time, right place and that's what it's all about, Walter. We're trying to do this in a systematic manner instead of holding it up and see what you can put together after all the pieces. So hopefully we keep the noise as much. But Kenny knows there's going to be some noise, and we talked about it. But I'll tell you what I give Kenny and the whole team a lot of credit. We're being proactive. We're getting out in front of it. We tell the customer what we're doing. We tell them what -- when we made the changes in [indiscernible] we told them, we gave them a chance to change their processes instead of just putting them in place. We're doing that specifically to try to keep them in. We understand how important the customer is to us. That's what drives our whole business model. So that's the way we're doing it, Walter.", "duration_s": 82.29999999999973, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0059.mp3" }, { "study_item_id": "MR-0060", "partition": "locked_confirmatory", "call_id": "1957381", "exchange_index": 32, "question": "No. I understand that part. I'm just wondering if we're in the third, the fifth or the seventh inning of this adoption cycle.", "answer": "I don't know. I don't know. Like I said, we haven't had time to -- with everything that's going on, we have it time to size it from a total market. And as we've said numerous times, from a revenue point of view, it's all over the map, depending on whether you're doing full dispenser units or just kits.", "duration_s": 18.620000000000346, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0060.mp3" }, { "study_item_id": "MR-0061", "partition": "locked_confirmatory", "call_id": "1700948", "exchange_index": 21, "question": "Got it. And I also I believe you guys filed with the STB for [indiscernible] rights agreement with Norfolk Southern. Can you give us a little more color there? Is that just temporary thing to get past the weather issues or is it more of a longer-term solution?", "answer": "Ravi, I'm not sure exactly sure what you're referencing there. I will say that we have coordinated with other railroads through these weather events and are still doing some of that with railroads. That's just part of normal course of business when we face significant traffic disruption.", "duration_s": 18.039999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0061.mp3" }, { "study_item_id": "MR-0062", "partition": "development", "call_id": "1961614", "exchange_index": 13, "question": "Great. And a quick follow-up. I know you won't feel the raw material impact or lower raw materials for the second half of the year. But can you maybe talk about directionally, given where oil is at, what you see in the basket as you head into the second half of the year? Is it could it be down double digit? And maybe talk about each of the paint buckets in terms of the direction.", "answer": "Well, I think right now, I think directionally, it's all we're going to say right now is it's down. It will depend upon July 1 type pricing, because solvents are immediately passed through, we'll start to see some of the resins benefit. But at this point, I think I would, given that it's going to be so little, and we'll have another chance to talk again at e end of the second quarter, I think I'd rather defer when we have more visibility into that number.", "duration_s": 30.889999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0062.mp3" }, { "study_item_id": "MR-0063", "partition": "locked_confirmatory", "call_id": "1885924", "exchange_index": 15, "question": "But it's not -- I guess, what people are trying to figure out, is there any pickup in Refinitiv? Is there anything going on, on the Cap IQ side that's becoming kind of nipping at your heels? Is there any change in any of that stuff? I guess, that's -- I'm going to get to? Or is it just --", "answer": "Well, when I look at the competitive win loss. We're still, I think, doing well from our market share -- taking market share standpoint.", "duration_s": 8.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0063.mp3" }, { "study_item_id": "MR-0064", "partition": "development", "call_id": "2213536", "exchange_index": 14, "question": "Because you're saying that the rate base is growing at 8%, right? And then you're saying the earnings growth is the upper half of the 5% to 7%, right? So let's just say, 6.5%, right? So I'm trying to understand it, the delta between 8% and then, say, 6.5% is solely a function of the equity dilution or is it some, I don't know, assumed lower ROE or something to that effect?", "answer": "No. It's primarily the equity issuance would be the driver there. I mean, even for 2021, you have to keep in mind that, as I mentioned in my comments, we closed out a forward contract in March, and then we had additional shares that we issued in June. So all of those now get into a full year of 2021 that didn't impact us in 2020. And then as we do the treasury shares and move in the $700 million that I discussed, that would be the primary mechanism that would be causing the difference.", "duration_s": 42.24000000000024, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0064.mp3" }, { "study_item_id": "MR-0065", "partition": "development", "call_id": "1862178", "exchange_index": 24, "question": "And maybe just as a follow-on, did you think your local market scale access in even bigger advantage in that type of market than what we've been seeing? And how does that play out if?", "answer": "Well, absolutely. I think it's a local market scale. I think it's also our commitment to drive consistent production at each flag. So we get the trade base into the communities. We -- our absorption in our typical community is very, very high. And so we keep them there. And they're not out looking for work while they're waiting on us us to start houses. So it's just a process. It's something we've been working on for a long, long, long time. And I think we do have a loyal trade base and and good markets by market say, now they're going to get paid. So that is a competitive advantage for us.", "duration_s": 46.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0065.mp3" }, { "study_item_id": "MR-0066", "partition": "development", "call_id": "1835912", "exchange_index": 29, "question": "Is there any particular region or part of the contract that saw that improvement?", "answer": "Got to believe it has something to do with providing great trucks to our customers. And I think it is really a part of it at the end of the day. i think that we've been able to get to our record market shares in Europe and hold onto that share because people are experiencing a fantastic trucks and saying they want some more of those.", "duration_s": 15.840000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0066.mp3" }, { "study_item_id": "MR-0067", "partition": "development", "call_id": "1641994", "exchange_index": 13, "question": "Okay. And quick follow-up on Europe. I appreciate the de-risking, the guide down a little bit. But can you help us how the orders were in the fourth quarter year-over-year?", "answer": "Let me just -- if we can -- our orders while we look forward the numbers. We had a very strong December in Europe. Yes, fourth quarter orders were up 8% and for full year order were up 17% in Europe.", "duration_s": 17.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0067.mp3" }, { "study_item_id": "MR-0068", "partition": "development", "call_id": "1640196", "exchange_index": 14, "question": "Okay, got it. And just a follow-up. Given the pricing environment that you mentioned, going ahead in 2019, and the potential loosening of truck markets and maybe a broader macro slowdown. Can you just clarify your broader strategy in pricing going forward? Are you happy to push for more pricing gains even if that means a loss of volumes? And shippers from rail to truck?", "answer": "Ravi, our strategy to when it drives shareholder returns. And this is a great environment to push our price. And we're going through a bid season right now in the intermodal network. And we're seeing continued strength there. So I'm very confident in our ability to continue to price through 2019. We've talked about that basically it for over the past year that 2019 was lining up to be a strong pricing year. And we still see that. And we're expecting the momentum that we created in 2018 to carry over in 2019.", "duration_s": 34.69999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0068.mp3" }, { "study_item_id": "MR-0069", "partition": "development", "call_id": "1641855", "exchange_index": 12, "question": "And then my second question would be going back to the Fluids business again. Talk about any updated thoughts around the U.S. retail fueling build out, not just the revenue assumptions maybe for this year and maybe in terms of the EMV aspect, but also, I guess, how you're handling that in terms of working capital build, which was something you've mentioned once or twice on the prior earnings call.", "answer": "I'll deal with the working capital one and I will let Brad take the EMV because, of course, we always have an EMV slide somewhere around here. Yes. On the working capital side of DFS or retail fueling, I think we have -- the conversion in our orders was very robust in Q4. So we're go into 2019 with not a lot of inventory. What we do have is the receivable balance from that strong growth. So in total, working capital, we had highlighted the fact earlier in the year that we were going to build safety stock to accommodate what we thought was going to be a robust demand environment. We got it at the end of the day. But from a working capital point of view, if there's any negativity of growing, it's the fact that we hung it up on receivables. But I will leave it to Brad to comment on what EM -- how EMV participated in Q4 and what our view on EMV is for 2019. Sure. Sure, Rich. When I speak about EMV, just a reminder, I'm not talking about dispensers that are EMV ready. It's really the component pieces. And we stay on track and tracking very carefully. I would say second half of '18, including the fourth quarter, was above [ '17. ] So we came out of that air pocket in the first half sequentially, we go into '19 and we see growth in solid -- we see growth sequentially and solid year-over-year growth in EMV. I would say DFS, our business leadership, is really very confident in terms of how we're -- we see our line of sight to EMV for 2019 based on discussions with our customers and specific projects. So EMV is shaping up to be year-over-year up into '19 sequentially improving throughout the year.", "duration_s": 119.89999999999986, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0069.mp3" }, { "study_item_id": "MR-0070", "partition": "locked_confirmatory", "call_id": "1973669", "exchange_index": 20, "question": "Just wondering just on SAG, how much of the decline in the quarter was a lower share-based comp versus the cost actions you took? And how to think about SAG moving forward, both in a maybe a shorter or longer downturn?", "answer": "Yes. No, thank you for the question. Probably 3/4 or so, maybe 60% to 75% of the amount was share-based comp. I mean, that's basically tied to the share price. So we'll continue to report on fluctuations there. The other reductions that you saw in the SAG cost, I mean, we really teased those a bit in the fourth quarter when we talked about having looked across our corporate and field operational overhead base, and we made some adjustments there really around technology and looking for ways to be more efficient as well as ways from the corporate standpoint to better manage professional services. And therefore, we said back in February that we expected SAG to be lower for the full year, both in absolute dollars and as a percentage of of revenue. Certainly, that guidance was lifted as we lifted all the other guidance in the release this morning. And I would say that as we think about SAG, as we go forward in these times, I mean, we're always looking for ways to better leverage the overhead. Just like our operations group have detailed contingency plans by plant, we also have our contingency plans with respect to SAG. So we will, as we go forward, we will see which of those contingency plans are executed on the basis of what we see happening in the business.", "duration_s": 113.74000000000024, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0070.mp3" }, { "study_item_id": "MR-0071", "partition": "development", "call_id": "2252496", "exchange_index": 8, "question": "Got it. And Rob, did you say that you're not building in a second half pickup too much in your expectation?", "answer": "Yes. That is what I said, John, yes. Because at this point, conjecture.", "duration_s": 4.319999999999936, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0071.mp3" }, { "study_item_id": "MR-0072", "partition": "locked_confirmatory", "call_id": "2275717", "exchange_index": 27, "question": "Okay. And then I think another question is kind of briefly touched on, but just wanted to ask kind of a little bit differently on new rate for move-ins. What's like the current level of discounting going on? Like is it 1 month free or any kind of gauge there would be helpful.", "answer": "There's basically -- you name it. There's one free being given or there's waive in the community fees. There's just a kind of structurally lower rent being offered. Typically, care charges are never discounted. But rent and community fees are fair game and operators tend to give them upfront. So we can get the impact of the discounts behind us. But there's a wide variety of discounting right now in the market.", "duration_s": 32.16000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0072.mp3" }, { "study_item_id": "MR-0073", "partition": "locked_confirmatory", "call_id": "1901431", "exchange_index": 28, "question": "On the press release though, didn't you guys say high single-digit growth?", "answer": "No, we did not. We talked about what our long-term algorithm look like, but we did not address specifically anything for 2020.", "duration_s": 9.420000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0073.mp3" }, { "study_item_id": "MR-0074", "partition": "development", "call_id": "1776132", "exchange_index": 27, "question": "Okay. Got it. And just one last one on the deposit cost. You mentioned that piece of which the deposit cost should rollover. Is that mostly due to the index part and if so, than what you see happening with the non-index part, just the customer behavior?", "answer": "As far as the rates coming down, the index part move very quickly with the overall grade changes. And so it's more the administered rates that take some time to face in and so that's why we only see about 5 basis points of benefit in our deposit rates in the first quarter. And that would expect that to be up to 10 basis points in the second quarter. And so it really is more managing through the administered rates.", "duration_s": 23.259999999999764, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0074.mp3" }, { "study_item_id": "MR-0075", "partition": "locked_confirmatory", "call_id": "2178837", "exchange_index": 5, "question": "Got you. Got you. And I understand you cannot talk about Tikkurila. But if for whatever reason that transaction doesn't occur, can you talk about your M&A pipeline? Obviously, you've been very active in the recent past. Should investors expect that there might be other sort of transactions or would share buybacks come back into the fore?", "answer": "Well, Frank, as I think you've heard me say this in the fourth quarter, back in October, I will say the same thing now, it's January. I'll be exceptionally disappointed if we buy back any shares in 2021, our acquisition pipeline remains robust and remains active, and we continue to work in this area. And so I'm feeling confident that we will have further announcements in the back half of the year.", "duration_s": 28.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0075.mp3" }, { "study_item_id": "MR-0076", "partition": "development", "call_id": "1817002", "exchange_index": 4, "question": "Saket Kalia from Barclays. Nikesh, you talked about will transition to the term license model, for example, for the firewall business, which was good to hear. But you also even suggested that may be some cloud products could be priced similarly to the firewall. I think we mentioned that quickly. Could you just give some examples of that and when that could actually start to happen?", "answer": "So thank you, first of all, for asking the question I want to make sure I clarify. Sometimes our sales teams bundle our annual products into 3-year deals and sell them like they would sell an upfront cash payment, which allows us to get the cash flow just maybe get the cash flow for our firewall product and need 3 years is roughly the term for our hardware business in terms of contract durations. So that's all I'm saying some of the cloud deals end up being 3-year deals instead of annual deal so we still get the benefit of the cash flow, so which is why Kathy alluded to the fact that we're not anticipating large-duration declines over the next wee years. We believe [indiscernible] I'm going to say it. We believe that the duration decline will be approximately 10% over the next 3 years. And hence, we believe we are able to deliver -- we will be able to deliver the $4 billion of cash flow over the next 3 years.", "duration_s": 51.32000000000062, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0076.mp3" }, { "study_item_id": "MR-0077", "partition": "development", "call_id": "1847223", "exchange_index": 3, "question": "The first one on just sort of the initial commentary that you provided on 2020. So just it sounds like, I guess, the high level when we think about capital allocation, you basically said, is just the same kind of North Sea will be kind of flat year-over-year, Egypt based on the success you had, I assume, additional information you're getting from the that it should see an increased investment there? And then it just sounded like in terms of kind of Permian Alpine High more of a shifting of capital from an earlier areas Midland and Delaware. So when I think about just as a overall when I think historically kind of 70-30 U.S. international just, I guess, how much that could kind of change? Is it sounds like just international the only one kind of directionally going up?", "answer": "I would say, John, first and foremost, we spent more money at Alpine High, and that capital is going to come down. So that in itself will change those -- that percentages of The expiration in Suriname would be a little larger as well. So that also would tilt the international, but then we stated in the Permian capital was going to come down, but in general, the oil-based drilling is going to go up so.", "duration_s": 31.579999999999927, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0077.mp3" }, { "study_item_id": "MR-0078", "partition": "development", "call_id": "1705222", "exchange_index": 5, "question": "First question is you mentioned, Tim, the Ilim dividends of total of $900 million. I seem to recall if your investment in Ilim has been all in less than that. I think when you did that investment 10, 12 years ago. Could you just update on that, please.", "answer": "Yes. All in, it's roughly $685 million, Chip. So now we've recovered more than what we have in the investment.", "duration_s": 8.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0078.mp3" }, { "study_item_id": "MR-0079", "partition": "development", "call_id": "2037794", "exchange_index": 11, "question": "And then maybe in the meantime, and from an organic perspective, it still seems like there's a couple of areas that you could spend a little bit to try and grow. I mean I know mortgage has been kind of a frustrating area over the years, but there's been some dislocation in the industry, some peers. That still seems like an area that you could be bigger. Capital markets, you have [indiscernible] up and you saw some of that strength first half this year. But obviously, the really big kind of mega banks, they're getting the benefit in trading and investment banking from this unusual environment. So just thoughts on kind of organically or some of the bolt-on deals that you've done in the past, focusing on those 2 areas.", "answer": "I mean, look, I wouldn't rule anything out. Neither those necessarily fit the longer-term strategic issues we're facing. But mortgage is an interesting question because we've clearly seen some stress in the, I'm going to say, the noncapitalized mortgage players. And to the extent that becomes a structural change in the industry, which would in turn cause mortgage itself to be more profitable for banks, then we could look to grow that. At the moment, the structural challenges with the mortgage business is the cost to comply with various regulations, coupled with the capacity in the market, just make it difficult to make money. \nNow, of course, we're in another refi boom, and all that looks good at the moment. But long term, that's not necessarily true. If that changes and/or the government agency model changes such that you have to deploy capital to be in the mortgage business, then that could be attractive. \nThe capital markets business, we purposely have been careful in picking our spots in that. That is a business that in my experience returns more to employees than it necessarily does to shareholders through the cycle and offers lower returns on capital through the cycle. But maybe with some of the changes in Volker and the opportunities we're clearly seeing just in the ability to, in effect, broker trades and the margins in that, maybe we would expand that. But we can do that organically, we wouldn't need to at all purchase something to do that.", "duration_s": 115.16000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0079.mp3" }, { "study_item_id": "MR-0080", "partition": "development", "call_id": "1699602", "exchange_index": 11, "question": "A couple of questions. Just on the expense question, one more for 1Q. I mean, you came in with an extremely low expense ratio this quarter. Do you see that more as one-off due to the fact that the revenues were a little lighter and the capital markets for the reasons you mentioned earlier? Or is this a good number that as we look forward year-on-year to 1Q '20, you could improve them?", "answer": "Well, again, let me just take one step back. We've given our perspective on what we think 2019 and 2020 is going to be. We've said it's -- with all the investments we're doing, the increase in technology, the Merrill, the health care, everything we're doing, adding bankers, adding financial centers, we think because of digitization, because of all the efficiency, we think we can hold expenses at that 2018 level. That's how I would think about it. I If we just think about Q1 expenses, they were up approximately $150 million from Q4. Q1, obviously, included the normal $400 million-ish of seasonality of elevated payroll expenses. This was sort of partially offset by the timing of some tech initiative spend and marketing costs, which combined were kind of down about $200 million quarter-over-quarter. But we expect both of those to be up for the full year of 2018 as we continue to invest. We mentioned in the prepared remarks the deferred comp issue, which had a quarter-over-quarter effect. I mentioned the Merrill Lynch intangibles which is about $75 million. But having said all that, for the year, is what I would focus on, we think we're going to be at $53 billion [ unchanged ].", "duration_s": 89.77999999999975, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0080.mp3" }, { "study_item_id": "MR-0081", "partition": "development", "call_id": "1958825", "exchange_index": 1, "question": "Okay. And then could you give us a sense for how much train starts are down in April? And then in terms of just headcount declines, do you think you can continue to outpace volume declines in the next quarter? And if there's any way to sort of parse out what percentage you think would be structural takeouts versus how much would likely come back with the recovery in demand?", "answer": "Okay. So far, I'll tell you, the team has done a spectacular job. We have -- actually, our train size has grown in April, not come down. So we are full bore, everyone's on looking at how we make this place with what the traffic that's offered to us and make it the most efficient. So it's actually gone up in size -- train size in April. You'll see that when -- as we report next or you'll see it from how we talk at different conferences. \nAs far as people, I think we've done a great job of staying ahead of the game. There would come a point where it's difficult to stay ahead of the drop in business. But so far, even up to this point right now, with the traffic that we see in April, we've been able to stay ahead and be productive in that we are dropping more than the adjustment in business. But I'll tell you, I'm no -- there's a certain point when it's impossible to do. So we're not there yet.", "duration_s": 55.37999999999988, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0081.mp3" }, { "study_item_id": "MR-0082", "partition": "development", "call_id": "2048019", "exchange_index": 30, "question": "Good to hear. And then secondly, I wanted to follow-up on e-commerce. Are your margins through the e-commerce channel today, higher, lower or similar to the same sale through a traditional channel? And as you continue to grow rapidly from a smaller base, how might that evolve? Just trying to get a sense for if and when this could become a meaningful swing factor in margin analysis moving forward?", "answer": "Kevin, I think you should model it in as basically the same margins.", "duration_s": 9.170000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0082.mp3" }, { "study_item_id": "MR-0083", "partition": "development", "call_id": "1852493", "exchange_index": 8, "question": "Okay, that's helpful. And then in terms of the dividends from BLIC next year, can you give us a sense of time frame? And just how we should think about -- thinking about capital at the hold co- and potential share repurchases in 2020?", "answer": "Elyse -- sorry, I just have to go back to pointing you to the unassigned funds of $1.2 billion, and I guess one piece of additional color I would add is that I think I'm going to anticipate what I might get here on this topic of the unassigned funds because I just said we had unrealized gains in hedged portfolio drive the DAC increase in the improvement of unassigned funds. So I'm anticipating someone like say, what happened how should we think about unrealized gains and what that means for both of those numbers. If we go back to when we first started talking about VA reform in 2018, we had communicated that we thought there would be a material benefit to our total adjusted capital from VA reform. And at the time, interest rates were more than 100 basis points. I believe more than 100 basis points what they are today. If we were to go back to where we were, if rates would have to go up 100 basis points, we would anticipate that these unrealized gains in the hedge portfolio would be we eliminated. But we would also anticipate that our reserves would come down by a similar amount. And so we would expect a total adjusted capital and unassigned funds would look pretty much like what you saw at the end of the third quarter everything else being equal.", "duration_s": 86.70000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0083.mp3" }, { "study_item_id": "MR-0084", "partition": "development", "call_id": "1792358", "exchange_index": 24, "question": "Great. And then second one, related to the deal. One of the great sort of things you guys have done over the years with the DOT you've taken on the data center consolidation kind of behemoth several times. And I know that this one started I think 3 years ago. How -- tell us how this gives you insight into getting the cost synergies with Worldpay? I'm assuming it's getting rolled in. And then what potential pitfalls do we have kind of joining the Worldpay data center project, which I assume is going to start soon, with the one that's ongoing? Is there any kind of -- how do we manage that risk?", "answer": "Well, it's a great question, Brett. I'd tell you global Seattle and his team have just done a phenomenal job with data center consolidation. We have over 80% of our digital applications now in the private cloud. We've launched -- we've announced publicly to our clients the availability of guaranteed of less than 15 minutes now, which the industries at 24, in some instances, 48 hours. So it's really, really gone well. And so naturally, as we put these 2 technology groups together, that comes under common ownership within FIS. And naturally, those data centers will become part of the overall consolidation plan in the future. So we feel very confident. We've got a great team geared up. We're well -- we're 3 years into this program. You're seeing the benefits drop to our bottom line. And we'll just keep the team now churning as we bring these groups together. So we have very high confidence on execution. We have very high confidence in taking advantage of the next-generation technologies, and it will be a key contributor to our synergy saves.", "duration_s": 78.23999999999978, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0084.mp3" }, { "study_item_id": "MR-0085", "partition": "development", "call_id": "1643972", "exchange_index": 6, "question": "I wanted to dive into Tubular a little bit because when you talk about the portion of your business at [indiscernible], some of that is around Tubular assets. So I was wondering, why that doesn't look a little bit better. Isn't it a bit more of an offset into the first quarter or beyond? And then just taking a step back on Tubular, like what is the right EBIT-per-ton that you see right now given -- assuming flat substrate costs like assuming flat [indiscernible] can you give us a rough amount to help us navigate when up or down. What you think the run rate earnings are on that business?", "answer": "Timna, to be honest, we haven't done that calculation because that's not really what we expect to happen. So I don't want to guess. It's not fair for you guys for me to guess the things we haven't actually done the analysis on.", "duration_s": 10.38000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0085.mp3" }, { "study_item_id": "MR-0086", "partition": "development", "call_id": "1778920", "exchange_index": 9, "question": "Sure. I mean, but given that, can you affect those changes by the first half of next year in that drilling program or is this more a second half of '20 program and you might just be willing to kind of eat lesser economics in the beginning of next year?", "answer": "Yes. I think we're going to have a better understanding on timing if we get a little bit more time here. I mean it's been 10 days. I think we've done a good job in identifying some of the issues and now it's -- what's our confidence in being able to align the schedule to meet and our minimum development criteria, and that's something we'll report back to you guys when we have better clarity on that in the future.", "duration_s": 28.139999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0086.mp3" }, { "study_item_id": "MR-0087", "partition": "development", "call_id": "1856605", "exchange_index": 14, "question": "The Majority Q4?", "answer": "I would say there is more a risk in 2020 than in 2019.", "duration_s": 3.8400000000001455, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0087.mp3" }, { "study_item_id": "MR-0088", "partition": "locked_confirmatory", "call_id": "1783486", "exchange_index": 22, "question": "I wanted to talk a little bit about your 2020 guide. In particular, this year, you decided not to include a margin guide in 2020. And I just wanted to get into that a little bit. Obviously, there's a lot we can't know about what the next year's going to bring in terms of the economy and demands from rates. \nBut there are 2 things, 2 factors that I think we can maybe think about qualitatively. One is the margin on spec; and the second is the lumber benefit, which you're seeing near term. \nOn the specs, David, I believe you mentioned that you thought that margins on specs are usually a little lower than the build to order but not right now, and in part because of the drop in rates. I mean, actually wanted to close quickly and locking those rates. That benefit to your margin on your specs relative to be, I would assume shouldn't -- we shouldn't assume that's going to continue unless rates drop further, which is not something that I would assume you would bake into your outlook. \nAnd then secondly, in terms of lumber benefit. I'm thinking, we don't know how much that was. I'd be curious if you could give it to us. But I assume that benefit shouldn't be assumed to continue in 2020 either. So these are 2 things that maybe would be in the margin next year. Are there material offsets to these things that you could point to that might give us some hope that margins could grow next year?", "answer": "Hey, Steve, it's Jessica. As we've kind of outlined, we did preliminary guidance with what we felt comfortable with today that we can commit to for fiscal 2020, and it's all subject to today's market conditions. We're going to focus, as we always have, on maximizing returns. And gross margin is going to be a product of both the overall market and what it takes from a pricing pace perspective community-by-community to maximize returns. And so we're not going to try July to give any sort of gross margin color for fiscal '20 other than continuing to make sure we're balancing pace and price to maximize returns. And Jess, I may have missed out. But just to clarify what I thought I said, the houses we sold and closed in Q3 were at a higher margin than if we would have sold and close the houses we sold and closed in Q1 in specs. Because incentives have abated, and we are seeing less of a need to incentivize a finished house to get it under contract and closed. But what I said earlier about spec margins generally being lower than build job margins is still true. That was true this quarter, and that would be in any base case scenario we have.", "duration_s": 81.55999999999995, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0088.mp3" }, { "study_item_id": "MR-0089", "partition": "development", "call_id": "1793250", "exchange_index": 12, "question": "And can you add anything about the color from Washington?", "answer": "Yes. Right now, nothing at all. I can't add anything other than what's going on. Obviously, very challenging negotiations and a lot of pushing back and forth. Again, I still believe this is something important and I do support it. It creates a lot of pain for me and obviously, for our company, but from my perspective, I do support 100% what we're trying to get done in Washington on the long-term trade benefits but we've got to get this thing done. It can't let sit thing for another 12, 18 months because it will definitely do what you talked about with some negative self-fulfilling prophecies.", "duration_s": 38.91999999999962, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0089.mp3" }, { "study_item_id": "MR-0090", "partition": "locked_confirmatory", "call_id": "1915754", "exchange_index": 2, "question": "It's Michael Bilerman here with Nick. And Debbie, thanks for working with your peers to standardize same-store, and we certainly appreciate that. 2 questions from me. From the fund that you launched, can you walk us through the process now of allocating acquisitions into the fund versus on the portfolio? It sounds like it's going to be both core and core plus. So what's going to be the factors of an asset or portfolio of assets going to the fund versus on balance sheet?", "answer": "Good. Well, we are excited about this. I've long admired Hamid and his success in this area, and I'm excited that we can use our infrastructure and platform to give investors a choice of how to invest in these core life science and medical office and senior housing assets. So the -- there are defined criteria, as you would imagine, for the fund. And over time, as the fund grows, which we expect and hope that it will, there will be just really a choice of which is the better home for the assets, making sure, of course, that we treat all of our stakeholders fairly.", "duration_s": 54.419999999999845, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0090.mp3" }, { "study_item_id": "MR-0091", "partition": "development", "call_id": "1639601", "exchange_index": 29, "question": "In terms of the backlog now at Aviation, do you have any NetJets Longitude orders in the backlog?", "answer": "We do. Yes. I mean, David, the way we do this is -- and we've always done this with Latitude is we basically as we firm up and commit the tail numbers and firm deposits on those aircraft, we move them into backlog. So it's usually about kind of a rolling 1 year look. And as their first deliveries will be in that Q3, Q4 time frame next year, those -- they firm those units up and deposits. And so they're in the backlog. So we had the NetJets units went into backlog. And we also had obviously, retail units going to the backlog in Q4 as well.", "duration_s": 32.70000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0091.mp3" }, { "study_item_id": "MR-0092", "partition": "development", "call_id": "1640196", "exchange_index": 39, "question": "All right, that's helpful. And then Cindy, just to clarify a comment you made, I think in, it should be about 80%. Is that inclusive of some the reclassification of some of the rental income of the above line? Or do is the trend to reconcile to 0 in 4Q this year to expecting like an 80% for the full year of '19 on that other net line?", "answer": "Yes, the 80% is -- we would expect for an annual run rate. I mentioned in my comments in the fourth quarter, we had about $25 million decrease year-over-year and returns on the company of life insurance. So that's what you are seeing in the fourth quarter. That was pretty unusual, it was tied very much to the market performance in the fourth quarter.", "duration_s": 23.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0092.mp3" }, { "study_item_id": "MR-0093", "partition": "locked_confirmatory", "call_id": "1635734", "exchange_index": 20, "question": "Are we playing golf yet? Or is that still far away?", "answer": "Credit is pristine. Mortgage credit is pristine. Middle market is pristine. Underwriting standards are pretty good other than a few little pockets that Marianne's mentioned, and we still saw people stretching in Auto. We saw some stretching, and we're not going to self-fund credit card, but a little bit of fuel stretching. We have leverage lending. We're not worried about all loan book. I think you've been having logical conversations but kind of the nonbank loan book, but that's not our concern, and it is what it is at the time. So. But I think where business are notably a little bit less relationship. So think about kind of loan relationships Commercial Term Lending, Real Estate Banking, mortgage, Auto, we're seeing we are losing or ceding share where it makes sense to do it. Yes, and competition you mentioned before it's back everywhere, and that's a good thing for America. That means pricing's a little tough and that you have to compete and.", "duration_s": 58.38999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0093.mp3" }, { "study_item_id": "MR-0094", "partition": "locked_confirmatory", "call_id": "1792796", "exchange_index": 0, "question": "Now that you've owned Esterline for a while, what -- really, what surprised you the most positively and negatively?", "answer": "Positively, I think the amount of opportunity we're finding. I think the way that the teams are identifying that with us and aggressively going after it, I think that has been just a breath of fresh air how much opportunity there is both on improving the operations themselves and in productivity and other items. But really, in improving the operations, there's a tremendous amount of opportunity. But that's also the negative is that finding businesses that, I think, are in times need some more capital injection, need to redo their operations, drive accountability. I think it all fits well with the TransDigm model. I also think some of the morale is maybe a little lower than it could have been. So I think the teams are responding very well to our leadership and systems we're providing. The other thing I'd add is on the downside, Kevin, I don't know that we've seen any significant downside if we didn't know how to go into it. Hopefully, that continues to be the case.", "duration_s": 83.72000000000003, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0094.mp3" }, { "study_item_id": "MR-0095", "partition": "development", "call_id": "1719407", "exchange_index": 0, "question": "So for the Mon Valley project, you've highlighted potential sources of funding of $250 million I believe you said from vendors and then also on secured notes as well as cash in the revolver. Can you provide a rough breakdown of the remaining allocation and also remind us of your targeted leverage metrics and what comfortable ranges.", "answer": "Yes. So we're in great shape, and I kind of talked about the timing of requirements. So I think overall, we would look to fill most of it other than the vendor supported with high yield. But we're going to be opportunistic, pick the right time. We want to make sure our message here is being absorbed, and so we're in no hurry to go out there until the market's right, and we need to. But I would say the majority ideally would be high yield and the vendor-supported financing.", "duration_s": 30.04000000000019, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0095.mp3" }, { "study_item_id": "MR-0096", "partition": "development", "call_id": "1644276", "exchange_index": 13, "question": "Maybe just on the leverage side. So including the joint ventures, now you guys rae at 6.3x debt to EBITDA. I guess, how does this compare to your target and kind of how and when do you expect to get there?", "answer": "Yes. So in terms of leverage, I mean, again, we want to get down to around the 5.5x consolidated net debt to EBITDA and then about a term less when you on a basis, including the joint ventures and the preferred. So somewhere in that approaching a 6.5x over time. Leverage will stay relatively the same as we go through the year, but you'll start to see leverage coming down as we look into 2020 with more and more EBITDA growth coming at basically the same debt levels. So you'll start to see it's coming down into 2020 and beyond.", "duration_s": 37.559999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0096.mp3" }, { "study_item_id": "MR-0097", "partition": "development", "call_id": "2223569", "exchange_index": 27, "question": "Okay. And then just lastly, can you talk just on Egypt that being still? Is it free cash flow independent, I assume, John and will continue to be?", "answer": "Yes. No, I mean we've got a good solid business there. We've built it over 25 years now. We reduced activity with when we had to everywhere. I think there's the opportunity. As Steve mentioned, we've got a lot of opportunity in Egypt. I think the new seismic and the new acreage is going to open some things up. And there's more to do there. But we're always working on preserving cash flow and those cash margins everywhere, and that's something we've been working on across the entire portfolio.", "duration_s": 32.40000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0097.mp3" }, { "study_item_id": "MR-0098", "partition": "development", "call_id": "1833834", "exchange_index": 25, "question": "Got it. That's helpful. And then I know you mentioned to it a few times on some of the various moving pieces on revenue timing. Any way to kind of size the totality of the revenue that might have been pulled forward for the fourth quarter and just for the sake of confusion so no one kind of gets that number wrong?", "answer": "Yes. We knew -- you can imagine as we were closing this quarter, and we knew that we're going to explaining this Q4 squeeze when we actually beat our own internal estimates for Q3 revenue in Fluids. That only made the problem harder. The fact of the matter is especially as it relates to process solutions to the extent that the product is ready and we can ship it, we'll be crazy not do it at the door and try to manage the Q4 number. So it's pumps and process solutions, especially Maag had an excellent Q4 last year. We recognize that in Q3, and I think that we've beaten this whole Fluids issue between the bad comp and the self-induced last year on the above ground and the fact that we performed very well in Q3 in China in Q3, and we would not expect that to do that again in Q4 on the underground side.", "duration_s": 58.13999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0098.mp3" }, { "study_item_id": "MR-0099", "partition": "locked_confirmatory", "call_id": "1885924", "exchange_index": 28, "question": "I think I missed the first few minutes of your comments, but I wanted to hear where any major cancellation fees that showed up in your revenues in the quarter, you guys just reported here?", "answer": "Cancellation fees?", "duration_s": 0.8600000000001273, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0099.mp3" }, { "study_item_id": "MR-0100", "partition": "development", "call_id": "1778695", "exchange_index": 21, "question": "Okay. And then second, as we kind of start looking at 2020, 2021, [ your ] CO2 compliance, can you help us balance out on the one that, it would seem to drive additional take rates across your product lines and install rates and how you're factoring that? And on the other hand, it's not lost on investors that the European auto market prickly in the mass market is a disaster from the OEM point of view and only going to get worse as these mandates come in, which could underscore both pricing pressure and/or ability to recover cost overruns. So how do you kind of think about your [ 2 to 3 ] outlook in light of those trends?", "answer": "So this is a question that I'd like to answer later in the year. We are -- we're currently going through the process of getting our arms around 2020. And with the volatility that we experienced, this is going to take some time. So I'd like to reserve my answer to a little point in time in the year.", "duration_s": 22.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0100.mp3" }, { "study_item_id": "MR-0101", "partition": "development", "call_id": "1900234", "exchange_index": 10, "question": "When you talked about the $250 million negative for pricing in 2020 if prices remain at fourth quarter levels, is that more front-end loaded? Does it primarily hit you in the first, second quarter? Any thoughts on how that flushes through?", "answer": "Let me clarify something. That's based on the -- that $250 million is based on the pricing we saw in January, not for the quarter.", "duration_s": 7.599999999999909, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0101.mp3" }, { "study_item_id": "MR-0102", "partition": "development", "call_id": "1835912", "exchange_index": 37, "question": "In U.S. and Canada, it looks like Class 7 growth was pretty healthy in the quarter and better than the market. And so I'm curious whether that's just sort of time...", "answer": "We can move on and maybe Joe can rejoin.", "duration_s": 7.7199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0102.mp3" }, { "study_item_id": "MR-0103", "partition": "development", "call_id": "1817002", "exchange_index": 37, "question": "Thanks for having the presentation and really compelling product vision. And it's great to see a value proposition that's not just -- you got to be secure because we're going to scare the crap out of you, but also, we're going to provide value...", "answer": "We do that out the field not here.", "duration_s": 1.7199999999993452, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0103.mp3" }, { "study_item_id": "MR-0104", "partition": "development", "call_id": "1919759", "exchange_index": 27, "question": "Correct. And just if there's any pushback from customers on the recent appliance price increases?", "answer": "Yes, we did see a small uptick in our discount rates this quarter. We feel like on the balance with the price -- the price increase that we took on product, we were still, at least on par, maybe a little bit better off with the price increase.", "duration_s": 14.840000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0104.mp3" }, { "study_item_id": "MR-0105", "partition": "locked_confirmatory", "call_id": "1700094", "exchange_index": 28, "question": "And then in auto, in the outlook that you've given for the industrial segment, sales outlook and the margin outlook, what is the auto assumption built in there? And to what extent is it derisked? Because it seems like you mentioned customers has their plans but maybe those plans can change sometimes.", "answer": "I think so far, it's tracking as we would expect. And the outlook that we're getting both at sort of the industry role of IHS kind of data as well as we're what hearing from individual customers in terms of their model mix and expected quantities that it's consistent with our plan. So I think we're in a fine shape in terms of how that business is positioned with respect to our guide.", "duration_s": 25.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0105.mp3" }, { "study_item_id": "MR-0106", "partition": "locked_confirmatory", "call_id": "1780827", "exchange_index": 5, "question": "Okay. And then just to come back to this kind of Canadian log issue. Can we get a general sense of what you think at current SPF pricing levels? Are many of the mills up there actually cash positive? Would you guess?", "answer": "Yes. Mark, it's really hard for us to speculate on the cost structure for our competitors. Really, what we can speak to is our mill in British Columbia, as I mentioned, we think that's a top quartile mill, and we can make money even at these levels. And so you can do the math. If we think we're a top quartile cost structure, that means our others aren't, at least not everyone. And so you can probably run your own math. It's hard for us to speculate specifically on their cost structure, though.", "duration_s": 30.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0106.mp3" }, { "study_item_id": "MR-0107", "partition": "development", "call_id": "2263154", "exchange_index": 25, "question": "And then there's obviously remediation work that is now going to be added to that. So instead of 500,000 hours, what would the total amount of construction hours look like, including all of the remediation that you need to do after high functional testing?", "answer": "So is the question how many hours remain after hot functional test of fuel load? Is that your question?", "duration_s": 10.740000000000691, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0107.mp3" }, { "study_item_id": "MR-0108", "partition": "development", "call_id": "1693639", "exchange_index": 27, "question": "Great. And then Marty, one last one. Just the clients scores with regards to the clients that are being serviced through the Chatbot's. How is that trending relative to more traditional?", "answer": "Yes, very good. We look at it from a number of ways. We don't always get them to do enough clients sack, but you get to that -- we watch it very closely just had a meeting on this, earlier this week. How much is -- how many of the questions are answered in the first question that they asked. How many are going to a service provider, because they're not getting the answer. And that's being free finalized at that time. What we're seeing is that increase from 40% are being answered by the Chatbot itself now up to 45% in just a month. And I think if we look out 3 months or 6 months from now I think that would be -- we are hoping that, that is quite a bit higher. And that will -- that's an indication to us that they're getting their answer. Now we also have other feedback channels. And so far, we're getting good feedback that the answers being there. And again, you start with 30 questions then it goes to 50, now we're over 100, because of the machine learning part of that of refining the question and understanding the natural language of what's a client asking for, were they really asking for and now we're responding with the right answer. So it's pretty early, but at this early stage to have 45% answered by the Chatbot itself is very strongly we think. So we're getting good positive feedback on that.", "duration_s": 80.80000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0108.mp3" }, { "study_item_id": "MR-0109", "partition": "development", "call_id": "1967434", "exchange_index": 32, "question": "Glad to hear everybody in the Southern Company family is doing as well as possible. I actually want to ask you about the jurisdiction that people don't ask you about, that may be one of the best ones people don't think about enough. Can you talk about Alabama? \nAnd can you talk about both where things stand with the approval of both the gas plants and the solar both the PPAs and ownership that you all filed at the PSC? \nAnd also, I thought there was a a rate docket there this year as well or undergoing in the winter and into the spring. Can you just give us an update on that? \nAnd then finally, how different is Alabama demand trends relative to ordinal ones?", "answer": "Yes. I would say, in general, you're in a giant process that's on track in Georgia for all that stuff -- I'm sorry, in Alabama. Yes, I think everything is going as we thought it would there. Yes. Your question about customer mix, just like in the entirety of our jurisdictions, it tends to move toward more industrial as you move west generally. That's true. But what's interesting in Mississippi? 25% of Mississippi sales are wholesale. And those wholesale sales are largely residential. So you give it a bit of a different mix in Mississippi, but it's small, but Drew is exactly right. Alabama and Georgia are pretty similar.", "duration_s": 42.5600000000004, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0109.mp3" }, { "study_item_id": "MR-0110", "partition": "development", "call_id": "1719407", "exchange_index": 6, "question": "Just a follow-up question on the CapEx and the layering of the asset revitalization program about $900 million still to spend at EAF, at Fairfield and now Mon Valley. Is there a way to maybe delay this? You saw sentiments time frame to get this and you think the downstream can handle it?", "answer": "I'm not sure I fully understand. You're breaking up a little bit, but we don't intend to slow down the asset revitalization. We've always said we if we can get to returns faster, we're going to go after them. So we need to make sure that we get ourselves positioned well and the revitalization is well underway. We're executing. And so we don't want to move slower. We want to move faster.", "duration_s": 22.179999999999836, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0110.mp3" }, { "study_item_id": "MR-0111", "partition": "locked_confirmatory", "call_id": "1792796", "exchange_index": 40, "question": "So if we think about the selling industry and what was that as a percentage of sales if you exclude all acquisition-related costs and noncash comp?", "answer": "I think that the deal for you to run that computation would be in the Q that we released this week. So I would just point you towards that when it comes out.", "duration_s": 7.739999999999782, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0111.mp3" }, { "study_item_id": "MR-0112", "partition": "development", "call_id": "1779319", "exchange_index": 0, "question": "So the same-store revenue guidance was very nicely to see You brought up to the low end of range. So Mike, with the positive market conditions you sighted, how much consideration did you give to adjusting the top end of the range?", "answer": "I'll start with that and then Angela will have a comment. Obviously we hit the top end of the range in Northern California, but we were pretty close to the midpoint or little bit above the midpoint in other markets, and so we thought there was plenty of room within the range, so we didn't need to move it. We cannot move rents super quickly because we have to turn the leases. And in the second half of the year, we turned fewer leases than we did in the first half of the year, so I think the guidance ranges appropriate where it is not. Angela, do you have anything to add? We had guided to a tougher first half and a lighter second half originally with a midpoint of 3. And given where the first half came in, certainly, we are comfortable with where our guidance ranges at this point. But having said that, keep in mind that the second half now contemplate heavy at supply, and so in that environment, it didn't makes sense for us to raise the high end of the guidance range.", "duration_s": 71.40000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0112.mp3" }, { "study_item_id": "MR-0113", "partition": "development", "call_id": "1642899", "exchange_index": 7, "question": "Probably more in the second half?", "answer": "There is definitely more headroom in the second half of the year than it was in the first half of the year.", "duration_s": 3.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0113.mp3" }, { "study_item_id": "MR-0114", "partition": "development", "call_id": "1721511", "exchange_index": 3, "question": "Strip some of the noise from weather and what have you may be expect the calendar shift for Easter as well.", "answer": "Yes. So I think -- so when we talk about there's local our local case volume for the quarter was the question I'm answering. It was 2.2% was organic. Total case volume organic was 1.3%, the spotlight.", "duration_s": 18.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0114.mp3" }, { "study_item_id": "MR-0115", "partition": "development", "call_id": "2462760", "exchange_index": 18, "question": "[indiscernible] I also wanted to ask about the wage investments. As you look across the portfolio, are you seeing greater challenges in your ability to recruit or retain employees and any differences geographically? And then how do you assess the risk that you'll need to make another big wage commitment next year?", "answer": "Lauren, this is Rick. We aren't really seeing a whole lot of differences across the country on staffing, not any more challenging in Texas as it is in New York. We're staffing our restaurants, and we're seeing the pickup. We've actually implemented a new system. As we mentioned, it's increasing our speed of hire. The one thing we've got an incredible employment proposition. When we make an offer, people accept it, and that's a great thing. And so I think that, to me, is the biggest nature. Our employment proposition is so strong that people want to come to work for us. As it relates to future need to increase our minimum kind of guaranteed wage. Right now, we're looking at -- the number that we have right now at $12 is the right thing for us. As we said, and Gene mentioned, we average over $20 -- around $20 an hour after this change, and we'll continue to monitor that and see where we need to increase wages on a market-by-market basis.", "duration_s": 62.38000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0115.mp3" }, { "study_item_id": "MR-0116", "partition": "development", "call_id": "1970661", "exchange_index": 20, "question": "Right. But if we think about how carpet has shrunk relative to where it was, say, 10 years ago, 15 years ago, what has that meant for your raw material exposure? And how should we think about that difference coming through in results?", "answer": "There will be less exposure. The other thing that's going to happen in the short term, given the dramatic decrease in a short period of time, even though the prices have gone down, we're buying significantly less, reducing our inventories on 1 side and also buying less relative to the volume we're producing. So both of those are going to have an impact on reducing the positive impact it would have if we were buying and running at the same rates we always run. One more piece to enter into it, our polyester is manufactured from recycled bottles and the recycled bottles are not moving down in proportion with the gas prices, oil prices.", "duration_s": 50.58000000000038, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0116.mp3" }, { "study_item_id": "MR-0117", "partition": "development", "call_id": "1817318", "exchange_index": 19, "question": "And then, if I can, just coming back to the 800 gig for a moment. You've given the expectations obviously for some initial adoption, particularly within the DCI market. And you mentioned the subsea win. How do you think about that maybe moving into the telco market as we go through fiscal '20? You mentioned, obviously, that on the network side or the transport side, you've been seeing fairly decent uptake of 400 gig there. Curious what your expectations are for 800, particularly on that telco side as we look into next year?", "answer": "Like every technology cycle, the cost per bit is important to all our customers, and having your hands on this market-leading technology gives you a market leadership plays in cost per bit. So there's no question interest in the service providers there as well. Maybe less so in terms of an application that uses 800 gig. But in other applications, and we talked about one, whether it's still offering 400 gig or using 400 gig as the service capability. You need to be able to transport that all over the network. And they're going to need technology the way to WaveLogic 5 technology [indiscernible]", "duration_s": 40.0600000000004, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0117.mp3" }, { "study_item_id": "MR-0118", "partition": "development", "call_id": "1699602", "exchange_index": 31, "question": "A couple of questions. I hear you all on the card purchase volumes and the rewards expense. Your card outstanding growth has also slowed. Substantially, it's gone from a 5% year-on-year last year in the first quarter and then it was in the 4-ish percent over the course of the year and it was flat year-on-year this quarter. Can you talk about -- I heard you say that you're trying to avoid customers that are giving the reward side. What about the card outstanding growth? Why has not slowed so much?", "answer": "You're talking about card balances?", "duration_s": 0.8800000000001091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0118.mp3" }, { "study_item_id": "MR-0119", "partition": "development", "call_id": "1705222", "exchange_index": 2, "question": "I guess, first one, Mike start with Ilim. It seems like operations and shipments and everything there seems pretty strong. Can you comment at all about sort of the trajectory or outlook for the full year in that business and then what you're thinking about or what the organization is thinking about in terms of expanding capacity? There's been some reports out there that suggests they're looking to make an investment over the next couple of years.", "answer": "Gabe, we -- I don't think we heard the first part. Where you talking about Ilim?", "duration_s": 3.6399999999998727, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0119.mp3" }, { "study_item_id": "MR-0120", "partition": "development", "call_id": "1641855", "exchange_index": 27, "question": "Got it. And then you mentioned tariffs as a factor in Fluids. And then can you also address how you did in oil and gas broadly away from retail fueling?", "answer": "The tariff related, what I mentioned about tariffs is the fact that we believe that it is contributing a little bit to the building of the backlog, right? Everybody is worried about the supply chain, which -- and a piece of that is tariffs. So customers that have plans, CapEx-driven plans, the demand plans for 2019, we feel that's what's contributing somewhat to the good order book that we have. In terms of our view on tariffs, we were -- we will be able to cover the tariff impact with pricing and productivity, and that's our expectation for 2019.", "duration_s": 35.11999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0120.mp3" }, { "study_item_id": "MR-0121", "partition": "development", "call_id": "1776276", "exchange_index": 43, "question": "And then just a couple of quick questions with regard to the used truck market. You said you saw it soften up a little bit. Could you describe if you're seeing that in 1 specific channel, i.e., kind of small fleets or kind of the owner-operator end of the marketplace? And what sort of increase on year-over-year base are you seeing from a price realization currently would be helpful as well.", "answer": "Yes. As we think about it in terms of the PACCAR products, Kenworth, Peterbilt, North America DAF and just they command the premium, so it's a relative position, I think competition doing real well. I think as I said earlier, I think a lot of effect has to do with how many trucks are coming back in and what percent yield retail those trucks out, we are able to grow our retail percentage, especially North America which has brought us good results. As far as the overall trends to the market, I think those are difficult to plan forward to. We'll watch them. We have a great team that's managing that business really well.", "duration_s": 34.039999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0121.mp3" }, { "study_item_id": "MR-0122", "partition": "locked_confirmatory", "call_id": "2406690", "exchange_index": 36, "question": "Bill, you guys mentioned about raising the entry-level wage or minimum wage for your folks. Some of your peers have done the same -- excuse me, Bank of Montreal raised their wages 20% last week, and Bank of America has got the 25 and 25 program. So the question is this, can you share with us what it means for the people right above the entry-level -- excuse me, in the entry-level worker, meaning like a branch manager, how far up does that ripple go in terms of the inflation on wages because of the minimum wage going up?", "answer": "It goes straight up through the pay grades. I mean, most of the cost is actually in the compression as opposed to the initial jump for the people who are at the lowest level. So part of the work set to go through is to figure out, in fact, how you move people up who are today at 18. But tomorrow, if the $15 person went to 18, the $18 person goes to 20, 50 or so. And I'm making up the numbers here, but that's the majority of the cost. And by the way, it's the majority of the work set to get right.", "duration_s": 34.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0122.mp3" }, { "study_item_id": "MR-0123", "partition": "locked_confirmatory", "call_id": "2049390", "exchange_index": 30, "question": "I want to go back, Jim, to one of the questions on operating ratio. I understand that looking out to next year in the back half, I should say, is a little difficult given the macro uncertainty. So I wanted to kind of take out that uncertainty and give you a scenario where volume is down or -- the volume rebound continues and year-over-year down just modestly. In that scenario, not guidance, but in that scenario where we have volume down modestly, could you do better in terms of operating ratio than you did last year?", "answer": "Walter, I think in the current environment of uncertainty, it's very difficult for us to sign up for any scenario, even a hypothetical one. But I would say this, we are committed to driving toward a 60% operating ratio, irrespective of the macro environment in which we find ourselves. And that means that if we are unable to grow volume and revenue at the pace we would like, we will attempt to make it up through productivity improvements. And I think we demonstrated that. Yes, the operating ratio in the second quarter was not what we wanted it to be and not what it needs to be. But in the midst of that, we recommitted to productivity improvements, and we demonstrated that commitment through the actions we took.", "duration_s": 43.25999999999931, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0123.mp3" }, { "study_item_id": "MR-0124", "partition": "development", "call_id": "1708141", "exchange_index": 10, "question": "Okay, got it. And then it was good to see the Southern log prices realizations tick up a little bit in the quarter, and I guess the outlook for 2Q implies that we stay at similar levels. Just wondering if you could parse out how much of that is maybe due to weather impacts or mix versus the long-awaited sort of tightness in that market that we've been predicting for many years?", "answer": "Yes. And so we absolutely saw a healthy increase in pricing, and I will tell you, I think the majority of that is due to weather. We had a really, really wet Q1 and that kept inventory levels low. It kept supply levels moderated, and so that was really reflected in the pricing that you saw. That being said, I do think we are starting to see some of those pockets that we've been talking about for years really start [indiscernible] where we have the new capacity coming online and running full. And certainly, we've seen that in areas of central Mississippi, some areas in Arkansas, a few geographies in Alabama and most recently in northern Louisiana. And so as we said, when that new mill capacity comes online and gets up and running full in that geography, that micro region, we are seeing some pricing tension. So on balance, I think that the price increase was largely driven by weather but we are starting to see the early signs of some tensioning in some of those micro markets.", "duration_s": 58.33999999999969, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0124.mp3" }, { "study_item_id": "MR-0125", "partition": "locked_confirmatory", "call_id": "1691216", "exchange_index": 24, "question": "One, just a quick clarification before my question. The comment on 2020 sitting within the long-term margin framework. Is that including or excluding any from the 53rd week?", "answer": "I don't think it matters either way, excluding we would still expect to be within the framework.", "duration_s": 4.760000000000218, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0125.mp3" }, { "study_item_id": "MR-0126", "partition": "development", "call_id": "1776276", "exchange_index": 1, "question": "Okay. So do you have any kind of preliminary thoughts about what 2020 might look like? Obviously, the market is sort of primed for a big decline.", "answer": "We typically comment on 2020 once we get closer to it, so that's probably something for the next call.", "duration_s": 6.100000000000023, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0126.mp3" }, { "study_item_id": "MR-0127", "partition": "development", "call_id": "1843548", "exchange_index": 27, "question": "Okay. And then just building on that question earlier. Does this surprise you that the project load has been very lumpy? Perhaps there's been less large projects coming to the market than we've seen in the past?", "answer": "No. It doesn't. Because I think if you look at the nature some of these jobs, you're going to have that degree of lumpiness. And one of the things that I think is important is as I indicated in response to the earlier question, what does the trend look like in a multiyear basis. And the other thing is if you talk to the people at ARPA, they, too, would tell you, we're not surprised by this. This is the type of activity that we would expect, and it's the type of longer-term dynamics that we're looking for that we actually think are helpful on rail market as well.", "duration_s": 33.92000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0127.mp3" }, { "study_item_id": "MR-0128", "partition": "development", "call_id": "1776145", "exchange_index": 25, "question": "Okay. And as a follow-up to that, if we think about the $150 million reduction to your initial inflation outlook, that's about $0.33 to earnings or 5 percentage points to EBIT dollars. And it feels like you're flowing through about 1/3 of that to shareholders. So is it, Mike, that we just -- this is a really good opportunity to address the wish list of the things that you have that are actionable right now in the marketplace, including increasing bonuses and whatnot out there? Or is this just conservatism as we think about the back half?", "answer": "Yes. I mean, I think, by our math, we're somewhere between -- flowing through between 1/3 to 1/2. But again, I think part of it is the market opportunity. And we think the conditions are good for us, then best of brands are responding and it's going to be productive to the long-term health of the business, and so that's why we're doing that. Some of the comp stuff is more formulaic. Last year, we are cutting comp, and this year it's just the math formula that it goes back up, so. But really, the focus for us is about brand reinvestment, and both as Maria said in products in the digital or in the marketing spending and then in some of the capability build. Yes. And I think if you took compensation aside, it would look a bit more like Q third coming through.", "duration_s": 46.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0128.mp3" }, { "study_item_id": "MR-0129", "partition": "development", "call_id": "1793250", "exchange_index": 7, "question": "And then one last one on the macro you've seen confidence that this isn't getting worse, but then you said things extend through the election next year. I mean, how are your customers and you guys going to not least because a little bit before all the uncertainty around the election? How much -- I'm sure you have confidence in the outcome like how are you going to integrate in that into your kind of plans and you're thinking?", "answer": "From our perspective, we're going to work multiple plans here from my perspective. I think we're going to look at in an environment where there's very little growth in environment. There's some moderate growth. Clearly, we still see our international business doing better than the U.S. at this point in time. That's going to allow us to see a little bit better growth but we're going to factor in that lead to be in a slugfest with real low single-digit growth for the next 12 months. And therefore, you've got to get that cost line in line and really prioritize where we're going to spend money. \nIt's not going to be -- in my opinion, I'm being very, let's say, cautious or negative. But I'm very concerned about business was like you said, keep pausing and then keep reevaluating the investment. And that's going to drag the business investment to a weaker environment. If it doesn't happen or only things get better we'll be again. But I'm worried about to happen therefore, we'll structure the company to be in that environment.", "duration_s": 54.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0129.mp3" }, { "study_item_id": "MR-0130", "partition": "development", "call_id": "1919759", "exchange_index": 10, "question": "Yes, that was off from the cash. My follow-up is, did you make any additional incremental changes to the incentive structures, as you saw that things are taking longer this quarter?", "answer": "Look, we have a very capable responsible intelligent sales team out there. And they understood the math when we did the math in the last year in terms of taking the multiples we gave them to go sell Prisma and Cortex and they did as we requested them to do. We have balanced those, we have a lot of scrutiny. We have a lot of inspections going on in the Firewall space, and our teams are responding. It's just -- honestly, it takes time. Firewall cycle has a time element to it. And call it, less judgment in the last quarter, when we look at the deal pipeline. We're being too optimistic that we could close a lot more of them in this quarter than we have been able to. The deals haven't gone away. They're just going to take time. And we're just trying to make sure that we are no longer setting unrealistic expectations of closing deals in our pipeline and giving a reasonable forecast, both to you and setting right -- the right expectations looking.", "duration_s": 52.7199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0130.mp3" }, { "study_item_id": "MR-0131", "partition": "development", "call_id": "1919759", "exchange_index": 16, "question": "And then a quick one for Kathy. On the geographic right now. I think you mentioned that the EMEA and APAC lagged for the quarter. Any chance you could give us the growth rate for the individual regions, U.S., EMEA and APAC? And maybe comment a little bit on the distribution pipeline going forward?", "answer": "Yes. I'm sorry. I'm really struggling to hear you, but I think you asked for our revenue growth by geography, is that correct?", "duration_s": 6.8400000000001455, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0131.mp3" }, { "study_item_id": "MR-0132", "partition": "locked_confirmatory", "call_id": "1699809", "exchange_index": 17, "question": "Maybe just to follow up on that intermodal question. As you think about getting through this lane rationalization this year and you start continues service improvement, as you look out over the next several years, is there a good number to think about in terms of the pace of domestic intermodal volume growth can be annually as you look at the market? Is it low single digits? Is it kind of in line with IP or GDP growth? Or could we still think of it as being a multiple of that underlying market growth rate?", "answer": "Yes. I think I would expect that we would get back to the high single-digit growth number.", "duration_s": 4.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0132.mp3" }, { "study_item_id": "MR-0133", "partition": "development", "call_id": "2400486", "exchange_index": 1, "question": "And if I can just ask 1 follow-up. Raj, on your commodity comments, it sounds like you would still expect maybe better commodity inflation later in the year. Do you have better visibility than you did before? I mean what would prevent you from having to go to the spot market more often if sales continue to go? How much visibility do you have on that inflation for the full year now versus last quarter?", "answer": "Sure, John. Let me start by saying we have -- you saw we increased our forecast for sales. So that gives us a little bit of, I guess, less need to have to go back into the market than what we're already anticipating. So some of that increased sales impact is baked into our estimate. As we look at Q2 and Q3, we have more visibility clearly into -- a lot more into Q2 and some decent visibility into Q3. Q4 is one that's probably we'll have to figure out where things shake out. But we do -- we did have higher inflation last year in Q4. But all in all, the way we're thinking about it is, Q1, we had about 5.5%. We have about 80% contracted for Q2 based on the updated volume. And then for Q3, I think we have around 60% contracted out. So we feel pretty good about that. Could there be some movement? Absolutely. \nBut I think that's where we showed you, I think, in the first quarter how we have the ability to manage through that. I mean I think the fact I mentioned about the business model improvements as well as other levers we have at our disposable -- at our disposal to help us manage through that fairly well.", "duration_s": 72.83999999999992, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0133.mp3" }, { "study_item_id": "MR-0134", "partition": "development", "call_id": "1833988", "exchange_index": 16, "question": "A question for you. I know the network is in good shape for the incremental margin next year, volumes snapback. Question I want on the headcount front, can you gear up quickly or would you need to gear up quickly given how much reduction you've had so that you can ensure the operations from that perspective will run smoothly?", "answer": "Yes, I'm going to at the highest level say yes. We've changed a number of things that make our ability to be more agile on both the upside and downside with on the upside, I would have to hire and train bring out a crew, a conductor has been cut dramatically. We're actually looking forward to the next time we have to add conductors to exercise that new muscle. Jim, there's some other things we've been doing. What are your thoughts? Lance, I think you hit it right on the nail. The bottom line is I don't think we have the increase, we have an increase in business. We are not going to increase on a same percentages will go up or we're going to get more efficient. It helps us become more efficient. I think we've shown what we can do this quarter when you have this kind of adjustment in volume and for us, that drop, 5700 FTEs in the third quarter shows that we've got the capability that we will make the right adjustments when the business level is and a lot of that was because of the efficiencies that we've built into the system. So I'm looking forward to what happens next few months and into the next year and I'm very excited about it. I think the numbers will dictate a great result for this company we've on board.", "duration_s": 76.96000000000004, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0134.mp3" }, { "study_item_id": "MR-0135", "partition": "development", "call_id": "1835912", "exchange_index": 15, "question": "Just trying to understand gross margins in a more draconian scenario than what you're forecasting for next year. I mean, I think if you go back and gross margins ex R&D in more of a garden-variety downturn have been around 12% to 13%, but you've got to go back like 7 or 8 years to see it. I'm just wondering, how do you think gross margins look in the next downturn whenever it comes in relation to that 12% to 13% given the way the company has evolved over the last decade, particularly with the growth in the Parts business?", "answer": "I think one of the great strengths of PACCAR is that we are always looking at operational efficiency gains, not just in 1 year but over the course of time. We're always thinking about cost control. So as we head into markets like the normalized market we're facing, we've already been aggressively thinking about cost control. I think that's what enabled us to deliver solid gross margins we have this quarter and even the quarterly gross margins we predict for next quarter in 14% to 14.5%. So I think that we're always mentioning the business efficiently for the benefit of our customers and we think that 14% to 14.5% that we deliver next quarter will be pretty solid.", "duration_s": 40.680000000000064, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0135.mp3" }, { "study_item_id": "MR-0136", "partition": "locked_confirmatory", "call_id": "1705543", "exchange_index": 30, "question": "Yes, no kidding, well. Two questions quickly, you're coming down the home stretch on some of your development deals that you started construction a couple of years ago. If you look at something like Station Park, looks like you would have cost per home of about $715,000 a unit, say $500,000 falls [indiscernible] $750,000. What you think it will cost you to build these products today if you were bidding out the GC work et cetera?", "answer": "It's a good question. We do have a Phase 4 of Station Park Green and we have -- John Eudy is not here with me today. I know that the costs are up. I don't know what the magnitude is. So it's higher in both cases. But I can't tell you. Again, it goes back to the comment I made earlier which is construction cost going up somewhere between let's say high single digits which is down from low double digits over the past couple of years versus rent growth which is in the 3 plus/minus percent range. So that's been the problem on the development side.", "duration_s": 40.25999999999976, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0136.mp3" }, { "study_item_id": "MR-0137", "partition": "locked_confirmatory", "call_id": "1703486", "exchange_index": 29, "question": "Congrats on the quarter. So to start with the yield-up initiative, you talked about growth in higher return businesses. When you look across your different businesses today, where do you see the highest incremental returns? I know intermodal isn't your highest margin business, but given it seems to be a key growth area, you mentioned the multiyear revenue CAGR of around 10% at the Investor Day. Would that be your highest incremental ROIC business? Or would you say that some areas in general merchandise would be at the top of the list?", "answer": "While we think we have margin opportunity across the board. And in terms of the top line initiatives, that's what yield-up fundamentally is about, so there's incremental margin potential in all 3 major lines of business. And merchandise naturally has some significant incremental margin potential because of the way the trains run and 1 more car on the train comes with very low additional cost. So the natural economics of that business favor the incrementals. But as we saw last year, we posted very strong incremental margin in our intermodal business as well, and that's partly because of the presnt trend that we were able to drive last year with our customers, with our general partners. Alan, any other reflections on the business? Yes. I'll talk a little less about pricing, I'll talk about productivity. Within intermodal, we've worked with our channel partners to provide a more productive, less complex network and as a result, that, coupled with the strong pricing that we've achieved in the intermodal franchise over the last 6 quarters, has really driven strong incremental margins of our intermodal network, and it now competes very favorably for capital with us. And that's one of the reasons we have the most robust intermodal franchise in the east, and it's a growth driver for us and why we're confident about the 10% revenue CAGR in intermodal. I'll talk about productivity within merchandise. I've previously talked about pricing strength and the momentum within merchandise. I'm very confident with that with the implementation of TOP21 this summer, which is targeted towards our merchandise network, we're not going to see even better incremental margins in our merchandise network.", "duration_s": 113.70000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0137.mp3" }, { "study_item_id": "MR-0138", "partition": "development", "call_id": "2182189", "exchange_index": 29, "question": "So Alan, how should we think about the cadence of your intermodal contractual pricing renewals? Like when do the bulk of them renew?", "answer": "Well, I told you, I mentioned, Jason, that we've got long-term deals with our contract -- with our channel partners. Does that help?", "duration_s": 9.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0138.mp3" }, { "study_item_id": "MR-0139", "partition": "development", "call_id": "1640196", "exchange_index": 6, "question": "If we take out the $1.5 million noncash gain in the quarter, the core operating ratio is more like 67.8%, unless I calculated something incorrectly that's an improvement year-over-year but not nearly that impressive in the context of best pricing environment in 7 years. I think that was a comment that was earlier made. And also, obviously, still far away from your peers. So what are the issues, I guess, either from a cost or volume side that maybe is not allowing you to make that type of progress of the profitability side in the context of pricing. And, I guess, maybe you can also address in the center the fact that you have CSX out there that is in a much better profit position. And has taken significant cost. And may be in a position to drive a little bit of market share shift?", "answer": "I think if you will just step back, we have produced over 700 basis points operating improvement -- operating ratio improvement under our old strategic plan. We've made significant progress on our operating ratio. We've -- that's been accompanied by a very strong earnings growth. And the shareholder returns as well. We have taken that -- that cash we have generated, we will invest in our company and we have been able to shareholders in the form of dividends and share repurchases. So it's been a strong performance for the last 3 years. Now we recognize that we have more room to increase shareholder value, and that's obviously our objective in the new plan. So we're going to continue to push operating ratio is front and center as I mentioned. And we'll pull out all the stocks to generate shareholder value in the coming years.", "duration_s": 50.93999999999983, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0139.mp3" }, { "study_item_id": "MR-0140", "partition": "development", "call_id": "1699403", "exchange_index": 26, "question": "Okay. The contractual pricing environment on the Truckload side are specific to the truck segment, could you provide the -- what the rate growth was in the first quarter for committed contractual business in truck? And then any expectations for the balance of the year?", "answer": "You're asking about price or volume, Ben?", "duration_s": 1.9200000000000728, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0140.mp3" }, { "study_item_id": "MR-0141", "partition": "development", "call_id": "2247395", "exchange_index": 15, "question": "I wanted to ask a little bit about payroll. And I think you alluded to this a little bit, Marty, but when COVID was originally occurring last year, one of the issues that you had was not doing price increases or not putting that burden on your customers. Where we stand today, do you think you'll go back to the normal cycle? Or how do you think that environment looks in terms of the ability to get some price increases?", "answer": "I think the ability is there. In fact, Kartik, I think during this year, there's a lot of things that we've talked about, we've shown a lot of value to our clients. And I think we're probably in as good or better position than we've ever been. One of the opportunities, while it's difficult on us and our clients is the ability to show how strong we are as a company and what we add to our clients and help them through a very difficult time. So I think the pricing power is very consistent, and I think you'd see a more of a normalized move in that regard.", "duration_s": 33.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0141.mp3" }, { "study_item_id": "MR-0142", "partition": "development", "call_id": "1828794", "exchange_index": 24, "question": "Just -- I'm not sure if I start or not, but in terms of the ASV retention rate, did you guys disclosed that? And if not, could you do that now?", "answer": "This is Helen, I'll take that one. Right now, so we showed client attention. We didn't show ASV this quarter. We're looking at ways of how we can provide better information along those funds. So you'll see that come back in the next quarter.", "duration_s": 11.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0142.mp3" }, { "study_item_id": "MR-0143", "partition": "development", "call_id": "2330095", "exchange_index": 4, "question": "I wanted to ask about the 8% sell-side growth in the quarter. Was there anything particular to call out there? Was it more a couple of client wins? Or was it more broad-based? And you mentioned the more willingness to spend by clients, so that seems positive. So just wanted to hear about your visibility into the new hiring class as well at the banks.", "answer": "Sure. So yes, it is broad-based, Toni. And I think we've seen the benefits of hiring this far into our fiscal year. And a lot of that is really driven by the investment that we've made in content and the core platform to support the extra workstations. There are still quite a few large banks that we don't have perfect visibility yet on their hiring classes, and those are going to come in, in the next month or 2, but we feel optimistic about that, just given the trends that we see in the market. \nSo a couple of other things I'd point out for the sell-side. One is we're beginning to monetize feeds and analytics in the sell-side which previously we've not done much of. So that is supporting some of the growth. And then in terms of new logos, we're positive this quarter for the sell-side firms, whereas Q3 of last year, we were negative. So we've seen a good relative -- even though we've closed more corporate and wealth clients, we're seeing good relative performance in terms of new logos for the sell-side.", "duration_s": 59.92000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0143.mp3" }, { "study_item_id": "MR-0144", "partition": "development", "call_id": "2185883", "exchange_index": 10, "question": "And last question, if I may? announced expansion, and it looks like it includes VCM capacity growth in excess of their PVC growth, you have a contract with them selling VCM to this company, how protected are you within your contract obligated to buy volumes from you and for how long?", "answer": "Yes. And so I probably won't comment directly on the very specifics of that. But what I would say in general is, expansions like this, particularly this one, they're really expected and needed, especially in this time frame by 3 years away. \nSo that's because of demand growing on both sides of the ECU. And we certainly don't expect any negative impacts out of that and all of that is planned for.", "duration_s": 39.61000000000013, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0144.mp3" }, { "study_item_id": "MR-0145", "partition": "locked_confirmatory", "call_id": "1896718", "exchange_index": 8, "question": "Yes. That was extremely helpful. As far as second question, Angela. So previously, you did mention the earlier redemptions, which played out in 4Q. So I'm just kind of curious, is is there still that expectation for more yields in your portfolio to be redeemed early? Or are those mostly done so far? And in terms of pipeline, what's in the work to backfill some of those deals?", "answer": "Shirley, that's a good question. We do expect heavier redemptions in 2020. And I assume you may recall that that we have talked about [indiscernible] our investments tend to have a [ 3-year life. ] And sometimes they get extended longer, which is terrific. And so the redemption timing can be lumpy. So as for to 2020, the redemption outside of the mortgage x security investment and strong to preferred equity and [indiscernible] about $145 million. And it's between the first half and the second half, it's pretty even, maybe a little bit heavier in the second half. And of course, yes, there's probably somewhere on the [ 100s 10-ish, ] so that's the cadence. \nAs far as the pipeline, Adam Chime in on that? Yes, Shirley, this is Adam. We're pursuing underwriting several deals in parallel at this point on the prep equity side. It -- these deals inherently have a long lead time, just like any development deals. So when they actually come to fruition, it can always be an unknown, but we are pursuing many and have quite a few in the pipeline. Yes. And Shirley, you may recall, we have a guidance of between $50 million to $100 million, so it's the $75 million. So that's a good number to -- for modeling purposes? And then the one thing I'll add is really the timing of the funding because they do lag a little bit, and so you want to layer that consideration.", "duration_s": 98.55999999999995, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0145.mp3" }, { "study_item_id": "MR-0146", "partition": "locked_confirmatory", "call_id": "1703486", "exchange_index": 0, "question": "I just had a couple of housekeeping items I wanted to ask about. But first, could you quantify the gain on sale? And then in the comp and benefits line, what was the benefit from capital life labor? And did you receive any payroll tax refund from the Railroad Retirement Board?", "answer": "Allison, in terms of the gain on sale of operating property in the quarter, it was about $11 million higher than last year. The capitalized labor increase was about $8 million, and we did not have anything included in comp and benefits related to any kind of refund this quarter.", "duration_s": 21.25999999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0146.mp3" }, { "study_item_id": "MR-0147", "partition": "development", "call_id": "1788294", "exchange_index": 2, "question": "Congrats on the quarter. Just one for me, Ita, how should we think about the impact of the 25% tariff on the gross margin guide? Obviously, you're reiterating euros 63% to 65%. If we were trade deal tomorrow, I guess, how much gross margins positively impacted? And have you done enough to kind of upset from a supply chain perspective?", "answer": "Yes. I think, we've been working on improving the supply chain and addressing some of the issues with the supply chain. And at the same time, obviously, we had other to customers, which we were also then managing and as the changed we've been fortunate enough we made enough progress that we been able to hold our margin increase that customer. And I think with the new news that we heard just before the call I think that's still the case, right? we believe that we have done enough of from a supply chain perspective that we should have minimal impact. But I wouldn't think there is a big swing in gross margin one way or the other, if either completely tomorrow or we continue to see some changes in it. I think we have done enough work from a gross margin P&L perspective. James, just to add to that. With the 63% to 65% range, we think the tariff can have impact on the gross margin, but it will be within that range of 63% to 65%. And as Ita said, the team, management team has been a tremendous amount of work. We're not immune to the tariff. We absolutely are affected by it. And -- but I think if the affect will be minimal.", "duration_s": 71.20000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0147.mp3" }, { "study_item_id": "MR-0148", "partition": "development", "call_id": "2051315", "exchange_index": 13, "question": "My first question is a bit higher level. It feels like from your commentary that what we've been seeing over the last couple of months is that some of the mix shift that we historically see in recessionary periods really has not come together to the same extent. Do you think that, that that's accurate. And I guess, how are you thinking about mix shift going forward and the sustainability of some of the trends that we've seen?", "answer": "I think, Susan, that is an accurate statement in terms of the mix shift that maybe you would say is typical of, let's say, a recession that we haven't seen. And there's several different theories on why that is, perhaps, is more affluent customers that would buy the higher level mix haven't really been affected in terms of unemployment or haven't been affected by the pandemic so far. So that's an aspect of it. But we are seeing good high-quality mix at that high level, and we're seeing it across our segments. We talked about record backlog in our spa business, and that's a high dollar discretionary purchase. And we have a very solid demand. So I think that's a fair statement. In terms of where we think mix will go as we look through the rest of the year, we really don't think it's going to be much of a factor. We had a little, call it, channel mix early on in the quarter as retail was stronger than trade. And we have a little bit of a mix headwind in Europe as that economy has yet to really pull back through, but we anticipate that when we look at the full year impact, that really isn't going to be that material as it relates to mix.", "duration_s": 82.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0148.mp3" }, { "study_item_id": "MR-0149", "partition": "locked_confirmatory", "call_id": "2178837", "exchange_index": 10, "question": "Yes. I was -- I got another question Ennis on the international expansion. I was just wondering if you could frame for us what you have in line. Are we talking about significant cost increase to try and become a, I guess, material competitor outside of the U.S. and Canada?", "answer": "Well, it definitely will not be a material cost increase. As you may have heard, making traffic paint is not as sophisticated as making our industrial paints. And as you know, in Mexico and Europe, we have a number of plants. So it will not be a cost issue. It will be a focus and distribution issue, making sure we get ourselves aligned with the winners in the contracting space that consistently win government bids and municipality bids and things like that. So that's where our focus will be. \nSo Mexico will be a start because of our strong base with our PPG-Comex team. And then we'll look at it on a country-by-country basis in Europe and do it in a very methodical and disciplined manner.", "duration_s": 50.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0149.mp3" }, { "study_item_id": "MR-0150", "partition": "development", "call_id": "1833005", "exchange_index": 15, "question": "Okay. And just to clarify something you said earlier, you said if your comps are up in Intermodal, you'll expect pricing to be up as well. Do you feel like Intermodal pricing can be up even if Truckload pricing is down contractually in 2020?", "answer": "That's what happened so far in 2019. I think there is a probability that yes, you could see that.", "duration_s": 9.360000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0150.mp3" }, { "study_item_id": "MR-0151", "partition": "development", "call_id": "1644425", "exchange_index": 27, "question": "Could you share that 2.9% growth in 4Q, what does it look like in January? And what does that trend -- what's the trajectory of the trend this year?", "answer": "Sure. That is up from where it was earlier in the year, and in January, it's down a little bit from there, as in San Diego. Both of those markets are down a little bit but that's not unusual at this point in time. That's why I quoted the -- with the fourth quarter number as a whole because 1 month, there's a movement that could go on within our portfolio, and certainly, it's the low demand period. So not really a good reference point. That's why we use the whole quarter but we only have January. So January is down a little bit from there.", "duration_s": 32.68000000000029, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0151.mp3" }, { "study_item_id": "MR-0152", "partition": "development", "call_id": "1701002", "exchange_index": 23, "question": "Okay. So that wasn't a change and one of the reasons why you were limited. It would just seem that the letter math would have been better, more than a $1 billion.", "answer": "Our math is within $12 million of what that template shows, for the $1 billion just put in perspective.", "duration_s": 5.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0152.mp3" }, { "study_item_id": "MR-0153", "partition": "development", "call_id": "1705429", "exchange_index": 18, "question": "Okay. Great, Mark. Super helpful. And then the last thing, if I may. In one of the notes for your 2019 operating estimates, you state here that the 2019 sales assumes Indonesian government approval or increase in PT-FI export quarter. Can you provide like a number for that additional scope? I think you have a permit for 180,000 tons?", "answer": "Yes, it was -- what's in our plan is very close to that. So it's -- we've got a little bit more in the plan today. I think it's 40,000 tons of concentrate that or something. It's not a huge amount. But we do want to get some flexibility for these things that Mark is referring to. So but just to meet our existing plan, it's not a significant number.", "duration_s": 28.519999999999527, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0153.mp3" }, { "study_item_id": "MR-0154", "partition": "locked_confirmatory", "call_id": "2178837", "exchange_index": 14, "question": "You're not providing financial guidance for 2021, but there's -- surely there must be internal targets for management compensation. Can you give us an idea of what performance objectives there are for the company? And what targets you have in order for people to reach those goals?", "answer": "Yes, Jeff, this is Vince again. We have the traditional targets established that we would in any given year for management compensation and also sales person compensation. Obviously, 2020 was very fluid. 2021, we think will be very fluid. Similar to every other company, our comp committee, our Board, will look at fluidness and react accordingly based on their judgment. But we do certainly have internal targets established today for 2021.", "duration_s": 37.039999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0154.mp3" }, { "study_item_id": "MR-0155", "partition": "development", "call_id": "1847223", "exchange_index": 28, "question": "Just wanted to follow-up on some of the Egypt questions to make sure I got some of your remarks correct. So in your prepared remarks, you indicated that your building and enhancing drilling inventory there. And so can you provide us with an update on what the current capital efficiency looks like, because that might have changed over the past couple of years you're spending below maintenance? And then how proactive the first call and incremental capital sounds like because it seems like there could be some exploration, I know, you said, there is already some gas facilities there, but not sure what's there in the oil side in order for you to increase production?", "answer": "Yes. Jeanine, I think if you look at Egypt, I don't think we've been under underinvesting. So that's the first thing I would say. I think we've been investing in appropriate pace. We had a very large discovery and many, many years ago, which is pretty unique. So if you take that out and look at the portfolio, we've been on a really good pace. You look at the discoveries we had in late '14 early '15, things have been going quite strong. So we got a big footprint, we've been there long term, we're spread over a very, very large area. And my point on the other tie-ins as we always have capacity there for more gas yields and so it -- things are going quite well and we do see the potential to improve our productivity with a new inventory.", "duration_s": 52.720000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0155.mp3" }, { "study_item_id": "MR-0156", "partition": "development", "call_id": "2427319", "exchange_index": 20, "question": "So just going back to the demand question, obviously, things are great. I'm just curious about where you're seeing the hottest pockets of demand. And conversely, where it's a little bit weaker. And I know you mentioned [indiscernible] versus not, but maybe you can go a little bit deeper. Does it matter? Like what type of center, power center grocery anchored. Is it just location demographic space, where you're seeing more customers or more population growth? I'm just trying to understand just a little more granularity on where the demand is. I don't mean today, I mean over the next couple of years.", "answer": "Yes. I mean I think the next couple of years could be somewhat reflective of today as well. So just thinking of geographic first because you mentioned that the Sunbelt, out of the 141 leases this quarter, over 52% came from Sunbelt markets. And then within that, the substantial majority, we're actually coastal some belt. So I think you will continue to see that trend. -- progress over the next couple of years. That is where population growth is continuing to rise greater than the rest of the country. Second of that, though, on the coastal market, for that remaining, say, 48% of leases signed, it was heavily weighted towards the coastal markets. So I think you still see that high demand there. So between that, the [indiscernible] Sunbelt that's where we have seen the majority of activity. Beyond that, too, like Southern California, as I mentioned earlier, is extremely aggressive. It's a very, very tight market to penetrate. So the scope of inventory created opportunities, multiple demand factors that helped push rents further north. \nIn the Northeast, it's typically been a fairly mature portfolio, usually having higher occupancy levels. And so it's just there are natural constraints there to actually add any new supply as well. And people wanting to penetrate Long Island, for example, I think we'll continue to be difficult. So when there is an opportunity, you do see multiple bidders at the table wanting to enter the market. And then -- so I think that's what you continue to see play out over the next couple of years.", "duration_s": 94.03999999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0156.mp3" }, { "study_item_id": "MR-0157", "partition": "locked_confirmatory", "call_id": "1644025", "exchange_index": 16, "question": "Got you. And then just a little bit of a follow-up on what you mentioned in the prepared remarks on expansion to Germany, Italy, France. Wondering what potential time frames you're thinking about? And potential milestones before we see some contribution from that expansion?", "answer": "Yes. So we've already laid the groundwork. And really what we needed to complete really as you would imagine because of Brexit. And because of the way clients could be affected, we had to wait till we set up our full line of CCAP fronts and convert our clients in Europe from where they were situated in our Oik funds in U.K. over to our Lux-domiciled funds. And that transition, we did the bulk of it in the fourth quarter. So that actually slowed sales a bit because we couldn't do it as we were transferring client assets et cetera. And it was completed actually last weekend, which we feel very good about that will situate us well in a sense that would not cause any harmful effect to our European clients as the Brexit transaction or whatever occurs there in agreement in the future. So now, we'll be able to start to ramp up our activities drive some more sales activities and add our resources there to grow activities more in those countries.", "duration_s": 69.94000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0157.mp3" }, { "study_item_id": "MR-0158", "partition": "development", "call_id": "1776276", "exchange_index": 47, "question": "Just trying to figure out how much of that goes into 2020, how much is helping the fourth quarter. Is the fourth quarter builds just have a normal seasonal less build days but the daily rate stays the same, I would argue that's probably a little better than what people are thinking. I'm just trying to get a feel while it helps the fourth quarter, what does it mean about 2020? But you're still speaking pretty constructively about your orders into 2020. So just trying to put a mosaic here together. Your backlog's doing better than the industry given the share gain obviously implied in that backlog versus the industry totals.", "answer": "Yes. I think you're characterizing it really well, David. [indiscernible] and we'll watch what 2020 does as it get closer to us. Yes. We'd like to thank everyone for joining the call and thank you, operator. Thanks, everyone. Have a great day.", "duration_s": 26.149999999999636, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0158.mp3" }, { "study_item_id": "MR-0159", "partition": "locked_confirmatory", "call_id": "1765944", "exchange_index": 20, "question": "Yes. because I mean it looks like there's about over $5 million this quarter or around $5 million? And based on your annual outlook, does it -- it's expected to fall off quite a bit?", "answer": "Okay. So that's probably question you want to follow up with Rima on, but there is nothing material change that we would see happening so it might be something which needs to clarify with you.", "duration_s": 11.66000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0159.mp3" }, { "study_item_id": "MR-0160", "partition": "development", "call_id": "1958825", "exchange_index": 25, "question": "Jennifer, I understand the desire not to guide headcount in a very volume uncertain environment. But I was hoping you could kind of give us a dollar framework for the executive pay temporary reductions and the sort of rotating leave of absences you've got with the management workforce.", "answer": "Thanks, Bascome. I'm going to decline that opportunity. It's part of everything that we're doing to manage our cost structure and pulling all the levers across the board. And you've heard us talk about that before, and you saw it in the first quarter where we were able to make improvement in every one of our cost categories. And so this is part of certainly the comp and benefits line, but we've got work going on across the board, and that's really the way that we look at it is in that context.", "duration_s": 27.399999999999636, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0160.mp3" }, { "study_item_id": "MR-0161", "partition": "development", "call_id": "1970703", "exchange_index": 7, "question": "Everyone, and thanks for all the detail. Glad to hear Texas cement pricing seems quite robust, and your expectation was to get the full $8.", "answer": "No, no, no.", "duration_s": 0.4800000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0161.mp3" }, { "study_item_id": "MR-0162", "partition": "development", "call_id": "1970661", "exchange_index": 8, "question": "A question and a follow-up. Thanks for the insight and the detail on the margin for 2Q. As we think about the back half of the year, should the decremental and incremental margin continue in this 30%, 40%, 35%, 40% range? Or should we expect it to behave differently than that?", "answer": "The difficulty with that is, like we said a couple of times on the call already, is the lack of visibility and not knowing how sales are going to trend and how we're going to respond with cost takeout, permanent versus temporary, all are going to impact what our decremental margins are. So Eric, I don't think we're prepared to give you an answer that you'd like to have on that question right now. You also have another thing with governments helping different amounts most of them are temporary and how they're going to change and evolve depending on the economies. We also don't know.", "duration_s": 39.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0162.mp3" }, { "study_item_id": "MR-0163", "partition": "locked_confirmatory", "call_id": "1901431", "exchange_index": 5, "question": "I have some questions about the chicken guidance. You lowered the margin estimate by about 200 basis points. But also in your prepared remarks, Noel, you said that you're now including the assumption that global demand will match the supply growth, which has also been increased to 4%. I think in your prior guidance, you said you were not going to include any ASF impact on the Chicken business or on the business as a whole. Are we now assuming that there's an ASF -- a positive ASF impact, in the back half of your year? And then I had a follow-up.", "answer": "Yes, we do think that there will be a positive impact, Rob, on exports. We are expecting the production 4 production -- 4% production increase. We are expecting to continue to see growth in demand from an export standpoint, not only to China, but to other places in the world as well.", "duration_s": 22.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0163.mp3" }, { "study_item_id": "MR-0164", "partition": "development", "call_id": "1772293", "exchange_index": 14, "question": "And then, Frank, so you're -- maybe give us some numbers on where the net price increase at Aviation was. It narrowed a bit in the first quarter. So where was it in the second? And also given that you have yet to certify for Longitude, is your full year delivery target fully intact? Or should we be looking at a slightly smaller number this year?", "answer": "Yes, on the price side, Cai, gross price is $13 million for the quarter and net price was $3 million. So continued good performance on that front. And no, I mean we continue to be positioned to deliver on Longitude once we've achieved your certification and kind of we feel like we're in the right place to meet the commitments that we have for that. And we obviously haven't adjusted the Aviation number kind of in any way.", "duration_s": 29.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0164.mp3" }, { "study_item_id": "MR-0165", "partition": "development", "call_id": "1712053", "exchange_index": 9, "question": "So putting that forward, especially the share price [ isn't ] accretive?", "answer": "That is a possibility that is available to us.", "duration_s": 5.6400000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0165.mp3" }, { "study_item_id": "MR-0166", "partition": "development", "call_id": "1788294", "exchange_index": 35, "question": "Got it. Just to clarify on the Q4, kind of, expectations trying to just understand half and half commentary. Is it going to be essentially a few points below seasonal trends or do you think that's is going to be more than that?", "answer": "Yes. I mean, I think the that we think second half over second half. It's a very different environment, right? if we think about second half last year very strong demand, we're significantly different when you look at where we're second half of this year. we're trying to communicate, right? To put a specific number on it, we're not ready to do that for Q4 yet. But I think there has been significant changes from the momentum and the growth in the cloud part of it.", "duration_s": 36.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0166.mp3" }, { "study_item_id": "MR-0167", "partition": "development", "call_id": "1963761", "exchange_index": 38, "question": "Okay. Just 1 follow-up on that is if you had any update on Macy's at 680 Folsom, and I think they were planning to sublease that space. Any latest thoughts there?", "answer": "Yes. So we actually -- we checked in, and there's no \"lease\" yet that we're aware of on the Macys.com space at 680 Folsom. I think that, that -- again, that space was put on the market pre COVID-19 as they made a decision to move those people to a different location from a regional perspective. But so we anticipate that, that space will still be on the sublet market, and it's a great space, and that -- it will lease whether the economics hold for what Macy's thought they were going to get relative to where they will ultimately do a deal. That's hard to [indiscernible] from. Thank you very much, operator. Our call is pushing 2 hours, so I'm going to minimize my closing remarks to simply thanking everyone for staying with us for all these minutes and your interest in Boston Properties. Thank you, everyone.", "duration_s": 59.090000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0167.mp3" }, { "study_item_id": "MR-0168", "partition": "locked_confirmatory", "call_id": "2406690", "exchange_index": 24, "question": "Following up on Gerard's question, as we look ahead to Fed tapering and eventually rate hikes, how are you thinking about deposit betas relative to when we exited the last serve cycle?", "answer": "I think they're going to be a lot lower, simply because there's so much cash sloshing around. Remember, even when the Fed tapers, they're not necessarily shrinking and so with the cash in the system, the competition for deposits just won't be as great as it once was. So I think at the margin, they've got to be lower. And another way of answering that with all the deposits that we have, we're not thinking a lot about betas, right?", "duration_s": 26.539999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0168.mp3" }, { "study_item_id": "MR-0169", "partition": "development", "call_id": "1896528", "exchange_index": 32, "question": "So let me get to the next point, which is the known fallouts that you had from 2019, so Dressbarn and all that, that's 130 basis points that you know going into this year, correct?", "answer": "That's already built into our...", "duration_s": 2.1200000000003456, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0169.mp3" }, { "study_item_id": "MR-0170", "partition": "locked_confirmatory", "call_id": "1641895", "exchange_index": 27, "question": "Okay, understood. And then just one question probably relates to the illness up margin. With the incremental there was quite high. There wasn't a great deal of incremental sales growth. But at the end of the day, is that more of a mix around software sales dollars at the increase at a faster rate than projects? Is there a mix in there, or is that pressure that is more of a price capture that ANS? And just curious how we deliver so much margin there?", "answer": "Yes. The way you can think about there, Rick, is that our spend was light, as I mentioned earlier, and it was particularly light in that segment. From a mix point of view within that segment, Logix did actually quite well. So there was not a big mix driver within that segment.", "duration_s": 26.48999999999978, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0170.mp3" }, { "study_item_id": "MR-0171", "partition": "development", "call_id": "1909046", "exchange_index": 2, "question": "So John, if I heard you right, it seems like you added back the depreciation, the EPS would 6 to 6.20. That's a lot better than where the street is on revenue that's pretty much in line. Is that the mix in EWS? Or where else is that leverage coming through in the model?", "answer": "Just ask the question 1 more time. I didn't fully follow. I'm sorry.", "duration_s": 2.519999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0171.mp3" }, { "study_item_id": "MR-0172", "partition": "locked_confirmatory", "call_id": "2280113", "exchange_index": 12, "question": "Yes. Okay. And then one for Kevin, just on the business jet OE fronts, how much of a lead -- is it too early to have conversations with OEM customers about potential production rate increases there. Have you had any of those yet? Any color you can give us on that end market?", "answer": "Well, I think we're starting to hear from Airbus of rate readiness, notifications of ramp in narrow-body rates. Seems to make sense. It seems like there will be a hole in the market that they need to fill. We will be ready to fulfill that as it comes to pass. Makes sense that there will be some of that need, though.", "duration_s": 22.580000000000155, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0172.mp3" }, { "study_item_id": "MR-0173", "partition": "development", "call_id": "1900234", "exchange_index": 13, "question": "A question on your earnings power. If we look back at 2014, your pro forma EBITDA was $1 billion. Since then, the caustic soda index prices are up a bit and chlorine and EDC prices are down, but natural gas prices have dropped from around $4 to $2.50. That should have given you a net EBITDA tailwind. And then when you consider cost synergies of $250 million in revenue synergies on top of that, you should have been able to generate about $1.3 billion or $1.4 billion of EBITDA in 2019 based on your sensitivities, but you did $941 million in 2019. That's about $60 million below the level of pro forma 5 years ago. How do you explain not being able to grow EBITDA over 2014 pro forma?", "answer": "I would say, I think you've thrown a lot of things at us there. And I would prefer to write down what you said and get back to you on that point because we're not going to pound through the pro forma and all the differences that I'm not saying you're wrong, I'm not sure exactly of the veracity of everything you said.", "duration_s": 18.639999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0173.mp3" }, { "study_item_id": "MR-0174", "partition": "development", "call_id": "1640196", "exchange_index": 40, "question": "Okay. And then just in there at the -- in the offset to the line that moved above the line, I'm assuming the coal royalties will be included in that. And can you give us any sense of how much of an increase you might have gotten in the fourth quarter this year on that number?", "answer": "Yes, it's not significant. Thank you. We are proud of what we've accomplished and are excited about our prospects for future success. In a few weeks, we will discuss the strategic initiatives we have underway, which will further strengthen our company and to deliver even more value to our shareholders. And we look forward to discussing them with you at our Investor Day on February 11. Thank you.", "duration_s": 38.55000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0174.mp3" }, { "study_item_id": "MR-0175", "partition": "development", "call_id": "1894715", "exchange_index": 34, "question": "Okay. Like 27%, 28%?", "answer": "In that kind of range.", "duration_s": 1.400000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0175.mp3" }, { "study_item_id": "MR-0176", "partition": "development", "call_id": "2330095", "exchange_index": 7, "question": "I wanted to follow-up on the strong sell-side ASV growth a little bit further, specifically, curious how much you would attribute that acceleration to the deep sector rollouts and and maybe what's a reasonable expectation for the timing of new deep sector rollouts going forward? Or anything else you can share on areas of focus there.", "answer": "I would definitely attribute some of it to that. We had one significant win that was related to deep sector. And we're on track with that program. So the team did a tremendous job of laying out over a 3- year period, a number of sectors that we would be developing. And we're on track with that program. So 7 quarters into it, we feel really good about the momentum there. We've done a lot of hard work to partner with a lot of firms to bring their data and integrate it into FactSet, which is something we always do really well. And then for other data sets, we're going out and collecting it ourselves. \nSo overall, we're really thrilled with that program. The team has done an amazing job, and it's beginning to have a real impact for us on the sell side, but it's not just the sell side. We will be able to monetize this data within the corporate space within the buy side as well.", "duration_s": 55.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0176.mp3" }, { "study_item_id": "MR-0177", "partition": "development", "call_id": "2352893", "exchange_index": 12, "question": "Going back to the recoveries, I appreciate all the color on that. Was there any portion of that $15 million that was in the prior guide? And then additionally, is there any assumed improvement in the guide just from day-to-day collections in the second half?", "answer": "Yes. So the $15 million referring to the rental assistance that was added to the guidance. It was not in the prior guide. We had kind of telegraphed on the first quarter call and even back to original guidance that we had assumed that collections would remain the same and that the bad debt level would be the same. So the $15 million is incremental. We're also assuming that the collection rate, the 97%, stays the same. So the only real change we made to the guidance was adding the $15 million, 5 of which we've already received on the rental assistance side.", "duration_s": 30.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0177.mp3" }, { "study_item_id": "MR-0178", "partition": "locked_confirmatory", "call_id": "2412864", "exchange_index": 28, "question": "We've been through a lot here, but I guess we haven't really talked a whole lot about South America. And I noticed that you guys did take up your full year '21 guidance for the market there. So I would love to hear what's going on in South America.", "answer": "You bet. We did take the market up a little bit there. What we've seen in South America is our dealers are doing a fantastic job down there. We have the new DAF that we introduced last year. Customers are in love with that truck. It's performing at the top of them, so our premium reputation is established in South America and Brazil. We've grown in the Andean region as well. And so South America is a strong point for PACCAR, and we've had the strategy to grow there and it's been successful.", "duration_s": 25.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0178.mp3" }, { "study_item_id": "MR-0179", "partition": "development", "call_id": "1705222", "exchange_index": 22, "question": "Tim, just following up on Turkey. Is it possible to roughly quantify the size of your business there? And from an earnings perspective, is it accurate to say that this will hit both North American industrial packaging on the export side as well as the European industrial business?", "answer": "Yes. Probably, to a lesser degree in terms of the business on the ground in Turkey and I would expect most of the detrimental impact to be in our export containerboard business. Turkey, in year's past -- it's ranged, but it's been anywhere from 100,000 tons to 200,000 tons. And it depends on the economic ambitions in Turkey and a number of other factors. So it's a big market for us. And given, as Mark said, the tariff structures that have been put on for one, but then secondly, just the underperformance of the economy there, it'll -- we'll work to overcome it. But it's a challenge in the near term.", "duration_s": 49.18000000000029, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0179.mp3" }, { "study_item_id": "MR-0180", "partition": "development", "call_id": "1892998", "exchange_index": 6, "question": "Yes. Jim, I know you love this question. What inning are you in the PSR process?", "answer": "Well, baseball is finished. So let's talk football soon as it's right in the middle of the real exciting part.", "duration_s": 6.940000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0180.mp3" }, { "study_item_id": "MR-0181", "partition": "development", "call_id": "1700866", "exchange_index": 24, "question": "Just curious if anybody's going to top your organic growth this quarter. Let's see what happens there. Question on software growth. Can you guys -- I mean, you alluded to that. But can you just talk about the growth for stand-alone software and what would standalone software business be in 2019 versus 2018?", "answer": "Well, as usual, we're expecting high teens to 20% growth in our software business. That target has not changed. We grew into teens in Q1, so I think we're very much on track. the connected enterprise is really transforming. We're going to be doing some fun things at Investors Day. I don't want to give too much away in the day after in terms of new launch that grows a few that went to hand over you probably saw a little bit of end of that in terms of Honeywell Forge. But I'm excited by what's going on in that team and what they're trying to do. And the embedded platform is growing nicely as well. I mean think mid- to high single-digits growth there as well in a lot of those platforms. So overall, it's been an area of emphasis for Honeywell. It's going to continue to be, and we're seeing the results in our P&L.", "duration_s": 55.14000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0181.mp3" }, { "study_item_id": "MR-0182", "partition": "development", "call_id": "1647116", "exchange_index": 26, "question": "Kevin, Nick, you talked about a few organizational changes in promotion, going back to Myles' question a bit more. Can you give us how you're going to tackle this deal versus other deals just given the relative size? Any qualitative color will be helpful.", "answer": "I actually don't think we're going to approach it really all that different. We are going to have a focused team to work on it. We're putting some dedicated resources on it, but we're going to use the same integration playbook that we always use. And we have some resources to apply to it, both in finance, as you've heard. There's obviously other folks that were able to dedicate to the Esterline integration team, senior group controllers and the like that will help round out the team. We've been, I think, planning for something significant for a while and putting resources in place, stretching folks, getting our EVPs ready. We have another wave of potential folks ready depending on what's needed. So the succession planning and people development as a way of business is really what we've been working on for a very long time. So I don't feel -- I'm not as concerned on the resource side. I think we will have the people to put on the Esterline integration team to make it successful.", "duration_s": 74.97999999999956, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0182.mp3" }, { "study_item_id": "MR-0183", "partition": "locked_confirmatory", "call_id": "1713407", "exchange_index": 21, "question": "Got it. And it's been a couple of months since you announced the split or potential or the upcoming split of the Upstream Energy business. Can you speak to whether or not you're seeing interest from potential buyers in that business at this point?", "answer": "Yes. That's not something we would comment on publicly one way or another.", "duration_s": 3.7199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0183.mp3" }, { "study_item_id": "MR-0184", "partition": "development", "call_id": "2269101", "exchange_index": 11, "question": "And I don't have the queue in front of me. Can you tell us what the purchase commitment growth rate would be sort of on a year-over-year basis before the Q was filed? What was it last year at this point? Do you have that data handy?", "answer": "Significantly lower. Yes. So I think if you take a look at -- I mean, we're going to find it later today, so you'll see it. But we're -- it's significantly higher. We haven't been in that real historically.", "duration_s": 11.300000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0184.mp3" }, { "study_item_id": "MR-0185", "partition": "development", "call_id": "1792358", "exchange_index": 31, "question": "Okay. And then -- and lastly for me, can you give us some indication? You spoke a bit about that the evolution in the marketplace of kind of faster payments and how you're well-positioned on a lot of different axis to benefit from that. Can you just speak to any capabilities that the merger will unlock in terms of potential honest alternative routing paths to go from merchant to bank? Or is that something that's in your road map? Or any color there would be helpful, too.", "answer": "Yes. No, Ramsay. We think there could be a real opportunity there. Obviously, when you start talking about long-term combination of the company and some opportunities that might exist, that's one of them that we're looking at. But we're not really prepared to to talk about that today. Thank for joining us today. We are thrilled with this combination. Worldpay is a respected global brand with a best-in-class executive team and over 8,000 talented employees. They have a loyal and extensive client base and partner network who represent some of the most successful businesses in the industry. This, combined with our profitable and very predictable financial institution business, banking and capital markets, all aimed at the heart of commerce and the financial and transactions that power the world's digital economy, makes this a powerful combination. We are grateful to all our loyal clients who depend on us to keep their businesses running and growing every day. Finally, I am personally thankful for our now 55,000 leaders and employees for their hard work and dedication in serving our clients. FIS is dedicated to advancing the way the world pays, banks and invests. Thank you for joining us today.", "duration_s": 75.70000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0185.mp3" }, { "study_item_id": "MR-0186", "partition": "development", "call_id": "2278037", "exchange_index": 30, "question": "And just following on to the other part of the question, related to carbon capture opportunity. Is there a bit of a chicken and egg problem there where the infrastructure might not be in place to take the captured carbon to wherever it's going to be stored or sequestered? And how do you see the market sorting that out?", "answer": "You are very right because when people talk about capturing carbon -- so we can capture cabin for you anyway -- anywhere there is a plant which puts out CO2 out of an SMR or a chemical unit, we know how to capture them. That's the easy part. The question is that what do you do once you have captured, you need to have a place to see questioning. And the biggest question is that where is it possible to sequester it? Where is it possible that there is enough core space to do that? That is the major question that will come into play in terms of how many of these projects can you do? Where can they be done and all of that?", "duration_s": 40.11999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0186.mp3" }, { "study_item_id": "MR-0187", "partition": "locked_confirmatory", "call_id": "2326894", "exchange_index": 8, "question": "I wanted to start off with a technology question for Rick. Last quarter, you mentioned being in the middle of developing a new 3-year road map for technology. And I wanted -- I was curious if you -- where you expect to see the biggest returns, whether it's consumer-facing in the box, online, back-of-the-house support center or in some other area? I mean where are the biggest opportunities and priorities for the next 3 years on the tech side?", "answer": "Yes, James, thanks for the question. We have completed our 3-year road map and what we're working on. And we look at it in a few places. But the primary -- I would say, the primary theme is reducing friction. So what we're doing with technology is reducing friction in the guest experience, in the team member experience and in the manager experience in what we do.\nAnd so that would mean continue to enhance our off-premise capabilities to make it easier for guests to order repeat orders and to pick up their off-premise experience. In the restaurant, we're looking at a revamp of our point-of-sale system. It's a pretty old system that we developed years ago. We're going to revamp that to make it much easier for our team members to handle the guest experience and to handle off-premise.\nAnd for the managers, we're simplifying the way things look in the back of the house. So a lot of our systems, while they have great back-end -- very great back-end, The user interface isn't as great. So we're working on improving the user interface. But all of those are under the theme of reducing friction.", "duration_s": 70.94000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0187.mp3" }, { "study_item_id": "MR-0188", "partition": "locked_confirmatory", "call_id": "1703486", "exchange_index": 2, "question": "I'm going to stick on intermodal, but I'm going to go on the international side here. How should we look at volume growth going forward considering that you guys talked about benefiting a little bit from a tariff pull forward in 1Q?", "answer": "Jason, as you noted, it was above the norm and the first quarter had pretty close to 10% volume growth in the international network. We certainly don't expect that to continue as we move throughout the year, and we expect it to move back towards trend. Go ahead.", "duration_s": 17.75999999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0188.mp3" }, { "study_item_id": "MR-0189", "partition": "development", "call_id": "2354077", "exchange_index": 1, "question": "Great. And then a follow-up question is probably for Ross. Regarding the increased transaction market, neighborhood community lifestyle or power centers, which are you seeing the biggest pickup in activity in transaction and which you're seeing the lowest rise in transactions?", "answer": "Yes. I mean there's no doubt that grocery-anchored infill shopping centers are very much in demand right now. As I mentioned in the prepared remarks, I mean you think about the risk-adjusted return spread on high-quality grocery-anchored centers in the high 4s or the low 5s, and you're still getting a good 100, 125 basis point spread compared to some of the other asset classes. So we're starting to see a lot of both private and some of our public peers getting much more aggressive on that product type, and we think that will just continue. \nWe are seeing more activity on power and lifestyle. There's not as much that we've seen transact as of yet. But with the improvement in the economy, with the improvement in the retailer sales, we are seeing much more conviction on some of those categories that you see in lifestyle centers such as restaurants, entertainment, fitness, really coming back and solidifying themselves. So I think that there's just a lot of demand for all product types right now within open-air retail.", "duration_s": 59.539999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0189.mp3" }, { "study_item_id": "MR-0190", "partition": "locked_confirmatory", "call_id": "2225279", "exchange_index": 7, "question": "Got it. Understood. I'll turn it over. Good luck through 2021.", "answer": "Do we think it's going to last through 2021? Is that your question?", "duration_s": 2.8399999999996908, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0190.mp3" }, { "study_item_id": "MR-0191", "partition": "development", "call_id": "1642903", "exchange_index": 8, "question": "Gray, it's good to hear. And maybe any near-term impact from the weather? And you had a relatively strong oil mix in the fourth quarter as well. I know that bounces around, and we tend to ask you from quarter-to-quarter, but anything on those 2 things?", "answer": "No, there has been some weather impacts. It's extremely cold, so the port -- polar road vortex is alive and well in North Dakota. Just right the rest of the nation, we expect to recover from all that is normal.", "duration_s": 12.360000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0191.mp3" }, { "study_item_id": "MR-0192", "partition": "development", "call_id": "1643972", "exchange_index": 36, "question": "And when you say fast term, would that be a bit this year or is that more of a 2020 kind of comment?", "answer": "Will be done with the program in 2020. So to the extent we can accelerate anything to get value more quickly over the longer term, we would accelerate projects, and we frequently revisit our footprint looking where the opportunities are and again, looking where outages. And so if you could actually move some of these things up we definitely would do it but for now we on the process described in the material we sent to you.", "duration_s": 25.90000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0192.mp3" }, { "study_item_id": "MR-0193", "partition": "locked_confirmatory", "call_id": "1854407", "exchange_index": 1, "question": "Okay. And then just as a follow-up, you brought up Caremark, are you seeing either Jon or Karen, are you seeing anything as far as the selling season is having an impact. I know, Larry, it's still a small market. But as we think about the number of MinuteClinics you have today, the services that you're providing, any impact at all in the 2020 selling season around having these offerings? Or again, is that more of 2021? And I'll stop there. .", "answer": "Lisa, it's Karen. Yes, we've been -- a couple of things on this topic. We've been talking to our clients throughout the 2020 selling season about how we can deliver that more personal, integrated, cost-effective and holistic care approach.\n[Audio Gap]\nresponse from our customers has been very positive to date. And I think we're seeing a fair amount of activity and pipeline build for 2021. And as we talked about previously, our focus for 2020 was to go to market with a more integrated medical pharmacy offering. And what we've done for the 2020 selling season, I'm very pleased to tell you that we are seeing increased traction in overall pharmacy penetration for our employer sponsor business, particularly where Aetna had the medical business, and we're now winning significantly greater percentage of pharmacy business. So there's a lot going on, and we're -- I can talk later relative to the -- some of the pilots that we have, but I'll let Jon cover where we're headed. Lisa, this is Derica. In regards to -- on the Caremark side, we've had the opportunity to introduce the HealthHUBs to a number of our clients both on the health plan side as well as on the employer side. And we've had a great deal of excitement and interest, and it's clearly playing out not only in our selling season. We look to wrap that up, but also to 2021. And I know there was always -- with the announcement of the deal between CES and Aetna, there was some concern amongst investors about potential for channel conflict. We -- with the interest that we have from some of the health plan clients, we're actually now listed 2 that are actually performing some pilots with us. That was related to the HealthHUB itself. So that gives you some idea to the type of traction we're getting in that space. And Lisa, this is John. If you remember, back when Caremark rolled out Maintenance Choice and the excitement in the market and the momentum that gave us, we're seeing a similar reaction in the market to HealthHUBs from the clients.", "duration_s": 119.09999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0193.mp3" }, { "study_item_id": "MR-0194", "partition": "locked_confirmatory", "call_id": "1970773", "exchange_index": 36, "question": "Okay. Fair enough. And then just finally for Mike. Any risk moving forward at all in terms of impairments on the intangibles, just with some of the dislocation in prices in the marketplace.", "answer": "No. No. I think you guys probably saw that SEC requires some quarterly test for companies like us, and we've done the analysis with our auditors at EY, and we've got a pretty good cushion across the board here. I think that's it. I think there's no 1 out in the queue. So we'd just like to thank you all for calling in this morning, and that concludes our call. Thank you. Thank you.", "duration_s": 38.38999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0194.mp3" }, { "study_item_id": "MR-0195", "partition": "development", "call_id": "2043239", "exchange_index": 22, "question": "Okay. And The Street being down 20% in the third quarter from a global revenue perspective, it sounds like your June kind of globally was probably down less than that 20%, if I connect the April, May, June comments. So just kind of your comfort at that $486 million number where The Street [indiscernible] in 3Q, I know you're not guiding, but I would assume you don't have too many concerns on that number.", "answer": "we'll give you an A trying. That was a good one. Yes, it's a good one, Jeff. No, we're not guiding, but we try to give you as much information. I know people are doing surveys and other work as well. You can help triangulate around it. But just don't want to give out -- for the things that we've talked about. I don't want to give out future guidance. And Jeff, we're not being cute here. It's just -- it's hard to read signal through noise right now, okay? And that's what we're conveying to see.", "duration_s": 23.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0195.mp3" }, { "study_item_id": "MR-0196", "partition": "development", "call_id": "1896363", "exchange_index": 34, "question": "Just a quick follow-up. Anything moving around on like cash conversion? I know that with the TransCore deal coming through? Maybe it's a bit of a different cash profile early on. Anything -- any dynamics there we have to be aware of for cash conversion or cash margin in 2020?", "answer": "Yes. No, thanks, Steve, for the question. I was preparing for it. I'm glad you got back on and ask. Yes. No, we definitely feel free...", "duration_s": 6.619999999999891, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0196.mp3" }, { "study_item_id": "MR-0197", "partition": "development", "call_id": "1856605", "exchange_index": 24, "question": "Got it. And then with regards to the automation efforts, you're standing up at the Newport yard. Can just walk us through the milestones? And how we should see that benefit rolling in going forward?", "answer": "Well, we are using them now. This is not a role in implementation. we are using this product on CVN 80 now, and we're really pleased with how they're being utilized and the results of we're saying. That being said, there were -- we assume some of those savings in 80 and 81 contracts. the very, very pleased with how it's going. We look at how they're being developed and how they're implemented in a very recurring basis. So we look forward to implementing an hour or 80, 81 on the Columbia-class as well.", "duration_s": 39.820000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0197.mp3" }, { "study_item_id": "MR-0198", "partition": "development", "call_id": "1636956", "exchange_index": 5, "question": "Got it. And just on capital deployment. What's your target for buybacks and acquisitions in 2019?", "answer": "Yes, David. We didn't give a target. If you look historically, we've given cash deployment target of the past couple of years. Part of the reason for us giving the target the past couple of years is we did lever down at the end of 2016. We tried to do an acquisition that didn't work, so we wanted to give confidence that we were going to deploy the excess cash from our balance sheet. As we sit here today, and we have a solid investment-grade balance sheet, we think that's at a premium in today's economic climate. We're not going to have -- we're not going to sit tight and analyze what's going on economically. We're not going to give a cash deployment target in the near term. Our preference remains acquisitions. We do have very active pipeline. I'm sure we'll talk through them in the call today. That's evidenced by the 3 acquisitions we announced here in the last 90 days or so, and we still have acquisitions in the pipeline.", "duration_s": 56.059999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0198.mp3" }, { "study_item_id": "MR-0199", "partition": "development", "call_id": "1712053", "exchange_index": 15, "question": "That's good. And then with Phil's question on the leverage and the dividend, have you thought about kind of what that payout ratio of AFFO might look like crown when they converted sort of dividend kind of the full payment. American Tower has kind of been in that we're going to grow it for a long time, which way do we think about you guys looking at the dividend date does come with the path might look like?", "answer": "The latter.", "duration_s": 0.7000000000000455, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0199.mp3" }, { "study_item_id": "MR-0200", "partition": "development", "call_id": "1647116", "exchange_index": 28, "question": "Nick, Kevin, very nice results. Kevin, maybe just a quick one for you. Given all this growth that you're seeing, are you seeing any stretch out in lead times within the supply chain or anything that is a watch item for you just given the strength that you mentioned across all your end markets?", "answer": "We have seen some limited supply hiccups. Generally speaking, we try to cover that with inventory buffers and our own work in progress to ensure that we can survive that. But yes, we've seen some limited, I don't want to say that we've seen none of that. I think it's isolated to a few areas mostly around chemical processing, outside processing, not fundamental across the business. So we've seen a little bit of that. But so far, we're handling it.", "duration_s": 37.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0200.mp3" }, { "study_item_id": "MR-0201", "partition": "locked_confirmatory", "call_id": "2032913", "exchange_index": 12, "question": "Great. Great. That's very helpful. And then sticking with PEO, just wondering if there's any update to how you're viewing the M&A opportunity set there. I mean, how much are you kind of considering the volatility or the variability in the economic backdrop and considering future deals? And are you at a point even now where you might be comfortable moving forward with something like that?", "answer": "Sure. Yes, we're still very interested. Obviously, we think the PEO business, it's a growing part of our business, and we do think that there's M&A opportunities out there. We're staying in touch. In the -- in this environment, it's a little bit difficult, obviously, one, from a remote working just the due diligence and so forth. But we're staying in touch with certain opportunities, and we're continuing to watch those. It does make it a little bit more difficult, not only the remote piece of diligence, but to understand where they've dropped employees or dropped clients, what's the take now? What's the valuation? And many of the possibilities of acquisitions are also a little bit nervous about selling at this point unless you're -- unless we're willing as a buyer or any buyer is willing to kind of overvalue expecting how it's going to bounce back. So it's a little bit of a tenuous time to buy, but we're staying very close to that market and very interested for the right opportunity.", "duration_s": 57.68000000000029, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0201.mp3" }, { "study_item_id": "MR-0202", "partition": "locked_confirmatory", "call_id": "2280113", "exchange_index": 22, "question": "And is there any way to gauge whether the uptick in aftermarket activity is as parked -- is it for parked aircraft coming back into the active fleet, and therefore, it's sort of an unnaturally high bump relative to what the underlying consumption might actually be? I'm just wondering if there's any way to parse all of the data you guys get to figure out if this a...", "answer": "Because if I was placing that, I would say that yes, some of it must be for returning aircraft although the parked fleet has slowed as to what's coming back out-of-park until there's more revenue passenger miles flown. So I think they continue to pull out capacity. They then have to get it ready to fly. So there's a little bit of that. I don't say that there's a whole lot of it is getting planes ready. I think it's actual usage, having inventory staged where you'll need it. It's just the return of flight activity, and maybe there was some harvesting of available hours on different planes or ship sets that they needed to manage now. Now I'm kind of you get into speculation.", "duration_s": 53.69999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0202.mp3" }, { "study_item_id": "MR-0203", "partition": "development", "call_id": "1830153", "exchange_index": 22, "question": "Just maybe just following up on the margin question. If there were a couple of things are wanting you can call out to hold you back whether is perpetual reinvestment or just faster-than-expected mix shift, what would keep you from something like notable margin improvements starting in 2021? And how we should think about that conceptually? As you talked about like moving towards less of a payroll model, more of a model tech model, how should be think about the margin conceptually in that lane?", "answer": "Yes. I guess I'd like to defer the -- a better or more complete answer to the second half of the year because trends will become more evident. But if I were to point to one thing, we've had relatively high spending. And what's been kind of unusual about our performance is that we haven't taken any charges. We have made changes on the fly. We've delivered double-digit EPS growth, and we've done that all within the context of the kind of programs that we run. So we understand that as we exit the year, some of that spending will decrease. We know that. We're working on that actively. And the question is, how much? We'll have better sense of that as we go through the second half of the year. The investments have paid off. I think the result we're seeing reflect that. And I think that all of the technology advances and improvements that Marty was mentioning are really the fruit of that accelerated investment. But you don't continue to invest at that accelerated pace, you pull some of it back down. So we anticipate as we go into '21 that that's what you would see.", "duration_s": 78.33999999999969, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0203.mp3" }, { "study_item_id": "MR-0204", "partition": "locked_confirmatory", "call_id": "1700964", "exchange_index": 31, "question": "Yes. I think to the point of the last question, you covered a lot of ground. But maybe just to stick with SG&A for a second. Rich, I think the initial progress there was pretty immediate once you guys announced it. And I would imagine that there were probably areas of stem that you found maybe a bit more opportunity or perhaps on the other side where there was maybe some indiscriminate COGS. Should we see the shape of SG&A start to look a little different as you refine the program? Or are you pretty satisfied with the kind of the initial phasing of how that went across the organization?", "answer": "I'm satisfied with the organization's ability to undertake what is a difficult exercise and the speed at which it was done. It's never going to end, but this is particular progress that we thought was important to identify and execute on. Once we reach that program limit relative to the restructuring charge that we took, you can foresee that these EPS bridges won't have that SG&A. Any other ancillary benefit will roll over to conversion at the end of the day. So at a certain point, we're just going to stop reporting on it once we reach conclusion because then, it becomes relatively discrete and it's not part of the program, right? What we said back in September is if we take a charge for it, we're going to report back on delivery for that charge. Once we are beyond that phase, it's just going to go back into conversion.", "duration_s": 59.809999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0204.mp3" }, { "study_item_id": "MR-0205", "partition": "locked_confirmatory", "call_id": "1832868", "exchange_index": 4, "question": "And I guess just to push you guys a little bit, the absolute level of RoTCE is quite a bit below peers. And I think what most people would think, your franchise should be able to do on paper. With that in mind, even in this environment, Mike, do you hope to push better than you do in 2019? is it that a goal that you think is definitely doable to do better next year than this year?", "answer": "Absolutely. I think we've got to continue to show progress, and we've got to continue to narrow that gap.", "duration_s": 7.019999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0205.mp3" }, { "study_item_id": "MR-0206", "partition": "development", "call_id": "2367492", "exchange_index": 3, "question": "And then you talked about the supply outlook on senior housing kind of being positive for the year and medium term. Given the recovery that's underway, when would you expect that supply to start picking up in terms of new starts?", "answer": "Yes. So -- it's Justin. There's a little bit of catch-up in terms of supply from last year that we're experiencing in the short term, it's a bump in the road, but starts and deliveries are very low. And so there's a window that we can look out, we think, a few years of runway to really have strong absorption in the sector. Certainly, capital will follow the fundamentals, and we would expect to see development chase this sector. But when they do, they'll be faced with the strongest aging demographic that the sector has ever faced. So we're certainly bullish and confident on the demand for senior housing.", "duration_s": 42.76000000000022, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0206.mp3" }, { "study_item_id": "MR-0207", "partition": "locked_confirmatory", "call_id": "2049390", "exchange_index": 16, "question": "Great. Mike, congrats and good luck. Jim, maybe I just want to step back on the clarifying your 60%. Is that now long term, it's not -- I just want to clarify, it's not a next year target. And then I guess I want to dig into this quarter, Mike, a little bit. If you took out 20% of employees, but as you noted, only 1,000 in the quarter with volumes down 26%. So most of the work was done before. Comp is now still 28% of costs, which is not different than it was back in 2017. So as you post an over 70% operating ratio, which is now 700 basis points worse than your peer and 1,300 basis points worse than the the company that tried to acquire you. Just I understand the confidence still in TOP21. What's missing? Even as companies were going through it, we saw others able to make improvements in that OR. What is the constraint here in getting the cost out because in times like this sometimes companies are able to pull out and be more aggressive in structurally taking out those costs. So Jim, as you step back, maybe give a view of what needs to be done here.", "answer": "Sure, Ken. Well, as we said a few minutes ago, it was a challenging quarter, and we are not satisfied with the 70% operating ratio we posted in the second quarter. We fully expect operating ratios to trend down through a combination of the growth that we reasonably expect over time and that we will produce ourselves and the productivity initiatives, the many productivity initiatives we have underway. Our strategy is adaptable, and we will lean one way or the other or into both as necessary given the environment we're in. And we are confident that we will make progress toward a 60% operating ratio. We'll get there as fast as we possibly can.", "duration_s": 44.19999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0207.mp3" }, { "study_item_id": "MR-0208", "partition": "development", "call_id": "1718461", "exchange_index": 8, "question": "Jayshree, I'm going to ask knowing what the answer is, but any can you give us any sense for how much revenue you can generate in campus, or either in a range or point number. What you're thinking through the year?", "answer": "Paul. Actually, I do want to answer that question, but can I do so at the Analyst Day? Is better than the saying never, right.", "duration_s": 8.819999999999936, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0208.mp3" }, { "study_item_id": "MR-0209", "partition": "development", "call_id": "1787203", "exchange_index": 18, "question": "Can you just comment on what the contamination is?", "answer": "Steve, this is Todd. If you look over the last 15 years, long-term item for Olin, our average expense has been just under $20 million a year and it ranges anywhere from $38 million in a year to $8 million. So this $20 million item happens is not unusual, it happens periodically over a 15-year period. And the other day, I think, we have over 77 sites that Olin is dealing within the environmental portfolio. And remember this is a side as we didn't take any legacy Dow environmental liabilities.", "duration_s": 42.90000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0209.mp3" }, { "study_item_id": "MR-0210", "partition": "development", "call_id": "2064936", "exchange_index": 31, "question": "That's helpful color. Switching gears for a second. How long do you think operating expenses can stay at these lower levels? I mean, when are you expecting them to kind of rebound and come to what they've been historically?", "answer": "So, it's an interesting question. I think when we look at the belt-tightening that we've done across the portfolio and what we've been able to do in terms of efficiencies, it's our job to continue to look long and hard about how do we do more with less, how do we belt tighten for the long term. And so I think the operating expense is one that we continue to monitor to see how we become more efficient. We've invested heavily in technology. We've invested heavily to make sure that the efficiencies gained or things that we can continue on past the pandemic. So it's not just a short-term pop. So it's one that we've been monitoring closely. And I think as a large national owner, we get benefits of scale there because the investments we make, we can deploy and really see significant efficiencies across the whole portfolio.", "duration_s": 49.289999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0210.mp3" }, { "study_item_id": "MR-0211", "partition": "locked_confirmatory", "call_id": "1700964", "exchange_index": 1, "question": "One of the questions we've been getting from investors this morning is that very nice beat in Q1. You raised organic growth number for the year yet you kept the EPS. What of the headwinds do you have more concerns about second half? Just if you could give us more color about the modeling process here for 2019.", "answer": "All right, like a couple of things. We're clearly tracking towards the top end of the range at this point. I think that we're pleased with Q1's results and it's always off to -- it's always good to get off to a good start because we don't want to be in a position of chasing a comparative fourth quarter that we had last year. So to the extent that we're getting in front and we are in front from last year because of the fact that production performance in DFS, our ability to -- a couple of things. If you look at the backlogs, there's some concern about the backlogs going down. But I would tell you that in ESG, that particular business grew by 11% in the first quarter. So the conversion and the availability of chassis was there so we're able to convert on the revenue side. And then you've got the backlogs going down in engineering systems, but we don't find that problematic because order coverage in that particular segment goes well into the third quarter. In DFS, as you know, we've been struggling in terms of output. We had a high backlog exit at Q4. Production performance in DFS was excellent, so it's another business that grew in the high -- grew 17% in the first quarter. So backlogs are going to come down because of production performance. I think the good news on the ESG conversion was the margin conversion rate was satisfactory. I think that we have work to do because we would have expected for the more the accretive margins in DFS to be higher. I think we've got a plan to track that through the balance of the year. So overall, it's not a question of us being overly concerned about the metrics and backlogs. It's just purely a question of we've got range, we've got a range up to $5.85 a share. We're tracking towards that. We'd like to get another quarter into our build so we get some visibility into Q4. And I'm sure we'll give an update at that point.", "duration_s": 119.20000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0211.mp3" }, { "study_item_id": "MR-0212", "partition": "development", "call_id": "1663214", "exchange_index": 7, "question": "And just a quick follow-up on the spodumene issue. Prices are down. You compare them out year-on-year. And just wanted to get your thoughts on maybe what's driving that and your view that flat to up pricing in your overall portfolio. It wouldn't to be enacted by lower, I guess, prices of spodumene, if at all.", "answer": "Well, this is Eric. It's a pretty simple answer, it's supply, right. As we all know it's publicly published, there's new supply spodumene come into the market. I'd point out though that, that is a very unproven quality, right. So I think that some of that supply will work better than others in meeting the conversed demand inside China. But the mere presence of more supply coming on has had the effect of creating somewhat lower prices. And what I'd point to you on that is the strategy of long-term agreement really comes into play when you have a situation like we have today. We are very confident in what our pricing model is going to be for 2019. We are very confident in the demand. We are very confident in being able to place the volume that we can produce in 2019 with customers under long-term agreements at set prices.", "duration_s": 54.40000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0212.mp3" }, { "study_item_id": "MR-0213", "partition": "development", "call_id": "1772293", "exchange_index": 24, "question": "Do you find that weather is a big factor for dirt as it is for snow? And then one last thing I wanted to ask you is similar in commercial helicopter, similar to my first question about H2, how do you get optimistic or as optimistic for a bounce back when the rig counts have been fairly soft, especially in the second quarter?", "answer": "Well, so on the helicopter front, keep in mind that our share in those deepwater rigs, I mean we really don't address that market today. That's part of what the 525 is about for the future. But where our market is and where we are practicing strengthen very strong order flow here in the last almost going on a couple of years now is really around the nearing stuff in oil and gas and frankly, a lot of emergency medical services, objective VIP, customs and border patrol, I mean it's a much broader market, police. At it really -- what really drives the 407 and the 429 markets is not the oil and gas markets. So there is a real contrast right now between the big machines that are largely oriented to serving that offshore oil and gas market. It's just not a market we've had a very big position. The market that's quite strong is again around more the light twins, the singles. So it's volume around 505, 407, 429 and 412, which is not that deepwater offshore oil and gas market.", "duration_s": 70.01999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0213.mp3" }, { "study_item_id": "MR-0214", "partition": "development", "call_id": "2400486", "exchange_index": 30, "question": "Just a quick follow-up on that part is what are some specific things that are going on there. And then I just -- separate question on the marketing and promotion side. I'm wondering how you're thinking about marketing and promotion spending as you see some of these COVID era forces easing, a variety of them. So more specifically, do you anticipate marketing and promotion spending returning to fiscal '19 levels in fiscal '23?", "answer": "So let me answer the last question first. No, we don't expect it to get back to that at this point. But then on the restaurant expense line, like I said, it's really contract services. We continue to look at our vendors and continue to work with them on how to kind of optimize, streamline some of this, and that's part of that. There was a little bit less R&M that has been catching up. And I think by Q1, we're more closer to pre-COVID levels on that line. But there's a little bit more on that line that I think will come back. But beyond that, there's really no specific 1 item here or there. I mean there's music, there's other stuff that we talk about, but these are -- it's in multiple places.", "duration_s": 42.20000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0214.mp3" }, { "study_item_id": "MR-0215", "partition": "development", "call_id": "2327819", "exchange_index": 24, "question": "I'm wondering if on this point of hiring and recruiting, et cetera, how you're feeling about the current product and services that Paychex can offer. And I know that, that can be a contributor, but I'm just wondering if there's incremental opportunity to expand and improve those or tie them into other services. Just trying to think about kind of this bottleneck that everybody seems to be dealing with right now and how you can help address that.", "answer": "I think the investments we've made over the last couple of years, really making onboarding of new employees, very easy for our clients, have been really important. It's all paperless. It can now be done online. And the partnership with Indeed has really picked up very well, the fact that Indeed gives credits to our clients for their early postings and so forth and get them kind of to the top of the list for posting. So from the standpoint of as soon as you let someone go, we can alert you to the fact that you can post that job now and Indeed, which is integrated with Paychex Flex, Indeed will post that job. If someone -- as candidates apply for that job, you can now see all that through Flex. You can do video interviews. You can onboard that employee and all of their information that, frankly, they can sell -- set up by themselves, the person that's applying for the job, and all that can be done and then approved and set up and run a payroll and all their other HR products from us, all paperless without ever anyone touching anything. So I think that is continue -- that is going to help a lot in the hiring process, and the integration with Indeed is going to help people get posted out to the biggest job board, frankly, in the world. So we feel very good about the partnerships and then about all of the process being completely paperless and onboarding. \nAnd then once they're in, all of the career development, the data analytics that we provide, the ability to communicate remotely through HR conversations where you can text within the app back and forth or message within the app back and forth, all is very strong for hiring and retaining your employees.", "duration_s": 111.57000000000016, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0215.mp3" }, { "study_item_id": "MR-0216", "partition": "locked_confirmatory", "call_id": "1780827", "exchange_index": 32, "question": "You've spoken about very wet weather depressing homebuilder demand throughout the first half of the year. I guess when you look at July, are you seeing -- or can you quantify any kind of demand pull or reacceleration of jobsite activity? And then just generally, when you have this kind of prolonged poor weather, do these projects get pushed later into this season? Or is there is some portion that just sort of lost for the year?", "answer": "Yes. With respect to July, from what we're seeing with our customer, there seems to be steady demand and steady pull-through. And so we still anticipate that construction activity will continue to build momentum. We haven't seen anything that would lead this to a different conclusion in July. \nWith respect to the projects that were delayed in the first half due to weather, I think there's a general optimism among our customers and the homebuilders that they're going to make some of that up. Now realistically, there is a limit on how much of that they're going to be able to make of this year, primarily because of labor availability. I think if people can get the folks to actually go out and do the building, they're going to make up a pretty fair amount. But I think has been much discussed. That remains a challenge throughout the industry. So they'll make up some. I doubt they will make up all, but we would anticipate, as I said, pickup in activity to see when we get to the end of the year, some moderate level of growth you we'll.", "duration_s": 57.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0216.mp3" }, { "study_item_id": "MR-0217", "partition": "development", "call_id": "1833988", "exchange_index": 9, "question": "And Rob, good luck in retirement, and congratulation Jen, from me asa well. So it was, pretty sure that you guy said that you no longer going to announce a core price setting that now makes every Class 1 real that doesn't disclose price. That's a pretty dramatic change from 5 or 6 years ago where that was key to the rail kind of bouquets and investment pieces. Why do you think that's changed? I mean is that because it's just gotten more competitive to get price? Is it because of her double regulatory environment? why have you seen that shift, you think?", "answer": "So I can't speak for other railroads. I can speak for us, and that is by publishing yield number every quarter, we work against ourselves commercially. I mean in the simplest way, when Kenny is talking to a customer and try to maximize that price discussion, our conservative yield calculation frequently works against us in the conversation. It's as simple as that for us. Rob? Ravi, I would just add -- Lance nailed it, but I would add as I said in my comments, you write it as we shift but I think as I exit the company, I also have never felt better about the understanding and value of understanding the impact that the pricing has on the financials. And you combine that with the continually improving service product, there is no doubt on my mind that Kenny and the marketing team completely understand that it's our objective to drive as positive a price and an adequate returns that we can in the marketplace. So rest assured, I guess the point is, rest assured that because we think commercially to our advantage were talking as precisely as we have about price, don't interpret that to me that we not aggressively going after pricing opportunities, which we think are still there and we're going to aggressively pursue the.", "duration_s": 84.85999999999967, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0217.mp3" }, { "study_item_id": "MR-0218", "partition": "development", "call_id": "1960924", "exchange_index": 25, "question": "Do any of your O&M or CapEx contracts have force majeure contract provisions that are impacted by this pandemic?", "answer": "Well, as I mentioned, we've had force majeure notices on some of our large renewable projects, but they're not affecting the timing or the outcome of those projects at this time.", "duration_s": 12.139999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0218.mp3" }, { "study_item_id": "MR-0219", "partition": "locked_confirmatory", "call_id": "1700964", "exchange_index": 20, "question": "Just want to go back to price cost. I think I heard you mention good price cost in Fluids. Maybe have you commented on the other segments and how do you think about is dynamic through the year in your cost specifically? How do you think those are going to progress through the year?", "answer": "I [indiscernible] Brad, correct me, but I think in consolidation, we're slightly negative in price cost in Q1. We would expect to make progress on that through the year as price increases gain traction throughout as we go throughout. And engineering systems specifically, we have done well on price cost, but in consolidation, it's slightly negative.", "duration_s": 25.24000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0219.mp3" }, { "study_item_id": "MR-0220", "partition": "locked_confirmatory", "call_id": "1704846", "exchange_index": 29, "question": "Just quickly on plumbing, you guys mentioned wholesale destocking. Can you talk about the trends you saw on U.S. retail?", "answer": "In terms of destocking?", "duration_s": 4.1599999999998545, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0220.mp3" }, { "study_item_id": "MR-0221", "partition": "development", "call_id": "1778699", "exchange_index": 13, "question": "Okay. That's very clear. And my follow-on question is really on the location in case of some of the onetimers this quarter. There was a $0.07 tax again, plus did that land in the tax line or worse that somewhere else, Nick? And secondly, the disruption is fixed in operating versus nonoperating. The payback was based on $0.20 of restructuring. Is that the right way to think about it, the payback sort of come down because some of it maybe touch and make sure [indiscernible] restructuring was?", "answer": "Nigel, just to parse out the teepees are asking about. The $0.07 benefit we incurred in relation to held-for-sale status for our gas detection business, that ran through the tax line -- the income tax line of our income statement. The $148 million of total restructuring, we had $112 million of that impacting our operating expense. And the balance, $36 million of nonop. And that's exactly in line with what we were expecting. We were estimating approximately $150 million. The fact that some of it's hitting nonop versus operating doesn't impact at all the projected benefits we have going forward of approximately $110 million yet this year, and on an annualized basis, $225 million to $250 million. As far as where that restructuring happened, I would say geographically, it happened around, fairly well dispersed around 3M. And as far as business, of the 112 that within operating expenses of that restructuring, about 75% of that was in our corporate and unallocated section and about 25% of that was in our businesses. Now the benefit, that $110 million of benefit, that will be felt by our businesses through the second half of the year and it will be fairly proportionate to the size of each of our businesses as far as of the benefit they'll see in the second half.", "duration_s": 107.27999999999975, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0221.mp3" }, { "study_item_id": "MR-0222", "partition": "development", "call_id": "2185883", "exchange_index": 19, "question": "I had a few questions on epoxy. So we've seen propylene and benzene costs move up quite a bit in January. Of course, LER prices also soared about $0.27. Could you just walk through the moving parts here? And all things equal, would you expect to see unit margin profitability increase in epoxy in Q4 versus -- or sorry, Q1 versus Q4?", "answer": "Yes. Yes, so I think Pat will give you a little color on that. He'll probably just sort of cut to the chase and get to the answer on that without too many moving parts. Yes. Yes. Matthew, the short answer is yes, we are going to expand margin in Q1 versus Q4. And yes, that's the short answer.", "duration_s": 22.539999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0222.mp3" }, { "study_item_id": "MR-0223", "partition": "development", "call_id": "1647101", "exchange_index": 18, "question": "And how do you think about the returns on those, and is the majority moving forward more kitchen and bath-type opportunities versus, I guess, the redevelopment Edgewater a little bit of a different animal?", "answer": "Yes, Edgewater is certainly a onetime thing. The rest of it is a combination of a either full scale redevelopments where we're doing not only the apartment homes, we're doing the common areas. Include some projects that are just purely large CapEx projects but really just not generating any kind of incremental return. It's just CapEx. And then there are other projects, which we call apartment only, which are just touching the apartment homes. And so when you look at the redevelopment activity and the apartment-only activity, typically, we're seeing returns that are sort of in the 10% on capital type range based on the enhancements that are being invested in the building. And again, as I said, the CapEx side of it is probably something you just underwrite basically 0. But in terms of apartment only generally less returns.", "duration_s": 51.7800000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0223.mp3" }, { "study_item_id": "MR-0224", "partition": "development", "call_id": "1856605", "exchange_index": 9, "question": "That's very helpful. One other quick follow-up, if you don't mind. Can you walk through some kind of key upcoming risk retirement milestones in Q4 and I guess, early 2020 ending on the horizon?", "answer": "Well, the previous milestones we provided in Q2 for 2019 are all on schedule. We expect those to happen over the balance of the year, and we'll provide an update for it 2020 on our year-end call.", "duration_s": 18.309999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0224.mp3" }, { "study_item_id": "MR-0225", "partition": "development", "call_id": "1913086", "exchange_index": 18, "question": "Real quick on a follow-up on Gary's question about, I think, in the hand off, Doug, for me to Christophe. You covered just it's on coronavirus, it's in China and then those 3 categories. But was it consistent with what you have in the press release of just water and pest or is it more broad-based? Is it like $0.04, $0.01? Just kind of curious by segment. And then I have a follow-up.", "answer": "Yes. And I would say the specific impacts in industries, we're doing it clearly -- I mean, it all makes sense, right? Hospitality, travel is way down in China. Hotels are clearly impacted. Food service is clearly impacted. You have a number of chains that have shut down half their units in many instances. We have, then, obviously, industrial production, which you're speaking to, which has also been curtailed. I mean, they extended China New Year for at least another week, and they've talked another week. It's really different by province. You have a number of plants that are working to start back up, some have. All of ours are back up and producing at this point in time. But they were down for several weeks, and others were as well, and some take longer to ramp up. Then the closer you are to widespread outbreak centers, the longer going to take for them to start-up production.", "duration_s": 62.63999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0225.mp3" }, { "study_item_id": "MR-0226", "partition": "development", "call_id": "1894715", "exchange_index": 15, "question": "Well, I think the context of the prior question was just that it did jump a little bit in the fourth quarter relative to the third quarter. So just holistically, if we're looking at it for the full year, I'm just trying to get a sense if...", "answer": "I would think [indiscernible] I think a longer view of it, look, where PACCAR has historically performed and know that we'll perform in that same level. And as I think -- I would get such share is we will continue to rigorously manage our costs and control them and make the right decisions to build the future of the company in a great way.", "duration_s": 16.7199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0226.mp3" }, { "study_item_id": "MR-0227", "partition": "development", "call_id": "1772439", "exchange_index": 9, "question": "Okay. And just on the credit quality, Rob anything to note there? The MPLs are up a touch and lumpy stuff going on there overall credit looks good, just maybe a comment there?", "answer": "Yes. That's our view, John. Just a couple of deals coming off of really, really low levels last year. So when you take a look at the percentages to the total loan portfolio, there are virtually unchanged. We had a couple deals on the commercial side, go to the MPLS. One is which went to the top there that we've disclosed. But they're and unrelated and have instances and circumstances that mitigate what would be further broader concerns.", "duration_s": 28.339999999999918, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0227.mp3" }, { "study_item_id": "MR-0228", "partition": "development", "call_id": "2049626", "exchange_index": 18, "question": "Can you comment a little bit about what you're seeing in frac volumes at Belvieu? And I'm kind of going back a little bit, just kind of what the trend could you kind of call that data out a little bit about what you've seen frac wise? And are you saying does not have any export capacity, especially given LPG exports have kind of held up relatively strong and during the last 3 or 4-month period does not having a dock capacity or export capacity actually impact you at the frac level, your volumes relative to maybe what you think or what you're seeing your competitive peers rowing fracs and at Belvieu as well?", "answer": "We -- right now, because of the way our system is set up, all our fracs can be a Belvieu frac. So when you look across our system, we have plenty of frac capacity because any of the volume that we frac in the Mid-Continent with the Sterling system, we can make that volume show up in Belvieu. So right now, as we look forward, we have plenty of frac capacity through 2020 or until we see a much better improvement into producer -- productivity that we would need to bring MB-5 back on. So we're in pretty good shape on the fac capacity side. In terms of do we need an export offer, does that impact us on the frac side, it is not at this time. Right now, there's more export capacity than in frac capacity, really. And so we are able to contract and have contracted a lot of volumes in a short period of time to exporters because they need that volume to fulfill their commandments across the DUCs. So at this time, we don't see that it's a hindrance Motohara. Of course, as we look into the future, that's still something on our list that we would like to look at a period of time when we see more supply come online that would warrant additional stock capacity. But this time, we do not see it as a hindrance or is it a disadvantage to those.", "duration_s": 80.89000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0228.mp3" }, { "study_item_id": "MR-0229", "partition": "development", "call_id": "1944952", "exchange_index": 38, "question": "Glad you're healthy. I was just curious, as it relates to revenue sensitivity to changes in certain key metrics, like ADP has talked in the past, so 1% change in client retention has about 6x the revenue impact as a 1% change in bookings, just as an example. I mean, should we assume kind of similar types of relationships hold for Paychex? Or any specifics you feel comfortable sharing just so we can think about the way forward?", "answer": "Yes. I would just say broadly, a drop of a change in our loss rate of about 1%, it yields about $25 million of impact to 25 -- 2.5, I'm sorry, $2.5 million. The checks or pays per control are really the most important, so it sounds like they're somewhat similar to what we are. So -- but we'll see as we work through our plan.", "duration_s": 35.030000000000655, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0229.mp3" }, { "study_item_id": "MR-0230", "partition": "locked_confirmatory", "call_id": "1854893", "exchange_index": 18, "question": "Okay. And maybe you can talk about what you -- where the shipment growth was this quarter by geography.", "answer": "Yes, it was actually pretty good throughout our footprint, particularly strong in Mid-Atlantic, Southeast, Coastal Texas was very strong. South Texas was strong, Southern and Central California were strong. Tennessee was -- East Tennessee was very good. And although you didn't ask, I'll offer that on the pricing side, very widespread virtual -- well, every one of the key markets experienced year-over-year price increases. So that was nice to see as well.", "duration_s": 34.80000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0230.mp3" }, { "study_item_id": "MR-0231", "partition": "development", "call_id": "1655362", "exchange_index": 15, "question": "Just starting, I guess, with midstream. Could you help maybe bridge the 4Q actual results to the 1Q guidance? I know maybe there was some items on both sides here, but it just seems a little bit bigger than the normal sensitivity would suggest and the differentials. And then if you have an outlook on the full year for the midstream business, whether it's on differentials or the pretax income, if you could share that?", "answer": "Yes. Part of what's happening Q1 is a Dolphin turn around. So that's part of the difference between Q4 and the midstream and the differential impact and Dolphin. We have some other just general marketing things that will have an impact in Q1 that we can detail out after Q1. But with respect to the full year, it's kind of hard to forecast the full year at this point, because the differentials and what the volatility there might be. So we will see how things go over the next few months-or-so. Hey Phil, this is Jeff. just to add on what Vicki said. I mean, one think that we wanted to update people on is to remember, when the differential collapses, you see that in midstream from a negative standpoint. But the upstream now, given our oil production in the Permian, will realize more than 50% of what you lose on the midstream side. So given the way to think about that, we gave that sensitivity, so as that differential collapses, just for everyone to remember that more than half of the benefit will be recognized in oil and gas.", "duration_s": 71.89999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0231.mp3" }, { "study_item_id": "MR-0232", "partition": "development", "call_id": "1838176", "exchange_index": 8, "question": "And just a follow-up in electronics, historically, you guys have been very good at calling out electronics better than the other suppliers in the industry. It seems it was one area of the shortfall in the quarter. Can you give us more specifics as to what subsegments within electronics end market and one of the slides where you give the full-blown disclosure. What specific end markets or products drove the acceleration this quarter versus previous quarter?\nI'm referring to Slide 18.", "answer": "Yes, I'll talk about the 4 end markets in electronics broadly that I talk about when we talk about driving our growth. Consumer electronics, we saw softness in that, continue to come through in Q3. Factory automation, there's no sign that that's turn around this point, and that also remains soft. Auto electrification, we saw lower build rates in Q3 in automotive electrification-related platforms and makes and models, so that was impacted by the overall auto build rate. And so we still had some growth in our auto electrification portfolio but not as strong as we'd seen earlier in the year. And then semiconductor, I would say it declined into the quarter. But as I said, there may be some early signs that will see that pick up as we go forward. So that's kind of the view of the 4. So [ nearly ] 3 of them were soft in the quarter, and our frame is to that's the order for Q4 as well.", "duration_s": 66.73999999999978, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0232.mp3" }, { "study_item_id": "MR-0233", "partition": "development", "call_id": "1835804", "exchange_index": 27, "question": "If they're not connected, there's so upsetting going there serve build that's negative and positive in the purchase accounting accretion?", "answer": "I probably, I would still say that they are not connected to each other.", "duration_s": 3.360000000000582, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0233.mp3" }, { "study_item_id": "MR-0234", "partition": "locked_confirmatory", "call_id": "1915754", "exchange_index": 25, "question": "Okay. And will he remain on the -- in this current board seat at new senior? Is that been discussed at all?", "answer": "I mean, that's something that I would refer you to new senior floor.", "duration_s": 4.700000000000273, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0234.mp3" }, { "study_item_id": "MR-0235", "partition": "development", "call_id": "1847223", "exchange_index": 8, "question": "Bobby here, but I appreciate the compliment. Quick question what about the You didn't mention that as one of the types?", "answer": "At this point, we haven't gone through a full evaluation of all the play types. Bob, that's where we are. This is too in the in a very nice session.", "duration_s": 18.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0235.mp3" }, { "study_item_id": "MR-0236", "partition": "locked_confirmatory", "call_id": "1778539", "exchange_index": 10, "question": "But, I guess what -- when you talk about the performance this quarter kind of exiting the year, I guess just simply, how did the OEM business do? I know you guys kind of characterized the OEM business. And within that, this kind of packaging, food and beverage vertical where I think you serve a lot of the small- and medium-sized builders so well. How did not business do?", "answer": "So Steve, the way you can think about it is our global OEM business was down about mid-single digits. And within that, packaging was down high-single digits in the quarter.", "duration_s": 12.299999999999955, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0236.mp3" }, { "study_item_id": "MR-0237", "partition": "development", "call_id": "2252496", "exchange_index": 26, "question": "Can you talk about your interest rate positioning post the actions you plan to take in the securities portfolio? And then also after you fold in BBVA USA. I realize there are some moving pieces, but what would your expectations be in terms of how asset sensitive you are in factoring those 2 things in?", "answer": "We're going to still end up being asset sensitive. I mean, largely because even with our suggested build, the deposits we're going to have with the Fed are going to be quite large. I would tell you that our duration of equity and measured asset sensitivity has decreased as a function of the rise in rates, but that's less about what we're doing and more about the negative convexity in the bank's balance sheet.", "duration_s": 31.800000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0237.mp3" }, { "study_item_id": "MR-0238", "partition": "locked_confirmatory", "call_id": "1691216", "exchange_index": 28, "question": "Got it. You've talked about the contribution of mix coming from the variety of different places customer spending more generally at the table. Is that impacting your table turn at all and impacting traffic?", "answer": "Not really impacting our table turns. I mean, we've been really focused on improving throughput in our restaurants. So even though we're adding mix in Olive Garden, remember most of that mix it probably about and is coming from 1 place not necessarily on the add-on sales side. So it's not extending the mean period. And at LongHorn, their mix has been coming from add-on sales, but they've always had a pretty good add-on sales business. Our focus is to continue to drive better throughput in our restaurants, and we're not seeing the impact of mix it's lengthening the time in the restaurant.", "duration_s": 34.11999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0238.mp3" }, { "study_item_id": "MR-0239", "partition": "development", "call_id": "1639601", "exchange_index": 23, "question": "Okay. And then a question maybe for Frank. The Industrial revenue guide for '19 seems a little bit low. I mean, Tools & Test is in a full year that you had -- that you're backing out here. So that lower Kautex revenues here, assuming even though you said flattish profits? Or is it SPV less? If you give a little bit more color on that.", "answer": "Sure. I think as -- well, there's about $250 million of revenue kind of from Tools & Test. So that's obviously a pretty meaningful headwind of coming output. As Scott mentioned earlier, kind of at Kautex, we -- based on the IHS data, we expect kind of flattish type of numbers. And as we look at the specialized vehicle business, obviously, we're focused on performance, improved profitability there. We've taken some restructuring actions to actually kind of get out of a few product lines. So that's putting a little bit of headwind on things. And we're just, therefore, planning relatively flattish when you look at all that. But where the focus is on performance specialized vehicle without a lot of top line growth.", "duration_s": 46.42000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0239.mp3" }, { "study_item_id": "MR-0240", "partition": "locked_confirmatory", "call_id": "1635298", "exchange_index": 48, "question": "Second one, a little one which is what is the dollar market for your wealth management revenues in Asia in 4Q '18 and what was it in 4Q '17? Because you give us the last 12 months, but it's hard to get a little sense of what the revenue's actual dip year-on-year without the actual number for the quarter.", "answer": "Yes. Vivek, I don't have that number in front of me. I'll have to get back to you with something there.", "duration_s": 7.920000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0240.mp3" }, { "study_item_id": "MR-0241", "partition": "development", "call_id": "1778920", "exchange_index": 6, "question": "Toby, Kyle, the Rice team had identified call it $500 million of free cash flow uplift relative to EQT's prior plan when implemented. I was wondering if you could maybe help us walk through the $500 million that you previously cited between the DMC cost savings and other initiatives. Just trying to better understand how you get to that number.", "answer": "Yes. Sure. So the $500 million we talked about in the campaign there is a couple of things that are driving DNC us getting the $500 million. First being assumed activity level, and that activity level would assume that we were growing at 5%. And the second being the cost difference between executing well costs at $1,100 a foot or compared to a $735 per foot target. So some things have changed. Obviously, we're setting expectations and coming up with an amount of activity that is based on economic projects to develop. So what we're really focused on and want to be comparing ourselves against going forward in the future is going to be how close we are to our $735 per foot cost target because that's irrespective of activity levels.", "duration_s": 53.13999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0241.mp3" }, { "study_item_id": "MR-0242", "partition": "development", "call_id": "2036829", "exchange_index": 7, "question": "And the last part of my question was, since quarter end, you see the COVID cases increase in Florida and Texas and see what's happening in California. Any change in assumptions in the last couple of weeks?", "answer": "When you say functions, Mike, what do you...", "duration_s": 2.519999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0242.mp3" }, { "study_item_id": "MR-0243", "partition": "development", "call_id": "1833249", "exchange_index": 10, "question": "Rob, I was wondering if you could just ask you about the dynamics around the outlook for NII next quarter? You've got the average loans up and NII down a little bit. I guess with the deposit pricing maybe inflecting down, could we see the NIM decline a little bit less next quarter and some other factors at play there?", "answer": "Yes. Maybe, John, I mean, you're on it. That's the calculation. I think the biggest variable will be 1-month LIBOR and how that affects our commercial yields. I think that's the biggest sort of unknown variable, and we'll have to see.", "duration_s": 13.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0243.mp3" }, { "study_item_id": "MR-0244", "partition": "development", "call_id": "1778695", "exchange_index": 8, "question": "This is Aileen Smith on for John. The following up on Joe's question earlier around the backlog and the slight revision there for 2019. It's possible within that full year backlog estimate, could you remind us what your realization was relative to expectations in the first half of the year? And maybe where this stacks up versus the implied realization on the backlog [ in ] the back half of the year?", "answer": "In terms of our marketing growth, outgrowth in the first half of the year? Is that your question?", "duration_s": 4.139999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0244.mp3" }, { "study_item_id": "MR-0245", "partition": "development", "call_id": "1642899", "exchange_index": 18, "question": "Great. And the second question from a bit higher level, looks like you stand reasonably good chance of hitting double-digit EPS this year, which would be a year ahead of schedule related to 20/20 Vision. So 2 quick questions and please remind us what's original guidance of double-digit EPS inclusive of economic disturbance of a material sort? And the second, has the ROIC component of your Vision 2020 tracked according to our expectations thus far?", "answer": "Yes. Sure. So first on the 20/20, we did say that we would reach double-digit growth, we didn't say exactly what the double-digit number would be, but as you commented on, higher end of our guidance is $10 per share and we'll certainly work as hard as well possibly can to reach high EPS growth. On the ROIC number in general, is on track. Obviously, our investment in Silversea ways on the development, but our other investments have really outperformed, which is allowing us to see our ROIC continue to move North. So I think that's kind of how we see things to continue to evolve. The one comment I would make just to put something into context, if you look at 2019 and the guide that we've given, if we had the same FX and fuel rates at this time last year, that number would actually be about $0.40 higher than what were' guiding today. And so that is one factor that has changed for us, but trying to project what economic changes there might be going forward, that's not something we do in our forecasting for the future.", "duration_s": 88.53999999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0245.mp3" }, { "study_item_id": "MR-0246", "partition": "development", "call_id": "2462760", "exchange_index": 23, "question": "Rick, marketing is still one of the biggest sources of margin expansion within your business. What main factors will you consider as you work to determine when it's time to start adding some marketing dollars back into the business incrementally?", "answer": "Yes. James, thanks for the question. As we mentioned in an earlier question, Olive Garden will always be a marketer because of their scale. The advantage that they have in their size, gives them the ability to spend money in marketing. And we'll continue to look at the time when equilibrium comes. We still have a lot of demand to come into our restaurants today. We have reduced our marketing spend overall. And as I said, as we increase -- whenever we make that decision, I don't want to tell you when we would do that based on strategic implications. But whenever we would make that decision, we would ensure that, that marketing is profitable, whether it's -- when we compare to what we would do if we didn't have that marketing. So we have had a couple of hundred basis points of improvement in marketing spend. I would tell you that even if we increase our marketing dollars, we will still have some margin improvement or margin maintained with marketing. So don't assume that when we bring marketing back, it's going to basically reduce our margins by the amount that we bring it back.", "duration_s": 65.99000000000024, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0246.mp3" }, { "study_item_id": "MR-0247", "partition": "development", "call_id": "2215448", "exchange_index": 2, "question": "Maybe just following up on that question. I know you said it's the back half of the year. But just curious what the timing is and then the cap rates on any of those asset sales. Trying to get a sense of any potential dilution in the back half of this year into 2022.", "answer": "Yes. I mean, obviously, we're going to look to be smart about when and how we do it. I would basically just refer you to kind of the back half. And you can make a weighted assumption around timing. So obviously, TBD and cap rates also TBD, but we would look really to find lower cap rate assets that we could dispose of. And obviously, you can see in the market, there's a really strong bid across the board in these asset classes. And that is a very good sign for our ability to execute in a really effective way.", "duration_s": 45.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0247.mp3" }, { "study_item_id": "MR-0248", "partition": "development", "call_id": "1704896", "exchange_index": 9, "question": "Maybe just starting off with the North America business. You talked about the sharp slowdown there in organic growth in Q2, but a bit of orders sort of exit rates. So I just wondered what should we expect for North America growth in the second half versus what you did in Q2 and were there any specific verticals that have seen that pickup?", "answer": "Yes. So Julian, for the second half of the year, we expect actually somewhat similar growth rates as we've seen in the second quarter for North America. And so in general, we expect continued above average growth in our Solutions and Services business, which are most exposed, of course, with some of the heavy industries that we're talking about, but our product business is, we expected about similar growth rates in Q3, Q4 than what we've seen in the second quarter.", "duration_s": 33.01999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0248.mp3" }, { "study_item_id": "MR-0249", "partition": "development", "call_id": "1778920", "exchange_index": 14, "question": "Okay. And last just if you have any sort of estimate yet for what you would think about as a kind of a breakeven gas price in the context of driving corporate level free cash flow going forward.", "answer": "Yes. No. Let me let us get back to you and fix you in 90 days and we'll be able to better run some sensitivity so you can kind of see free cash flow at different price stacks.", "duration_s": 15.2800000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0249.mp3" }, { "study_item_id": "MR-0250", "partition": "locked_confirmatory", "call_id": "1780827", "exchange_index": 31, "question": "Okay. And then just you did a good job outlining sort of BC log costs. You got a couple mills in Alberta. What are you seeing there log cost wise? And any type of inflation you're seeing as well?", "answer": "Not really any sort of meaningful appreciation of log cost in Alberta. Those are remaining reasonable. Again, it's all wood basket-dependent in one respect, and we have good fiber availability near the mills that we're running in Alberta. And so they don't have the same stumpage model in Alberta as they do in BC, so you didn't see that same uptick in July that you saw in the British Columbia region. So log costs are pretty much comparable.", "duration_s": 27.800000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0250.mp3" }, { "study_item_id": "MR-0251", "partition": "locked_confirmatory", "call_id": "1642852", "exchange_index": 15, "question": "Okay. And then the 7.5% [ decay ] that you required, is that annualized?", "answer": "Two things. So that you can look at the files, documents in terms of the contract all the details are there and probably a little more complicated than I am making. But that's the run rate. That's the 7.5% revenue run rate decline off of what was originally put in place [indiscernible] purely due to clients not coming over, right, through the deal. So I think it's just important to note that. Again, there's details around that, I don't know [indiscernible]. It's a common practice around these transactions prefer.", "duration_s": 33.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0251.mp3" }, { "study_item_id": "MR-0252", "partition": "locked_confirmatory", "call_id": "1635298", "exchange_index": 2, "question": "Mark, I was wondering if you could clarify the range that you're referring to? In your answer to Jim's question, you mentioned the 41.8 this quarter. It's low on that slide. Was there a range from that to something else or just kind of this ballpark of 41 to 42? Just wondering kind of what you're referring to there.", "answer": "Ballpark range, if you look into Page 17, fourth quarter of '16, the LTM there was about 42.3. [ Fourth quarter ] of [ '18 ] is about 41.8. So that's a ballpark range roughly.", "duration_s": 11.11999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0252.mp3" }, { "study_item_id": "MR-0253", "partition": "development", "call_id": "1701224", "exchange_index": 42, "question": "Got you. And then on the -- you mentioned in the press release ready to take action if need be on the cost savings front. Is that just simple blocking and tackling in areas where there might be weakness? Or is there, PPG has done $80 million, $100 million type cost savings programs a couple of those over the last couple of years? Or is that something bigger like that?", "answer": "No. I think those comments are primarily focused on what you call traditional blocking and tackling. We can't act on the fact that if the economy out there is choppy. There's a lot of things that aren't within our control. And we -- if we see something going sideways or down, even in a more draconian way, we'll take whatever decisive actions we need to take, and that could be deeper than walking and tackling. But I think the mention we had in the prepared remarks is really around blocking walking and talking. Thank you, Andrea. This is John Bruno again. I'd like to thank everyone for their time and interest in PPG. If you have any further questions, please contact our Investor Relations Department. This concludes our first quarter earnings call.", "duration_s": 56.289999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0253.mp3" }, { "study_item_id": "MR-0254", "partition": "locked_confirmatory", "call_id": "2275717", "exchange_index": 14, "question": "Okay. And I'm just curious on the move-in data, what is the data analytics telling you about the acuity level of the people coming in? Are you seeing pent-up demand, presumably some level given you're over 100% of what you saw in '19? And what does the data history suggest in terms of what that may do to the length of stay, if, in fact, you're seeing higher acuity coming in?", "answer": "Yes, that's a great question. Throughout the past 12 months, we've actually seen length of stay go up. And part of the driver of that was that reduced respite business that I described earlier. So length of stay has gone up a little bit. It will come down a little bit as we bring more short-term stays back into the pipeline. In regards to pent-up demand, the -- if you look at the leads, it's Page 9 of the business update, you'll notice that leads are at about 104%. And When we think about pent-up demand, I think of 120%, 130%, some big number that's lined up, and we really just look at it as demand and demand that's not even fully supported by traditional lead sources. \nSo not so much pent up. But certainly, we're pleased with the recovery thus far. And one other thing I'd mention is that as we've spoken with operators, they're not having leads come to the doorstep and say \"I've been waiting for the vaccine or I've been waiting to make this decision.\" We actually had quite a bit of activity throughout pandemic. And if you normalize it for the communities that were closed, it was pretty consistent. So we're just seeing the community is open again and some lead sources come back and providing demand for our service.", "duration_s": 87.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0254.mp3" }, { "study_item_id": "MR-0255", "partition": "development", "call_id": "1705263", "exchange_index": 13, "question": "Quickly on the net revenue yield and passive sell-like, 7% year-on-year and more than that quarter-on-quarter. Is most of that just mix and end markets or were there any material price changes in the quarter?", "answer": "So it's going to be mixed. There's a substantial amount of nonfee-earning AUM in the passive category like the leverage associated with our mortgage REITs. When we do an equity offering, that shows up. So that will definitely push those fee rates down relative to what you might see on the quarter-on-quarter basis.", "duration_s": 21.559999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0255.mp3" }, { "study_item_id": "MR-0256", "partition": "development", "call_id": "2213536", "exchange_index": 27, "question": "Great. That's helpful. And then real quick on the electric vehicle charging. If you look out over the 5 years, you had mentioned a relatively small program you have now. What do you think about the upside potential in terms of CapEx? And would we see that more in distribution or is there an opportunity to add transmission in terms of large substations, et cetera, that would support EV?", "answer": "I think the benchmark, Travis, I mentioned is that I think there were only 1,400 charges in the State of Massachusetts, and we're finishing up a 3-year program that brings that number up to 5,200. But the targets, the communicate in Massachusetts, both have for electric vehicles are quite ambitious. We have a slide in here that shows that. So my expectation is that the investments will largely be in the distribution system, I think, we'll be mindful about any potential impacts on transmission needs. But I think that would be focus on distribution build-out for these charges, and I wouldn't expect any near-term transmission needs created by the loan. Next question is from Paul Patterson from Glenrock.", "duration_s": 63.09999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0256.mp3" }, { "study_item_id": "MR-0257", "partition": "locked_confirmatory", "call_id": "1641895", "exchange_index": 28, "question": "Okay. When you talked about -- and Blake, you've mentioned this Information Solutions and Connected Services. My guess is that the Information Solutions base probably outgrew Connected Services. I don't know if that's easy enough to parse through. But again that seems that whatever help the software FactoryTalk suite product sales within ANS?", "answer": "Yes, I think on balance the margin is between that market is at or slightly above the company average over the period of time.", "duration_s": 16.75, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0257.mp3" }, { "study_item_id": "MR-0258", "partition": "development", "call_id": "1701002", "exchange_index": 28, "question": "Okay. If -- I know your conf -- you're confidence you can hit your target. If you do come up a little short on the fee side, is there more room on the expense side to manage expenses even lower than what you're guiding to right now? How much flexibility do you have in terms of discretionary expense?", "answer": "Our expense range is based on the assumption that we are inside our revenue targets as far as both fee income and net interest income. If we see weakness in those categories, we do expect to see our expenses come down appropriately. And as -- we've mentioned many of the fee categories that have some variability to them are more capital markets related. And we've got a high variability that the expense associated with that as well.", "duration_s": 23.340000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0258.mp3" }, { "study_item_id": "MR-0259", "partition": "development", "call_id": "1885905", "exchange_index": 21, "question": "And then just as a follow-up that in terms of some of the volatility that you've seen with the consumer demand side despite incredibly strong consumer metrics. That sort of breakdown in that very strong relationship is [indiscernible] meaning if you saw good consumer trends, good consumer health metrics. You typically saw a pretty nice casual dining same-store sales. You guys pointed out that, that has softened up a little bit. Any further comment on that?", "answer": "I think it's -- might I have a real brief comment on that. This marketplace is going to be defined by winners and losers. If you have a strong value proposition and you're executing at a high level, and that execution is going to be driven by our employment proposition. In this environment, attracting, retaining great employees has never been more difficult. And those that can do that with a strong value proposition are going to win.", "duration_s": 27.639999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0259.mp3" }, { "study_item_id": "MR-0260", "partition": "development", "call_id": "1849084", "exchange_index": 6, "question": "I was hoping you could spend a little bit time relative to this cloud issue, to what extent you're confident that there is no competitive encouraging here that's causing it? And that, in fact, you have sustained share at that customer, how can we judge that? How do you get your arms around, clarity around that point?", "answer": "Alex, that's a very good question. From our perspective, the competitive dynamics have not changed in the cloud or in general. We always have aggressive competition, and we will continue to see aggression there. But what gives us confidence the cloud titan are delaying the spend or distributing that CapEx differently is as you know we always tried ourselves in a close partnership and in relation with cloud titan and generally especially in the case of Facebook and Microsoft, they have been not only vendor customer relationship, but we really a core development that kind of the partnership, which is engineering to engineering, not just busy. So when you look at that, there is no evidence that competitively or white box wise has been any change. There has been a process change, there is better inventory management, there is better procurement, optimization, et cetera. And you can always expect these cloud customers of who want to be multi stores, but it isn't any different than you've seen in the past in behavior, in relationship, in our innovation, we have 10 400-gig products and not of them are in trials. So the relationship and the technology partnership better. Anshul, do you want to add to that? Alex, we work very closely with our customers to a point where we're working on the 2021 roadmap along with these customers right now and quite well aware of the making to the architecture as well and have very direct feedback from customers as well. There is no that pleasing us. It's simply the demand has gone down, and we are very confident of our shares when that demand comes back as well we collaborate with these customers. So we're not worried about it and the customers are pretty direct as well not our share going someone else, their demand", "duration_s": 111.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0260.mp3" }, { "study_item_id": "MR-0261", "partition": "locked_confirmatory", "call_id": "1899125", "exchange_index": 5, "question": "Okay. But you should -- just directionally, you should be also generating some operating cash -- reasonable amount of operating cash net of CapEx?", "answer": "With that growth rate, yes.", "duration_s": 1.259999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0261.mp3" }, { "study_item_id": "MR-0262", "partition": "development", "call_id": "1712053", "exchange_index": 6, "question": ".\nOkay. And the leverage side, nobody has mentioned dividend yet, but you've talked about doing that within the next couple of years. If the shares stay at this level or somewhere around here, does it make sense to pull that forward as a way to maintain leverage rather than buying back stock?", "answer": "I mean, it could. It would be something to add to the list of things to look at.", "duration_s": 8.930000000000064, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0262.mp3" }, { "study_item_id": "MR-0263", "partition": "development", "call_id": "2215448", "exchange_index": 28, "question": "I guess, first one, just regarding the percent of SHOP communities open for move-ins. That data on the bottom of Page 11, the explantation looks pretty positive with that metric jumping up from around 80% in early January to now 95% just in the last month or so as communities available for open for move-ins. So I guess I'm just curious to hear more color, is that driven more by either voluntary policy changes by the operators? Or is it more just changes in local government guidelines? And how much of this is simply driven by the benefits of the COVID vaccine? If we're able to get the extra color around all that as far as that improvement?", "answer": "It's Justin. Yes. So what you'll see is the -- first of all, 95% of our communities are open to move-ins, and then we segmented them based on just the restrictive environment. And what drives that, so segment 2 and segment 3. Segment 3 is the most open, most consistent with pre-COVID lifestyle. Segment 2 has some restrictions, but you can certainly take move-ins. And it's the state and local health departments that are really weighing in on how open a community can be. And so those conversations are happening constantly, and it's very much driven by recent COVID activity, sometimes in the broader community, sometimes within our own communities. So that's fluid. But as you can tell from the overall picture that new cases are down and open communities are up. So it's looking good across the board.", "duration_s": 61.159999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0263.mp3" }, { "study_item_id": "MR-0264", "partition": "locked_confirmatory", "call_id": "1663300", "exchange_index": 38, "question": "Well, that's not -- that's something we -- at some point, you would share that with us?", "answer": "We've been saying based upon -- actually, \u00d8rsted has disclosed an 8% unlevered IRR, which is going to give us the return that we think would be transmission like or better, when you look at some of the returns of equity that we would expect there.", "duration_s": 16.3799999999992, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0264.mp3" }, { "study_item_id": "MR-0265", "partition": "development", "call_id": "1705041", "exchange_index": 13, "question": "I mean, your customer's destocking, I'm sorry.", "answer": "Oh, I'm sorry. I think it very easily could have impacted our total revenue by 100 basis points. Josh, just to give you a little color, too. The automotive slowdown in China was one particular case where we saw significant impact in our growth from channel. And so where you see a slowdown in a particular market like electronics or automotive, it's accompanied with a change in inventory. Everything from finished goods back through the value chain. And so that is a -- that's clearly visible in those cases.", "duration_s": 39.86000000000013, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0265.mp3" }, { "study_item_id": "MR-0266", "partition": "locked_confirmatory", "call_id": "1838324", "exchange_index": 22, "question": "I wanted to drill down a little bit on CECL. How much is the reserve for auto loans expected to change under CECL?", "answer": "So Steve, we're not going to give that level of guidance at this point in time. We'll disclose those stats, obviously, in the future, but not going to disclose it here.", "duration_s": 9.400000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0266.mp3" }, { "study_item_id": "MR-0267", "partition": "development", "call_id": "2253721", "exchange_index": 11, "question": "So I had a couple of ticky-tack modeling question. The first is just on the non-asset sensitive fees within custody and fund administration. And we've had 2 pretty meaningful sequential increases these past 2 quarters. That line item exited the quarter at about $178 million versus what historically had been a pretty consistent range of $150 million to $160 million. Just curious what's driving the recent strength in that line item? And maybe just as we think about from a modeling perspective, what's the right jumping off point we should be thinking about as we look ahead to 2Q?", "answer": "Yes. And just to make sure I'm tracking totally specific, you're talking about other noninterest income at $180 million on the income statement.", "duration_s": 7.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0267.mp3" }, { "study_item_id": "MR-0268", "partition": "locked_confirmatory", "call_id": "1787043", "exchange_index": 6, "question": "Okay. And then is there any information that you can give on pricing for Sunrise Wind or any idea when that will be made public?", "answer": "As I mentioned in my comments, we are probably a few months away from finalizing a contract with [indiscernible] and the expedition really is within 30 or 60 days after that. So after that period at some point there is an expected disclosure of pricing.", "duration_s": 22.24000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0268.mp3" }, { "study_item_id": "MR-0269", "partition": "development", "call_id": "2182189", "exchange_index": 1, "question": "Great follow details there. Maybe 1 for Mark. Looking at the gains, I think you said it was about $11 million in the quarter, looking at the cash flow. I think it implies something a little bit higher than that. Just looking at the gain on disposals. So maybe you can clear that up for me. And then just give us a sense as to what you're expecting for gains in 2021 when you look at that 300 basis points of OR improvement?", "answer": "Yes. The property gains, Brian, were -- in the quarter, the fourth quarter were 11%. we ended up the year at really $26 million of gains, a little shy of where we had intended or thought. And the guidance for 2021 is to be in that $30 million to $40 million range. But you know these property gains are lumpy, and they can move around, and we'll provide some transparency. And if we have bigger ones in a given quarter, we'll call them out and let you know.", "duration_s": 29.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0269.mp3" }, { "study_item_id": "MR-0270", "partition": "development", "call_id": "1835804", "exchange_index": 1, "question": "Just on the acquisition, on MB. I know there's been some press about departures, -- departures going to continue banks. I just wanted to see if you could talk a little bit about what you have seen on the bank or front. Because I know some of the reports were including other departures that were unrelated? And have the departures been consistent with your expectations or have they exceeded?", "answer": "John, as I mentioned -- this is Greg. I mentioned in my prepared remarks, the execution on the expense synergies are going as planned. The large part of expenses obviously was personnel. So you absolutely expect some of that personnel move to other banks. You expect that. I would say right now, 90% of all the high performance that we target or retaining from a bank perspective were still in the back today. So we have not lost it's very much in line with our expectations that we've modeled in, and there's probably a little more to come as we continue to work towards our expense synergy numbers that you expect that in the back office and some of our sales force we bring to company together, look at our ratios and we need that market while those bankers did have opportunities Fifth Third and the banks. So banks talk a little bit but that should be expected and within our model those transactions.", "duration_s": 56.22000000000003, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0270.mp3" }, { "study_item_id": "MR-0271", "partition": "development", "call_id": "1777155", "exchange_index": 28, "question": "That's great caller. Jim, and that leads me to my second question. When I look at your TOP21 and kind of compared to past iterations of PSR, when I look at the 100 basis points that you're guiding for this year, [ 64 20 21, ] it's a little different from PSR, right? I mean PSR is front-end weighted, being reductions in OR. And then, those OR reductions taper off as we get through the plan. What you suggest is that you're looking for 100 basis points this year, but then accelerating to, you know what, 220 per year in the next couple of years and that's where I'm struggling a little bit.\nIf you can tie TOP21 in to show why operating ratio was in fact going to double its pace of improvement in 2020 and 2021 to get to that 6% target, certainly would be helpful.", "answer": "There is more to come. And as we laid out at Investor Day, this would be an iterative network planning process and there will be additional phases of operating plan change and the optimization coming. Those will be the basis for further operating ratio improvements as well as the growth that we can manage for the duration of the plan forward into 2021.", "duration_s": 23.81999999999971, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0271.mp3" }, { "study_item_id": "MR-0272", "partition": "locked_confirmatory", "call_id": "1700964", "exchange_index": 33, "question": "Obviously, a lot was asked so minor kind of piggybacks on to make some clarifications. Is it possible, Brad, on the ES bookings, the organic, if we would pull out the ESG, what that number -- what that minus [ 32 ] would look like?", "answer": "You know what, I think we can give you that as a follow-up. We're going to have to calculate it. We can give you that one off-line.", "duration_s": 11.139999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0272.mp3" }, { "study_item_id": "MR-0273", "partition": "development", "call_id": "2462760", "exchange_index": 19, "question": "Great. And just a follow-up on price covering most of what you view as structural and absorbing the short-term fluctuation. Can you expand on what you view as transitory? Is it primarily just the commodity piece or anything related to labor?", "answer": "No. We view labor as actually more sticky. So it really focuses on the commodities, is where we see some of the transitory, especially on the proteins front where you already see some of that coming back, right? You saw beef prices peak up, especially middle states, and they're coming -- you're starting to come -- you see them come down.", "duration_s": 18.7800000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0273.mp3" }, { "study_item_id": "MR-0274", "partition": "locked_confirmatory", "call_id": "1703766", "exchange_index": 26, "question": "Okay. And then related to that, in E&T, you had mentioned earlier that you expect your order trends across oil and gas from recent will improve in the second half. Have you seen any of that improvement yet so far? Or that's still on to come?", "answer": "Again, gas compression has remained strong and steady. We haven't seen a pickup in order rates for well servicing and the recent portion of oil and gas yet. But again, we expect that to come. On the part of our oil and gas business, there is, of course, order turbines, and that business has remained steady. We've seen a pickup there in international orders, which are typically tied more to big CapEx projects and elevated oil prices. So that business is starting to pick up so...", "duration_s": 29.279999999999745, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0274.mp3" }, { "study_item_id": "MR-0275", "partition": "development", "call_id": "2025737", "exchange_index": 43, "question": "Okay. Understood. And the second topic, and it's kind of a completely different one, but it's a big spending bucket, a lot of companies are you're kind of thinking about and reevaluating their calendar '21 versus calendar '19 G&A. I mean, we're all kind of recognizing how different we can work in efficiency and how much travel we actually need to do and how much money and time, virtual work and work at home, what have you actually saves us. And that's something separate even in head count. But how many of the changes in terms of the organization are you making, whether it's spending per employee, not on salary, but on things on top of salary, also number of employees are we beginning to think it might be the right level for the organization? And if it's possible to -- because it's such an important number to put in the model and just to think about, what that calendar '21 versus calendar '19, if it's fair to think about it in that way, it could look like for Darden?", "answer": "John, it's hard to answer calendar for us because we're a fiscal year company. We don't think calendar. So to think that way would take a little bit of mental math.", "duration_s": 8.760000000000218, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0275.mp3" }, { "study_item_id": "MR-0276", "partition": "development", "call_id": "1703663", "exchange_index": 28, "question": "A question on coal to chemicals projects that are being discussed around the world. Do you have any technology there similar to your gasification technology? And if not, it would still consume a lot of gases. So what are you seeing or hearing about request of bids for ASUs for those projects?", "answer": "Well, I think all of those projects, people would be looking for bids for ASUs. The way we are trying to differentiate ourselves by making an offer to the customer that we provide you not only the ASU but also the gasification. And therefore, a different package rather than just competing for the ASU, which most of the time, if the customer wants to buy the ASUs by themselves, they usually do a sale of equipment rather than sale of gas. So and as you see most of the current existing gasifiers in China, which there are many, have all been sale of equipment. So we are trying to differentiate ourselves by getting a bigger package. But if the customer insists that, \"No, I just want the bid for the air separation unit, we usually -- depending on who the customer is, we usually give them the bid because we'll be happy to build the air separation unit. But we are trying to differentiate ourselves by giving a bigger package to the customer.", "duration_s": 70.36999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0276.mp3" }, { "study_item_id": "MR-0277", "partition": "development", "call_id": "1705041", "exchange_index": 27, "question": "Yes. No, no, I was just kind of like I just -- I don't know whether the I thought the 8 50 kind of it for a lack of a better term. So the fact that there's kind of another charge in Minnesota, I'm just trying to kind of -- I'm definitely haven't done -- I'm not, I don't know how it work on this. So I thought kind of the 8 50 took care of Minnesota.", "answer": "Yes. And that's the way to think about it, Steve. This was just to make it complete so that we didn't leave Minnesota out and have it kind of question by exception.", "duration_s": 8.320000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0277.mp3" }, { "study_item_id": "MR-0278", "partition": "development", "call_id": "2051315", "exchange_index": 16, "question": "Okay. That's helpful. And then just a couple of quick ones on the Spa business. First is just how much seasonality is there in that business? And you talked about seeing a significant amount of pent-up demand. But did you lose any market share in the second quarter? Or all the major manufacturers constrained from a production standpoint?", "answer": "When you look at the industry, everybody is constrained at this point. So you're right on that assertion for sure. There's no question about it. In terms of seasonality, typically, this is a very seasonal business. However, with our strong order book and our backlog we anticipate that seasonality through the summer fall and into the winter, frankly, to not be there this year. We've got a tremendous backlog, and we're looking forward to filling it. Yes, quite honest, so this is clearly not a demand issue. This is a supply issue. I mean this was -- we were not permitted to manufacture. And so to Keith's point, we're seeing really good strength in this business.", "duration_s": 42.940000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0278.mp3" }, { "study_item_id": "MR-0279", "partition": "development", "call_id": "2278037", "exchange_index": 10, "question": "The equity income in that division was $32 million in the quarter, and maybe it was up $10 million year-over-year and $10 million sequentially? Why was the equity income so high? And is that an unusual number?", "answer": "The equity income is so high, Jeff, because I explained that last time, because our equity affiliate in Americas is Mexico. And Mexico, unfortunately, because of COVID, the demand for oxygen was phenomenal, just the way it is right now in India and the way it is for -- in Brazil. Quite frankly, that is why some of our competitors are having very good results because of that. It's a very unfortunate situation. But I mentioned last quarter that if you are at a medical business right now, Mexico, Brazil, India will make you a lot of money. And we saw that benefit in our joint venture in Mexico.", "duration_s": 41.91999999999962, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0279.mp3" }, { "study_item_id": "MR-0280", "partition": "development", "call_id": "1963761", "exchange_index": 28, "question": "A number of companies in the media tech industries have already announced that employees are not coming back to work until at least September. I'm wondering if you're seeing this in your portfolio at all. And whether or not it's September or earlier, do you anticipate more office tenants will be requesting either a basement or deferrals?", "answer": "So that's a very broad question. I'll try and give a broad answer. In some of our markets, some of our tenants have made those types of, I guess, releases. And in other markets, we actually have tenants who are telling us that they're going to be coming back earlier than we would have expected. And we're actually making accommodations for them filling the buildings up before we're in a position where we can really roll out all the things that we would like to roll out. So it is very much a market-by-market determinant. The concept of abatement or deferment really isn't one that we're talking about with regards to office tenants other than in a very unique situation where a particular customer has significant financial challenges at the moment and where we think it's constructive for us to be helpful.", "duration_s": 58.340000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0280.mp3" }, { "study_item_id": "MR-0281", "partition": "development", "call_id": "1699403", "exchange_index": 0, "question": "Wanted to ask you a bit more about the -- your thoughts on the volume in Intermodal in the first quarter. I know if you would care to offer the volume growth year-over-year by month? I know sometimes that's noisy with Chinese New Year timing but if you want to offer that? And just, I guess, maybe more on what happened in weakness in March, whether that's a demand issue or if you think there's something else going on?", "answer": "I'll jump in with the numbers first, and then I'll let Terry offer up his observation. In January, the volumes, and these are based on calendar days, we were down 7% in January. We are down 6% in February, and we were down 7% in March. Yes, I would say a couple of things that went on in March. First off, I believe the West Coast was down versus what we anticipated. I think the data that we've seen is that China, in February, not only between because of Chinese New Year but because of the potential tariffs that were supposed to go in March 1 had a good shift, I think, it's down 20-plus percent, and we see that landed into a much slower West Coast volume off the West Coast. The other thing that we're hearing from customers is that the warehouses are full. We've had a very late spring, and typically, the restocking of spring merchandise did not show up in March as it has in past years. So those are probably the 2 major factors along with the things that we had with the PSRs, lane closures that we've seen. And then the service disruption that we saw in February. Some of the freight that we used to handle, we think maybe drifted -- some of the French freight drifted from -- away from the rails, and we think with the service pickup that we've seen recently, some of that should come back to us here in the second quarter.", "duration_s": 103.24000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0281.mp3" }, { "study_item_id": "MR-0282", "partition": "development", "call_id": "1699403", "exchange_index": 24, "question": "Okay. And then just any thoughts on quantifying weather and rail service in the first quarter?", "answer": "We haven't. I mean internally, we've trued to take a stab in the dark at what those costs are, but we haven't -- I'm not comfortable saying they're solid enough to talk about what the rail dollars were.", "duration_s": 13.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0282.mp3" }, { "study_item_id": "MR-0283", "partition": "locked_confirmatory", "call_id": "2275717", "exchange_index": 23, "question": "Okay. I was just trying to get to this, like we expect pent-up demand could enter the market as these other referral sources come on, and we could see some of those leads and move-ins even move higher from this point?", "answer": "Well, they could because when you think about it, if you -- maybe -- whatever you want to call it is okay with us. But when you think about it, for example, when UnitedHealthcare reported and they said really that seeing your level medical procedures and surgeries and things really hot and it bounced fully back, okay? And you connect that with what Justin said earlier that really a leading indicator of those kind of professional referrals would be really health care procedures. \nAs those seniors start to have those procedures, If you look at that and then you see those professional referrals come back, you could characterize that if you want a pent-up demand as they had delayed those surgeries and so on. So you could -- I don't want to quibble over words. I think what's good is there's really good demand and we're seeing it come through and it's then 2 consecutive months, and we hope and are projecting for the second quarter that it will continue.", "duration_s": 68.81999999999971, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0283.mp3" }, { "study_item_id": "MR-0284", "partition": "locked_confirmatory", "call_id": "1713407", "exchange_index": 23, "question": "And yes, I apologize for the typical sell-side question, but can you just comment on the overall M&A landscape, particularly in Asia and Europe?", "answer": "Well, Europe's probably as good as it gets in the U.S. right now simply because a lot of people are unsettled. And with that often comes opportunity certainly in the U.K., but I'd also say on the continent. In terms of Asia, I mean the challenge in Asia is scale and culture, i.e., can you buy a company that's meaningful enough in size to be worth the risk and the effort to bring it on and integrate it? And then culturally, and this isn't the Asian culture just make sure it's a company -- what's the company's culture and how has it been built in terms of how it sells and creates value, et cetera. So there, we've got to be -- make sure that it's a company that we would have a right to own and run as we go forward. Generally, I guess, I think we're going to enter a period where acquisitions of even size are going to make sense again. It'll happen. I don't know exactly when it's going to happen. But being smart about the price you pay is always a good idea, and it proves out over time. We believe that value's created through return on invested capital and our ability to generate cash. And those are the things that we look very carefully at when we make acquisitions that can we do those things over a period of time? If the answer's yes, we're all in. And if the answer's no, we're quite felt careful unless it's got some similar strategic value beyond just, which is hard to find often.", "duration_s": 105.72000000000025, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0284.mp3" }, { "study_item_id": "MR-0285", "partition": "development", "call_id": "1779319", "exchange_index": 22, "question": "Okay. Fantastic. And then when we looked at those permits I mean they're falling quite a bit started middle of last year. Is that mainly due to the cost at your side where the rents are not growing fast enough? Or do you think the political uncertainty is also having a big factor in that?", "answer": "I think both it's all the above. It's how much risk do you take and what types of yield are you expecting, how you're going to compensate for that risk. And I'd say, maybe adding to that is the project sizes are getting bigger and bigger, and the cost per unit is -- has increased pretty dramatically. So you need more equity in a lot of these deals. And as we see this in the preferred equity environment and in that predevelopment period costs are going up faster than rents and when we come in with preferred equity sometimes these deals are short of equity given cost increases. And that's causing some delays there. So it's all this. Yes, but it all involves the relationship between construction cost and development yields.", "duration_s": 53.23000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0285.mp3" }, { "study_item_id": "MR-0286", "partition": "locked_confirmatory", "call_id": "1832868", "exchange_index": 5, "question": "Just maybe first on ICG a little bit, I was a little surprised that expenses were up quarter-over-quarter despite revenues being down. I know you had taken some severance in the first quarter, and I thought the messaging was that you'd start to see those expenses come out in the back half of the year. Was it just volume? Was it investment? Or any other severance in there? How do we think about the trajectory in ICG expenses?", "answer": "Sure. So yes, the expenses were up 4%. There are investments that we're making in the ICG, particularly in our TTS business and how we improve the client experience and deepen some of those client relationships and those investments obviously are critically important. There are some volume-driven growth tied to it largely around transactional expenses. And then there are some compensation costs as all. So there's the higher performance from a base compensation point of view. There's some strategic hires that we have made in parts of the franchise. And then lastly, and you've alluded to it, but it certainly played out in this quarter as well, is we've seen pressure in some of the wallets. And as we thought about kind of the long-term or longer-term business model and benefits from technology that will play out, we have made some capacity adjustments. Those capacity adjustments mostly come with a cost. And so that is part of what you see in the quarter as well in that 4% increase.", "duration_s": 69.24000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0286.mp3" }, { "study_item_id": "MR-0287", "partition": "locked_confirmatory", "call_id": "2412864", "exchange_index": 9, "question": "I appreciate that. Just because if you do that, and you run the rest of the year out that way, it looks like your deliveries are running ahead of the initial 22 industry guidances. And I guess that goes back to your comment, it looks like you'll build more than the industry sales next year. I'm just kind of trying to square that circle a little bit. Is that the right way to think about it?", "answer": "That's probably true. That's really 1 of the things we focused on in the course of the quarter or 2 is there's a tremendous amount of customer demand for the Kenworth, Peterbilt and DAF trucks out there. And so our focus has been around getting as many prepared for delivery as we can, building and just shy of component to satisfy that market demand for these great trucks.", "duration_s": 18.1400000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0287.mp3" }, { "study_item_id": "MR-0288", "partition": "development", "call_id": "1838723", "exchange_index": 29, "question": "Okay. That's great color. And then, very early on in the call, you mentioned how supply is really concentrated in the urban areas, which you generally are not. And I'm curious if you've been able to quantify how well Essex has done relative to your urban counterparts from an internal growth perspective. Is there a number that you track to see how you're doing purely on that -- using that supply observation?", "answer": "Yes. This is Mike again. I think that there are just fundamental differences between us and the competitive set. And I think one of the key difference is that we -- our focus is core FFO per share growth and NAV per share growth, it really is not tied to the same-property metrics that are quarter-to-quarter, et cetera. And they won't -- why does that matter? Why would it disconnect? It would disconnect to the extent that you make investments in property, you overinvest in property, for example, which use capital dollars. And yes, it will push up your same-property revenue growth but it doesn't actually add value on a bottom line basis. So when you look at large capital investments, capital investments that have relatively short duration income, we're less excited about that. We are interested when we do renovation projects, for example, we're looking for a long-term return consistent with real estate, and there's lots of things that can be done investing in personal property, shorter-term, revenue-generating type proposals that can make those numbers look better. That's not our focus. Our focus is on growing income and core FFO per share cash flow over long periods of time. And I think go look back at the chart, Rich, there -- I think the proof is in the detail. There's actually 1 chart on our -- in our presentation that, I think, sums it up, which is we produced a long-term -- we've got 25-year CAGR. We've been a public company for 25 years, the CAGR of shareholder return is 16%. I don't think there's a lot of companies that have done that over 25 years.", "duration_s": 113.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0288.mp3" }, { "study_item_id": "MR-0289", "partition": "locked_confirmatory", "call_id": "1661896", "exchange_index": 6, "question": "And it will show as finance cash flow or will it show as investing cash flow?", "answer": "Well, it's going to be consolidated since to operate in control, it's still going to be the consolidated entity within the minority interest cutback, how we handle our other consolidated entities with minority cutbacks. The usual NGL cutback.", "duration_s": 11.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0289.mp3" }, { "study_item_id": "MR-0290", "partition": "development", "call_id": "1705041", "exchange_index": 20, "question": "Just wanted to touch on 2 things. First, is there, as you think about the -- when I think about the call [indiscernible] you talked about the [indiscernible] this kind of sequencing, it's usually a multi quarter episode, I mean, I'm thinking about like the way you slice it down [indiscernible] a few years ago. Can you just be clear, are we seeing any actual churn in your order patents? Or is it just affects of sequential stabilization?", "answer": "Lawrence, I mean, you broke out a bit of, so I'm not sure I got a question. But I think you're asking about the softening and the slowdowns that we're seeing. They can sometimes last longer. Do we see any indication that those are turning or not expected last long, so that ...", "duration_s": 18.059999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0290.mp3" }, { "study_item_id": "MR-0291", "partition": "locked_confirmatory", "call_id": "2356711", "exchange_index": 18, "question": "Yes. And then some companies have talked about purchases because of the higher volumes versus plan. I wouldn't think [indiscernible] freight is a big issue for you but maybe address those 2 points. And -- because that theoretically could change very quickly, so I'm just wondering what impact from spot purchases and [indiscernible]", "answer": "Spot purchases. Can you explain that a little more?", "duration_s": 7.510000000000218, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0291.mp3" }, { "study_item_id": "MR-0292", "partition": "locked_confirmatory", "call_id": "2351784", "exchange_index": 30, "question": "I was hoping to touch on the new product launches for just a quick second. Correct me if I'm wrong, but I think you mentioned about 10% fuel efficiency improvement in Europe that should start production a couple of months. And I think I heard 7% on Peterbilt and Kenworth. Can you help us understand how good that is from an upgrade perspective maybe versus prior fuel efficiency increases and sort of historical model changes?", "answer": "Sure. That's a good way to think of it. The first thing is double-digit changes in Europe where speeds are more like 100 kilometers an hour -- excuse me, 80 kilometers an hour for trucks is, wow. I mean, getting that kind of improvement is just amazing. And the DAF team did such a fantastic job. And one of the reasons they're able to do such a good job is they work closely with the government there all in defining what the shape of a vehicle can be. And so the government allowed a different shape of a vehicle, and DAF is the first OEM and the only one that's announced to do so, so far of being able to bring out a cab that meets this new shape, which is more aerodynamic. So just fantastic effort by the team at DAF in bringing that truck out. \nAnd it doesn't just create aerodynamic benefit but the interior and the visibility of this truck are just amazing. And I would also say that from being a user of the truck, if you get in the truck and you're driving it just the way it feels, it's really, really quiet, like I would say, quieter than a [ 5 Series ] BMW when you're running down the highway. It's just fantastic. And then if you use the sleeper compartment of it, it's got all kinds of creature comforts and luxury for the drivers. And so it's just a beautiful product that delivers this double-digit fuel economy. \nAnd in characterizing it against other programs, you might think 5% is a lot. That's how we would look at it. It's a 5% change in fuel, big change in fuel economy. So for them to get 10%, just amazing. And same thing for the Kenworth and the Peterbilt teams getting 7% on these next-generation 579s and 680s. They just did a great job of bringing everything they could to the table, and that's obviously got a big impact on lowering operating costs for our customers. So these trucks are going to set the mark for the industry.", "duration_s": 105.90000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0292.mp3" }, { "study_item_id": "MR-0293", "partition": "locked_confirmatory", "call_id": "1850143", "exchange_index": 5, "question": "And what is your expectation for a turnaround cost in 2020 relative to 2019?", "answer": "We haven't given a specific number, Jim, but I would tell you, qualitatively, they will be higher. The -- we've talked about the large turnarounds. There's one in the VCM plant that occurs every 3 years. It will occur in the second quarter of next year, and that will, all other things being equal, make turnaround cost higher next year than this year.", "duration_s": 19.220000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0293.mp3" }, { "study_item_id": "MR-0294", "partition": "development", "call_id": "1777473", "exchange_index": 1, "question": "Okay. And then as it relates to the reduction in the revenue outlook, I would assume that has more to do with your outlook for U.S. market growth just based on percentages than international or internal disruption. But if you run the numbers based on the full year guidance that, to some extent, it might imply a flat to lower growth in the market in the second half of this year. And I'm just wondering your thoughts on how severe the slowdown might be. And is there a recession your forecasting right now?", "answer": "So great question. When we talked about it a lot. I would say that we're certainly not going to forecast the recession. And what we have seen in the market in the U.S. has been slow growth but pretty stable over the last several months, so we don't see anything that implies that we are heading off a cliff in the U.S. Obviously, internationally, there's pockets that are more problematic than others. But in general, we're not forecasting negative necessarily. We think it's a possibility that probably not a probability at this point.", "duration_s": 33.710000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0294.mp3" }, { "study_item_id": "MR-0295", "partition": "locked_confirmatory", "call_id": "2051537", "exchange_index": 27, "question": "Okay. And I guess just with respect to your third quarter production guidance here, you guys have the kind of adjusted international production of 135,000 BOE per day and kind of the upstream CapEx of $190 million. I want to see if you guys could provide those numbers on a kind of fully consolidated basis. So what would those be if we didn't make those kind of downward adjustments for the Egypt noncontrolling interest and midstream and other things.", "answer": "Yes. I don't have those numbers to hand. So I'd suggest maybe you call Gary to take a look at the reported volumes. We typically talk about adjusted because those are the ones that have a true economic effect for Apache shareholders, but I understand the desire to know what the reported numbers might be. So if you want to talk scary about that, that would be probably the best source.", "duration_s": 28.519999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0295.mp3" }, { "study_item_id": "MR-0296", "partition": "development", "call_id": "1700907", "exchange_index": 17, "question": "For Michael, again, on auto. And if you answered it, I apologize. Is written premium -- written auto pricing keeping up with the loss trend?", "answer": "I don't know specifically written keeping up with loss trend's, but certainly on earned business, we continue to expand margins. And on a written basis at 5 points of RPC, I would say we are continuing to expand margins on both basis. I didn't specifically to that, but we feel good about the margin expansion. And again, the outlook is for auto target returns.", "duration_s": 28.84999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0296.mp3" }, { "study_item_id": "MR-0297", "partition": "locked_confirmatory", "call_id": "1787043", "exchange_index": 14, "question": "Got you. Understood. That's helpful. You've talked about 12 million shares being done over some time period. Is there any color you can provide on how to think about matching of the timing of the forward with when you would want to do what depending on when the CapEx kind of hits just to understand that timing?", "answer": "Sure. The forward was put out after a year so the exhibition is that by the end of May of next year that those 12 million shares would be issued.", "duration_s": 11.060000000000173, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0297.mp3" }, { "study_item_id": "MR-0298", "partition": "development", "call_id": "1693639", "exchange_index": 26, "question": "And then just from a longer -- yes, and from a really longer-term perspective, there's 2 different dynamics that are occurring, one is your early on in terms of the implementation of some of these efficiency measures, as it relates to Chatbots and everything that, that can end up doing from an efficiency and a service model perspective, which would obviously, increase margins. On the flip side, we've got adding PEO, which just -- it's going faster. So from a mix perspective, that's going to drive the margins down. How do we think about the balance of those 2 from a longer-term investor expectation perspective?", "answer": "So you know, Mark, I guess, I would say 2 things, one is that assuming current mix, when we get through the 4-year ago of Oasis, we would expect to come in to 2021, improving EBITDA margins of the 20 base, so that would be our expectation. Caveating it, as I've been saying for 18 months, that if PEO growth accelerates even faster than we anticipate, which is still good teams growth and that could have impact that perspective. The other thing that could impact it is, I called out, what management solutions. The management solutions growth in that area, but it carries a higher margin would be an offset. But I think those are all the factors that as you plug in model, you'd have to evaluate.", "duration_s": 51.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0298.mp3" }, { "study_item_id": "MR-0299", "partition": "development", "call_id": "1958825", "exchange_index": 13, "question": "So I guess that's actually my follow-up, if I can. Like so a 59% in the first quarter to me as a full year run rate, somewhere in the mid-50s range, whenever -- not this year, obviously, but whenever things normalize, is there anything about that 59% in 1Q that you feel is sort of not sustainable that we shouldn't think about sort of what the earnings power is in a couple of years when...", "answer": "Not making a commentary on your math on what it translates into for the full year, that 59% in the first quarter was clean.", "duration_s": 7.519999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0299.mp3" }, { "study_item_id": "MR-0300", "partition": "locked_confirmatory", "call_id": "2351784", "exchange_index": 6, "question": "It is a good run rate. I'm just trying to figure out the model. And just real -- finally, real quick, just the dealer inventories right now versus where they ought to be?", "answer": "Well, dealer inventories are limited, which will extend the market also. We have about 1.6 months of inventory at the dealers and I think the industry is 1.9 or 2. So it's less than we'd like it to be, of course, but that does bode well for a strong extended demand cycle.", "duration_s": 16.25999999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0300.mp3" }, { "study_item_id": "MR-0301", "partition": "locked_confirmatory", "call_id": "2042728", "exchange_index": 5, "question": "Hey, Rich and Brad, the $13.4 million of cost actions you took in the quarter. How much of that was -- how much of that maps against the original $50 million target and how much was new incremental structural? Because I think, Rich, you had called out some new incremental structural in a couple of the business segments in your prepared remarks.", "answer": "That is the new structural. So the 50...", "duration_s": 5.3400000000001455, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0301.mp3" }, { "study_item_id": "MR-0302", "partition": "locked_confirmatory", "call_id": "1635298", "exchange_index": 22, "question": "Terrible. Good luck and enjoy. We are going to miss you.", "answer": "You're going to like Mark a lot more. He's a lot more friendlier than I am.", "duration_s": 3.319999999999709, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0302.mp3" }, { "study_item_id": "MR-0303", "partition": "development", "call_id": "2327819", "exchange_index": 17, "question": "Maybe, Efrain, if I could ask -- I know we've asked a lot of questions about the pace for control assumptions and strong bookings, but how about the company's own hiring in what seems to be just a tight labor market? How should we think about where Paychex is in terms of direct sales capacity? And how is your ability to hire and retain in sales right now?", "answer": "Yes. Samad, I'll take that one to start anyway. It's been good. I mean it's -- we certainly have had some challenge, I think, on the front end from a service perspective in some locations. But generally, we've really picked up in the last -- we've done a couple of things that have really picked up our hiring and filling those spots. We think we're in good shape. From a sales perspective, we're in very good shape from starting the year at full capacity with everybody in the seats, well-trained on the products that we're offering. And I think we feel good about that. We are seeing it as a very big challenge for our clients, and that's providing some opportunities through, again, the employee retention tax credit and telling them how we can help them get dollars there that will help not only retain their employees, but they could use some of those dollars toward hiring, too. You're seeing a lot of upfront bonuses and things like that, that clients have never even considered before that we're helping advise them might be a good trend to start.", "duration_s": 60.41000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0303.mp3" }, { "study_item_id": "MR-0304", "partition": "locked_confirmatory", "call_id": "1850143", "exchange_index": 12, "question": "If we took third quarter levels and just ran them straight?", "answer": "I don't have that calculation. I would prefer to answer that with more information.", "duration_s": 7.879999999999882, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0304.mp3" }, { "study_item_id": "MR-0305", "partition": "development", "call_id": "1647116", "exchange_index": 14, "question": "Okay. And last one, the Esterline intangible amortization that you would expect to run through your adjusted numbers. Do you have an estimate for that at this point?", "answer": "I think you probably look at the pro forma financial that were filed with the [indiscernible] document, and it's $20 million and that could change as we work through the final accounting.", "duration_s": 9.860000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0305.mp3" }, { "study_item_id": "MR-0306", "partition": "development", "call_id": "2059209", "exchange_index": 9, "question": "Maybe if we just look even longer term, with 400-gig coming up, yet we have a coronavirus pandemic that we're working through to. And it's harder to have teas and coffees with people in person and such. Any visibility you have on 400-gig coming, whether it be discussions? Are they more fruitful, taking longer, testing labs? How should I think about that?", "answer": "Right. Thanks, Jim. Well, I think, as we've always told you, 400-gig trials began at the end of last year. But we -- as we said last quarter, we will be delayed from 2020 to some of them may go into 2021 due to all the things you mentioned, COVID-related slowdown. You just can't deploy 400-gig over a virtual collaboration conference. You have to do new product qualification. You have to get the optics in. \nThat said, we're very pleased with our progress in 400-gig. And we're winning tons of customers. In fact, to date, we won over 50 customers in 400-gig. So we're pleased with the progress, but many of them are in trials and early deployment cycles.", "duration_s": 45.059999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0306.mp3" }, { "study_item_id": "MR-0307", "partition": "development", "call_id": "1838015", "exchange_index": 17, "question": "No. That just helpful. Just a quick follow-up as it relates to capital deployment, you touched on your ability to do M&A, while this investigation is ongoing. What about your ability to continue to buyback shares, can you do that before you file the 10-Q or are limited on what you can do there?", "answer": "We don't -- so generally speaking, we don't comment and share repurchases for a lot of different reasons. What we typically do is after having repurchased shares, we make comments on how many shares we repurchased. And if there are number of different reasons for that, that I think represents a good practice. And so as it relates to going forward, stay tuned, we talk about share repurchases on an upcoming call.", "duration_s": 27.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0307.mp3" }, { "study_item_id": "MR-0308", "partition": "development", "call_id": "1778920", "exchange_index": 26, "question": "Okay. Got it. The last question, if I could. Regarding the production mix going forward. Is it going to remain roughly the same in terms of Southwest Pennsylvania and West Virginia completions?", "answer": "Yes. This is Scott. I think it will be similar for the rest of the year as we've outlined. I think it's possible as we get through this review that we have a little more activity focused in Washington and Greene County and Pennsylvania and a little less in West Virginia as we're putting that land position together to set it up for combo development. So it's possible in 2020 and maybe 2021 you see a little more in Pennsylvania than West Virginia than in 2019.", "duration_s": 32.67000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0308.mp3" }, { "study_item_id": "MR-0309", "partition": "development", "call_id": "1995197", "exchange_index": 27, "question": "Okay. Then just one follow-up for you, Bob, just around the P&L. Can you sort of speak to the cost structure breakdown between fixed and variable and maybe how we should have OpEx trends into the third quarter?", "answer": "Yes. I would say, I mean, we've been -- we were very pleased with our ability to kind of manage the kind of the cost structure here. If you looked at it kind of on a sequential basis, there was about a $35 million kind of reduction. About 1/3 of that, quite honestly, was travel-related as we put brakes on, and I would expect that to be probably even more significant in Q3, obviously variable -- and then discretionary spend, and then we do have some element of our variable comp that reduces with performance. But what I would say is Q3 is going to be more challenging because we are protecting those growth investments, but we are very pleased with our ability to kind of manage our costs. Yes. Bob, if I could just jump in there. I mean the fact that we were able to increase margins in the quarter, you missed with pandemic, we're really quite pleased with that. And we didn't take shortcuts here. So we -- there was no COVID-19 layoffs within Agilent, and we've got a team that is not worried about their future employment. They're all worried about winning the marketplace and taking care of our customers.", "duration_s": 66.65999999999985, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0309.mp3" }, { "study_item_id": "MR-0310", "partition": "development", "call_id": "2059209", "exchange_index": 1, "question": "Okay. Are you still getting a little bit of drag on revenues, Jayshree, because of the supply chain stuff, but maybe it sounds like maybe not as much as last quarter?", "answer": "Yes. We're improving from Q1 to Q2. We'll improve again from Q2 to Q3, but we won't get back to normal till Q4.", "duration_s": 6.560000000000059, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0310.mp3" }, { "study_item_id": "MR-0311", "partition": "development", "call_id": "1840075", "exchange_index": 3, "question": "Okay. In other words, if the worst case scenario, GM doesn't get resolved until Jan 1, the low end of your range for the year, the 755, still captures that. That's what you're saying?", "answer": "Yes. I mean, obviously, we don't want to get the customer profitability but in terms of EPS, we're talking about pennies of impact here.", "duration_s": 9.299999999999955, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0311.mp3" }, { "study_item_id": "MR-0312", "partition": "development", "call_id": "1919759", "exchange_index": 14, "question": "This is in for Shaul. We have 2 quick questions. First one for cash. I think you talked about in the prepared remarks key indicators that tracking expecting positively on the firewall side. Nikesh, can you help us?", "answer": "We're having a hard time hearing you. Sorry, can you speak up? We're having a hard time hearing you.", "duration_s": 4.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0312.mp3" }, { "study_item_id": "MR-0313", "partition": "locked_confirmatory", "call_id": "1691216", "exchange_index": 16, "question": "Got you. And Gene, just on the M&A, I mean, there's been a lot of talk of portfolio companies, I guess, expanding their portfolio and you mentioned in your opening remarks leveraging scale and your cost advantages are the real competitive advantages. I'm just wondering do you feel you took another brand anytime soon or is it just more opportunistic, I get the impression that your hands with your existing brands I would think of you guys as eager to acquire any time soon I just wanted to make sure I understood that correctly.", "answer": "Yes, I think what's important is our current portfolio can deliver the long-term framework for the foreseeable future. And I don't want to -- what repeating what you just said, we're really focused on regaining momentum in CSK, but the management and the Board obligation to our to continue to evaluate the situation in our current portfolio and look for opportunities to add over time. but I think, it's important to reinforce to do an important make acquisition to be able to achieve our long-term framework.", "duration_s": 37.24000000000024, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0313.mp3" }, { "study_item_id": "MR-0314", "partition": "development", "call_id": "1772345", "exchange_index": 14, "question": "That's helpful. And just separately, the CCAR and approval impressive $30 billion as you mentioned earlier do you plan to use all of that? And should we assume the timing if you do all that is spread even react flexibility to front end if you wanted to?", "answer": "Yes, we plan to use all of it and spread equally over the quarters the way the method works and the sort of guidance they gave you. So it's spread evenly over the 4 quarters, and yes, we plan to use 100% of them.", "duration_s": 12.459999999999582, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0314.mp3" }, { "study_item_id": "MR-0315", "partition": "development", "call_id": "1773051", "exchange_index": 11, "question": "And the [indiscernible] run way of deals to do in this space, Rich, that would meet your returns criteria and pricing and so forth?", "answer": "I hope so. Maybe more in September.", "duration_s": 3.7199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0315.mp3" }, { "study_item_id": "MR-0316", "partition": "locked_confirmatory", "call_id": "1700948", "exchange_index": 28, "question": "So we used $24 million longer term which is what you kind of guided to before this kind of lumpy items. Is that in a good number for...", "answer": "Beyond 2019, that's probably a reasonable assumption.", "duration_s": 2.680000000000291, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0316.mp3" }, { "study_item_id": "MR-0317", "partition": "development", "call_id": "1721511", "exchange_index": 28, "question": "I want to follow-up on your some comments that were made about maybe independent restaurants being a little bit softer in the March quarter. I mean, whether we adjust for weather or not. The context of the question really what I'm getting at is have you seen a significant rate of openings for independent restaurants? In other words, your addressable customer base maybe over the last 12 months? And considering the amount of labor pressure that independent restaurants are facing and just margins which were in general lower than chains, are you actually seeing a pickup in closures on the independent side that's noteworthy even on like a very market-specific basis?", "answer": "John, I wouldn't say anything that's unique that's happened there. I mean, as you well know, in this industry, you've got a lot of new business coming online all the time and you also have folks that are closing. I don't [indiscernible] say we have seen any dramatic shift in that area. As I mentioned, the different data sources have some mixed information, but all of them generally talk about positive spend, dollars being up in that kind of 2.5% to 3.5% range and then you have traffic generally down with the exception of NPD, which is showing slight increase in traffic. So I don't think there's anything unique or anything this quarter that we've seen as highly different than what we've seen in the past quarters.", "duration_s": 45.90000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0317.mp3" }, { "study_item_id": "MR-0318", "partition": "locked_confirmatory", "call_id": "1700094", "exchange_index": 35, "question": "[indiscernible] from different manufacturers, I don't think everybody else is seeing the strength that you're seeing. So [indiscernible] there?", "answer": "I'm sorry. Your line is really breaking up, we're not -- we can't really get the question.", "duration_s": 3.8200000000001637, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0318.mp3" }, { "study_item_id": "MR-0319", "partition": "development", "call_id": "2049626", "exchange_index": 4, "question": "Great. And then what I think you've spoken in the past on the 2021 CapEx opportunity being just generally lower than 2020 or kind of halfway through the year, should we think of the spend opportunity next year is something sub $1 billion? Or is there kind of a book-end way to think about how your spend?", "answer": "No. I just said in my prepared remarks that we would be in that $300 million to $400 million range for 2021, including maintenance and growth, and we will sustain that level of CapEx as long as producer activity, eroder activity is generating growth that we need to expand capacity. As Terry mentioned, we have all the assets in place to get us back to that EBITDA level north of $3 billion. And so we're in a great position here where we don't have to jump on the CapEx level until producer activity warrants that for growth.", "duration_s": 43.24000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0319.mp3" }, { "study_item_id": "MR-0320", "partition": "locked_confirmatory", "call_id": "1854893", "exchange_index": 6, "question": "So I'm wondering if you could talk about the pricing announcements that you've made for 2020, what's the breadth of pricing actions? Or is it more or less mid-single digits across the board? Or is there more variability by market? And in terms of the pricing actions that you're taking, are they more significant than what we've seen in those comparable markets in '18 in areas where you're pushing pricing above the company average for '20?", "answer": "As always, they're going to be -- there'll be variability, and that's just because different markets have different cadences of you push price for a while and then you let it catch up and you push price for a while. So those will all be a little different. I think that the pricing dynamics in all markets is good. I believe we'll see price -- real price increases and the vast majority, if not all of our markets. Our backlog, our booking pace would support that mid-single. Our conversations with our fixed-plant customers, I think, would support that. Again, we're still -- we're in the middle of this. So it's still early in the process. That's our best thoughtful guide at this point. We'll give you a more educated view of this as we have a volume in February. But the very strong shipments on the private side, coupled with the visibility of the dramatically growing highway work, really support pricing throughout the sector, not just aggregates, but I think all construction materials and construction. We'll end this year strong, and I think we'll start into 2020 with very good momentum.", "duration_s": 77.37999999999988, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0320.mp3" }, { "study_item_id": "MR-0321", "partition": "development", "call_id": "1885905", "exchange_index": 5, "question": "Great. And then, Rick, just a quick one on the margins. I think there's been several quarters in a row of productivity and mix cited as a pretty nice offset to the labor inflation you're seeing. I'm just wondering what the sustainability of that looks like? And whether you're starting to lap that at any point in the next quarter.", "answer": "Jeff, a couple of things. One, we've said quite a few times that we don't expect to have labor below last year for quite a while as we keep inflation. And so this quarter played out, we were about 10 basis points lower than last year in labor. The productivity, if you remember, a lot of that started with new restaurants last year, around the third quarter, and we started to see a little bit of an increase in productivity from new restaurants. That should start lapping itself. \nSo we still feel pretty good about managing our labor well the way based on inflation, what's going on now. And we've all contemplated in our guidance of 1% to 2% total inflation. I'm sorry, about 2.5 -- I'm sorry, 2.5% total inflation.", "duration_s": 46.16000000000008, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0321.mp3" }, { "study_item_id": "MR-0322", "partition": "locked_confirmatory", "call_id": "2042728", "exchange_index": 20, "question": "Maybe just the first question around the Imaging and ID segment. Fairly heavy decrementals in the first half given the gross margins and what happened with sales. I didn't see too much color on the margin outlook on Slide 4 for that segment. So maybe help us understand how you see decrementals in the second half, how much narrower those should be in that segment versus what we saw in Q1 or Q2?", "answer": "They should -- well, I mean, let's start from the beginning. In marking and coding, our margin, which is substantially the bigger portion of that segment, our margins were flat. So all of the decremental margin in that segment was from textile printing. And if we go back and take a look at sequentially last year, textile printing weakened in the second half. So decrementals, as long as marking and coding can hold their margin performance, which we fully expect them to do, should be less in the second half just because of an easier comp.", "duration_s": 41.14000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0322.mp3" }, { "study_item_id": "MR-0323", "partition": "development", "call_id": "1639601", "exchange_index": 41, "question": "Sorry, I think I was on there. Just a quick one on V-280. Scott, can you talk about maybe the range of outcomes that you're thinking about for V-280 in the '20 budget? What would be considered good? Is there some kind of commitment that you guys have to have? And how that might affect -- how -- whether it's a lot or a little that's in the budget? How that might affect your pace of spending on V-280 going forward?", "answer": "Well, to affect our pace a lot. So I mean, we don't have no insight into the [ V-20 ] looks like at this stage of the game. We're certainly encouraged by the dialogue that we had. And I think the Army has had publicly around their desire to accelerate these programs [indiscernible] 1 and [indiscernible] 3. So we would certainly hope here shortly to start to see that -- those statements turn into some contracted work. As I said earlier, look, we've now exceeded 280 knots. I think our team has done everything we've asked of them to design and build a terrific aircraft. It's maneuverability is understanding, it's been demonstrated. So it's sort of debunked all these notions that to order product can't have maneuverability of a more conventional aircraft. The speed now going through them and then breaking through that 280 knot perform envelope this thing does everything and more than that it was expected to do. So at this point, we'll have no choice but to roll back any funding that we've put into it, waiting to see what the Army is going to do, because we've done what we can do.", "duration_s": 67.64000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0323.mp3" }, { "study_item_id": "MR-0324", "partition": "locked_confirmatory", "call_id": "1700964", "exchange_index": 2, "question": "And just a follow-up question. How are you thinking -- your stock is up, everybody else's stock is up. How do you think about cash in 2019 and within your previous range and? Also how do you think about cash deployment in 2019? And has that thinking evolved given that the world is changing?", "answer": "We don't necessarily make decisions on share place as it relates to cash deployments. I think that we've clearly got a bias for inorganic growth and we've got some things in the pipeline. So to the extent that we can use are available cash there, we will. If we are unable to find inorganic opportunities, then clearly, we would average in, in terms of share buybacks. So overall, I think our thinking is consistent on that manner.", "duration_s": 31.060000000000173, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0324.mp3" }, { "study_item_id": "MR-0325", "partition": "development", "call_id": "1787203", "exchange_index": 17, "question": "And this environmental remediation charge that you have, what size is this associated with? What's the source of the contamination? And how significant could this be longer-term?", "answer": "We're not going to respond specifically about the site. This is just part of the ongoing remediation activity at the site. This is not indicative of a trend or harbinger of things to come. This is just a normal course of events as we work cooperatively with the agencies to remediate sites that were targets -- often sites for us some years ago.", "duration_s": 28.699999999999818, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0325.mp3" }, { "study_item_id": "MR-0326", "partition": "development", "call_id": "1727341", "exchange_index": 15, "question": "Got you. And then on Catalysts, you've had a little bit of margin pressure over the last couple of quarters. Can you just comment on what's driving that and how you think 2019 evolve?", "answer": "This is Raphael. So we're looking at 2019 to be essentially flat year-over-year on adjusted EBITDA basis. There's certainly our mix effects that occur from year-to-year, depending on how much hydroprocessing versus FCC business. Those on the whole, the business is strong, continues to follow the macro trends of need for chemicals, fuels and clean chemicals and fuels. So we feel confident in the future outlook for the business.", "duration_s": 33.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0326.mp3" }, { "study_item_id": "MR-0327", "partition": "development", "call_id": "1701002", "exchange_index": 9, "question": "Okay. And just out of the expense management this quarter was very good to help us set some of the weaker fees and you clearly sound confident that the fees will come back strongly the rest of the year. If for some reason the revenue is a little bit weaker than you hoped for, are some of these cost adjustments or cost savings sustainable?", "answer": "Yes. Well the cost savings are sustainable. And I would also argue or suggest that as we saw this quarter, many of our revenues also have a highly correlated expense number with that. So that expenses are variable to those revenues that are being generated in this case, those capital market revenues are highly correlated and we've said that in the past it's been about 30% correlation and so there is that opportunity to adjust that. We've talked a lot about making sure that we hit our efficiency targets and make sure that we deliver on our commitments to the street. And part of that is making sure that we continue to focus on expense control in order to help manage to achieve our targets even if the revenues are weaker. So I think you'll see ongoing efforts for us to continue to manage that down and expect our efficiency ratio to continue to decline each quarter from here on out this year. And so that will allow us to achieve that targeted level.", "duration_s": 63.95999999999981, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0327.mp3" }, { "study_item_id": "MR-0328", "partition": "locked_confirmatory", "call_id": "1792461", "exchange_index": 13, "question": "Got it. And on GAAP basis, it's obviously noncash and accounting-oriented. Is there any kind of sizing you can give at this point? Or just wait until third quarter?", "answer": "Yes. I think you're have to wait until the third quarter. Actually, no. This is an involved process. So stay tuned.", "duration_s": 7.579999999999927, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0328.mp3" }, { "study_item_id": "MR-0329", "partition": "development", "call_id": "1897568", "exchange_index": 27, "question": "I know that the commercial construction piece of your construction business is not the biggest, but you've had some helpful and interesting perspectives on that in recent quarters. Just curious what your view is at this point? What you're seeing and assuming going forward on the commercial piece?", "answer": "Yes. So the commercial business can be a little lumpy on a quarterly basis. Really, they're related to the timing of projects. So up 5% in the quarter was certainly 1 of the better numbers from that business. I think if you look at the full year, the business construction -- the commercial side is actually down low single digits. And so I think we expect, at current run rates, it will be similar to that in 2020. So I wouldn't expect a significant acceleration in 2020. And again, the Q4 number at 5% is at the high end of what this business typically does.", "duration_s": 43.039999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0329.mp3" }, { "study_item_id": "MR-0330", "partition": "development", "call_id": "1944952", "exchange_index": 14, "question": "Thanks for the early guide here. And Efrain, I appreciate the analogy. Thank you for that one.", "answer": "And all of you is to remember when I was wrong that I at least tried. I led with my chin.", "duration_s": 8.099999999999909, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0330.mp3" }, { "study_item_id": "MR-0331", "partition": "locked_confirmatory", "call_id": "1704846", "exchange_index": 6, "question": "Okay. I appreciate that detail. And then secondly, just back to decorative. You mentioned the trends around sales pace accelerating in March and April in paint but you change the revenue guidance slightly. So is that simply just, as you mentioned, the slower expectations around Kichler? Or is that just a reflection of the 1Q results? I guess ultimately, is the expectation that sales growth 2Q to 4Q is going to be a bit slower than what we previously envisioned?", "answer": "Yes, in terms of the segment growth, I would say that probably it comes down in 2 factors, as you mentioned, one, the Kichler revenue is -- was a little bit softer here in the as part of the year. And then also we had a little bit softer first part of the year in our other businesses in that segment. And so that's why we kind of guiding down to the lower end of that range here in -- for 2019.", "duration_s": 25.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0331.mp3" }, { "study_item_id": "MR-0332", "partition": "development", "call_id": "1705068", "exchange_index": 9, "question": "Got it. That's helpful, Jessica. And then second, you gave some staff on the mortgage business and the profitability this quarter was actually quite impressive given some of the challenges in the mortgage space today. I was hoping you could just comment quickly on what you're seeing regarding the changes out of FHA? I know your average metrics are very favorable, but there's a of your business that goes outside of the mortgage business. So has there been any fallout or any impact at all from the adjustments in March?", "answer": "We have not seen materially impact in the business of all. At the margin, there are certainly individuals customers that may have to wait and work on a different loan program or getting delayed in their process, but we have not seen any significant impact whatever.", "duration_s": 15.099999999999909, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0332.mp3" }, { "study_item_id": "MR-0333", "partition": "development", "call_id": "1787201", "exchange_index": 32, "question": "Got it. And then I just want to ask a strategic question. We look around in the EV landscape, and we've obviously seen some collaboration amongst automakers trying to thread the investments. You've taken a slightly different approach. So far, it's been a bit more go-it-alone approach. So I guess my question is -- and you don't have the same considerations that you don't have to deal with Europe, you are not doing -- being forced into this as much. But would you ever consider allowing other automakers to use your best platform sort of what VW is doing with NEV? I mean will that help with scale? Will that help with profitability?", "answer": "Well Dan, what I would say is what we are doing is we have an arrangement with Honda. We have already -- Honda has already partnered with us on the cell technology and some of the electric vehicle components. So I think we were actually one of the first, I think, if not the first to do that. And as we move forward, if it make -- we are open to working with other OEs and leveraging it even further, but we're already doing that with Honda, and it definitely provides savings from an engineering perspective, and it has scaled benefits as well.", "duration_s": 34.98000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0333.mp3" }, { "study_item_id": "MR-0334", "partition": "development", "call_id": "2362465", "exchange_index": 24, "question": "Got it. So tailwind. And then sorry, 1 last one. The orders conversion, I know there was an earlier question about mid-single-digit growth in the fourth quarter. I mean, you're coming off of a 17% orders comp, and I know that orders don't completely equal revenue in the immediate term. But I mean with that kind of order projection and with you guys talking about turnarounds being good in the fall, I mean why would organic growth slow in Automation Solutions? \nIt's a tougher comp, but it's only a couple of hundred basis points where the orders are just obviously inflected. So I mean, why would that go from 8% to like 5% at the midpoint of that guidance? Is there something about timing? Or is that just conservatism around the COVID or whatever?", "answer": "Well, less so COVID more so the availability of materials, particularly electronics, Steve, that are a challenge in that business. And I think as we guided Automation Solutions within that band, I think it's -- there's momentum on the order side. \nThe question is, can we convert in the plants? And it is a hand-to-hand combat. I can't emphasize that enough in terms of material arriving and our ability to have the labor to convert it. And it's -- and that is what keeps me a little bit more guarded in terms of the order-to-sale conversion in the fourth quarter.", "duration_s": 43.840000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0334.mp3" }, { "study_item_id": "MR-0335", "partition": "development", "call_id": "2206284", "exchange_index": 1, "question": "That's great. We received a lot of questions about this idea of sort of the legacy OEMs, right? I'd put maybe 3 European OEMs in that camp versus this next gen of startups. Could you talk about just what does it like to win business on the startups? Are you seeing them at a similar proportion of in-sourced first outsourced, just because it's such a new environment for everyone involved?", "answer": "Yes. We are working with both, right, both the legacy OEM, as you call them, and new startups. We have actually been pretty successful towards those 2 customer market segments. Obviously, in our business, we are in the business of long-term relationships. And that solid foundation that we have and the solid customer intimacy that we have across the world -- certainly matters.", "duration_s": 40.94999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0335.mp3" }, { "study_item_id": "MR-0336", "partition": "development", "call_id": "1833005", "exchange_index": 13, "question": "This is Justin Long from Stephens. Maybe to start with Intermodal, I know you were successful winning some Intermodal business late in the bid season. If you were to strip out the tailwind from some of those markets against the mahout underlying Volumen environment trended in the third quarter relative to what you would view as normal seasonality?", "answer": "Yes. I think there's kind of 2 stories we had, 4 or 5 bid events that happened towards the latter part of the second quarter. Plus we had bid events prior to that, that should've allowed us to grow even more than what we're anticipating. And the rule came down to compliance of that we've talked about. I think what you're seeing in the latter part of the third quarter and enter now is that the compliance is better than what we saw in the second quarter, and that's kind of lifting all boats, if you will. So we have 4, 5 bid customers that helped us, but in the compliance with the rest of the base is also given us a lift.", "duration_s": 47.92000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0336.mp3" }, { "study_item_id": "MR-0337", "partition": "locked_confirmatory", "call_id": "1783486", "exchange_index": 13, "question": "Great. No, that's helpful, and it makes sense. I guess, secondly, on the lot positioning, I noticed that the option lock percentage ticked down a point sequentially in the third quarter after, again, several years of very impressive growth and gains in that number. \nHow should we think about the option lock percentage course over the next couple of years? Obviously, the low 60s kind of exceeded your goal or hit your goal faster than expected. Should we kind of expect this type of range to be more of the new normal? Or is there kind of another leg up in the option lot percentage over the next couple of years?", "answer": "I think you asked the question the right way in the term of years to look at this. It is a fairly volatile measurement, and we have been very fortunate the past several quarters. It has done nothing but increase. But it will bounce a little bit from time to time. But directionally, over the next few years, we would still expect that control of lot position to climb above its current level. I wouldn't say that there's going to be a rapid accelerated leg with that or anything we can point to as catalyst to take it immediately up 3%, 5%, 7%, 10%. But continually, as we're continuing to adjust our business to focus on returns, we're looking to continue to control more land and partner with more third parties in delivering lots to the builder.", "duration_s": 44.419999999999845, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0337.mp3" }, { "study_item_id": "MR-0338", "partition": "development", "call_id": "1635649", "exchange_index": 13, "question": "Okay. Great. And then just following up on the CRE and loan growth guide. It sounds like CRE, you guys -- that's been a soft category for you in '18. But you do expect growth? Just what's the underlying confidence with -- on the CRE front, given what sounds like a pretty competitive environment?", "answer": "I think a couple of things. I think we had a good last couple of quarters on new construction loans that originated. That will start to fund up. We think a little bit higher than maybe the base has been the last few quarters. That's been primarily in the multifamily space. Also in some of the owner-occupied space as well. And also -- and I probably said this too many times, but we feel like the payoff velocity, even really never seem to let up during the year. And I just like -- our outlook is that the payoff loss will be less next year than this year and then our construction fundings will be better next year going in. Plus, we have better territory there. I mean, we're better in the Florida markets that we're now more deeply involved in should also give us a little bit there. So you put those kind of 3 things together. I'm not saying CRE's going to jump off the page. It was negative, I think, 5% or so for the year in growth. I think it gets at least probably low single digits, which is good improvement, which is driven by the 3 components that we would believe go into '19.", "duration_s": 67.34000000000015, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0338.mp3" }, { "study_item_id": "MR-0339", "partition": "development", "call_id": "1705263", "exchange_index": 14, "question": "Okay, good. And then one other one on -- there's a lot of changes, obviously, on the retail distribution side just in terms of how they're approaching their business and move towards more portfolio construction, but I think that has a long tail. So the question I have for you is what are you doing to capitalize and change with them? Meaning, to your answer to the last question, you have a lot of the tools between your ETF franchise and your broad diverse products, but they're changing portfolio construction and they have different needs. I'm just curious if you're seeing big changes and are you changing in a big way on how you approach that channel?", "answer": "Yes, I'm going to make a couple and let Greg -- so absolutely. We've not been clear. So under the banner of solutions, that's exactly what we're doing. It is really creating models for platforms with platforms, working with -- if you want to stay in the wealth management platform where your question was. Also with the big teams, working directly with the big teams, helping with analytics, helping with them within the various systems, within their approved list and what they're trying to accomplish. It has been a massive undertaking for us. And that is the way to the future. I think if you don't have the resources to compete there, I thank you are purely disadvantaged. And we have a very talented team. And maybe Greg you want to talk about... I don't think we need to add a ton to that. I think the solutions team, we really put a significant investment in over the last 4 years. It's got a couple of components to it. The client engagement piece really do go out and do a superior job of kind of understanding the needs that both platform as well as the institutional side, what their needs might be. And we have an analytical team to really come back and try to create outcomes for them, whether that be, in the case of retail, where we have model portfolios and other things that we can create. And we're doing that. And we've done that pretty extensively even though, over the course of the last couple of years where we've partnered with a number of platforms that we think could be helpful whether they're using, directly, our model portfolios or in some cases are going to use that modify what they're doing. But I think the question is spot on in where we think the retail market ultimately is going to go. And we think with the solutions capability and what we're doing from an engagement standpoint, we're going to be extremely well positioned.", "duration_s": 100.40000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0339.mp3" }, { "study_item_id": "MR-0340", "partition": "locked_confirmatory", "call_id": "1767138", "exchange_index": 5, "question": "Last quarter, you directed as to fiscal year 2020 EBIT being modulating up year-over-year in flat EPS. Are you still -- everything you're saying in the marketplace, are you still expecting this?", "answer": "Rivka, we're going to just comment on current year 2019. We don't want to get into a practice of going back to discussing long-term models or 2020 guidance. What we will be doing is in the next conference call, we'll give comprehensive guidance on all of the assumptions around 2020. So we're not going back on the discussion on the -- we just refer people back to the previous material that we placed out there in Q2.", "duration_s": 33.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0340.mp3" }, { "study_item_id": "MR-0341", "partition": "locked_confirmatory", "call_id": "1787043", "exchange_index": 27, "question": "Okay, okay. And then just really quick clarification on the equity. How much would you have needed if you weren't doing the offshore wind? Was the need there either on the parent refinancing site or down of the utilities?", "answer": "What we said and what we will continue to say is that we have a robust $13 billion capital program in our forecast time. And that combined with the activities we are performing in the wind area really drove the need for the equity issuance. I hesitate to allocate x amount to 1 category versus the other, but certainly when you look at, we do have robust capital plan that was a big driver of that piece. Next question is from Julien Dumoulin-Smith of Bank of America.", "duration_s": 44.7800000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0341.mp3" }, { "study_item_id": "MR-0342", "partition": "development", "call_id": "1646974", "exchange_index": 9, "question": "And the last question if I may. You made a comment in your prepared remarks, if I heard it correctly, that Chlor Alkali could be sold out by 2021. Perhaps we'll hear more next week, but I was wondering if you could comment on the rates of demand and supply growth that you're basing that on?", "answer": "I would prefer to leave that for next week because we're going to have a third party talk about that.", "duration_s": 4.800000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0342.mp3" }, { "study_item_id": "MR-0343", "partition": "development", "call_id": "1849084", "exchange_index": 9, "question": "and I just want to make sure we all understand that the account that's driving this downside here is not historically largest customer. And then the second part of that is given the disruption you saw from Microsoft earlier in the year, I guess, what's the context of their spend level as they going to go forward in the 2020?", "answer": "So just to clarify, Alex, it's the second cloud titan. It's not the one we mentioned, the last time that had a Q2 2019. And specific to Microsoft, as we are projecting, we expect -- we fully expect them to be a north of 10% customer concentration for 2019, and we expect to have a second new cloud titan customer, which will be Facebook.", "duration_s": 24.25999999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0343.mp3" }, { "study_item_id": "MR-0344", "partition": "locked_confirmatory", "call_id": "1772350", "exchange_index": 9, "question": "Okay. Got it. But those securities that you plan to put on in terms of the some of the pressure that you mentioned for the next quarter, are those kind of anything of those are NII accretive?", "answer": "We're thinking of those as in terms of the liquidity position and the regulatory issue specific?", "duration_s": 6.220000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0344.mp3" }, { "study_item_id": "MR-0345", "partition": "development", "call_id": "1833434", "exchange_index": 0, "question": "May be we start on sort of the OR obviously significant progress here, yet again in spite of meaningful volume declines. I guess, when you think about sort of the outlook, maybe you can go beyond sort of the near-term target of sub-60 and the efficiency and other opportunities that you highlighted are still on the table. How can we start thinking about things, I guess, we'll be putting your head on for 2020, I thinking about is there to be returned to volume or less operating ratio is that you think about 2020 or maybe a little bit more operating ratio just want to get a sense of you are thinking about sort of guiding the business into 2020, which hopefully has more stable outlook.", "answer": "Chris, while first of all, we're not going to get into 2020 just yet. We'll ramp up the fourth quarter here and then we'll start trying to give guidance as to what 2020 is going to look like. I guess, only just 2 general comments and then either may be Kevin or Mark want to jump in with some additional commentary, but just 2 general comments. It's difficult, still very, very difficult to gauge where the overall economy is going. I think we're confident for the fourth quarter as we call what we thought was a pretty soft outlook going forward and so we're going to have to wait to see to start figuring out what the revenue is going to look like next year. But again, generally speaking, our plan is to grow this business and to the extent that we can grow this business, we're going to do it. And then secondly, our plan is to run this company as efficiently as we possibly can and we're going to continue to focus on them. So this is not a -- they are not mutually exclusive. We're going to do both at the same time, and that's what we've been shown we can do this year.", "duration_s": 86.68000000000006, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0345.mp3" }, { "study_item_id": "MR-0346", "partition": "development", "call_id": "1727341", "exchange_index": 4, "question": "Luke, nice to see the positive 3% on Lithium pricing. Can you talk to what you're seeing with regard to mix? And what is your level of confidence that you can sustain the positive pricing throughout the course of 2019?", "answer": "Kevin, so this is Eric again. Our volumes are, as you know, under long-term contracts. So the vast majority of our carbonate volumes and almost all of our hydroxide volumes under long-term contracts with fixed prices, and they have a floor associated with them. So our mix is going to be representative of the production mix we talked about. There's going to be close to 30,000 tons, roughly, of hydroxide and 40,000 tons of carbonate that we're putting into the market on a rounded basis. And our confidence of being able to sell that is at current prices that we are seeing in the first quarter is very high going forward. And then Kevin, if you remember, on the last call, we said that we thought pricing would be the for lithium for the full year will be flat inflationary. That's still what we expect. What you're seeing at 3 quarter in the first quarter -- that 3% in the first quarter, some of it is that some of the price increases in 2018 didn't hit although in the first quarter they were through the year. So you're seeing a little bit of that also in the first quarter 2019. But we still expect them to be flat inflationary for the year.", "duration_s": 72.53999999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0346.mp3" }, { "study_item_id": "MR-0347", "partition": "development", "call_id": "2182189", "exchange_index": 7, "question": "I wanted to go back to some of the merchandise markets where the outlook is pretty constructive outside of energy. And we got steel prices through the roof. You mentioned auto. But could you talk with what you're hearing from your customers? I mean are there discrete items where you have plants reopening utilization rising? Like how much visibility do you have into this turning into a real sequential volume acceleration versus seeing just some of the indicators and in a very different backdrop from what we saw in the first 6 months of last year?", "answer": "Yes, Masco, I think we've got pretty good visibility into this, at least for the next couple of quarters. You saw our merchandise ex energy rotate into growth year-over-year during the fourth quarter. So -- and we're continuing with that level of momentum. As you noted, steel prices are like 12-year highs, right? And so our customers are talking about adding back capacity. The corn market or I should say, the corn, wheat and soybean market, those commodity prices are about 60-year highs. And then the housing market is about as strong as it's been in 14 years. And so you couple that with the fact that wholesale inventory levels are close to 2 year lows, and there's a lot of demand for our product out there. Even in the paper market, those who make corrugated cardboard, they're sold out because of the proliferation of e-commerce. And so across the board, we're seeing strength in our merchandise network which gives us a lot of confidence as we move into '21.", "duration_s": 74.55999999999995, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0347.mp3" }, { "study_item_id": "MR-0348", "partition": "development", "call_id": "2349349", "exchange_index": 4, "question": "Okay. That makes sense. That's what I thought. And just, John, I don't know if I missed it, but I was hoping you could help us just how to think about what you've baked into your guidance for just the growth and verification and employee services for the back half of the year?", "answer": "Yes. So I think what we talked about is we gave a good view, I think, of what we expect the growth to be for the full year. And as we indicated, we expect Workforce Solutions to grow over 30% in the year. So obviously, that's up substantially from what we talked about in April. So it reflects the much stronger performance in the second quarter, but also continuing very strong performance in the third and fourth quarters. And we're expecting that to see continued strong performance across really all the businesses, as we talked about, I think, effectively, we held or increased our expectation for growth in all of our businesses in the second -- in the full year and therefore in the second half. So we're feeling very good about the trend.", "duration_s": 37.38000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0348.mp3" }, { "study_item_id": "MR-0349", "partition": "locked_confirmatory", "call_id": "1703766", "exchange_index": 12, "question": "And in that same regard, if orders were up in the second half of the year, price/cost, the way you're guiding the year, that would imply the first quarter was the worst of the price/cost for the full year. Can we extrapolate that into your thoughts on margins year-over-year in aggregate? [indiscernible] second half.", "answer": "So price/cost realization.", "duration_s": 2.2200000000000273, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0349.mp3" }, { "study_item_id": "MR-0350", "partition": "development", "call_id": "1701224", "exchange_index": 10, "question": "Chris Evans on for Bob. So on pricing, 8 quarters in a row of improvements. Recognizing your industrial coatings margins are still pretty depressed. How much more price is needed there to recover the lost profitability? And then maybe more specifically, does the consolidated 1Q pricing you printed this quarter represent a high water mark for the year as comps get harder throughout?", "answer": "Chris, this is Vince. I'll take the second part of your question. We're still on pricing in Q2. We're still doing surgical and targeted pricing in not onlin the industrial segment, but in other businesses. So I would definitely not consider that high watermark. I think you alluded to it properly. We're starting to stock price on top of price. We still got some need to recover in certain businesses or regions. We're going to continue to push to try to fully recover this over the course or balance of this year. Chris, this is John. Maybe on your cumulative other questions. If you look at the past 10 quarters, raws were up a cumulative amount of low single digits and pricing is maybe up 3, a little bit more than 3%. We typically say we need to get half of the raw material inflation to be even. So that's the delta we're looking at.", "duration_s": 49.159999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0350.mp3" }, { "study_item_id": "MR-0351", "partition": "development", "call_id": "2059209", "exchange_index": 30, "question": "Okay. And is there -- what would you say -- can you just give us a sense of your backlog? Like how much of that has kind of been held up?", "answer": "Yes. No, we don't talk about backlog, but it's safe to say we have some. So this concludes the Arista Q2 2020 Earnings Call. We have posted a presentation, which provides additional information on our fiscal results, which you can access on the Investors section of our website. Thank you for joining us today and, everyone, be safe. Thank you.", "duration_s": 23.559999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0351.mp3" }, { "study_item_id": "MR-0352", "partition": "development", "call_id": "1637341", "exchange_index": 9, "question": "Okay. And then just separately, the Fed's talked about proposing the CCAR stress tests that's run on and not leverage ratios, have you have you thought through what that could mean for you?", "answer": "Yes. I think we've done the modeling of that. I think there's been a fair amount of outside modeling. And right now, I think Tier 1 leverage is our constraint under the stress test. The difference between a Tier 1 leverage binding constraint versus an RWA binding constraint, while it's not perfectly discernible, rough estimates $1 billion range, maybe $1.5 billion, but that kind of depends on exactly how the test is run, what the timing is of the various market factors and so forth. But that has some real material benefit, and I think we are optimistic that with bill having passed and the Fed working on implementing on that and some of the Vice Chairman comments that there is some real movement. It's just a matter of time and hopefully months, not quarters, when we hear more. But it will be -- it's an important positive force.", "duration_s": 59.58000000000038, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0352.mp3" }, { "study_item_id": "MR-0353", "partition": "locked_confirmatory", "call_id": "1713407", "exchange_index": 32, "question": "Okay. And then secondly, your first quarter volume growth of 1% is kind of lagging the overall fiscal year '18 of 4%. How do you see that going forward? And do you expect price to make up the delta of that?", "answer": "I'm trying -- the 1% for the company?", "duration_s": 2.5599999999999454, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0353.mp3" }, { "study_item_id": "MR-0354", "partition": "development", "call_id": "1788294", "exchange_index": 14, "question": "I wonder if you can comment on what you expect your largest customer to be as a percentage of sales in 2019? Jayshree, I think earlier in the you had indicated it would go back to historical levels, which many of us interpreted is 16% of sales instead of the 27% in 2018. Like as we get closer to the end of the year, you must have better visibility. I'm curious to hear that?", "answer": "Yes. That's a good question. I think my prediction of teens -- mid-to high teens is still what I think is our best estimate, 27% was wonderful, but a rare event.", "duration_s": 11.6400000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0354.mp3" }, { "study_item_id": "MR-0355", "partition": "locked_confirmatory", "call_id": "2051537", "exchange_index": 35, "question": "Congratulations. I'll jump in on the Suriname success, congratulations. Real quick question there. I just wanted to confirm who will operate the upcoming fourth exploration well.", "answer": "Apache will operate the Keskesi well. After that well is when we've already started transitioning with our partner, Total. And I will say we chose the right partner for a lot of reasons, and we're excited to continue working with them and let them take the reins as operator.", "duration_s": 19.720000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0355.mp3" }, { "study_item_id": "MR-0356", "partition": "locked_confirmatory", "call_id": "1692960", "exchange_index": 7, "question": "Got it. And then you previously indicated that visibility into large deals should improve as we move through the year. Can you provide us an update on progress of these large deal conversions, how this compares with your internal expectations and when you may be in a position to update guidance that reflect progress with these larger deals?", "answer": "Yes, so I think, we have good visibility now on the second half, but typically we're -- it's not clear it was more than 6 months out on some of that stuff. So based on what we see in the pipeline, for the large deals where we're affirming our guidance for the year around the midpoint of the guidance.", "duration_s": 18.40000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0356.mp3" }, { "study_item_id": "MR-0357", "partition": "development", "call_id": "1961614", "exchange_index": 16, "question": "Gentlemen, kudos on your charity efforts. I appreciate the commentary on the raw materials and the outlook. I just wanted to see the other side of that calculation on the -- your ability to raise pricing. You've done a really good job over the last couple of years with price increases in each quarter, et cetera. Must be a very difficult environment right now. How should we think about that side of the equation?", "answer": "Frank, this is Michael. First of all, I hope you like [indiscernible].", "duration_s": 3.7200000000002547, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0357.mp3" }, { "study_item_id": "MR-0358", "partition": "locked_confirmatory", "call_id": "1713407", "exchange_index": 11, "question": "Doug, you have competitors the last 6 to 9 months in order and Institutional. How are they acting in the marketplace?", "answer": "Well, I guess our new competitor in Institutional would be new owner.", "duration_s": 9.239999999999782, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0358.mp3" }, { "study_item_id": "MR-0359", "partition": "locked_confirmatory", "call_id": "2225279", "exchange_index": 10, "question": "And bringing their bread box, less than 10% of it?", "answer": "That's a great question. I don't know we've ever broken that out before. I don't have it handy on me.", "duration_s": 8.41000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0359.mp3" }, { "study_item_id": "MR-0360", "partition": "development", "call_id": "2352893", "exchange_index": 19, "question": "Okay. That's helpful. And then following up on to your San Francisco comments on the transaction market specifically, do you think that [ 4, 4 ] cap rate you reported for the smaller asset you sold in the suburbs is indicative of market pricing? Or has there just not been enough volume to tell yet?", "answer": "Yes. There's not enough volume to tell. I mean there's such a wide range in how properties are performing that there's not enough. Our expectation is that cap rates will normalize there and lower over time and that there'll be a lot more bids that they're looking for.", "duration_s": 16.139999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0360.mp3" }, { "study_item_id": "MR-0361", "partition": "development", "call_id": "1913038", "exchange_index": 4, "question": "First, focusing on Illinois, we are seeing a pickup in learnings in Illinois, I know you talked about lettings in the prepared commentary, but focusing on that how do you expect forward you're seeing work, what type of projects and how big of an impact could we build only have a state that has relatively underperformed over the past several years?", "answer": "I think it was hard for me to hear you. With your question, first of all, how is it in Illinois, and then what would -- should we expect from how we're working with [indiscernible]?", "duration_s": 9.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0361.mp3" }, { "study_item_id": "MR-0362", "partition": "development", "call_id": "2352893", "exchange_index": 10, "question": "So when I think about all these building blocks of improving fundamentals that don't yet kind of matriculate to the bottom line, you still have negative same-store growth, of course. But if you were pre-pandemic sort of 3%-ish, 4% type NOI same-store growth and you're down 8%. In the midst of it now or in the tail end of it, hopefully. You -- Mark talked about the bounce back opportunity. Is there any reason mathematically that we wouldn't be talking about a mirror image of that move. So in other words, something like in the range of double-digit type of a bounce back in 2022, maybe not sustainable, but that's the kind of sort of correction that might happen and then we go back to more normal way type of growth in the years afterwards. Is that a reasonable way to think about it?", "answer": "Rich, it's Mark. Thanks for the question, Bob may supplement or correct me as needed here. We're not going to give '22 guidance, but I think your thought process if conditions continue, as Michael has described, the last 2 years, we acknowledge '20 and this year '21 have been among the worst. There's a lot of reasons to believe '22 will be among the best years for EQ, if not the best, and an exceptional year for same-store revenue growth and NOI. I think we've got good discipline on the expense side. And so getting the double digits would require excellent expense controls as well. So we're not going to commit to a specific number. \nBut the way the numbers just set themselves up is as these concessions go away, we report on a straight-line basis as we move rents up in a lot of cases beyond pre-pandemic numbers, the kind of math you're putting out there is certainly attainable.", "duration_s": 54.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0362.mp3" }, { "study_item_id": "MR-0363", "partition": "development", "call_id": "1852493", "exchange_index": 30, "question": "Given the decline rates, but also maybe now that you're further removed from that to demonstrating independence as a company?", "answer": "Yes. I don't know it doesn't seem to have changed that much. Our situation is a little different obesity, but we have a brand or sell, which you're kind of pointing to, but at this point, we have said over a couple of conference calls that we get inbound calls from distributors. It's business though, you got to fight everyday for it, but I feel really good about our abilities in the marketplace across literally hundreds of distributors, Myles, you want to add anything. Yes, sure, absolutely. But I would say, with the annuity side of the business, we're getting inbound calls as it relates to expanding and offering our annuity solutions to new firms. We're also expanding with the annuities business to new channels, channels that we haven't been in the past. And his relates to we've been incredibly pleased with the demand from a number of firms, major firms out there that won't have the SmartCare product on their platform. So as it relates to expanding distribution, bringing on new firms and entering new channels, it hasn't been challenged at all for us.", "duration_s": 68.92000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0363.mp3" }, { "study_item_id": "MR-0364", "partition": "locked_confirmatory", "call_id": "2049390", "exchange_index": 0, "question": "Jim, I just want to pick up where you left off. So you mentioned the goal 60% from an OR perspective. And obviously, there are some structural changes that you made during the quarter. Some of those might have been pulled forward from future plans because of the pandemic. But when you think about sort of the hump yard opportunities and some of the other structural network changes that you've made, how do you sort of see that potentially impacting that longer-term 60% goal? Is there an opportunity beyond 60%? Can you just put some numbers around it?", "answer": "Chris, good question and really shines a light on what is our main focus right now, which is to continue driving productivity and efficiency gains in the current economic environment. And we took action in that regard in the second quarter through the conversion of one hump yard and the closure of another. We also took off-line 1 of 2 major back shop locomotive maintenance facilities. So we demonstrated our commitment to driving productivity in the midst of the volume challenges in the second quarter, and we will continue to push hard on that as we move through the rest of the year and beyond. Mike, let me turn it over to you for some additional comments. Yes. Well, we're not letting off the gas. We've got several things we continue to look at that are in the hopper, and we'll roll out as appropriate based on the volumes in the business. But like I've said before, we are going to continue to push ourselves to find ways to reduce our structural costs out there and the terminals that we can do without while still providing the service product that we've committed to. So we still have things we're working on, and you'll see those roll out in the future.", "duration_s": 86.72000000000003, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0364.mp3" }, { "study_item_id": "MR-0365", "partition": "development", "call_id": "1896363", "exchange_index": 18, "question": "Yes. Just could you possibly just give some commentary around the profit associated with the MTA contract? And what might be the cadence there? I mean, is that a just an EBIT or EBITDA contribution from that contract? And is it -- does it scale up meaningfully as the revenue grows there or is -- just some feel for what that could add, so I can get kind of sense per share on a quarterly basis, given our revenue assumptions.", "answer": "Yes. So I think as you're aware, the TransCore business margin is below the Roper average. And so this business is going to be in that range. And I think the margins do improve after the first quarter moving forward. Exactly how linear that's going to be, it's difficult to predict, as Neil mentioned, given what goes on with the project, but it certainly will get a little bit better after the first quarter, and it's probably going to be relatively consistent throughout the rest of the year as our -- is our best assets we sit here today.", "duration_s": 32.42000000000007, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0365.mp3" }, { "study_item_id": "MR-0366", "partition": "development", "call_id": "1835685", "exchange_index": 15, "question": "Just with the comments on your land spend and closing communities during the quarter I mean just [indiscernible] can you share any thoughts on the direction that community counter next 6 to 12 months?", "answer": "We haven't given any guide. We'll do that as we release our fourth quarter earnings in January.", "duration_s": 5.900000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0366.mp3" }, { "study_item_id": "MR-0367", "partition": "development", "call_id": "1896363", "exchange_index": 21, "question": "Right. Okay. And then just a second follow-up question around Roper's core EBITDA, fantastic year from a margin perspective for the full '19. The puts and takes here, maybe a little bit around MTA contract as well as your commentary around a minus mid-single-digit growth for the process tech piece of the business in '20. What might be a reasonable assumption in basis points for targeted EBITDA margin expansion for Roper in '20? The reasonable target be 50 or?", "answer": "No. I think embedded in our initial guidance as it normally is, is that EBITDA margins will be roughly flat year-over-year. There's maybe a little bit of an increase. But certainly, the TransCore project is a negative. And then some declines in those more cyclical businesses is generally a negative to your margin. And the flip side of that is excellent growth at the software businesses, which is a net positive. And if you add all those things together, our initial [indiscernible] EBITDA margins about flat year-over-year, and we'll work a little bit better than that.", "duration_s": 32.85999999999967, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0367.mp3" }, { "study_item_id": "MR-0368", "partition": "locked_confirmatory", "call_id": "2441395", "exchange_index": 26, "question": "Okay. Makes sense. And then the commentary on bookings ahead of shipments by end market, do you happen to have the numbers on exactly where the book-to-bill is by end market in the quarter and year?", "answer": "No, I don't have the exact numbers.", "duration_s": 2.699999999999818, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0368.mp3" }, { "study_item_id": "MR-0369", "partition": "development", "call_id": "1644425", "exchange_index": 20, "question": "Best of luck when you retire.", "answer": "Well, I'll never retire but I'm not going to be working 24/7. We're not going to let John go that easy.", "duration_s": 10.849999999999909, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0369.mp3" }, { "study_item_id": "MR-0370", "partition": "locked_confirmatory", "call_id": "1792796", "exchange_index": 22, "question": "Okay. I can also follow up on my math with you, guys, after the call there. Kevin, the example you gave on the F-35 at Kirkhill, is that a variant and on time and to specification? Is that something you find maybe not quite to that degree, but is that something you find in pretty much everything you acquire?", "answer": "We frequently find operations that aren't performing at the level that they need to for what their customers expect. So if that is specifically what you're asking, yes, we do see...", "duration_s": 13.66000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0370.mp3" }, { "study_item_id": "MR-0371", "partition": "locked_confirmatory", "call_id": "1784810", "exchange_index": 4, "question": "How do you think about reflecting the CapEx benefits from any further generation procurement here from the IRP?", "answer": "I understand. Thank you. We will -- has been our historical practice, we'll update CapEx probably at the end of the year call which will be end of January, first of February. So we give you a new estimate. But I would argue that the direction of CapEx associated with this IRP approval is probably up. When you consider the ARO associated with the ash pumps, when you consider kind of the storage project. You know the -- a swing in that obviously solar. If you remember last year I don't think Georgia Power won any of the new solar, but Southern Power did. I mean later, Southern Power came in and bought a lot of the development activity by other successful bidders. That also can be a swing and what CapEx looks like down the road but that's a little hard to predict today.", "duration_s": 57.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0371.mp3" }, { "study_item_id": "MR-0372", "partition": "development", "call_id": "1700866", "exchange_index": 25, "question": "You want to talk a little bit about Honeywell Forge ahead of the Analyst Day?", "answer": "No. I can't steal all of the thunder. I've got to have something to talk about in May. You'll have to wait a little bit.", "duration_s": 6.6599999999998545, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0372.mp3" }, { "study_item_id": "MR-0373", "partition": "locked_confirmatory", "call_id": "1792796", "exchange_index": 2, "question": "Right. And then just one last follow-on that. I think the guidance you gave for this year implies that the margins at Esterline might slow down a bit in the second half, but historically, that was usually the better margin period for Esterline. I mean would there be any reason we should expect that historical precedent to change?", "answer": "I think, in general, it's conservatism on our parts. That's what we're stressing right now as, again, we're learning and unpacking the Esterline businesses. We haven't seen anything, as Nick said, that alarms us, but we just don't want to get anyone ahead of our performance just yet.", "duration_s": 18.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0373.mp3" }, { "study_item_id": "MR-0374", "partition": "development", "call_id": "1788368", "exchange_index": 28, "question": "I had a question about the fabric business, is there a way to maybe look at the -- fill out the attachment? How many of the customers are using the fabric products today in installed base? How much -- so how much penetration do you have for those products in the installed base? And how has that trended in the last quarter?", "answer": "Last time we talked about probably, Taz, in terms of the cap rates, I will tell you that it continues to steadily trend up.", "duration_s": 5.820000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0374.mp3" }, { "study_item_id": "MR-0375", "partition": "locked_confirmatory", "call_id": "1783486", "exchange_index": 2, "question": "The first one is on the $1 billion share repurchase authorization. That seems like a little bit of a pivot for you guys when we think it's pretty positive. But maybe you could just give us a little help on what drove the decision. \nAnd then in terms of expected cadence of repose, I mean were you expect to be kind of consistent buyers each quarter. More opportunistically, how should we think about that?", "answer": "Thanks, John. This is Bill. This is the next step for us. We've begun being a more consistent repurchaser of our shares over the last couple of years. And generally, the pace of our repurchases have been increasing over the quarters. We did opportunistic fluctuations when we see a pullback in the stock. But we're repurchasing shares out of our cash flow. And as our cash flows increased, we've increased our repurchases. So we see this authorization as kind of the next step in that process. We do expect to continue to be a consistent repurchaser, but we will see some fluctuations quarter-to-quarter, depending on where we see the opportunities. The authorization has no expiration date so it doesn't necessarily imply a specific cadence or a specific time frame they would all be spent. But we feel like that was the appropriate amount to authorize to put out in front of us and signal to the market that we're going to continue to be a consistent repurchaser.", "duration_s": 54.37999999999988, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0375.mp3" }, { "study_item_id": "MR-0376", "partition": "development", "call_id": "1776145", "exchange_index": 26, "question": "Okay. And to close out, Mike, can you just walk us through a few of the key geographies as to what's happening on the constant currency basis across Brazil, Argentina and China? You touched on at a high level a few of them, which gives a little bit more texture to what's happening in those markets/", "answer": "Yes. Very solid growth. I think, Brazil, double-digit growth overall. Net selling price and mix were up in the teens. Volume was down slightly, I would say, almost even. Overall in Brazil, I think the market price has generally moved, although some level competitors have been lagging. The better expected -- than expected volume performance really is related to great execution. And when I say execution, it is the whole ball of wax, meaning it is the innovation, it's the marketing and then it's the selling, and all those things are working well for us. In addition, I think in a market like Brazil and Latin America more broadly, we've got very developed plans to expand kind of the categories in adult care and wipes, and that's paying off this year. Argentina, I guess, I would say high double-digit organic growth. The volume decline was in the, I think, single-digit level, so you get -- again, you could talk the same thing, which is I think the consumer has kind of reset their expectations for price but also very strong in market execution of the teams that kind of reduce the volume impact that you would've expected from that level of pricing. So Latin America, very strong performance from a revenue perspective. Central and Eastern Europe, up almost 20% or a little bit over 20%. Very strong performance in Ukraine and CIS. Russia continues to grow at a very good pace for us, although I will tell you our shares are a little bit more under pressure there than we've experienced over the prior couple of years. But the formula there is also the same thing as it will be innovation, marketing and great in market execution. ASEAN, up double digits. So we're feeling good about most of our D&E markets.", "duration_s": 115.51999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0376.mp3" }, { "study_item_id": "MR-0377", "partition": "locked_confirmatory", "call_id": "2326894", "exchange_index": 11, "question": "On the March earnings call, you reported that hourly labor productivity had improved by, I think, you said over 20% for the system. So I'm just curious, two things. How are you measuring labor productivity? And I think you touched on it a little bit earlier, but how have you driven this level of improvement in productivity?", "answer": "Jeff, this is Rick. Yes, we did mention that productivity was about 20% better across the system. And we measured on an hours per guest basis. So how many guests can we serve per hour -- per labor hour? And we're still seeing significant labor productivity improvements.\nAs Raj mentioned, we had a significant improvement in labor per labor margin, even with inflation. And the way we did it was what we've been talking about for the last year is continue to improve our processes from the food coming into the backdoor to getting to the table, which means significant menu design work, significant prep design work, which took a lot of the steps and procedures out of the kitchen.\nAnd what I would say is we are never done with that. We redesigned our processes over the last year. We have to look at them again, and we have to redesign. So we're going to continue to do that to drive efficiencies where we should drive efficiencies so that we can reinvest those savings in our plate and give a better experience for our guests.", "duration_s": 68.03999999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0377.mp3" }, { "study_item_id": "MR-0378", "partition": "locked_confirmatory", "call_id": "1838112", "exchange_index": 21, "question": "Got it. And then just a high-level question. You're -- I guess, you have a Investor Day in about a month. I think it's your first one in quite a few years. Just curious if you can give us any kind of high-level sense of what your priorities are for that?", "answer": "Yes. We'd like to walk you further through the transformation that we've made at the firm, areas that we've invested in and give you a little better flavor for what that looks like and how we're operating and what it could mean to us moving forward. And just have a further chat with you. which is hard to do it in these type of phone calls. And so we thought it was time for us to spend a little more time with you.", "duration_s": 29.279999999999745, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0378.mp3" }, { "study_item_id": "MR-0379", "partition": "locked_confirmatory", "call_id": "1792796", "exchange_index": 31, "question": "Okay. That's helpful. Can you provide any more color are either around the third quarter results for aftermarket, early momentum on the defense side? Any specific programs or opportunity you expecting the point to the you saw notable strength in the quarter?", "answer": "No. I think F-35 is a leading program for us. I comment on that, that, that continues to do well and continue to grow and expand for us. Many of our businesses are on that platform. But I think we look for that. I anticipated that question. We all did. And we went looking for are there any onetimers. It's nicely spread across the business. If you look for platforms, that takes us a little bit longer to diagnose. But F-35 is important. The A400 is important. There's a lot of important platforms, the same ones that you would expect. But the OEM strength is really nicely across many businesses for us.", "duration_s": 47.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0379.mp3" }, { "study_item_id": "MR-0380", "partition": "development", "call_id": "1778920", "exchange_index": 11, "question": "Welcome back to the public fold. Yes. I just -- I guess I wanted to talk to a couple of the slides. On Slide 5, I was just thinking as you walked through that, obviously, there's some risk maybe that the legacy activity will kind of cannibalize the opportunity to move forward in a more in that kind of properly planned development case. Kind of how confident are you in the kind of ability to move forward with that properly planned case and fully achieve that end state goal? How much more work do you think remains to be done in terms of understanding the potential impact of legacy development on the ability to optimize things going forward?", "answer": "This is Toby real quick and then I'll pass it over to Derek. I would say the thing that we're excited about is the fact that we have such a large inventory of undeveloped leasehold. If you look at where we're going to be focusing our development in southern green, there's not a lot of producing reels we have to dance around so our inventory is pretty virgin. And so but it does take work to get that leasehold ready to develop, and that's we're going to be focusing our teams. Any other color you want to add on that, Derek? Yes. I mean just one thing to go I mean just look at the asset base and jet this is what gets us comfortable saying we are going to get there in the issues we are seeing with EQT today to be frank this is what we dealt with at Rice Energy in 2014 and 2015 when we had the same vision. It's we know what end state we like to get to, what are the steps needed to get there. It's essentially the same asset based primarily in County and Washington County. A lot of the sites that we plan to develop going forward are Rice Energy sites, so we have a clearer picture of what we need to do to get there and I think we've done it before and we think we can get there again.", "duration_s": 66.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0380.mp3" }, { "study_item_id": "MR-0381", "partition": "locked_confirmatory", "call_id": "1963579", "exchange_index": 35, "question": "So in the past, you used to give us a number of in Latin America and in North America. You have now put them both together. Are you still closing down stores in that region?", "answer": "Last quarter, we did close 8 in Latin America. And I think this goes back, Rosemary, to the point that I made earlier about our ongoing -- I call it a pretty rigorous review of businesses, brands, customer programs, other investments. And we've closed 8, and those were in areas that were persistently soft markets. The -- we've got a terrific leadership team down here as well, and David and that team are working closely together to evaluate every 1 of these operations. They're going to stand on their own or they make tough decisions, and we've made some tough decisions. And we'll continue to look at that business. We want to continue to grow that business. There are some dynamics in that market that make it a little more challenging, but we've got a lot of upside potential we should be in as well.", "duration_s": 54.409999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0381.mp3" }, { "study_item_id": "MR-0382", "partition": "locked_confirmatory", "call_id": "1644025", "exchange_index": 31, "question": "Yes, okay. Secondly, just wanted to get into -- and maybe I would be a little bit more direct on the question around Auto and Home. Setting aside catastrophe losses, and obviously the reinsurance program was very effective. But underlying, I agree with John's comments earlier, and the like margins are improving very nicely. Jim, you've made it pretty clear that this business is not necessarily a core business on a go forward basis. So basically that's my take. I get the point yet where you can take action?", "answer": "As I said, we're going through our strategic review here. And we will be complete of that as we go through the first quarter. So why don't we just stay tuned, okay?", "duration_s": 12.260000000000218, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0382.mp3" }, { "study_item_id": "MR-0383", "partition": "development", "call_id": "2206284", "exchange_index": 3, "question": "Just a first question on the change in segmentation. And I'm just curious as you look at the new 4 segments, now that you've carved off or identified fuel injection and aftermarket as separate segments, are those maybe more separable and potentially could be up for sale over time, as it might be much slower growth than the other 2 segments?", "answer": "Yes, I guess that's not how we're thinking about it. I mean we look at those businesses, they're businesses that, from an accounting perspective, needed to be reported separately. And that's part of the reason that they reported that way. And our focus is really on growing the profitability of those 2 portfolios. \nAs you look at the FIS business, as Fred talked about in his remarks, we're seeing wins in GDI, and we see some real growth prospects in that business along with the leading positions that, that business already has. I think as we look at it, we see opportunity to improve the profitability of that portfolio, and that's really the focus there. \nAnd from an aftermarket perspective, we feel good about the margin progress that we saw in that business in the fourth quarter. And we would expect to continue to drive margin performance in that business. So that's really how we look at those right now.", "duration_s": 45.43999999999983, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0383.mp3" }, { "study_item_id": "MR-0384", "partition": "locked_confirmatory", "call_id": "2351784", "exchange_index": 9, "question": "All right. Maybe the final quick one. Just any commentary on pricing? I mean, I know things are sort of sold out. When do you start taking orders for '22? And is there any reason not to assume that the pricing wouldn't be more robust as you start to do that?", "answer": "We are taking pricing for 2022. And we had -- if you just look at our -- our order intake has been very strong. And so we're seeing how that's progressing through the market and working on raw materials pricing into those models and just moving forward thoughtfully into 2022 as we take those orders. And we do expect the new trucks to be a bigger percentage of our build in the second -- or next year, and that will be good for everyone.", "duration_s": 26.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0384.mp3" }, { "study_item_id": "MR-0385", "partition": "development", "call_id": "2025737", "exchange_index": 22, "question": "Got it. And on the -- the question I had about margins -- sorry, did you say which banners you might be opening Olive Garden, LongHorn? Or is it sort of look back at historical rates and that brought the right mix?", "answer": "Yes. I would look back at historical. Our plan this year is to open at least one restaurant for every brand. And some of them, again, were already under construction, but the majority of our openings will be Olive Garden and LongHorn.", "duration_s": 15.200000000000273, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0385.mp3" }, { "study_item_id": "MR-0386", "partition": "locked_confirmatory", "call_id": "1637045", "exchange_index": 26, "question": "Just a follow-up on the dedicated comments. I think was made that the expectations that is going to continue to grow at the recent run rate, which has been around 25%. Is that a thought that that's really what the revenue for dedicated should grow throughout all 2019? I mean, if you could also follow it up with kind of the expectations for the cadence to the margin improvement understanding the businesses coming through right now with where the targets are for that business. At what point do you see that in the second half of '19 or is that more pushed into 2020 with some other growth?", "answer": "Todd,, that would be asking for guidance. \nHowever, before I allow and make answer, I just wanted to make that point very clear. He will not give you guidance.", "duration_s": 12.079999999999927, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0386.mp3" }, { "study_item_id": "MR-0387", "partition": "development", "call_id": "2362465", "exchange_index": 16, "question": "Got it. And then second question has been really good color on the call here, especially in the portion from Ram on the focus on the cost inputs, labor, commodities, et cetera, but not as much focus on price realization. Can you give us, for the 2 segments, more color on pricing? And I know one of the headwinds on Commercial & Residential solutions like Copeland is locked into longer-term contracts. So just price realization color would be helpful here.", "answer": "Yes. So first off, I'll answer the question with -- as it relates to automation, automation has been green on price/cost and has been very, very disciplined in getting price this year, and that dynamic will continue into next year. So we see no issues as it relates to price or price/cost on the automation side of the business. \nAnd on the Commercial & Residential side, particularly in the climate business, the price realization, which is a function of our long-term OEM contracts will start unlocking in the January time frame of significance. Now we do have pricing that will go into effect in October, but the big impact we will start to see in the second quarter of fiscal '22, which in turn assuming the commodities start softening will turn them into the green category into the second quarter of next year. So that's how we see it. A lot rides on our contracts, which open up in the Jan time frame.", "duration_s": 61.809999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0387.mp3" }, { "study_item_id": "MR-0388", "partition": "development", "call_id": "1663214", "exchange_index": 31, "question": "And then a question about the -- your Lithium business in China, one of are your competitors referred to some uncertainty related to potential changes in EB subsidies. Just wondering if you have seen some reluctance among your Chinese customers to sign longer-term contracts? And if so, how have you responded to that direction?", "answer": "Mike, this is Eric. So I think we have said through today, most of our businesses is outside of China. In the EV value chain because of the type of demand we play into from a acquire perspective. It's also a reflection of the fact that the Chinese accounts customers have been reluctant for some time to commit to longer-term agreements. So that -- and periods of time when there is uncertainty in their home market and certainly there has been macroeconomic weakness in China and changing subsidies. Some of these don't necessarily local manufacturing, which is carbonate base as oppose to hydroxide base. It creates uncertainty for them. So I don't doubt. We are certainly seeing that, but it's part of a longer-term trend that we also look in terms of the preference for long-term contracts.", "duration_s": 50.13999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0388.mp3" }, { "study_item_id": "MR-0389", "partition": "locked_confirmatory", "call_id": "1644011", "exchange_index": 0, "question": "So, Howard and Billy, I guess, my first question is just how secure you see your fiscal '19 volume outlook in cigarettes to be? And maybe to help with that, I was just wondering if you're able to decompose some of the volume drivers that you provided as it relates to the the fourth quarter that down 5%. It was worse than the full year run rate. So I'm just wondering what the contribution from maybe macro-elasticity factors, which I'm assuming includes excise taxes as well as manufacturing pricing and the cross category movement would have been in the fourth quarter? And then, I guess, more importantly, looking to '19, where do you see within the context of those drivers the potential improvement coming from?", "answer": "Yes, Steve, I think, if I understand your question correctly, if you look as we progressed through the year, we did have 2 increases: one was in Oklahoma and other was in Kentucky. And so that had an effect because that was represented about 5% of cigarette industry volume. So as you progress through the year, of course, you have the initial drop for the price shock and then it returns to elasticity as you move through time. I would say as we move to this year, right now gas prices are our tailwind to the overall adult cigarette consumers are as we expand gas prices dropped. Last year, they were up 13% year-over-year, and we've seen them drop as we progress into the first part of this year. So we should see that impact through time.", "duration_s": 42.66000000000008, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0389.mp3" }, { "study_item_id": "MR-0390", "partition": "locked_confirmatory", "call_id": "1902228", "exchange_index": 5, "question": "Okay, very helpful. And then I have a follow-up for Keith. Keith, you mentioned that ASPs were increasing in your commentary on gross margins. Can you just maybe comment on what's driving that ASP increase? Is that just a mix shift dynamic? Or did you actually raise prices on appliances?", "answer": "Yes, I think the -- I think what I'm trying to do is parse out the fact that in the benefit to gross margin, there was really 3 pieces to it. Indirect, which I would attribute to economies of scale that we're seeing. We have a large warehouse facility that we acquired a number of years ago that and I think that's a fairly \"permanent benefit on the indirect side.\" On the direct side, I think the operations team does a very good job of each quarter working down the average direct unit cost and then the third component was ASP. And I kind of broaden that conversation, if you will, a talking point. The last quarter, I attributed to discounting. And the reason for that is, I would put discounting as a component of ASP, but I also want to give some credit to the ability to -- the company, if you will, to maintain a somewhat normal price list changes you have from time to time and not giving up those back -- giving those back in discounting. Other economy scale working is really the ASIC chip, right? So we're the #1 unit shipment, probably more than the #2, #3, #4 combine as well help us we kind of a lower average cost of per ASIC chip, which gives us huge computing power over the generic CPU, the competitor using. So that's also helping driving the cost lower?", "duration_s": 77.23999999999978, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0390.mp3" }, { "study_item_id": "MR-0391", "partition": "development", "call_id": "1718461", "exchange_index": 30, "question": "I wanted to follow-up on Alex's question. Last quarter you guys were real exception to the digestion that other companies were seeing with cloud and one of the reasons I think you gave was that you were finding new places in the cloud. I don't know if that met new tiers, current customers, or new types of customers and I'm just wondering is that not happening or is that what's going on here, or did you just basically underestimate Microsoft as obviously year last year or so pause wouldn't be shocking at Microsoft?", "answer": "Yes. So I think, our used cases, including the regional spine and DCI live and well, they're intact and we're continuing to make great progress as many cloud Titans there. I think we underestimated the customer who paused in Q2. And even the customer ho paused in Q2 didn't intend to pause in Q2. So we found that we kind of found on that out together, and when we are letting you know .", "duration_s": 25.019999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0391.mp3" }, { "study_item_id": "MR-0392", "partition": "development", "call_id": "2253721", "exchange_index": 31, "question": "I mean it sounds like flow trends in there more positive?", "answer": "Yes. There were some flow activity that we saw there. Like Mike had mentioned, we've been seeing good growth in ESG, some of the Quanta Active products as well. But the waivers, they're on a sequential basis, certainly kind of overwhelmed what we saw from both favorable markets as well as business flows. Thanks for joining us today, and we look forward to seeing you in July for our second quarter update.", "duration_s": 41.75, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0392.mp3" }, { "study_item_id": "MR-0393", "partition": "development", "call_id": "1655362", "exchange_index": 20, "question": "On the breakeven, you're talking about the 24% on average per year growth in the Permian Resource. But can you get the number for 2020 to '22, what is your return per well productivity improvement that you assume paying for 2018 or 2019? And also, what is it the technical assumption as far as the base decline goes?", "answer": "Sure, so Paul, what we said last year, we said 24% CAGR, 4-year CAGR, this year, it will be 30% to 35%. So obviously, that number is coming down as the base grows. And so the way I think about it, when we originally rolled that out, we said capital would be roughly flat, with where we were last year, which was around $2.8 billion. And so what's going on when you do that, it goes back to question Phil asked is you actually -- we're running say, 12 or 13 rigs at that pace. But as you spend less on facilities, you're able to dedicate more of that capital and to drilling wells. So just easy math, these aren't exact numbers, because we'll factor and work with working interest and other things, but facilities goes from 20% to less than 10%, that could add a couple operated rigs do better generating production growth instead of being spent on facilities.", "duration_s": 58.64000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0393.mp3" }, { "study_item_id": "MR-0394", "partition": "development", "call_id": "2037794", "exchange_index": 27, "question": "So Rob, I had a question for you on credit, and I wanted to, I guess, first in actually more of a bourbon fan than single malt. But...", "answer": "I was waiting for that to come up a little sooner, but I understand. Yes.", "duration_s": 7.059999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0394.mp3" }, { "study_item_id": "MR-0395", "partition": "development", "call_id": "2278037", "exchange_index": 13, "question": "So I guess a little bit of a follow-up on Lu'An. This year has obviously been a lumpy year with the kind of not getting paid full out, like the contract being rejiggered a little bit while it was down. I guess is there a way to think about how the total payout in fiscal '21 versus fiscal '22 will look out in terms of overall earnings contribution?", "answer": "Fiscal '21, which is the one we are in right now versus fiscal '22, right?", "duration_s": 6.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0395.mp3" }, { "study_item_id": "MR-0396", "partition": "development", "call_id": "1712053", "exchange_index": 13, "question": "A follow up on a couple on previous questions. Simon was asking on the leverage side, and you talked about the portfolio. It looks like the portfolio growth in the first quarter was probably less than a percent. And even if we add in the price under contract through the end the third quarter, it's still kind of in the 1 plus percent range. So are you seeing some bigger transactions out there that could get you into the target zone of 5% to 10% [ portfolios ] given that the answer to Mike there was that prices are getting tougher?", "answer": "We think that there will be some opportunities along those lines, yes.", "duration_s": 5.639999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0396.mp3" }, { "study_item_id": "MR-0397", "partition": "development", "call_id": "1787710", "exchange_index": 9, "question": "Okay. That's good color. And on job growth and wage growth. So wage growth, your assumptions came down 50 bps versus job growth that was only up 10 bps. So I was curious as to how you guys think about that dynamic between those 2 drivers in relationship to demand.", "answer": "This is Tim. First of all, those aren't our numbers. Those are third-party numbers that we rely on. I think you've got to -- and the wage growth number is for the entire population. So I think it's probably a fair question what's happening with our resident base. Our resident base probably seen a bit stronger wage growth than that just given this disproportionate number 4-year college grad degree folks in our units. So not really sure what's -- why it's falling short from maybe the 3.5% to 3% was the driver given the shortage of labor and the tightness of the job market, but I guess the point of that slide from our standpoint is it's more or less from a demand standpoint, big demand drivers are more or less coming in as expected a little bit better on job growth, a little weaker just marginally when you're talking about 50 basis points. I think it's almost rounding error honestly, marginally weaker than originally anticipated.", "duration_s": 66.94000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0397.mp3" }, { "study_item_id": "MR-0398", "partition": "development", "call_id": "1854581", "exchange_index": 34, "question": "Okay. So it would need to be midteens. It wouldn't -- it has to be more a certain level above your regulators dissipation returns, right? [indiscernible] I should say.", "answer": "Yes. That is correct. All right. Thank you, Andrew. That's the end of the queue for today. So we want to thank you all for joining us. We look forward to seeing most of folks on the call at the EI Conference, starting on Sunday. Take care.", "duration_s": 18.990000000000236, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0398.mp3" }, { "study_item_id": "MR-0399", "partition": "development", "call_id": "1776132", "exchange_index": 31, "question": "Can you guys share with us what your customers are saying from the standpoint that the forward curve is expecting a [ 3 ] [indiscernible] Fed rate cuts this year. And it seems rather dramatic, considering our macroeconomic environment, doesn't appear to be that week. Is there a disconnect you think between the forward curve and what your customers -- commercial customers in particular are seeing on the ground?", "answer": "Gerard, I would say to some degree there is. Just kind of what we're hearing from your clients. The tone and sentiment with our clients continue to remain positive, we're having a lot of strategic discussions with them. I would say it's been about flat kind of quarter-over-quarter if I could give you really the sentiment. Some of the areas concerned continue to belabor very hard to staff up their operations, both knowledge workers and also nonskilled workers. And also there is higher employees away. I think the trade transient certainly doesn't help because it's uncertainty, but on balance it doesn't feel I'm talking to our clients which we are doing very regularly. It doesn't feel the same as you would think it would feel if you look at the forward curve.", "duration_s": 51.840000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0399.mp3" }, { "study_item_id": "MR-0400", "partition": "development", "call_id": "2206284", "exchange_index": 14, "question": "Okay. And just secondly, you did north of 11% margin in the quarter. And I'm wondering if that says anything about your longer-term 2023 target of 11%. I think that you'd be annualizing it at more than the $15.5 billion or so that you annualize at in Q4. So is that starting to look conservative? \nAnd if you could just repeat, did you say that inorganic or strategic actions might include divestitures as well? Or you're simply looking at more acquisitions?", "answer": "Yes. I guess on the -- when you look at the Q4 performance, we're obviously really pleased with the fact that we delivered 11.4%. And now that's an annualized revenue of $15.7 billion, so obviously higher than the run rate that we're walking into here in 2021 where at the midpoint of our guidance 15 and actually 300 million of that is even driven by currency. So Q4 is really about $1 billion higher annualized revenue than where 2021 is x foreign currency. \nBut I think directionally, you're looking at it the right way. We feel that between the incremental synergies that we expect to deliver even beyond 2021, which is another $85 million, with the additional margin improvement that we're driving in certain portions of the legacy Delphi businesses in particular, and with the revenue growth inclusive of that backlog we just highlighted and our ability to convert on that, we feel very comfortable with our ability to deliver on that greater than 11% margin in 2023. \nAnd then on the other question you asked around M&A, I was actually speaking more to the acquisition side, but we do have an active portfolio management process. And I would say we're spending a lot of time thinking about that as we look ahead. Because I think you should expect that, that will be a more active part of what we're looking at on a go-forward basis. But my comments really were focused on some M&A activities -- opportunities that we're looking at that could utilize cash flow that we're generating this year.", "duration_s": 85.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0400.mp3" }, { "study_item_id": "MR-0401", "partition": "development", "call_id": "1894715", "exchange_index": 37, "question": "I think your heavy duty percentage tends to be around 85% historically. So first, are you still comfortable with that breakout longer term? And the second part of my question, what was it in the fourth quarter?", "answer": "So I think that, that general percent is okay, but we have great growth opportunities in the heavy side and the medium side as we look forward to it. So we'll continue to see share developer PACCAR positively, a steady approach to it. And we've been very successful growing share, and we'll continue to find that same success. I don't think there'll be much of a shift, though. And I don't have the exact number, but you can -- your numbers of ratios are about right.", "duration_s": 23.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0401.mp3" }, { "study_item_id": "MR-0402", "partition": "development", "call_id": "1778699", "exchange_index": 7, "question": "And then on inventory, I assume that improved free cash flow forecast with I think it's Slide 23, I'm on Slide 24, that's all working capital, right?", "answer": "Yes. Our projection -- we're keeping our projection of free cash flow conversion -- well, I think you are going into a deeper slide. Working capital is the biggest thing impacting our free cash flow conversion and dollars for 2019.", "duration_s": 15.75, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0402.mp3" }, { "study_item_id": "MR-0403", "partition": "development", "call_id": "1777473", "exchange_index": 34, "question": "Okay. And is investment spending a big part of that? Or is it pretty small? I mean you guys guided on the whatever?", "answer": "Certainly, investment spending in Zoro in the U.S. is a big part. That was planned at the beginning of the year, and we are spending that money and seeing what we want to see out of that. So we had always planned for the Zoro margins to come down in the year, and that's what we're seeing. So that's -- when we talk about investment spending, that's really what we're referring to.", "duration_s": 20.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0403.mp3" }, { "study_item_id": "MR-0404", "partition": "development", "call_id": "1639601", "exchange_index": 39, "question": "Yes, understood. And then on the new distribution agreement. Is there any -- the way these agreements have been structured, is there any difference in terms of profitability opportunity when you go kind of into a more tailored approach like this? Or once these distribution channels get fully set up, can we see even more improvement in that business from a margin perspective?", "answer": "I think we expect it to be not be very different. It should be a nice healthy margin. So I mean, it's certainly structured that way. As I kind of alluded with Cai, this is a win-win for both companies. So both we and the [indiscernible] team are equally incentivized to make sure that this is a good, profitable program.", "duration_s": 23.079999999999927, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0404.mp3" }, { "study_item_id": "MR-0405", "partition": "development", "call_id": "1700907", "exchange_index": 25, "question": "I guess 2 quick followup questions. The first question goes back to the discussion on expense ratio. In your 10-Q letter, you talked about 40% of the business flowing through these business centers in beach. I was curious maybe even talk about where does that sort of a net out -- is that an eventual improvement in expense ratioof the savings get relocated someone else?", "answer": "Productivity and efficiency is a strategic priority across the entire place in each of the businesses in claim ordination virtually everything we do. And so some of what Greg's achieving to the business centers continue to see that it also contributes to other strategic objectives specifically making sure that we are providing good experience for the brokers that were doing business with and the customers that we are serving so it all goes to that point. The savings -- whatever productivity and efficiency venerate there and frankly, anywhere else, really for us, we look at operating leverage or enhanced operating leverage as an opportunity. And as we said before, we will take those dollars and it will reallocate them over time as we see fit. We can fall to the bottom line and we will see an expense ratio, we can reinvest it in strategic initiative that we think are going to drive shareholder value. Or if we want to or need to we can decide that we want to put enterprising without compromising our written objective. So I know you have heard us say a lot but what's important to us about enhanced operating limit is having that flexibility.", "duration_s": 65.25999999999976, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0405.mp3" }, { "study_item_id": "MR-0406", "partition": "development", "call_id": "2025737", "exchange_index": 3, "question": "Great. And then, Gene, you mentioned kind of streamlining the operations and the menus. Is that something you think will continue longer term? Or do you see that maybe some of the items coming back that you removed?", "answer": "Yes. I think each brand is in a different place. Each brand went to a different place when they went to off-premise only. So some brands, I would say, right now, are probably back to 100% of where they will want to be other than maybe some promotional items here and there. Other brands still have 10%, 15% that they need to add back to their menus to make them competitive, but it was not only the menu. I mean, I think when we basically closed down the operation, except for off-premise, we have the chance to rebuild as we open back up. And we had a chance to look at all our processes and procedures, and I think we were able to simplify and eliminate a lot of prep work in some of our businesses that we'll never get back into the business. I think these are costs that we're going to -- we've gotten out. We've had a lot of discussion around our table is that it's been much easier, as we build the on-premise business back up, to reimagine what the operation in the back of the house looks like versus trying to reimagine it why you're operating. And we're really thrilled with the results so far.", "duration_s": 70.38000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0406.mp3" }, { "study_item_id": "MR-0407", "partition": "development", "call_id": "2043239", "exchange_index": 10, "question": "Okay. I guess it's going to be hard to get a dollar figure out of you guys. How about just on ADAPT, I'm curious about the business model here when you're talking about kind of increase in utilization. Can you help us think about how you plan on monetizing that? Is there some sort of profit sharing or revenue sharing that it comes to the increased caseload? And when does that kind of start to kind of flow through the P&L? Should we expect this as a 2021 event? Or when -- is this a small program that shouldn't really have a material impact to revenue?", "answer": "Well, Ravi, this is John. So you talked about the ADAPT program that we spoke about?", "duration_s": 4.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0407.mp3" }, { "study_item_id": "MR-0408", "partition": "development", "call_id": "1862178", "exchange_index": 11, "question": "And the destination, ultimately, the 60%, where would you like that number to get to? And over what time frame?", "answer": "Hard to say, an ultimate number higher than where it is today. But it's something we'll probably be working at very hard for our entire careers here at D.R. Horton.", "duration_s": 15.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0408.mp3" }, { "study_item_id": "MR-0409", "partition": "development", "call_id": "1655362", "exchange_index": 16, "question": "Sure. I mean, is there a caustic price assumption that will be behind that chemicals guidance? I know that maybe the early part of the year seems to be a little tougher than the back half, I'm trying to calibrate that.", "answer": "Yes, Phil, this is BJ. For caustic and obviously the sale price erosion towards the end of 2018, our assumption in 2019 is we're going to see some price pick up, but not to the level of the erosion that we saw towards the end of the year. So we're taking a conservative approach looking forward. But we feel really good about the supply and demand fundamentals long term in the caustic market. So I think it's conservative, but we still felt really good about the forward years. Just to add one thing on. As we've certainly made a few adjustments to the 2022 gas outlook, because we wanted to keep it current, and that was one of the items that we were more conservative on caustic prices as well as sulfur, which affects the midstream business. The combined effect of that is a deduct of about $150 million versus what we showed in 2022 versus what we showed you in the third quarter. We also had a deduct of a $250 million related to the lower production associated with a lower capital spend in 2019 and the rest of a ramp in 2020. So that caused some confusion also last night when we didn't intend for that. We thought we laid it out, but just to clarify, so that's $400 million combined, which more than offset the $150 million pick up we had from the $5 increase in the Brent price differential versus last quarter. So just trying to bring it kind of current with current thinking, so it's not stale, but that's where we kind of move from the midpoint of the $9.25 billion last quarter to the $9.0 billion this quarter.", "duration_s": 97.34000000000015, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0409.mp3" }, { "study_item_id": "MR-0410", "partition": "development", "call_id": "1703663", "exchange_index": 6, "question": "This is actually Mike Leithead on for Duffy this morning. I guess to follow up on the pricing dynamics, nice acceleration this quarter. I was hoping you can maybe give a sense of where you think merchant operating rates are today, particularly in North America and Asia?", "answer": "Sure. North America operating rates are in about mid-70s. The operating rates in Europe are around in low 80s and the operating rate in the areas that we are operating in Asia is about mid-80s.", "duration_s": 16.839999999999918, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0410.mp3" }, { "study_item_id": "MR-0411", "partition": "locked_confirmatory", "call_id": "1784810", "exchange_index": 1, "question": "I appreciate. That's extremely thorough. Two more quick questions. One, just is, just in the quarter you've said that you had hottest May in 50 years and I know you said on a year-to-date basis things are sort have evened out. But can you how much usage and how much of the incremental earnings in the quarter whether it was usage or directly weather driven came from that weather event or is it too sort of [indiscernible] clear that, that what would you able to carve that out?", "answer": "Greg. This is Drew. We actually put it in slide 9 but the weather impact for the second quarter was about $0.03. Relative to last year about $0.07 relative to normal, but if you look out over the course of the entire year I think weathers actually down about [ $0.01 ] relative to our normal expectations for consumption. As we look at the individual usage classes, conservation and energy efficiency or pervasive trends particularly in residential and commercial, then on the industrial side, we did see a downtick of about 2% in total electricity sales. We think a good portion of this just describes a general economy that's in a bit of a pause. Trade skirmishes are sort of a vacuum to good capital deployment or a barrier to good capital deployment over the long-term and strong dollar in general with an economy that's about 25% dependent upon exports for its production really just signal to us that we're seeing a little bit of weakening in that section of the economy. Greg. Let me jump in here real quick. Let me correct, I had a brain cramp, I don't know why, I was in a conversation this morning kind of getting ready for CNBC, I had Brown's Ferry on my mind on another issue. The last completed one was Valspar, so anyway.", "duration_s": 85.25999999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0411.mp3" }, { "study_item_id": "MR-0412", "partition": "development", "call_id": "1920686", "exchange_index": 10, "question": "A couple of questions. First of all, when thinking about flailing limits. Just curious do you think there's potential for North Dakota to tighten the flaring limits further? And if so, what would have to happen for that? And second, do you have any read-through or read into the recent report put out by the Railroad Commission in Texas regarding flaring there?", "answer": "I'll -- Michael, it's Kevin. I'll start and then let Chuck jump in. I mean, the flaring the gas capture targets or the flaring targets in North Dakota do step down at the end of this year. They stepped down from 88% capture or step up from 88% capture to 91% capture. So clearly, that is one step-up in conversations we have with the state and our producers. Obviously, we want to drive that number well below that. We have experience. When you look back at '15 and '16, when we -- when midstream kind of got caught up, we drove flaring to lower levels than that. So I think that's the goal. As it relates to Texas, yes, we saw the report. I think any -- just from a regulatory perspective, I do think we'll see continued discussions around flaring as to where that goes from a regulation standpoint. I don't know that I'd have a point of view at this point. But Chuck? Yes, I guess what I would add in North Dakota, Michael, is that the kind of the interested stakeholders up there between the state, the producers and the processors have been meeting fairly regularly over the last, let's call it, 2 quarters, looking at the current flaring rules, flaring exemptions, how the interested parties can work more closely together to mitigate flaring. And there's some discussion of potentially changing some of these rules going forward, but there's nothing concrete as of yet.", "duration_s": 108.25, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0412.mp3" }, { "study_item_id": "MR-0413", "partition": "development", "call_id": "2330095", "exchange_index": 30, "question": "Can you just clarify a little bit further your costs for the may quarter, they look like they're up about $9 million or so as I look at them versus the February quarter. Was there anything of onetime in nature? Just go through that a little bit further that we should think about as you try to think about cost for the August quarter. I can see your guidance for margins, but is there anything onetime in nature to call out that won't repeat like a catch-up for accruals for incentive comp?", "answer": "The largest piece of that -- so thanks for your question. The largest piece of that really is compensation. So the compensation, meaning the bonus accrual. So we had to do a catch-up from the first half of the year. But now that we have greater visibility to where we'll end, I mean we are a pay-for-performance culture. So we -- if we expect higher performance, then we will increase our bonus accrual as a result. So that's what you're really seeing in Q3, and that again reflects both the catch-up as well as the higher accrual for the quarter.", "duration_s": 33.75999999999976, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0413.mp3" }, { "study_item_id": "MR-0414", "partition": "locked_confirmatory", "call_id": "1635298", "exchange_index": 19, "question": "I want to ask one question on lending. Looks like you guys like the industry, so really good growth especially on the North America side and EMEA, especially in corporate banking, and it looks like some's in the Markets business. Can you just give us some color on was that, in your view, just core underlying economic improvement akin to like you talked about earlier? Was some of it related to the market disconnect and perhaps might be fleeting and kind of was on balance sheet, off balance sheet? How can you help us understand this big surge in Corporate Lending you saw this quarter?", "answer": "When you look at the Corporate Lending, and in Corporate Lending, I think if I -- it grew about 2% sequentially. It's about up 6%. I'm talking about the average balances that we give you in the back of the earnings deck. And that loan growth was pretty much spread across various components. I'd say that overall, there was still good corporate demand for loans. We saw good corporate demand. It didn't range a little bit different by geography and how we chose to address it. We had a lot of strong client demand in Asia, for instance. And then if you look, you see that our Asia loans were actually down sequentially and year-over-year and that's just because that demand was at spread that we didn't feel were appropriate so we just chose not to participate. On some of the things we did do in our, say, TTS business where we saw that the spreads didn't quite meet our hurdle rate, we still originated the loans, but we originated them for distribution. So again, pretty good demand. There is, in the markets area that you mentioned, a lot of that growth is driven by some year-end community reinvestment act lending. That's what we do -- the segment of the business where we do our community reinvestment act. But there's also an element of some residential warehouse lending that is in there that we would expect them to clear out sometime in the first quarter as securitizations are executed.", "duration_s": 106.52000000000044, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0414.mp3" }, { "study_item_id": "MR-0415", "partition": "development", "call_id": "1734704", "exchange_index": 11, "question": "And maybe ACG margins were pretty impressive. The pull-through there continues to be north of 50%. I guess what's driving the massive step-up in that business this year? Because the expansion even relative to what you saw in the first quarter kind of accelerated. I'm trying to get a feel for the underlying.", "answer": "Ross, I'm glad you noticed that because we're pleased with the overall margin performance in ACG. And I made the comment proven we can scale our service business and made good margins. Was I'd like to do is turn the call over to Mark and let him take a little bit of a bow here with the audience. maybe share Mark, what specifically has been going on with your team. Thanks, Mike. On the margins front, obviously we've seen a nice expansion through the first half on that. \nComing back to a couple of things Mike and Bob has alluded to. First of all on the Agile Agilent programs, many of these are shared services across the company, which certainly help the broader gross margins for the business. But inside the business particularly services, there's been 2 major themes. One is we've used advanced analytics to really look at how we can improve various aspects of their -- operations, and used these analytics pretty widely over the course of the last year to help drive that. And then second component of that, I talked many times about our business online and use things like mobile apps that fundamentally facilitate faster and more complete work for the team on the ground. \nSo you put all those pieces together it's turned out to be actually a quite positive development, but this is after a lot of years of investment to really build a platform across our services business that scalable.", "duration_s": 94.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0415.mp3" }, { "study_item_id": "MR-0416", "partition": "locked_confirmatory", "call_id": "1635298", "exchange_index": 37, "question": "You've got such a global footprint here in this area. New business or a new client growth, is that a contributor each year as well that actually moves the dial? Or is it just a steady Eddie from 1% to 3% or 4% new customer?", "answer": "No, no, no. Definitely -- I don't have the number in my head, but we don't have 100% penetration on our corporate client base with TTS. As strange as that may be, as good as we are, we don't have 100%. So we have the ability to introduce that TTS product set into new clients every year and we are doing that. And then once you're into new clients, what you're likely to get is you get one of the regions or maybe several of their countries, and therefore, there's the ability then to go into multiple countries, multiple regions. And it's been a lot of that, a lot of that is what has fueled the volume growth in TTS. I think overall, Gerard, we've got something like a low double-digit market share in TTS. Maybe it's 10% or 11%. Whatever it is, it's relatively small, and there's a sizable growth opportunity in TTS. And John, to your point, it's not just sprawling with new multinational clients but also the smaller client that are looking to go global. And given the breadth of our franchise, we are positioned to take advantage of both of those opportunities and serve both types of those clients.", "duration_s": 83.30000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0416.mp3" }, { "study_item_id": "MR-0417", "partition": "locked_confirmatory", "call_id": "1978012", "exchange_index": 32, "question": "So that's helpful. Well, I just feel like the runway is clearly open and everyone was waiting for you guys to take off.", "answer": "Well, thank you. We appreciate that support. We -- our wings are flatting. Thank you, Tayo. I think we have 1 more operator. Anything further? Okay. If we don't have any further questions, I want to sincerely thank you for your time, your attention, your interest in Ventas. We have a great team here that's really committed to protecting and preserving the company and for really delivering for all the stakeholders who depend upon us. \nSo we look forward to seeing you on the other side of this terrible pandemic. And until then, stay safe and strong. We'll see you soon. Bye-bye.", "duration_s": 59.289999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0417.mp3" }, { "study_item_id": "MR-0418", "partition": "development", "call_id": "1787201", "exchange_index": 22, "question": "Congrats on a good quarter. [indiscernible] the pickup, you lost a lot of -- Mary, you've highlighted you gained retail share, but you have lost share overall in the segment year-to-date. What is the outlook for the second half? I mean is guidance predicated on holding your share from where it is now and the benefit of just sort of plant being fully up and running? Or do you expect to regain share in the second [indiscernible]", "answer": "We do see a growth in share in the lower end of the ABB segment, Colin. I'd say that if you look at the increased share that we've had, it's been in the 45 to 50 -- in 50,000-plus segments, obviously the more profitable segments. And we would expect to hold that because we were underrepresented in these segments with our K2 products. And what we're really doing is like fixing that underrepresentation, if you will, as we go into T1. So you expect normalization in the lower ATP segments. And obviously, it's higher heavy-duty rolls out there will be another positive as well in diesels coming in. So we do expect to increase shares in the second half of the year between the all the other cab variants as well as HD.", "duration_s": 45.01999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0418.mp3" }, { "study_item_id": "MR-0419", "partition": "development", "call_id": "1920686", "exchange_index": 30, "question": "Congratulations on the new project announcements. Agri was on the call a little late. So if you drew can skip it. But any comments on the export opportunities and Walt, as you kind of have answered 2 or 3 questions about leverage, is there a downside limit where it just doesn't make sense to let that ratio fall any further, if you don't have sufficient growth CapEx and M&A available, a point where you have to think about new dividend or share buyback policy?", "answer": "Well, as it relates to the second part of your question, obviously, as our debt gets paid down to the levels that I was just discussing, it opens up a lot of alternatives for us, whether it be share buybacks or dividends or whatever. But I think the key is that it will be -- we'll have the flexibility to do what we think is appropriate at that time. \nAnd as for the [indiscernible].", "duration_s": 23.039999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0419.mp3" }, { "study_item_id": "MR-0420", "partition": "locked_confirmatory", "call_id": "1783251", "exchange_index": 31, "question": "I wonder if you can give us an update on direct mailings to your cigarette consumers and onserts or inserts in cigarette packs on behalf of JUUL? How many have you sent out? And what are the redemption rates looking like?", "answer": "Yes. We don't see a level of that detail, both direct mailings and onserts to date have occurred. And I know that there is further activity that's planned between now and the end of the year communicating about the benefits of JUUL, but we haven't shared the numbers or fine details on that.Attendees: Broadly speaking, how the results of those changed your estimates or sort of what kind of relation we expect to see specifically on your brands from JUUL? No, it hasn't. I don't think we've seen anything that caused us to change our views on JUUL's growth rate or the cannibalization of our products.", "duration_s": 53.590000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0420.mp3" }, { "study_item_id": "MR-0421", "partition": "development", "call_id": "1642903", "exchange_index": 25, "question": "Okay. How about 2020, any kind of rough number?", "answer": "No, we don't have guidance out on that. So again, it will depend on our plans as well as any potential third-party opportunities that the Midstream has.", "duration_s": 10.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0421.mp3" }, { "study_item_id": "MR-0422", "partition": "development", "call_id": "1838723", "exchange_index": 16, "question": "Okay. And second question. Year-to-date, average monthly rental growth in the same-store portfolio was 3.4%. How much are you seeing expansion in fee growth in the same-store portfolio, pets, parking, trash, et cetera, and how we sort of reached the point, not only in your portfolio, but it is an industry we sort of maxed out on the fees you can charge a resident that you're already -- say, $4,500 a month for rent.", "answer": "Sure. This is John. The fee part of it is running just slightly in front of the base rental revenue at this point in time. But that said, there's a level of change that's going on within the different line items. For example, you have cable and you have the cable cutting, so that's going down. At the same time, parking is going up. And then there's a few other line items that are moving, where pets is fairly flat. \nSo I think longer term, there'll be some opportunities. I had mentioned a while ago, we were working with renting some of our amenity space to nonresidents. And at the same time, I commented that immediately, two of our peers picked up that off the call and with our same vendors. So we're pretty quiet about the details that we have going on. But going forward, at least. But I do think there will be some level of opportunity with that. The big thing though, always is rents. And Essex is always been focused on our assets, on our locations on our research and that will always be the #1 most important aspect of Essex, but we do try to enhance our returns wherever possible.", "duration_s": 70.23999999999978, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0422.mp3" }, { "study_item_id": "MR-0423", "partition": "development", "call_id": "1719407", "exchange_index": 8, "question": "Got you. A discussion of the European asset. Is the environment now not conducive to raising capital from that market through asset sales?", "answer": "Well, I think you know about the Dynamo lines. So that's an important investment for us, and that is an extraordinarily well-run asset, and it's been throwing off substantial EBITDA for -- from well-run operations. This is one of those businesses that makes money in the trough, and so it's an ideal asset for us. And we'll continue to make sure that we manage that well. And with the Dynamo line, that also gets us additional EBITDA.", "duration_s": 29.100000000000136, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0423.mp3" }, { "study_item_id": "MR-0424", "partition": "development", "call_id": "1894715", "exchange_index": 35, "question": "Going back to the MX engine, it looks like you had a pretty strong fourth quarter. I don't know how much of that increase was a mix of customers that you're shipping the engine out to. But how are you thinking about your penetration rate for this year?", "answer": "So we have a great powertrain offering, obviously, with the MX engine. That's a core of it. We have great relationship with Cummins as well. He does a great job of supporting our customers with their powertrain. We did grow our MX engine share to 47% in the fourth quarter for a full year average of 43%. Part of what enabled that is we invested in manufacturing capacity in the course of the year last year. So we have adequate capacity to build as many MXS as we want for the customers. We look forward to seeing that continue to grow as we move through the cycle.", "duration_s": 28.539999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0424.mp3" }, { "study_item_id": "MR-0425", "partition": "development", "call_id": "1843548", "exchange_index": 18, "question": "Okay. I appreciate the color. And the difference versus normal seasonality? So if we look at over the past 10 years, your heritage pricing is typically up $0.20 sequentially fourth quarter versus third quarter. So if that dynamic plays out this year, your pricing cadence exiting the year will be up 6% just the way down math works out. Is that something that you expect to play out under normal seasonality or are there any moving pieces from this point that we should keep in mind?", "answer": "I guess what I would say is this, if you're trying to just look at Q3 ASP, and you're trying to do you sort through what all the mix issues are instead of being modestly that property would have been modestly over 4, that's probably just a pure straight up same-on-same type of comparison, Jerry.", "duration_s": 16.700000000000273, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0425.mp3" }, { "study_item_id": "MR-0426", "partition": "development", "call_id": "1766471", "exchange_index": 2, "question": "I may have missed the exact client count growth that you just called out in your prepared remarks. Can you maybe talk about, within segments, small, micro -- small and mid-market, kind of where you see growth [indiscernible] for payroll?", "answer": "So I think it's either on the -- I think it's on the -- in the press release and it's on our investor slide. So we ended the year at about 670,000 clients. Last year, we disclosed 650,000. We saw growth -- a lot of growth in the SMB segment of the market.", "duration_s": 18.340000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0426.mp3" }, { "study_item_id": "MR-0427", "partition": "development", "call_id": "1701224", "exchange_index": 9, "question": "Understood. And just on auto OEM, Michael, very good job on pricing. But obviously, weak volumes. Are the weak volumes jeopardizing at all your price initiatives or your price traction in OEM?", "answer": "David, I don't think so. I'm doing this at the same way we saw with architecture. We were the first ones out with price. We're the most aggressive in trying to hold our customers accountable for us to recover our margins. We provide a lot of value to our customers, a lot of new technology. And obviously, we're getting price across the world in that. So when our competitors are getting as aggressive as we are, if they do that, then we would expect to see some of that volume flow back. Right now, it's more important for us to get price, and that's our #1 objective. And David, this is Vince. I think our customers clearly understand that for calendar year '17 and calendar year '18, we got little to no price. So we're still well in the rears in terms of value capture for what we deliver to them.", "duration_s": 53.83999999999992, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0427.mp3" }, { "study_item_id": "MR-0428", "partition": "development", "call_id": "1793250", "exchange_index": 13, "question": "Dave, can you talk a bit about this ballooning funnel of projects or I guess, that stuff has been committed but not booked? How long did those typically stay out in that state? Is there any kind of the kitchen that close process rate something where you think there is a commitment but until it drives commitments to back down. So how confident are you in that looking over the next few months, quarters, whatever?", "answer": "So if we look at the funnel, where the final funnel, it's growing right now. It's growing outside the United States. So we're starting to see -- we had not seen a lot of growth with the bigger projects outside the United States, primarily North America driven large funnel project business. So we're now starting to see some of the international bit issue, be it in the Middle East, be in Latin America, where some of the larger projects are now starting to follow the handsets white funnels getting a little bit bigger.\nNow going back to the one, but not booked situation. The big issue for us is, it is like -- it's like product that's been or for that that's been picked and put into shelf. There is a shelf life. And historically when we see this grow like we have seen this before, typically, that shelflife you're looking at 12 to 18 months on these projects. These are massive projects. These are projects. Typically, they're going to last 3, 4, 5, 6 years. So you need to late 6 to 12 months that's not unusual. But from my perspective, if you get out of their 12, 14, 16 months, these things really start changing and nothing happens, then you're going to see is a refit the progress we too early to say that because a number -- recently, it's pretty normal. And now getting about $1.1 billion. It's Starting to get a number that's got my attention. And so I think the key issue for me is watching and see what this customer start doing. These are a lot of gas projects and a lot of U.S. based projects at this point in time.\nAnd so I think we've got to watch it. There's nothing we can overreact to. But from my perspective, these things sit out there for 12, 14, 16 months then you're going to start seeing a revolution what's the management of this project that we want to downsized to.", "duration_s": 108.98000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0428.mp3" }, { "study_item_id": "MR-0429", "partition": "locked_confirmatory", "call_id": "1644025", "exchange_index": 25, "question": "The combination ratio meaningful improved for the full year in protection, are you considering actions that could unlock value and free up capital committed for that business? And then the second question, how much rate are you currently taking and pushing across the different products and protection after several years of cash losses?", "answer": "Okay. So you're talking on -- from the standpoint on the rate I guess?", "duration_s": 7.3400000000001455, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0429.mp3" }, { "study_item_id": "MR-0430", "partition": "locked_confirmatory", "call_id": "1700094", "exchange_index": 30, "question": "Got it. As we look out to next year, what are your thoughts in terms of when you hope to certify the Denali and the Sky Courier and start to deliver them?", "answer": "No, Cai, I'm pretty focused on Longitude right now. So but we have said that we want to get both aircraft into the flight test program. The first flights here by the end of the year. We're just -- we don't want to go out there yet with expected certification dates. Obviously, that process has been a lot more painful than we expected. So we'll probably take a little time to make sure we understand how that process is going to play out on those aircraft before we commit dates out there.", "duration_s": 27.820000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0430.mp3" }, { "study_item_id": "MR-0431", "partition": "development", "call_id": "2213536", "exchange_index": 8, "question": "It's Julien here. So maybe to follow-up in order here. Can you talk about the run rate level of contribution from the offshore projects? I know that the timing is obviously moving around, and I know you just said that there are lots of puts and takes. But in an effort to sidestep some of that debate, as best you see it today, including the latest update, the ITC, how would you characterize that run rate level of net income contribution, if you will?", "answer": "Yes. And again, it's another way, Julien, I guess, get at the question of providing guidance beyond our forecast horizon here. So I don't want to publish a number until we have a pretty good visibility into the annual cash flows and earnings profile in each of the projects.", "duration_s": 20.559999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0431.mp3" }, { "study_item_id": "MR-0432", "partition": "development", "call_id": "1830153", "exchange_index": 6, "question": "I wanted to maybe follow-up on the improvement you called out both in management solutions and also the mid-market. Is that more of a function of the enhancements you've made with Paychex Flex? Any color you can put around that? And also maybe just talk about how much of that's being improved by the sales force enhancements and channel strategy? Any think in terms of color you could provide around that will be great.", "answer": "Yes. Sure. I think it's a little bit of both. I think certainly the product is -- the enhancements to Flex have been significant, not only from the payroll side, but the integration side and all -- some of the products and features that we discussed today. Even like the payroll grid, offering many more options and making it just easier for them to go from a payroll standpoint. But the integration of the HR and I think the sales team and sales -- so their effectiveness and the sales approach is being much more about HR first instead of leading with payroll coming in and offering the full suite of products that we offer. And then also, as I mentioned today in the comments, offering others to have -- we have a full set of APIs to other providers of on-demand services and HR products and accounting products and that is getting broader, and I think we see that as well. We certainly offer a one solution set. That's the great thing about Paychex. We can have them all fully integrated into Flex if you want it. But if you're on an HR on an accounting system that you want to make sure you keep an interface into Flex, you can do that as well. So I think it's that approach. I also think the employee approach, Jim, that we -- I mentioned earlier, really doing things with the mobile app is making self-service mode available to their employees, not only their checks, their W-2s, signing up -- signing off on time, in attendance, changing schedules, setting up your 401(k), all of that is adding a lot of value to the mid-market in particular, and we're seeing that payoff for us. So we're very pleased with the first quarter start.", "duration_s": 104.89999999999986, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0432.mp3" }, { "study_item_id": "MR-0433", "partition": "locked_confirmatory", "call_id": "2205718", "exchange_index": 12, "question": "And just 1 more for me. Maybe more modeling related. But the potentially uncollectible rent adjustment in Q4 was -- appeared to be a $3 million positive. Does this reflect primarily the cash basis tenants paying that rent? Or how should we be interpreting that number?", "answer": "Greg, it's Kathleen. I'll help you out there. So if you look at the page, you really almost need to take the 3 line item better there together. So rent abatement, cash basis tenant adjustments and then also that potentially full rent income adjustment together to come up with what the total P&L impact is. And the reason for that the opposite signs or the income sign in the adjustment line is really primarily to the way that we're presenting the rent abatements. So on tenants that we are looking at the reserve and thinking there's a potential for future rent abatement, we would take a reserve on that, a general reserve. And then when the actual abatement does occur, you'll see it come through that rent abatement line, but that reserve that we have put up previously flipping in that line with the uncollectible adjustments. So it's really, overall the 3 lines together. \n[Audio Gap]", "duration_s": 48.66000000000031, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0433.mp3" }, { "study_item_id": "MR-0434", "partition": "development", "call_id": "1961614", "exchange_index": 8, "question": "Okay. That's helpful. And then on Slide 9, at the bottom, I think you provide a useful framework for the expected sequence of recovery in your various businesses. Can you speak to the OEM and refinish blocks there, so to speak. Why is it that you would expect OEM to recover quicker than refinish? Is that based on the credit crisis experience or what you're seeing here today?", "answer": "Yes. I think a lot of it has to do with the fact that the cars aging in the fleet is almost 12 years. And we expect people to continue to want to buy new cars. We also see that happening right now in China. So if you think about China car sales, they've incrementally improved each of the last half a dozen weeks. And actually, last week, they were almost flat with prior year. And so our experience has been that people still need vehicles. There's a likely positive out of this is that people are going to shun public transportation for some period of time, which means they're going to want to either buy a new car or they're going to want to continue to maintain the car they have. So I think those are going to be positive for us coming out of this. And one other consideration, Kevin, is because the refinish business is a distribution business, we do know there's inventory in the chain. People were expecting, as Michael alluded to earlier, a normal season. Typically, the distribution channel stock up, go ahead up spring. That stock up did occur. But then again, we had a rapid decline of demand. So we do know we'll have to work through inventory in the entire channel as well.", "duration_s": 79.82000000000016, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0434.mp3" }, { "study_item_id": "MR-0435", "partition": "development", "call_id": "2363396", "exchange_index": 5, "question": "And I know you mentioned you had 1 additional acquisition in the pipeline as of now. Any other comments you can share as far as what's in the pipeline beyond that? Or what you've seen as far as pricing movement since you've closed the last 4?", "answer": "No, not at this time, Katy.", "duration_s": 5.5499999999999545, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0435.mp3" }, { "study_item_id": "MR-0436", "partition": "development", "call_id": "1647101", "exchange_index": 17, "question": "Appreciate that. Just curious what the attractiveness today is for redevelopment as you have seen rental rate growth improve, albeit gradually. And given the decrease in development starts moving forward.", "answer": "Yes, thanks, Austin. Sean, you want to take that? Sure. Happy to do so. Yes, Austin. I mean, development -- excuse me, redevelopments been pretty active for us. Yes, we invested almost $200 million in the past year across about 7,300 homes. A chunk of that related to the rebuild at Avalon headquarters about $70 million but still around 7,000 units that we developed last year. And in terms of planning forward going forward, I'd probably think about we're going to spend somewhere in the range of $150 million to $200 million of a year over the next couple of years of redevelopment activity. And then beyond that, a little bit, but the returns have been compelling and the opportunity set has been something that we're comfortable with. So that's kind of where we are.", "duration_s": 46.14000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0436.mp3" }, { "study_item_id": "MR-0437", "partition": "development", "call_id": "2213536", "exchange_index": 31, "question": "Well, I think it's on -- when I looked at the chart, it looked to me when I was doing a comparison that from 2021 and maybe it went from $209 million to $443 million for 2022, $184 million to $264 million. I can follow-up later. I mean, I'm not -- I don't -- but that's what I -- it just looked like to me like there was a -- it could be timing too or something, I don't know. Anyway, I just -- I was wondering if there's anything in particular. \nAnd then finally, on the Offshore Wind, given what we've seen in Texas and what have you, and I apologize for not knowing this, but I was just wondering, just in terms of how these contracts work, if there was some issue with not being able to provide power, is there -- I mean, do you have to go in the spot market and make it up or do you just simply not get paid for the power that you don't deliver? Or I just wanted to sort of get a sense as to how it works since basically, what maybe think about this, of course, is what we're seeing in the Midwest and stuff?", "answer": "Yes. I guess from what I understand about the Texas and what they're struggling with. I think the problems stem from the financial structure for power generation that really doesn't often the many incentives to -- the power plant operators to prepare for the winter. They have an electric rig that put an emphasis on sheet prices over reliable service in England, as you know, we have a robust capacity market where the box inadequate supplies committed 4 or 5 years out. \nAnd in terms of the people talking about wind, what I understand, the impact on the thermal plants the wind frees up that they the deal with, I think, either the nuclear unit went down, but the gas plant from probably 5 or 6x the loan that was loss and wind. I think wind is only 10% of the in Texas.", "duration_s": 58.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0437.mp3" }, { "study_item_id": "MR-0438", "partition": "development", "call_id": "1840075", "exchange_index": 19, "question": "So we're just going back to the segments here for a minute, you give us some good color around the in North America but if I look at the auto OEM, you actually had pretty nice rebound in organic there internationally. So can you give us more color on what's really going on in Europe and especially in China where the outperformance versus build really widened this quarter?", "answer": "Yes. So I think, in Europe, we talked about I think in the last call appear to begin to stabilize in Europe. And so we've gone from being down kind of mid- to high-single digits to now flat as builds have recovered as well in Europe. And then China was really the big outperformance there is really the result of continued penetration gains, primarily with local Chinese OEMs or even in a market where builds are down kind of in the mid-single digits here in Q3, we're able to outperform and grow our business 7%. So it's nothing new. It's really a continuation of the strategy that we've been pursuing there for many years.", "duration_s": 47.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0438.mp3" }, { "study_item_id": "MR-0439", "partition": "locked_confirmatory", "call_id": "2042728", "exchange_index": 28, "question": "Got you. And just a follow-up question. In terms of Europe, I think there was some talk back in May about Europeans trying to catch up post COVID. I think there was talk about VW being staying open in August or some talk about Italian staying open in August. Can you just give an update, anything different about how European businesses that you interact with will treat summer shutdown this year after COVID?", "answer": "You know what, Andrew, that's a good question. I would have to get Andrey to get back to you. I think on consumer goods, we've seen decent performance, which manifests itself in the marking and coding business. I think in heat exchangers, we exited on a positive trajectory from where we were at the beginning of the quarter. So that's kind of industrial applications, for lack of a better word. But I'd have to get back to you on the belt. And look, and then we had certain businesses in the portfolio, like automotive aftermarket that in April and May were absolutely very low levels of activity. So June relative to those 2 months, it's improved, but I don't think we need to get overly excited because that base is relatively low.", "duration_s": 49.720000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0439.mp3" }, { "study_item_id": "MR-0440", "partition": "development", "call_id": "1773051", "exchange_index": 3, "question": "Good execution in kind of an uncertain environment. On the product ID side, you mentioned bookings were down in Asia. Are you seeing anything in kind of the machine builder channel that is a bit more choppy than expected given that there's a lot of cross-border kind of activity for those guys in small machine builders and in the U.S. and Europe that are kind of selling into there that your products may kind of go along at the same line with?", "answer": "Steve, I don't know that question. I'd have to go back to the guys and maybe we'll have to see the segmentation of the individual markets that they sell into. I just think that overall...", "duration_s": 11.779999999999973, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0440.mp3" }, { "study_item_id": "MR-0441", "partition": "locked_confirmatory", "call_id": "1896718", "exchange_index": 15, "question": "Okay, great. And then the next one, preferred investments, obviously, you've highlighted is what you guys are choosing to do in terms of capital allocation. Just curious on either the current book or the ones you're underwriting. Is there an option, or are you trying to get options to actually roll your preferred into equity? Or essentially take ownership of those deals when they complete? Or is the financing market just too easy to -- for the developer to sort of get permanent financing?", "answer": "So this is Adam. We look at it several ways. I'd say the most basic kind of down the middle of the fairway. Prep deal is going to be paid off after certain period of time, whether it be 2, 3 years. We do, however, with every deal, we have that conversation where there are potential hybrids, where there is a potential to convert into equity and it is on a deal-by-deal basis. And we're seeing probably a little more of that opportunity now given where we are in the cycle.", "duration_s": 29.519999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0441.mp3" }, { "study_item_id": "MR-0442", "partition": "locked_confirmatory", "call_id": "1970773", "exchange_index": 23, "question": "Okay. And then just a real quick follow-up. In terms of just looking at the adjustments, were there -- in terms of the workforce actions you took in the quarter, were there severance costs in the quarter? And if so, were those in the EBITDA as defined or were they adjusted at?", "answer": "It was de minimis this quarter in Q2. In Q3, it will be a larger charge, something on the order of $40 million to $70 million of onetime costs, we think. And what we'll do is we'll show it in the add-back table next quarter, but it will be an add-back since it's onetime nonrecurring costs. And the EBITDA, Mike, complies with our credit. Essentially, that's the EBITDA adjustment as defined in our credit agreements. That's what we use.", "duration_s": 29.639999999999873, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0442.mp3" }, { "study_item_id": "MR-0443", "partition": "development", "call_id": "1788368", "exchange_index": 30, "question": "Got it. And just one last one for me, you said that non-FortiGate obviously grew faster than FortiGate. Any more color on the cloud piece of the non-FortiGate. I know you [indiscernible] some metrics in the past but any more color on how the cloud piece of non-FortiGate did this quarter?", "answer": "The fastest growing element of the non -- of the fabric. Thank you, Crystal. I'd like to thank everyone for joining the call today, and let everybody know that Fortinet will be attending the following Investor Conferences during the third quarter. Oppenheimer on August 7 in Boston; we have the Raymond James Conference on August 21 in Chicago; the Dorothy Conference in Minneapolis on September 5. And we look forward to seeing many of you over the next several weeks. If you have any questions, please give me a call or send me an e-mail. Have a great rest of your day. Thank you very much.", "duration_s": 40.970000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0443.mp3" }, { "study_item_id": "MR-0444", "partition": "development", "call_id": "1784885", "exchange_index": 30, "question": "And then Bill, in legacy L3 the space and intelligence segment, it seems like the book to built for fiscal '19 was probably around 1.0, which is pretty solid. And obviously, there's some good growth there, but there's also a kind of growth in this base budget. Maybe if you could talk a little bit about the visibility have there and the confidence you have that you guys are taking a fair share on this space side.", "answer": "Look, Seth, I mean we feel pretty good about the space business. You're right, I mean in the year, the book-to-bill is a little over 1. Backlog came up a little bit. So there's a good trend there, and we've talked about that pretty consistently over the course of fiscal '19 with the classified business being up midteens and the quarter looking pretty good. That comes from a couple of different areas. When we talk about our classified business, it's not just space. So there's opportunities in space both exquisite as well as moving to smallsat. The team has just done a great job maintaining a strong position on exquisite components while at the same time taking the lead on the full-ended mission solutions with smallsat. But our classified business in that area also relates to other domains, and that business continues to go well. Again, same philosophy, moving from providing components to subsystems to now full mission solutions, whether they be terrestrial systems, nearshore systems, deep water systems. And that business has gone very well. And it's really this philosophy on the budgets are coming up, and we're expanding our ability to compete on more a full end-to-end mission solutions. And you can see the trajectory happening in the back half of the year. We continue to see strong growth in the classifieds business. I'll just say that Bill and I spent a fair amount of time last week reviewing the classifieds business, and I was fairly impressed with the technology and the opportunity. So we're excited with the space business going forward and other classified work.", "duration_s": 91.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0444.mp3" }, { "study_item_id": "MR-0445", "partition": "development", "call_id": "2346012", "exchange_index": 27, "question": "Okay. And then you guys -- I ask this question every quarter, and you seem to be playing it very close to the vest. You clearly have been investing a lot in combining the payments and the banking businesses to give -- I think you said on one call to be more Chime-like or go after Chime, not them specifically but the concept. Can you give us any more meat on the bone as far as what the strategy is? When we're going to see it? You said you want to serve existing clients better but also capture a lot more new customers. And I don't know where to look for that in the external releases or when we should look for it.", "answer": "Yes. Mike, it's Andy. We're spending a lot of time on that internally, and I'll tell you what: we're going to put something in the earnings release in deck by the end of the year to give you more information on this. We are looking at it on a regular basis. It's one of our top priorities. I think it's a huge opportunity both from an increased penetration to current customers as well as customer acquisition, and we'll give you more on this before the end of the year.", "duration_s": 22.059999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0445.mp3" }, { "study_item_id": "MR-0446", "partition": "development", "call_id": "1647116", "exchange_index": 19, "question": "Okay, that's fair. And then just on the overall kind of revenue front. Organic growth, I know it seems may be 2 years, there were speculation you guys couldn't really grow organically anymore, and here you put up one of the best organic growth rates in quite some time. I mean, could you give any color, what really drove that volume versus price? I mean did you see volume, material volume increases in all markets? Or was there more price in certain markets? Any kind of color, if you could parse out that growth? Just it was such a good rate that we haven't really seen in quite some time.", "answer": "I think it's important in this business to recognize that revenues can, at times, be lumpy. They can be really strong and unexpectedly strong at times one quarter to the next. It's a lumpy business. It has to do with managing of inventories and the supply chain and other factors. So yes, we, again, want to appropriately conservative in the way we look at this. Not seeing concerns in the future, but just wanted to appropriately conservative without getting ourselves ahead.", "duration_s": 37.90000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0446.mp3" }, { "study_item_id": "MR-0447", "partition": "development", "call_id": "2346012", "exchange_index": 11, "question": "Got it. And then I was hoping that you could give your thoughts on the open banking aspect of buying executive order, making it easier and cheaper to switch banks by requiring banks to allow customers to take their financial transaction data with them to a competitor. Just curious if you had any broad, high-level thoughts on that?", "answer": "Yes. One of the reasons we're investing in all these digital capabilities is because we want to be the very best in terms of digital and have great capabilities to serve our customers. And that, combined with the human element -- finance is complicated, and having people in addition to digital, I think, is critically important. So that's how we think we're going to effectively compete in the long run, and that's what we're focused on.", "duration_s": 21.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0447.mp3" }, { "study_item_id": "MR-0448", "partition": "development", "call_id": "2065334", "exchange_index": 22, "question": "I'm just curious, where are you with your journey optimizing your LVT facilities in North America in terms of breaking even? It looks like the exemptions on imports are at least going away for now. Do you have that ability to kind of meet that demand as your capacity ramps up this back half? Is that a nice windfall for you guys?", "answer": "Let's start. What he's talking about is there were duties on click LVT that was drawn a year ago for a year. I think it was yesterday, the government has reinstated the duties on those products. With that, what we think is going to happen as the reverse of what happened last year, is that the industry will have to increase prices to cover the tariffs, which should increase the value of our manufacturing as we go through. \nWith the businesses, the European operations are ahead of our U.S. operations in their improvements. The European operation is all -- is profitable today. And it's going to continue to improve as we continue to enhance the operations and take costs out. The U.S. improvements are following. But again, I think we said it before, we had expected to have multiple engineers over here all through the second quarter helping the group do the same thing we've already done. I don't know if you know that you can't travel between the 2. So all of that's been postponed. \nBut we are, with or without increasing the production speeds and processes in all of them, at the same time, we're introducing new products and styling to help the business as we go through it. So I think it should help us. I think we're getting better at it, and we're turning the corner.", "duration_s": 91.30000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0448.mp3" }, { "study_item_id": "MR-0449", "partition": "locked_confirmatory", "call_id": "2326894", "exchange_index": 27, "question": "Obviously, you have -- you doubled your off-premise sales per unit at Olive Garden, basically fourth quarter '21 versus fourth quarter of '19. So that does leave a pretty substantial amount of capacity that kind of remains for on-premise dining. So I wanted to ask a few points on that.\nYou mentioned that much of off-premise is being used as a home meal replacement that would suggest, I guess, the lack of cannibalization for on-premise dining. But can you possibly update those if you know the cannibalization numbers between the percentage of off-premise sales that are coming from on-premise? And I guess, at this point, I mean, do you think it's an opportunity -- a necessity to basically bring back those on-premise customers here was Olive Garden is so busy before that maybe people aren't getting to eat at the times that they want? But just to think about getting that off-premise sales -- on-premise sales per unit back to the 100% level that you previously had in 2019? And if there's anything that you can talk about, whether it's age or that level of vaccination, state by state, what have you, that shows different levels of success of achieving on-premise sales '21 versus '19?", "answer": "Yes, John, that was -- there's a lot in there. All I would say, and I want to be brief here is we're going to do whatever we can to drive as much on-premise dining inside Olive Garden as we possibly can profitable sales in the dining room. And we're going to try to grow as profitably as we can in the off-premise channel.\nWe also have to recognize at this point in time, there's still a lot of people out there in our trade that aren't comfortable going into restaurants yet. And so we still have a ways to go to understand where that natural sales level for Olive Garden is going to level out and a lot to learn. And so we haven't been that granular yet to understand who the consumer is. We'll get there once we reach this new place. But our goal is to drive as much business as we possibly can -- profitable business as we can in restaurant and do as much profitably as we possibly can off-premise.", "duration_s": 66.62000000000035, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0449.mp3" }, { "study_item_id": "MR-0450", "partition": "locked_confirmatory", "call_id": "1783486", "exchange_index": 6, "question": "Do you have those numbers handy, Jessica? Just percentage of ASP incentives today versus a year ago, quarter ago just so we can kind of see?", "answer": "So we don't typically quantify incentives because, to us, whether it's price or if it's something flowing through cost of sales, it all falls out in the margin. So to us, margin's the best grade, and we don't typically try to quantify incentives that way.", "duration_s": 13.839999999999918, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0450.mp3" }, { "study_item_id": "MR-0451", "partition": "locked_confirmatory", "call_id": "1783486", "exchange_index": 11, "question": "Directionally, would you assume that your core community count continues to grow?", "answer": "We've never given specific guidance on community count, and we're just going to stick to what we currently expect for fiscal 2020. And we may have a little bit of non-specific guidance about color on community count in November. But today, that's what we feel comfortable with for our preliminary guidance.", "duration_s": 15.240000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0451.mp3" }, { "study_item_id": "MR-0452", "partition": "locked_confirmatory", "call_id": "2275717", "exchange_index": 16, "question": "And then maybe just, Debbie, bigger picture. Given this recovery and the potential now you're citing over a multiyear period, maybe give us some color on whether you're maybe rethinking the acquisition focus in terms of buckets. Is there an opportunity for Ventas to get more aggressive on senior housing in certain areas? Or are you sticking sort of the more balanced approach?", "answer": "Again, we do highly subscribe to the benefits of diversification, Vikram. It has served us incredibly well over the years and particularly over the last year. We have always been big believers in the senior living business. We're excited that we have this recovery upside opportunity embedded in our portfolio now, and we intend to capture that. And also, we totally do intend to invest and acquire senior housing, assuming we find assets of equality and in markets where we think it's really going to provide good risk-adjusted return. But yes, we would certainly expect to have that in our acquisition buckets.", "duration_s": 50.63999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0452.mp3" }, { "study_item_id": "MR-0453", "partition": "development", "call_id": "1778920", "exchange_index": 17, "question": "Got you. Okay. I mean as the biggest gas producer out there that certainly setting around 2 50 would help there. And then just to understand. You talked about this massive penalty potentially for getting out of the MVP pipeline. Can you put some context around that? Is it $100 million? Is it $500 million? Like what is massive in terms of getting out of MVP?", "answer": "Yes. This is Blue. The short answer is we're not going to walk on the project. I think that's probably the short answer.", "duration_s": 6.940000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0453.mp3" }, { "study_item_id": "MR-0454", "partition": "development", "call_id": "1703663", "exchange_index": 21, "question": "For Europe?", "answer": "For Europe, we expect the run rate to continue. We are not -- as I said, with Brexit delayed, we are not concerned about volumes in Europe and we remain positive about pricing in Europe.", "duration_s": 18.04000000000042, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0454.mp3" }, { "study_item_id": "MR-0455", "partition": "locked_confirmatory", "call_id": "1639872", "exchange_index": 19, "question": "DG, could you maybe just kind of just go back to your comments on tariffs because you expressed confidence in your ability to pass through both the inflation and tariffs. So if we end up with a 10% or [ 0 on less 3 ] compared to 25% in your plan, should we assume that's awash with pricing a little less than you would have otherwise gone with?", "answer": "So I think your -- Nigel, I think your question is what happened to the tariffs [indiscernible] go back to 10%? Is that your question?", "duration_s": 8.289999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0455.mp3" }, { "study_item_id": "MR-0456", "partition": "development", "call_id": "1835804", "exchange_index": 10, "question": "Fair enough. One small thought to get a fair amount of question from GreenSky investors it sometimes wonder if there are Fifth Third investors are GreenSky investors are asking it. But could you maybe give us an update movement is the loan book to stand now and any thoughts on the growth trajectory going forward?", "answer": "So the loan book stands at about $1.4 billion. Clearly, incremental growth this year came in lower than we expected because the fee payments in the portfolio are overwhelming increased level of originations. If you remember going 2 years ago when we first announced the partnership, we thought by now we would be at $2 billion, which was the back-end goal. And so the in terms of the portfolio metrics, credit is behaving as we expected and margins are behaving as we expected. And the company clearly announced a period of time, which they will be evaluating different strategies and we are waiting for that and depending upon in what direction they choose to go, we will make our own decisions based on how we see those loans benefiting our balance sheets. So I think there's still probably some questions that need to be answered because before we can give you a clearer direction on GreenSky.", "duration_s": 76.32000000000016, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0456.mp3" }, { "study_item_id": "MR-0457", "partition": "development", "call_id": "2363396", "exchange_index": 8, "question": "First, congrats on being a Dividend King. I wasn't even aware of that. I knew about Dividend Aristocrat. So Dividend King is pretty cool. \nDon, following up from Steve's question, last quarter when I asked you about '22 and said, you wouldn't put out '22 unless you thought that you could beat it, which is what you've now done. And listening to Dan talk about what's not in the number, meaning like your tenants to a cash basis now, you're not assuming any of those people go back to being a straight line, which means that's a boost, that's an upward bias to earnings, plus you killed it on this quarter, there's no reason to think that you won't outperform on further quarters. \nAgain, why should we stay within your guidance range for '22? Why wouldn't we do -- be above it? Because what you do is you run the team to always outperform. You don't put something out there unless you think that you can achieve beyond that. And if you're telling Steve that you don't think you'd be back to peak NOI to '23 and you just covered your dividend basically a full year earlier than you thought, again, it sounds like there's some good upsides to '22.", "answer": "How in the world, my friend, could I possibly answer you the same way I did last time when I have to sit here and say, from last time, Alex was right. I mean that's hard for me to do well. Hard for me...", "duration_s": 14.820000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0457.mp3" }, { "study_item_id": "MR-0458", "partition": "development", "call_id": "1909046", "exchange_index": 23, "question": "Yes, Brian on for George. So I was just looking at your 2020 revenue guidance, which I know comes below your prior long-term target of 68%. I know you haven't reinstated financial targets yet, but based on customer conversation, to what degree do you believe long-term organic growth potential of the business is ?", "answer": "Yes. Again, you got a similar question earlier, Brian, that on long-term guidance, we clearly gave you our guidance for 2020. We're not ready to put a long-term financial framework back in place. Although we're working towards that in 2020. We talked about the things we want to see, and we're getting really close to that. So I think I'll just leave it at that.", "duration_s": 22.659999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0458.mp3" }, { "study_item_id": "MR-0459", "partition": "development", "call_id": "1718461", "exchange_index": 17, "question": "Got it. I can ask a follow-up question on something everyone asked, but I have it, I want to look at differently. There is 1 big customer that grew a 100-plus percent and it will, we will understand if that customer is pausing. Because it's abnormal to see this kind of growth. The question is what is the growth in cloud in aggregate if you remove that specific customer, in aggregate this group grow or grow not grow this quarter or the guidance I mean?", "answer": "Yes, I don't know that we are going to break that out at this point. I think the concentration on a single customer is probably appropriate, but I don't know that we're going to try to separate things out the vertical inside of the vertical.", "duration_s": 14.720000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0459.mp3" }, { "study_item_id": "MR-0460", "partition": "development", "call_id": "2263154", "exchange_index": 22, "question": "Understood. Very helpful, guys. Maybe just, Tom, on the -- for the next 6 to 8 weeks as you're sort of doing this hot functional testing, can you just maybe elaborate on the specific risks and what remediation actions could you take in responding to those risks?", "answer": "You mean within the test?", "duration_s": 0.9800000000000182, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0460.mp3" }, { "study_item_id": "MR-0461", "partition": "locked_confirmatory", "call_id": "2042820", "exchange_index": 27, "question": "A quick one, which is just an update on the Northern Trust open. Given the environment, should we expect a similar kind of increase as you've guided to in the past? Any color on that? And then I have a bigger picture question.", "answer": "Headlines that won't see a significant decline relative to prior years. And we typically see $16 million, $17 million sequential increase in business promo as we look into the quarter, a few thoughts on it. One, the tournament is going to be players only, as you know. Secondly, we don't give any specific cost about the tournament, but people should know most of the cost associated with the tournament are about television and the expenses related to tournament production, and those actually aren't going to come down significantly. And so -- and then the reality is the television ratings for PGA have actually been very, very good. And so there will be modest savings as we think about reduction in travel and entertainment and some other things, but the reduction won't be meaningful.", "duration_s": 60.07999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0461.mp3" }, { "study_item_id": "MR-0462", "partition": "development", "call_id": "2263154", "exchange_index": 15, "question": "I've got a quick 1 on the balance sheet. It looks like you dropped the expected debt financing plan for the next 3 years by over $2 billion. I imagine a bulk of that is the $1 billion of freed up working capital and parent credit support related to Sequent. Does that also include cash proceeds from the sale? And are there other noteworthy factors there?", "answer": "wait a minute, I'm going to turn this over to Drew. The broad conclusion of your question is no. None of this has anything to do with Sequent at this point. Andrew, I'd just say the reason it dropped is because we did the long-term debt issuance of $2 billion. Sequent really only changes what we would provision for short-term working capital. So that would come out of bank revolvers and the like. But I would say if you aggregate what we actually issued in the first half, you come up with a number that's almost exactly the same as what we had projected when we met with you last. \nBut we can -- we're happy to walk you through the table. I think it's Page 19 or something like in the earnings packet.", "duration_s": 43.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0462.mp3" }, { "study_item_id": "MR-0463", "partition": "locked_confirmatory", "call_id": "1639872", "exchange_index": 44, "question": "Okay. The other question I had is it goes back to tariffs. If the tariffs are rolled back or we actually achieve a trade deal, what actually happens to pricing? Does pricing have to get reversed? And how do you guys think about this dynamic over the next few months?", "answer": "Well, so for us, we actually separate price/cost in terms of how we think about it pricing for market. We try to get the best cost we can. I think I mentioned this before. Typically, when there have been things like that have happened, price will change, but there may be some lag. So there might be some period of short-term benefit. Ultimately, you would expect if tariffs would roll back that prices would eventually sort of moderate. But typically, we get some period of benefit then.", "duration_s": 27.039999999999964, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0463.mp3" }, { "study_item_id": "MR-0464", "partition": "development", "call_id": "1663214", "exchange_index": 9, "question": "Okay. And in the hydroxide market, we've seen some industry players talking about a sort of adoption of NMC 811. And I was wondering, given your position to the supply chain if you are seeing that same kind of a slower shift to the higher nickel caplets? And if that's having any effect in the relative mix of carbonate and hydroxide?", "answer": "This is Eric speaking here. So we did not come I point out that 811 is a potential consumer of hydroxide, and NCA is a consumer hydroxide, right. So yes, in 811, we are not seeing a rapid move to 811. The technology is interesting. On a experimental level and commercial level, it's proving difficult to process from a safety standpoint having to be several times versus straight 62 chemistry. So -- and it does require hydroxide, but it has been challenged. The growth in hydroxide is being driven by NCA. The company for that is Tesla, of course, but there are other automobile manufacturers who are looking at NCA or incorporating NCA as well, and that is 100% hydroxide-based chemistry.", "duration_s": 48.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0464.mp3" }, { "study_item_id": "MR-0465", "partition": "development", "call_id": "2362465", "exchange_index": 27, "question": "Okay. That's very helpful. And as a follow-up to one of the earlier questions at C&R RAS, in aggregate next year, do you think the business grows organically, just given kind of the outsized strength that we've seen in this fiscal?", "answer": "I believe so, Gautam. And what we are going to and you've seen in the numbers today is that the backlog situation across the businesses at $1.1 billion. And that's what -- that's the impetus to drive the organic growth despite what happens in the residential AC cycle. And that will support the organic growth in the business for '22 . The longevity of our commercial businesses as well.", "duration_s": 28.38000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0465.mp3" }, { "study_item_id": "MR-0466", "partition": "locked_confirmatory", "call_id": "2042728", "exchange_index": 30, "question": "And then second question, I know, obviously, shippable second half backlog is something you guys have talked a lot about today. What does that mean? Or how do you guys think about it as a plan for backlog at the end of the year? Is the plan basically saying, what we're going to be depleted and orders need to pick up to put us in kind of a normal position exiting the year? Or is the level of kind of backlog depletion that you're contemplating kind of normal, for lack of a better term?", "answer": "I think normal, for lack of a better in the longer cycle business where it tends to be lumpy. The Maags of the world and the Belvacs of the world, they're actually building a back -- a long-cycle backlog into 2021 today. On the short-cycle side, that is going to be more short cycle. So it depends on the trajectory between now and the end of the year, quite frankly. So we would expect certain businesses that have a seasonality to them like refrigeration that will deplete a bunch of the backlog between now and the end of September because generally speaking, retailers, they'll be doing a lot of installs in Q4 around Christmas time. But now we'll see if that's -- if the dynamics change this year. So on the longer cycle businesses, I think right now, the trajectory is good as, as we deplete. We're building into 2021. On the short-cycle ones, I guess it depends on when we get to the end of Q3 and what the outlook for revenue is to Q4, but I don't see any anomalies in there.", "duration_s": 72.10000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0466.mp3" }, { "study_item_id": "MR-0467", "partition": "development", "call_id": "2349349", "exchange_index": 22, "question": "For employment and income verification, do you have a sense of how often the costs are borne out of the profit pool of the originator versus pass-through to the consumer and their closing costs? And on the 60% metric that you gave us, any sense if you over- or under-index to the purchase versus refi market relative to broader inquiries, specific on the Verification Services?", "answer": "Yes. And I think you're talking about mortgage, Jeff. In mortgage, the credit file was used in virtually 100% of mortgages.", "duration_s": 9.9399999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0467.mp3" }, { "study_item_id": "MR-0468", "partition": "development", "call_id": "1778699", "exchange_index": 21, "question": "Three problem areas that have been pressuring 3M for like more the past year, auto, electronics and China. So the China you called out continue to be soft, but notionally, on a geographic basis this quarter, it did not stand out as a particular negative. So can you comment on that? And what kind of color you see across your businesses in China, in particular, and related to kind of the tariff and trade frictions?", "answer": "Deane, we do talk a lot about China, auto electronics and kind of get them all together. But maybe just to be a step back and look at China for 3M, we continue to see strength in our Health Care business, up high single digits. And so that was driving a strong growth for us. We also saw strength in our medical solutions business in particular. Transportation and Electronics was up low single digits in the quarter. We saw significant decline in automotive OEM, but that was cornered and offset by electronics, up low single digits. We saw strong growth in our transportation and safety business there in our advanced materials business. So there was some strength areas that helped China balance out. As I said earlier, sequentially, we see Transportation and Electronics a little softer in the second half. And so we're taking a conservative you around build rates in electronics outlook to build a review of the second half. And that's part of impact in China. But second quarter saw some strengths in a good performance against a strong comp year-over-year.", "duration_s": 63.320000000000164, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0468.mp3" }, { "study_item_id": "MR-0469", "partition": "development", "call_id": "1705263", "exchange_index": 32, "question": "And when you mentioned the next 2 years, that's something that you're going to be looking into, any additional color you can provide in terms of goalposts, objectives there and how you're thinking about that sort of saving into the expense growth in that post 2-year backdrop?", "answer": "As we've always done in the past, as things become material an interesting, we'll definitely share them. I would say though that none of that should have any impact on the $475 million that, ultimately, we our going to deliver that. And so if there's opportunity to invest further, it will be completely offset by extra savings. Okay. Thank you, everybody, for your time and questions. I appreciate it. And we will talk to you shortly.", "duration_s": 35.849999999999454, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0469.mp3" }, { "study_item_id": "MR-0470", "partition": "development", "call_id": "2462760", "exchange_index": 21, "question": "I appreciate that, Rick. And then just one more question, just on the consumer, and recognizing some of the pandemic impacts here could make this question typical. But sort of what are you seeing right now across consumer demand behaviors overall consumer health, and then how you think about the consumer going into '22. Is there anything on the lower income consumer yet that's starting to concern you? Just broader thoughts and perspective there would be great.", "answer": "Yes. The consumer has never been healthier, right? I mean you look at all the statistics out there, when you look at the personal balance sheets and where the consumer is at, I think they're learning how to manage through the inflation. And I would expect -- and as we transition to calendar '22, I would expect the consumer behavior to continue to be strong. It's just there's a lot of talk about inflation. And inflation has been a horrible thing to the lower-end consumer. But when you really think about -- if you look at the share of wallet when you think about gasoline, it's still historically low even at current prices. And so I think people are making choices. I do believe that we're still transitioning this experiential economy, and I think people want experiences after 18 months of not having experiences. And I think going out to is an experience that people want to have more regularly than they've had over the past 2 years. And so I feel really good about where the consumer is.", "duration_s": 73.38000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0470.mp3" }, { "study_item_id": "MR-0471", "partition": "development", "call_id": "1890919", "exchange_index": 8, "question": "So obviously, this year, you have a number of headwinds that you outlined, and that was really helpful. But I just want to understand -- and also, you've talked about more to do on the cost side. But just broadly speaking, do you need a more normal volume environment in order to really leverage those costs and get the OR even lower, somewhere in the mid to high 50s. How should we think about that? In terms of the different revenue environment?", "answer": "Yes, Allison, it's Kevin. Clearly, we've outlined more cost savings that we think and there's runway to continue to do that. The model we're setting up here is we're positioning ourselves for growth and really to leverage that when the growth comes. And -- so I think we're very excited about the model we've created. There's a lot of leverage in this model to really drop the revenue at a high incremental margin. That's what we're looking forward, as Mark and the team are -- pursuing growth opportunities for us. So -- but as Jim just explained, too, if the volume environment gets worse than what we expect, we all know we have to react. We did it last year. We came into 2019 thinking revenue was going to be $500 million higher. We had to react after in the second quarter. And Jamie and the team pulled together. We came up with a new plan based on the volumes that we saw from that point on and we adjusted. And I think we did a great job, so we'll do it again if we have to. And the math will just work out in terms of what the margins are, should the business levels come back. We're building a tremendous company here with great operating leverage to take advantage of the incremental volumes when they come back.", "duration_s": 78.75999999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0471.mp3" }, { "study_item_id": "MR-0472", "partition": "development", "call_id": "1920686", "exchange_index": 12, "question": "So just to follow-up there on the 2020 capital program. Can you clarify how much of that is attributable to the $900 million of backlog additions you slated for 2021.", "answer": "Yes, about half of the $900 million we announced is 2020 spend.", "duration_s": 5.739999999999782, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0472.mp3" }, { "study_item_id": "MR-0473", "partition": "development", "call_id": "1784885", "exchange_index": 3, "question": "On the deal closing, you guys increased share repurchases and your dividend. How are you maybe thinking about the overall free cash flow target and targeting return to shareholders?", "answer": "Well, I think, as Jay was alluding to, we feel good about this year in terms of cash generation. We're still targeting $3 billion 3 years out. That's calendar '22. We'll certainly ramp to that. So I think we're off to a really good start in terms of the cash we generated in the first half. LTM cash, what we're going to do this year. So all that's looking good. We ended June on a pro forma basis with $1.7 billion on the balance sheet. We're going to generate about, I think, $2.5 billion more or less in the next 12 months, so that puts us about $4.2 billion more or less of cash available for deployment. Our dividend is about $700 million, $680 million. That's including the 10% increase we did. We announced in July 1 that will be enacted here in August. We'll reevaluate that in January, about $700 million of dividend. We had about $300 million worth of deal and integration costs. We just spoke about that, over the next 12 months. We had to fund the surf and deferred compensation programs. But what that means, that leaves you about $3 billion over that period of time for things to do, $2.5 billion on buyback and about $0.5 billion, Sheila, that's going to be held on the balance sheet that's because that's what we require for normal working capital needs.", "duration_s": 74.3599999999999, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0473.mp3" }, { "study_item_id": "MR-0474", "partition": "locked_confirmatory", "call_id": "1703766", "exchange_index": 21, "question": "I guess first, just a clarification on -- Jim, your comment that the RI orders were up in the first quarter versus the fourth quarter, does that include traditional mining equipment? Or is that more skewed towards quarrying or big construction?", "answer": "Yes. I think what I said was our order activity remains strong in RI, so I don't believe I gave a quarter-on-quarter comparison. But again, quotation activity is strong and just general quotation activity and order activity is healthy in RI. Yes. I think from an overall perspective, actually, it was in my comment. I think I did say actually order rate in Q4 was higher -- Q1 was higher than Q4 '18. So we did see that increase -- some increase coming through. That was in mining, and there was some [indiscernible] quarrying and aggregate at the moment.", "duration_s": 34.70000000000027, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0474.mp3" }, { "study_item_id": "MR-0475", "partition": "development", "call_id": "2447228", "exchange_index": 8, "question": "Appreciate that. And then a follow-up on the shift in chemicals and supplies from ACG to LSAG. If the logic behind the move is to increase the connect rate, can you remind me where is the connect rate today and where you want it to be over some period of time?", "answer": "Yes, it's a great question. And the team continues to do a great job under leadership here to do that both at the purchase and then on the ongoing aftermarket. What I would say is right now, if you look at the overall attach rate, it's probably in the mid-20s right now. And if you look at the attach rates year-on-year, we saw very nice growth on the new placements. So all the new instruments that Jacob and team have been able to sell. That's why we feel very good about the ACG business going forward. So we still have a long way to go there in terms of opportunity. across both the services as well as the consumables. Some of our competitors are higher than that. And so we've got aspirations that are well above that Yes. And Dan, I'd just like to make sure it's clear. We're not making this change because we were dissatisfied with the improvements in our connect rate. This icing on top of the cake to further accelerate it as we look to balance span and control and business responsibilities with the real driver was the one commercial -- creation on the one commercial organization. And I think this is a nice secondary benefit that we're actually going to get, we think, even more focused and tighter alignment between our product development groups on the CSD side and instrument side.", "duration_s": 75.77999999999975, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0475.mp3" }, { "study_item_id": "MR-0476", "partition": "locked_confirmatory", "call_id": "1899125", "exchange_index": 17, "question": "Just a couple more. Jason, you had said that, obviously, as you continue to ramp up the technology component of your CapEx that does have a shorter depreciable life and then that's where some of the additional spending is occurring along with some employee cost in 2020. But is there anything you're doing maybe amping up a little bit of marketing, just given everything that's gone on here year-to-date and maybe the increased uncertainty as to how that could or could not impact other areas. Thankfully, it hasn't so far. Is there any component of that in your spending? And then also related to the cost, can you quantify for us the Grand Bahama impact to the equity income or just some ballpark area as well as the wildfires and the other geopolitical items?", "answer": "Sure. So on the marketing side, there's certainly more marketing costs in the first half of the year. Most of that is just driven due to the election coming up. So we are trying to get ahead of that cycle. As it relates to Grand Bahama, as I said, in the first quarter, there's about $0.12 or $0.13 -- I'm sorry, $12 million to $13 million of equity pickup loss due to that dry dock being closed.", "duration_s": 35.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0476.mp3" }, { "study_item_id": "MR-0477", "partition": "development", "call_id": "1788294", "exchange_index": 12, "question": "Question and a clarification for me, please. On the question, I'm wondering if you all have applied the same methodology coming up with your guidance as you have in prior quarters, sometimes attempting to adopt more conservative assumption on close rates or what have you -- after a guide down? And then, secondly, the clarification is, when you sustainable levels in 3Q, Jayshree, were you meaning over the course of the third quarter will be back at sustainable levels or we're at full run rate August 1 and game on?", "answer": "So both your questions are intriguing. I'm still going to processing them. So the first one is, did we guide like we normally do and while living conservative? I'm just translating the question. Is that what you asked?", "duration_s": 10.1400000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0477.mp3" }, { "study_item_id": "MR-0478", "partition": "locked_confirmatory", "call_id": "1692960", "exchange_index": 25, "question": "So how much incremental ASV was added from the contract in the quarter, is it something smaller 5% of the total or is it something more meaningful?", "answer": "I don't think we're going to break that exactly. But it was -- most of the ASV was over the attributed in Q1 of last year, of this year, -- sorry.", "duration_s": 10.679999999999836, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0478.mp3" }, { "study_item_id": "MR-0479", "partition": "development", "call_id": "1892998", "exchange_index": 44, "question": "Just a couple of quick ones for me. On the locomotives that you've got in storage, historically, Union Pacific has maintained a surge fleet. So just curious for your thoughts on what size you might need in terms of a third fleet? And whether you would plan to start returning or selling the balance of those locomotives?", "answer": "Well, 2 things, and Jennifer can jump in anytime. I think if we could find a buyer for some of the locomotives that we have excess, we were able to dispose of some, we would do that. And as far as a surge fleet, Cherilyn, it all comes down to we've got a number of locomotives in normal status, so we could just go turn the switch, fuel them up and start running them. So if we needed to put them back in service, it would be pretty easy task. And we're talking in the hundreds of that number. That's the surge. It's sitting there ready to go. Yes. And just to highlight, Cherilyn. So we did in the quarter reduced our total locomotive fleet by about 300. We sold a couple of hundred. We did find a buyer, and we scrapped another 100 or so. So we are continuing to evaluate those things at all points and looking at what's the best financial decision for us to make as a company. But we look forward to bringing those locomotives that are in storage and putting them back into service because we do think that's the most cost-efficient way to handle future volume growth is to leverage that existing fleet.", "duration_s": 66.01999999999953, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0479.mp3" }, { "study_item_id": "MR-0480", "partition": "locked_confirmatory", "call_id": "2049390", "exchange_index": 21, "question": "Jim, so you have Cindy starting in about a month or so. Could you talk a little bit about the initiatives that she will tackle first in terms of the network? Any ideas that she may have already brought to the table from her time at UP or CSX maybe that are different or additive to what you're currently doing? And then where does Mike Carrel fit in? Will he report directly to Cindy and continue to roll out PSR?", "answer": "Cindy and I are very focused on maintaining the operational momentum that we have demonstrated in 2019 and 2020. So we together, view this as an opportunity to continue to push hard on productivity. As we've said, that's a key part of our strategy. And the measures that we take will be similar to the measures we have taken thus far to work to enhance labor productivity, fuel productivity, asset productivity and on down the line. She and I are both also focused on maintaining a high level of service while we pursue these productivity initiatives. That's critical to our long-term success. That's the basis for our ability to grow the top line in the future. And lastly, I would say that she and the rest of the Board are closely aligned on the central importance of safe operations, and we'll be looking for every possible way to continue to drive safety performance as well. So at a high level, that will be the agenda and the alignment that the 2 of us have.", "duration_s": 65.01999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0480.mp3" }, { "study_item_id": "MR-0481", "partition": "locked_confirmatory", "call_id": "1899125", "exchange_index": 13, "question": "You guys had made some commentary that you were reducing dependence on European markets. I think that's not surprising given some of the commentary we've heard in recent quarters. But do you have any additional insight on the implied weakness that, that would, for us, maybe what you're seeing on a more country or regional specific basis?", "answer": "I'll just make a few comments and Michael can jump in. It's not a question of us shifting our sourcing based off of what we're seeing today. Based off of what we were seeing last year, our brands made changes to their deployment that really may be the global appeal greater, meaning that you can source from more markets versus maybe having a ship that was significantly dependent on the U.K. market, as an example. So our sourcing is a little bit different for Europe this year, but a lot of that's just driven by us globalizing the sourcing markets for our brands and our products that are based in Europe.", "duration_s": 38.76000000000022, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0481.mp3" }, { "study_item_id": "MR-0482", "partition": "development", "call_id": "1847223", "exchange_index": 26, "question": "May be a follow-up question on Alpine High and Altus in particular. Given the reduction in activity in Alpine High, I know you have but how do you see about the go-forward options at Altus longer term in terms of future capital spend on the JMP side potential options to address the value and the structure of the entity?", "answer": "Ryan, I'll ask you if it's not too big of an inconvenience to just hop on the Altus call this afternoon at 1'O Clock and we'll let and team there handle all of those questions directly.", "duration_s": 12.239999999999782, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0482.mp3" }, { "study_item_id": "MR-0483", "partition": "development", "call_id": "1897568", "exchange_index": 31, "question": "No, the ratios are not on inputs. So I think I understand that. And then just a quick follow-on. And this is -- I think it's [indiscernible] for Mike on the inventory. So the 40 bps adjustment, that's a LIFO charge, is that correct?", "answer": "Yes. I mean, it's really -- it's the mark-to-market of the inventory given that raw material costs have come down. So as we adjust the standards,lower to reflect the lower raw material costs, that's the impact that you're seeing.", "duration_s": 14.400000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0483.mp3" }, { "study_item_id": "MR-0484", "partition": "locked_confirmatory", "call_id": "1850143", "exchange_index": 33, "question": "Two quick questions or clarification for me. First on free cash flow next year, can you provide a little bit of detail on some of the elements impacting that? But as you think about the upcoming ethylene payment to Dow, if you're generating cash, may be buying back shares opportunistically, are you planning to address that payment just using cash in the balance sheet? Or are you thinking on to pull down a bit on that revolver?", "answer": "I would say, at this point, we haven't given any guidance on what we intend to do there.", "duration_s": 3.9200000000000728, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0484.mp3" }, { "study_item_id": "MR-0485", "partition": "locked_confirmatory", "call_id": "1703486", "exchange_index": 8, "question": "So on the labor productivity, so I see a 3-year target of 34%. How come this year is only 3%? What changes that is so sort of back-end loaded? And then I think, Cindy mentioned the 500 reduction for the year. You've already done 400, so are we done sort of reducing headcount? Or is there upside to that 500?", "answer": "Well, Scott, Cindy said at least 500 this year. And yes, we have made more progress that even we expected in the first quarter in terms of headcount, so we're -- we have roughed it to a good start. The implementation of TOP21 will give us another big opportunity to achieve labor efficiency because we'll be running fewer trains and that will result in fewer crews starts unless they continue.", "duration_s": 23.04000000000019, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0485.mp3" }, { "study_item_id": "MR-0486", "partition": "locked_confirmatory", "call_id": "1840205", "exchange_index": 13, "question": "Questions in ceramic. I think you'd said it was $18 million of higher input cost in the quarter. Send couple of quarters now specifically what product or what inputs are driving that up?", "answer": "Well, in particular in South America and in Europe, we had higher cost per energy. That's where one. And then also to material if you're in a global marketplace and the different places around the world, there's inflation in energy and there's inflation in raw material still occurring in most of the markets.", "duration_s": 19.360000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0486.mp3" }, { "study_item_id": "MR-0487", "partition": "development", "call_id": "2278037", "exchange_index": 6, "question": "Okay. And if I could also ask you on the guidance for the back half of the year, maybe specific to the Americas, are you assuming any meaningful improvement for your refinery customers and/or for helium volumes?", "answer": "Not particularly, no. for neither one. We are assuming that things will be approximately -- there might be some improvement, but that is not the driver for the forecast. We are taking a conservative approach there.", "duration_s": 20.019999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0487.mp3" }, { "study_item_id": "MR-0488", "partition": "development", "call_id": "1852493", "exchange_index": 5, "question": "Yes. Then just one follow-up and expenses you talked about the 150 run rate I think getting there by the end of next year it's how should we think about the expense savings coming through in 2020 kind of over the course of the year?", "answer": "You mean as we head towards the $150 million?", "duration_s": 2.6399999999998727, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0488.mp3" }, { "study_item_id": "MR-0489", "partition": "development", "call_id": "2025737", "exchange_index": 28, "question": "And just to confirm and close the loop on that, if you think about being relatively back in the range of 70% of sales, the staffing levels are 50% to 70% as a match to the 70% of sales. Is that the way to think about that?", "answer": "That's how I would think about it.", "duration_s": 1.4600000000000364, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0489.mp3" }, { "study_item_id": "MR-0490", "partition": "development", "call_id": "1727341", "exchange_index": 2, "question": "This is a Josh Spector on for John. Does question if you could provide additional information around the delay and qualification of Xinyu II. I guess particularly what impacted the first quarter. Just trying to mesh together kind of what you guys saw relative to competitors and some of the capital producers in terms of timing and longer-term versus nearer-term impacts?", "answer": "Josh, this is Eric Norris. I'm going to refer to a comment Luke made. qualification time for a company like ourselves that has -- using an existing plant or expanding a new brownfield next to it has established track record with canceled producer, that's a 4- to 6-month qualification process. We brought Xinyu II up in sort of November, December time frame so we are always bucking up against that time frame, right? And we were able to get certain customers qualified in time to get the product out by the end of March and make the quote and make that fall in the quarter. And we didn't. It's really just playing against the clock. And I think that also speaks to the confidence that those long-term customers have and the relationship we have with them as they cut -- actually, in the first quarter, cut some of their at least 1 or 2 of them did, cut that qualification time a little short. So we've got good volume in for a piece of their work but not for all of it. So I think that we were trying to be a little more aggressive thinking they could shorten the qualification time across the board and just at the higher end, quality for those long EV batteries, they weren't able to do that. They weren't willing to do that. So -- but we've done it continues on schedule for qualifications, and there are no issues. It was just a matter we thought we could get it tighter than what the traditional qualification would have been.", "duration_s": 81.76999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0490.mp3" }, { "study_item_id": "MR-0491", "partition": "development", "call_id": "2036725", "exchange_index": 25, "question": "Yes. And the second question is just going back to Slide 3. You lay out the percent of accounts on this page. Auto seems to be the biggest, and then in the supplement on Page 13, the balances seem to imply a big present on deferral. Just can you talk a little bit about the differences there? And then why do you think you're seeing more accounts in auto deferring versus other asset classes?", "answer": "Okay. I don't actually know the answer to reconciling the supplement to Slide 3. So Jason and team can follow-up with you on that one.", "duration_s": 10.329999999999927, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0491.mp3" }, { "study_item_id": "MR-0492", "partition": "development", "call_id": "2185883", "exchange_index": 12, "question": "Got it. And then just a follow-up on Winchester. When I've been to or such, you can't really find Winchester or anybody's for what it's worth. So are you looking to expand capacity? And then when you look at the pricing at these retail stores, it's 3x November, maybe 4x in some cases. Are you locked in those type of prices for this year? \nAnd maybe just a quick reminder, how much is commercial and law enforcement that we sort of understand the mix there?", "answer": "Yes. Yes, sure. I mean, Mike, I kind of just start at the back end of that. If you think about the mix of the business, it's not that far from being a 50% military, 50% commercial with some law enforcement mixed into that. \nThose are really, really rough, rough numbers, though. So in terms of capacity, I mean, we've just, of course, acquired a lot of capacity with the Lake City operation, but we continue to run that hard. \nAnd instead of expanding capacity, what we are doing is looking to optimize that capacity so that we do the right things for unit margin. In terms of whether we're locked into a lot of things, our government business or our military business is more steady, but commercially, even over the last 6 months, there's been certainly 3 or 4 price increases. \nAnd so we have the ability to change price as we need to change price. In fact, we have a February price increase that's on the table right now that really impacts nearly all of our commercial business or a lot of it anyway.", "duration_s": 78.84000000000015, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0492.mp3" }, { "study_item_id": "MR-0493", "partition": "development", "call_id": "2330095", "exchange_index": 5, "question": "That's great. And now that you're seeing things sort of normalize a little bit, can you just give us an update on if you've changed your thinking at all on the transformation targets in terms of either magnitude or timing? Just any sort of extra color from those targets that you had previously laid out before COVID.", "answer": "So you mean the 3-year targets that we laid out?", "duration_s": 3.0399999999999636, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0493.mp3" }, { "study_item_id": "MR-0494", "partition": "development", "call_id": "1693639", "exchange_index": 39, "question": "Okay, got it. And then just finally in the spirit of abusing the time limit here. Your workers comp comment, because of the blue gray composition, why isn't that the workers comp dynamic in the insurance side of your business is an impacting the PEO business as well? I would think more favorably being the [indiscernible] so what's going on?", "answer": "In the PEO, because you've got a bundle, you can offset the pieces of the bundle that you're selling. So in a steady state, right? You would have some impact, but the reality is, you're balancing that between the amount of healthcare insurance you're selling and the amount of workers comp that's attaching, and also the amount of admin fee you're charging. Our PEO is a little bit different than anyone else in the industry. When we underwrite a PEO customer, we do -- we make a determination, do we want you in a risk pool, because if we don't want you in risk pool, we're going to send you to our insurance agency and you're going getting a price that way. So we've got a little bit more control on the PEO side. And to the extent that we don't like the risk, we basically offset the -- we offload the risk to specialize carriers that don't mind dealing with that level of risk, so the net-net net of what I just said is, it really doesn't have that much of an impact on the PEO side Great. Thank you. At this point, we will close the call. If you're interested in replaying the webcast of this conference call, it will be archived for about 30 days. Thank you for taking the time to participate in our third quarter press release conference call and for your interest in Paychex. Thank you very much.", "duration_s": 96.35000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0494.mp3" }, { "study_item_id": "MR-0495", "partition": "locked_confirmatory", "call_id": "1691216", "exchange_index": 15, "question": "Got it. So the mix component of it was a big help in that expect as we look to fiscal '20?", "answer": "Unless consumers continue to buy like they're buying, we would expect a little bit lower in favorability from mix.", "duration_s": 6.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0495.mp3" }, { "study_item_id": "MR-0496", "partition": "locked_confirmatory", "call_id": "2441395", "exchange_index": 8, "question": "Okay. Perfect. And then within the aftermarket growth rate range, the 20% to 30%, Kevin, is there figure of merit that you're using to ballpark that? Is that a sequential growth that's underlying? Is that a traffic growth? Any...", "answer": "Well, I think it's traffic growth-related. And I think we're counting on that largely being U.S.-, Europe-related. We'll have to see how it unpacks around the globe. As you guys all know, we don't have geographical information along those lines.\nBut we will continue to monitor this closely. If the traffic patterns come along, like we believe they might, then the 20% to 30% planning, and I emphasize planning. It's difficult to issue that as guidance when -- as you know, aftermarket bookings tend to be book and ship. You don't have as much visibility. So this is for planning purposes. And every business will have a slightly different plan along those lines. But we tried to give you a roll-up of the range that will be based, I think, largely on takeoff and landing activity.", "duration_s": 63.13999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0496.mp3" }, { "study_item_id": "MR-0497", "partition": "locked_confirmatory", "call_id": "1639872", "exchange_index": 24, "question": "Got it, got it. And then thinking about productivity and cost savings beyond 2019 here. Obviously, you already commented on Zoro and the single channel kind of getting a little bit improvement from lower investment. I guess, any other way to think about normalized incremental margins for the U.S. the Other Businesses here?", "answer": "I'm sorry. You're talking about in 2019 or beyond 2019?", "duration_s": 3.8200000000001637, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0497.mp3" }, { "study_item_id": "MR-0498", "partition": "development", "call_id": "1833249", "exchange_index": 20, "question": "Great. Understood. Okay. And as a follow-on, on the commercial side, just bigger picture, the state of the commercial customer, you just mentioned still good pipelines on Harris Williams. Any changes to what you're seeing in the conversations and dialogues with commercial customers' willingness to do deals, to invest in plant and equipment, et cetera, just given the big picture points that Bill made in his intro?", "answer": "The only -- I mean, look, it's been muted, and we're hearing that from our customers is they're cautious in this environment that the way you would expect them to be. We have seen for what it's worth given the recent rate rally, a lot of hedging activity. One of the things that's inside of our other line, Rob, is our capital markets, FX and derivative activity. And that has picked up a lot, which is a big driver of fees inside the other line. But no, there hasn't been a turnaround in sentiment on the corporate side. \nSmall business is different. They're still bullish. The consumer is still bullish, but the larger corporate is holding back, and we're seeing that.", "duration_s": 45.159999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0498.mp3" }, { "study_item_id": "MR-0499", "partition": "locked_confirmatory", "call_id": "1838324", "exchange_index": 8, "question": "Okay. And is the organization strategy, I understand a lot of it is -- this quarter was MSR and maybe some refinance, but the origination strategy is still more Chicago focused, or is there something more than that driving it?", "answer": "Well, it is probably across the franchise, but I do think some of the changes that we made in Chicago and particular as we acquire FirstMerit and filled out the mortgage origination capabilities in the Chicago market, a lot of the growth has been coming out of Chicago since Firstmerit. We also did a lot of strengthen both here in Michigan -- Ohio and Michigan post FirstMerit. So don't want to downplay that impact either.", "duration_s": 29.940000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0499.mp3" }, { "study_item_id": "MR-0500", "partition": "development", "call_id": "1777155", "exchange_index": 30, "question": "Yes. Volume was down year-over-year in the quarter, but revenue was still up slightly and margins expanded about a point to drive the income up 4% -- excuse me, operating income. But if you look beyond the financials, the operating metrics were up a lot more, velocity up 20%, dwell down close to 40%. Why aren't we see more cost fall out of the system from this more fluid network? I mean is this temporal challenges like the stock comp benefit you had last year that hurt the year-over-year comparison in labor? Or is it just a situation that investor expectations around quickly we're going to see stair step margin improvement in international. Are those just too high early on here?", "answer": "We did see TOP21 driven expense improvements in second quarter, as Cindy went through in labor, in materials, in equipment rents. And we would expect those savings to continuing and to accelerate in the balance of the year. Now in the second quarter, those favorable expense rents were offset in certain cases by the comparison to last year. For example, the implemented tax refund we booked in the second quarter of last year. And there were some other things as well. For example, in Materials and other, it masked the improvements in materials expense. Going forward, we do expect to see additional TOP21 driven savings in all of those categories.", "duration_s": 39.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0500.mp3" }, { "study_item_id": "MR-0501", "partition": "development", "call_id": "1838108", "exchange_index": 28, "question": "Like a significant event mortgage but it's a growth in the whole company was more like 5%, like is the right way to look at it up from 2% or 3%? What's the right way to look at it?", "answer": "I understand the question, and we don't, at this time, have an intention to go back to try to create separate reporting publicly for mortgage and nonmortgage. So I think we've provided some pretty good detail in terms of the understand the impact of the mortgage market on a major businesses, and then I think that's probably the extent we're going to go to now.", "duration_s": 21.69000000000051, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0501.mp3" }, { "study_item_id": "MR-0502", "partition": "locked_confirmatory", "call_id": "1850143", "exchange_index": 13, "question": "Fair enough. And then on cash flow, I think Slide 12 is helpful to think about 2021. But if we were to just bridge from 2019 to '20 for free cash, we'll pick whatever level of earnings next year, but just diagnostic of that, how should we think about the changing cash calls next year versus what we have this year in 2019?", "answer": "Well, we talked about a couple of things that, I would call, onetime cash flow. Todd talked in his remarks about the ethylene. We also talked about the bond call. There's a premium to be paid on that. And we talked about the need, there was an earlier question to fund working capital at Winchester. That said, I would expect, given the environment we're in, that you will see lower capital spending for us next year. And if the business stays where it is, we should see working capital x the Lake City thing be a positive for us next year.", "duration_s": 36.24000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0502.mp3" }, { "study_item_id": "MR-0503", "partition": "development", "call_id": "1894715", "exchange_index": 0, "question": "Preston, maybe the first one, just on the guidance here for the first quarter. I'm looking at build rate in an industry level, at least projected build plans for North America calling for a modest small sequential step-up from 4Q to 1Q. And I'm curious how PACCAR fits into that in terms of -- within the context of that is down 5% to 7% deliveries, where North America fits in relative to Europe and some of the other markets.", "answer": "Sure. As we just said, we do expect deliveries to be overall 5% to 7% lower, and that's kind of matching to where the market really is. North America is more of that than Europe is. Europe has been fairly stable for us through the fourth quarter and into the first quarter. And really, it's just matching to where the normalized market has become where we're seeing the normalized market. So it's nice for us a s we have a pretty good percentage of the backlog. I think it's roughly 34% of the backlog. And compared to the inventory where the we are a smaller percentage of the inventory, in fact, we only have about 2 months' worth of inventory, 2.5 months of inventory sitting in there. So we are in pretty good shape that way. And it's just normalizing to the market.", "duration_s": 46.84000000000003, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0503.mp3" }, { "study_item_id": "MR-0504", "partition": "development", "call_id": "1705222", "exchange_index": 11, "question": "Okay. I'll do that. So getting a bit more needy. Obviously, you're running containerboard systems demand. How do you characterize your own inventory situation at present? And how long do you think it would take for the broader industry to get back into balance?", "answer": "Yes. I think we're kind of where we would like to be in terms of inventory levels as we look at the demand that we had in the first quarter and what happened with the transportation network and we try to reference that in my comments earlier. But a big portion of the downtime that we took, which is just adjusting to the speed of the transportation network and how it's working now versus how it worked over the past few quarters. So I think we ended in the quarter roughly in line with where we think we need to be and probably we manage it week to week and month-to-month.", "duration_s": 37.6400000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0504.mp3" }, { "study_item_id": "MR-0505", "partition": "development", "call_id": "1646974", "exchange_index": 22, "question": "Great. And then how do you think about your acquisition pipeline plan right now along the chloride value chain? Are there any areas where procurement, for instance, might offer some low-hanging synergies in this improving price environment for commodity chlorine?", "answer": "I would say that we are not thinking about acquisition as it relates to our existing Chlor Alkali infrastructure. If you look at our position in North America from an antitrust perspective, I don't believe there's anything out there that we could buy from a Chlor Alkali perspective.", "duration_s": 16.740000000000236, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0505.mp3" }, { "study_item_id": "MR-0506", "partition": "development", "call_id": "2037794", "exchange_index": 9, "question": "Sticking somewhat on the theme here of what you'll do with the excess capital. I guess to frame the question -- and by the way, I agree that we're still early and lots to still play out. But how do you know if the opportunity that you're looking for won't be there? And then kind of like what's plan B, right? Like, the hope is there'll be something interesting strategically and financially beneficial, and you'll know it when it's there. And I think the investors and analysts trust you guys are the right thing there. But if that doesn't arrive, when do you kind of capitulate and say, let's go to plan B and maybe rates are higher and you can buy some securities or you buy back stock? Like, what's the thought process there?", "answer": "The thought process is -- this will sound a little bit wrong, but to make that decision or worry about that if, in fact, we get into that environment. At the moment, we're in the middle of an environment where we -- I think [ Mike Corbat ] said this yesterday that there's more we don't know than we do. It is really unclear what the long-term damage is going to be to the economy and how long it's going to take to grow back. And our focus right now is to make sure we have, in Jamie's words, a fortress balance sheet that were serving our customers that were opportunistic inside of what is a fairly strange environment at the moment, and we'll sit and watch. And if all of that changes, then, of course, we'll change and replan and regroup and refocus and so forth. But today, none of that has changed. So we continue the course. \nAnd I know you guys want to sort of somehow drive us into a corner that says if the following 3 things happen, then are you going to do A, B or C? And my brain can't do that math. So we're not going to go down that path.", "duration_s": 72.62000000000012, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0506.mp3" }, { "study_item_id": "MR-0507", "partition": "locked_confirmatory", "call_id": "1899125", "exchange_index": 10, "question": "Yes. Okay. So -- but there's no way to help us figure out if we wanted to layer it in our estimates what's it...", "answer": "No, we're not going to be guiding for the first quarter or the full year as it relates to this.", "duration_s": 5.699999999999818, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0507.mp3" }, { "study_item_id": "MR-0508", "partition": "development", "call_id": "1727341", "exchange_index": 23, "question": "Great. And then just on the contracting. [indiscernible] come back and try to renegotiate prices lower and it had to be put off and/or refuse to take volumes at this point?", "answer": "We're constantly having conversations with our customers. So I'm not aware of anything where a customer has come back and say we need to sit down and have discussion about price right now. I'm just not aware that in this quarter. Maybe a small customer. Certainly, the major customers, no. Certainly the major customers, no.", "duration_s": 22.860000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0508.mp3" }, { "study_item_id": "MR-0509", "partition": "development", "call_id": "1642899", "exchange_index": 10, "question": "I just wanted to kind of continue some of the thought that Steve had earlier in the call just on cost and you've explained why you're looking at a 2% this year. I'm just trying to understand if we should think about in the kind of medium term, is the new norm as we are thinking about our 2020 model, should we be starting at a base kind of cost of 2%? Or your investment is going to be tailing off by then?", "answer": "I wouldn't -- I'm not quite sure with what to say with new normal, but this year they are approximately 2%, but what I will tell you is that we are committed to managing effectively our cost. We're always highly focused on it, but of course, there are investments that we're making and some things that pressure in some of the optics metrics like the Perfect Days of the world that have a revenues and cost, but don't necessarily have a PDC associated with them that can elevate that metric a little bit. But I won't give you a specific number just to hopefully everybody knows that we continue to be very focused on it.", "duration_s": 37.13999999999987, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0509.mp3" }, { "study_item_id": "MR-0510", "partition": "development", "call_id": "1642903", "exchange_index": 17, "question": "Okay. John, just curious that I mean, have you hold Exxon have ever reach out to the opposition party and see what is that current view about the contract and everything?", "answer": "Yes. So you know that both major parties, the current ruling party as well as the opposition party, have stated that they are supportive of the development and have consistently stated their intention to honor our PSCR contract.", "duration_s": 17.519999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0510.mp3" }, { "study_item_id": "MR-0511", "partition": "locked_confirmatory", "call_id": "2351784", "exchange_index": 24, "question": "So I just wanted to go back to supply chain challenges. So can you just give a little bit more color beyond semis? And can you talk about where other components are in short supply? Has the breadth of component shortage grown? And if you can, just talk about just like the month-over-month cadence. Are things -- did things get better or worse as you progressed through the second quarter?", "answer": "Chad, I'd love to be able to give you more but we've given you just about everything we can on explaining where we're at with supply base, and that there's a degree of uncertainty that you can see in every manufacturer's report, write-ups and we have that same kind of uncertainty working through our system. And if I could tell you more and knew more, I would, but we're going to continue to operate this business in a world-class fashion. And as we get the parts, we put them in the trucks and get them to the customers as quickly as we can.", "duration_s": 27.420000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0511.mp3" }, { "study_item_id": "MR-0512", "partition": "locked_confirmatory", "call_id": "1833877", "exchange_index": 19, "question": "Just going back on the guidance, given that you're expecting a similar organic growth in macro next year, and this includes a small amount from new leases that could be signed when the deal closes, can you provide more color on what type of activities actually could slow down to make for that difference?\nAnd maybe any thoughts on commercial availability of CBRS, if you are seeing any increased activity from the carriers as they deploy that?\nAnd a final question on the discretionary CapEx. It looks like it's a little bit lower versus '19. Can you talk about what's driving that reduction?", "answer": "Sure. On the first point, I really don't want to get into a specific customer guidance around what we expect in calendar year 2020. We've tried to frame this in a way that's helpful and just relatively minimal amount of activity that would happen in 2020 and how that would flow through to the guide that we've given. So I'm not sure I can add much color to that. We certainly assume that during 2020 we'll see new macro leases across the portfolio and across the industry and those will have some contribution in 2020, but those leases will, frankly, have more meaningful contribution to our 2021 results.\nOn CBRS, we are watching that activity. There is some of it, but it's not material to the results today. We don't expect that it will be material to our results in 2020 and the outlook that we're providing. Initially, I think most of the CBRS activity appears to be focused in building. So we're seeing some of that in the then new opportunities that we have, and that may contribute there. But it's really small at this point and not a material driver of the business. On the discretionary capital, Batya, the reduction really is to -- is related to what we believe it will take to put on air all of the assets that we believe will generate the new leasing activity that we have coming in to 2020. And we believe that's just lower in 2020 than it is in 2019. As you know, there was a step-up in activity going into 2019 and we're leveling out a bit in 2020. And while the result of that is a slightly lower capital expenditure profile on what we're seeing in '19.", "duration_s": 111.4399999999996, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0512.mp3" }, { "study_item_id": "MR-0513", "partition": "development", "call_id": "1646974", "exchange_index": 36, "question": "Thank you for providing a lot of details around your guidance. Does the 5% quarter-over-quarter decline in caustic realization include the benefit of contract renegotiations or should we think of contract renegotiations offsetting that 5% in Q1?", "answer": "It includes the benefit of contract renegotiations.", "duration_s": 2.4400000000000546, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0513.mp3" }, { "study_item_id": "MR-0514", "partition": "development", "call_id": "2036829", "exchange_index": 3, "question": "And then just on a follow-up. I mean this is the first cycle that we've all been through with CECL. And I always think about there's all these reserves being built that you're supposed to use as charge-offs hit, but that kind of assumes that you know charge-offs aren't going to go up kind of beyond the level of reserves, right? So like if charge-offs are going up, but the macro environment continues to get worse, you don't really know if you should be using reserves or not. So I guess I'm just wondering, like, it should be a little bit more coincident in terms of using reserves as charge-offs go up than maybe before CECL. But I would assume like the back half this year, for example, when charge-offs go up, like you're not going to be using reserves yet until you're confident that the macro is not going to be worse than you've reserved for, right?", "answer": "Again, I think in every quarter, we're going to be taking a view on the forward economic outlook. And so a little bit to your point, if we get into the third quarter and we're seeing that our outlook is consistent with what it was at the end of the second quarter, then we're going to take a view a balance -- balances in terms of loans, all things being equal related to balances, we're going to take a view as to whether we think that economic environment is going to be as we've scenario-ed it out, get better or worse and act with the reserves accordingly. \nI think the other thing that I'd point out to your question is that, remember, when I described how we established the reserves, we've also built this management adjustment, this qualitative approach, which is meant to account for some of that uncertainty and the prospect for a yet worse scenario.", "duration_s": 61.36999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0514.mp3" }, { "study_item_id": "MR-0515", "partition": "development", "call_id": "1900234", "exchange_index": 2, "question": "On Slide 12, you show an expected payment of $493 million to procure more ethylene. My recollection is that you had an option to do so. And so my question is, if we fast forward to December and it turns out that ethylene prices are quite low for whatever reason, do you have the ability to defer that payment? Would that be feasible or impractical?", "answer": "I think that is totally impractical. It allows us access to cost-based ethylene for 20 years. It matches up with the new vinyls contract we've already negotiated. So I would say that -- and as Todd mentioned in his remarks, vinyls is 1 of the 2 -- that plant is 1 of the 2 most important plants in our system, and we're not going to do anything to jeopardize that. So that's, in our mind, not practical.", "duration_s": 26.2199999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0515.mp3" }, { "study_item_id": "MR-0516", "partition": "development", "call_id": "1646974", "exchange_index": 27, "question": "Fair enough. And just taking your commentary. I guess where the math would work out is at least looking at the first quarter, you're looking at something that would be up year-over-year but probably down a little bit sequentially. Is that a fair read of the puts and takes?", "answer": "Yes, it would be.", "duration_s": 1.0, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0516.mp3" }, { "study_item_id": "MR-0517", "partition": "development", "call_id": "1776132", "exchange_index": 12, "question": "How much of the $200 million of savings was in the second quarter run rate?", "answer": "What we said as we were there at the end of the quarter, I would say that the number expense programs really had a launched date of around June 30. And so we still have upwards of about $20 million in run rate going into the third quarter for future savings.", "duration_s": 14.400000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0517.mp3" }, { "study_item_id": "MR-0518", "partition": "development", "call_id": "1776276", "exchange_index": 15, "question": "Great. And just I'm going to take on Europe also. Any particular markets or areas over there that you feel more worried than others? I mean a lot of those -- a lot of your customers from those markets are exporting out of Europe and from other parts of the world as well.", "answer": "I think that Europe has done really well. Obviously, we have the market range of 300,000 to 320,000 trucks and us gaining share. So this would be the fourth year in a row about 300,000 if it stays like this, and that's a fantastic market size and the DAF team, all the employees and teams and dealers are doing a great job of growing the business. I think the customers love the trucks and the fuel economy is outstanding. It's working really well.", "duration_s": 25.960000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0518.mp3" }, { "study_item_id": "MR-0519", "partition": "development", "call_id": "1856605", "exchange_index": 16, "question": "But if you have to do one on the leadership, again it sounds like you turn to making more changes than you normally would have to if you did it on the second ship?", "answer": "I don't know how to handicap that quite frankly. The change over the change from the leadership to the following shapes are not usually in the whole mechanical or electrical places and different be more in the complement system places. And so I don't know how to really kind of broadbrush that one.\nAnd our next question comes from the line of Pete Skibitski with Alembic.", "duration_s": 32.98000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0519.mp3" }, { "study_item_id": "MR-0520", "partition": "locked_confirmatory", "call_id": "2441395", "exchange_index": 27, "question": "Just a follow-up on a couple of questions. Noah has asked one. On the book-to-bill, in the aftermarket, it looks like for 3 quarters you've had bookings ahead of shipments. And so I had 2 questions related to that. One, are all shipments at some point booked? Therefore, the book-to-bill is actually a relevant metric. And second, what's going on there? It looks like you've been creating backlog. I'm just curious, like, is that what's happening, you're seeing orders for delivery customers want the product but not immediately? Is that -- like is there a duration stretch to the backlog that you're seeing in the aftermarket. That's my first question.", "answer": "I think aftermarket orders for more immediate shipments, but that doesn't mean they're all due tomorrow. So there is still a little bit of a range over when these things are due that's why it bleeds over quarter-to-quarter. In general, I think we're optimistic because we see bookings continue to improve, and that means growth in aftermarket as we go forward and why we're planning on 20% to 30% possible aftermarket growth.", "duration_s": 35.940000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0520.mp3" }, { "study_item_id": "MR-0521", "partition": "locked_confirmatory", "call_id": "1840205", "exchange_index": 8, "question": "Okay. That's helpful. I appreciate that, Jeff. And just one other one if I could squeeze one in, please. On the price/mix, I believe you said that you kind of netted out roughly neutral, maybe just a slight headwind year-over-year. I wanted to get a sense of sequentially how you're looking at price/mix, how it went from 2Q to 3Q in each of the segments and if that's still kind of a moving target and obviously, there's been some slippage there. I was hoping if you could address each of the segments directionally, sequentially where price/mix, particularly mix has trended in 3Q and how you see that playing out for the rest of the year.", "answer": "Listen, in general, all the businesses and price/mix is declining as the volume in different categories are under pressure. And as people -- as our customers tend to use price to attract cost consumers on one hand. On the other, suite that do sell more and more lower value products to utilize the higher. So there are still not all going number of. The only thing to add to that is for the enterprise it's lower like it says, $15 million. But that's largely in Flooring Rest of the World but that's with a lot of input cost easing. So I think [indiscernible] the quarter by segment but the theme is, essentially that there is competitive marketplace out there.", "duration_s": 43.159999999999854, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0521.mp3" }, { "study_item_id": "MR-0522", "partition": "locked_confirmatory", "call_id": "1777483", "exchange_index": 18, "question": "I have 2 of them. First one, Mark, I was wondering if you can quantify how much of your Semi Test and/or Semi and LifePoint is coming from 5G today, what percentage of revenues? And then I had a follow-up.", "answer": "Yes. We really don't break that out. Maybe we'll look at that to see if we can do that going forward. But at the moment, we really haven't consolidated that.", "duration_s": 9.860000000000127, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0522.mp3" }, { "study_item_id": "MR-0523", "partition": "locked_confirmatory", "call_id": "1765944", "exchange_index": 6, "question": "Phil, you mentioned the sort of unexpected cancellations. Could you give us a bit more color on are there any commonalities across client types. Are they sort of newer clients or long-term clients, the size of the clients or is there any way to sort of group them as opposed to just that would be helpful?", "answer": "So your question is about the clients that cancel completely?", "duration_s": 3.7000000000000455, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0523.mp3" }, { "study_item_id": "MR-0524", "partition": "development", "call_id": "2400486", "exchange_index": 28, "question": "One thing you didn't mention was pay. And I'm just curious if you think continuing increasing pay at kind of healthier rates or the rates that we've seen recently, if you think that will address the employment issue at all.", "answer": "No, I think you got to have competitive pay. And I think that's only one aspect of the employment proposition. There's been pressure on wage now for a few years, even before COVID. I think there'll be pressure on wage as we move forward. But I don't think it all comes down to just pay. I mean, I think if you -- I don't think the problems for the industry go away just because we're going to -- we have to -- if we pay more.", "duration_s": 30.81999999999971, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0524.mp3" }, { "study_item_id": "MR-0525", "partition": "development", "call_id": "1704896", "exchange_index": 7, "question": "Just 2 quick things from me. Just first on investment spending. Patrick, I think you said you're expecting lower investment spending. Are you just bringing that down in concert with the change in the revenue guide or is there some other kind of posture you're taking on investment spending here?", "answer": "No, Jeff. You're right. During the -- during our second quarter, and as Blake mentioned, we saw weakness starting in February. We decided to push out some of our increased spending for the full year. Last year, we talked -- last quarter, we talked about 70 or so million dollars. We're taking about $20 million less increase for the full year. This is going to be focused on lower discretionary spend. We're protecting our most important investments, of course. And of that $50 million, $55 million increase we're talking about, we still expect about 2/3 of that, we would have seen in the first half of the year. So we've seen most of the, call it, ramp up and spend.", "duration_s": 41.819999999999936, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0525.mp3" }, { "study_item_id": "MR-0526", "partition": "locked_confirmatory", "call_id": "1777483", "exchange_index": 19, "question": "Got you. No worries. Then us a follow-up, on the LitePoint side, is there an opportunity for LitePoint in the frequency range [indiscernible] millimeter wave or? Do you think there's opportunity in FRN 1 also for LifePoint? And along the same path, I think I asked this question last time too. It seems the 2 key players in Semi Test, but there are like 4 players in Wireless Test. Do you think that industry wireless LitePoint consolidated is better opportunity for everyone involved?", "answer": "Yes. So FR 1 is less on the opportunity for all of us than FR 2. But there is still growth as FR 1 rolls out. And the competitive dynamics in that business, we've talked about it before. It's a crowded might get the thing that LitePoint specializes in is on the production, test optimization. Their products really are not designed for R&D purposes. And therefore, I think in the production test market, although there are 4 or 5 competitors for development test, there is truly free were for production test. Amy maybe talk in 3 instead of 5. So yes, it's still a bit crowded, but I think for production test, a little bit less crowded than you might expect.", "duration_s": 58.690000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0526.mp3" }, { "study_item_id": "MR-0527", "partition": "development", "call_id": "1636754", "exchange_index": 20, "question": "Got it. And regarding Laurel Road, I think, if you get the question is really now the time to layer in consumer risk on your balance sheet given that we're late cycle? Beth, you write off some of the statistics in terms of income and FICA that were quite compelling. And wondering sort of what additional layers in terms of underwriting do you plan to -- due to enhance the process at Laurel Road has today, especially as it you're going to go to our retention model rather than originating sale?", "answer": "I would offer -- this is Mark Midkiff. I would offer that we do think that what we've seen that the underwriting is very sound and very complimentary, but obviously, we'll be under our rates and our buybacks. And I think that would be very focused around relationship where we get just better overall credit performance than when you're working at a transactional level. So that would be an enhancement. And of course, we've looked at this on our stress basis and feel very comfortable overall related to our risk appetite as well. It's just kind of a normal ongoing outlook for losses in that business.", "duration_s": 39.40000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0527.mp3" }, { "study_item_id": "MR-0528", "partition": "development", "call_id": "2025737", "exchange_index": 44, "question": "Yes. I understand, but it's like -- I just want to put an asterisk on calendar '20. But you're unusual, no, you're right in the middle of it. So no. Okay.", "answer": "And just let me give you an idea, we would anticipate in the first half of our fiscal year to have significantly less spend per employee in travel and in some of the department expenses that we have. We're also looking at our organization to see what the right size of the organization is based on our sales levels today. And so as we mentioned after -- in Q4, we saved $17 million in G&A. We don't anticipate to save $17 million in Q1, but we're going to save some G&A in Q1 and continue into Q2. Without talking about what the percent G&A percent is, it's not going to be hugely, hugely different than what it was at the end of the fiscal -- in fiscal '20. So I wouldn't model dramatic changes. It could be 50 to 100 basis points different but higher just because of the sales deleverage, but that's all in our guidance. It's all in what we have in. And as we get better understanding of what our sales levels are going to be going forward, we'll have a better understanding of what our G&A as a percent will be. But we will spend less per person on the department stuff and the travel in the first half of this fiscal year.", "duration_s": 79.64000000000033, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0528.mp3" }, { "study_item_id": "MR-0529", "partition": "development", "call_id": "1766471", "exchange_index": 23, "question": "Right. Right. And then just there was a comment, I think, Marty, you made about the integration with the carriers as it relates to Oasis. So perhaps you can just give us a little bit more color on kind of where you are in that process. And how much incremental geographical reach you're getting as a result of that as you try to convert the payroll installed base?", "answer": "Sure, David. There's really 2 pieces of that. Well, first of all, I'll say I think we're in good shape. We're in middle of that now but have already been working through it and particularly in the last few months. So one is geographic growth because they were in some states and areas that we weren't. So they had relationships there and already had some client that we could gain referrals from. From the carriers, they were a stronger -- they were stronger with one particular carrier that we have not been quite as strong with that give us a little bit more leverage. When you put us together, now we have more strength and more clout with all the carriers that we're involved with. So be think we've got very good plans between the 2 of us going forward into fiscal '20 and those were all kind of through the year. And so that gives us a better -- also when you have more clout, I guess, or more clients, obviously, we'll have better integration with those carriers as well. So I think we're set up well with the number of carriers, the plans and the integration with them. So it's going to give us an expansion into a little more -- a few more states that we're not in, but better than that, a little bit stronger carrier relations for the best benefit plans, which is one of the most important things to have when you go out and compete.", "duration_s": 74.01999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0529.mp3" }, { "study_item_id": "MR-0530", "partition": "locked_confirmatory", "call_id": "1902228", "exchange_index": 28, "question": "So got it. And then just a clarification on the guide. So given that your product revenues were basically -- they grew at the same rate in '18 and '19. Would it be fair to assume that the service revenues, there's no decline in the service revenue growth in '20? You should basically have the same 7 ICE 70 growth in '20 that you had in '19?", "answer": "I think we actually included in the guidance service revenue for the year. So I think that will probably give you a pretty good visibility to it, in the prepared comments.", "duration_s": 12.929999999999836, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0530.mp3" }, { "study_item_id": "MR-0531", "partition": "locked_confirmatory", "call_id": "2441395", "exchange_index": 19, "question": "And then just a follow-up on financial guidance. Just wondering, what are the key improvements or catalysts that you might be looking for in the coming periods in the overall market for you to have the confidence and the visibility to provide full financial guidance?", "answer": "I think it's market recovery, international markets, people flying again on an international scale and continued domestic travel. We know that business travel isn't a huge percentage of overall flights, but still very important to airlines in how they gear up their fleets and capacitize. So this is what we'd be looking at is acceptance and continued international flight activity, more domestic recovery in other pockets around the world to look more similar to where the U.S. is, which is very close within 10% to 20% of what it was pre-COVID. So I think those are the things we're looking at.\nAnd there's still a lot of unknowns. You see the -- China's traffic activity bounce around quite a bit. Every couple of months, they're shutting down and then coming back. These are the things that don't give us the confidence to give guidance, but we know that the market continues to improve and move forward at a steady rate. Does that answer your question?", "duration_s": 81.44000000000005, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0531.mp3" }, { "study_item_id": "MR-0532", "partition": "development", "call_id": "1840075", "exchange_index": 2, "question": "The GM strike, is that -- are you guys assuming that the GM strike does not get resolved in the fourth quarter as part of your guidance that may not move needle perhaps? And then when it actually ends, Michael, that 1% drag, does it flip to a 1% contribution? Or because there has to be inventory fill back at the company, right, in terms of working process, does it actually go up higher than the 1%? How are you thinking about it?", "answer": "Well I would say that all the scenarios -- all the potential scenarios finally gets settled, I guess, next week with a vote, all the way through. It never gets settled through the quarter are embedded in our guidance range. In other words, have really no purpose or advantage in trying to make a particular [indiscernible] obviously not involved in the process, but have incorporated all the sort of the most optimistic and the most pessimistic scenario in our guidance range for the balance of the year, and essentially that's how we're approaching it. And since you asked Michael, give you a little color on the potential impact on the organic growth of the company. Yes. I think here in Q4, as Scott said, kind of best case at this point is we start back up next week. So we've already lost a month, which is almost a full point of organic growth at the ITW level. About 3 percentage points of impact in the auto segment alone. So that's essentially done at this point. And and then if you kind of, as Scott said, if things do not get resolved this quarter, which is maybe the worst case scenario, we would lose another... That is the worst case. Which is the worst case scenario, we'll lose another 2 points of organic growth here. So those things are kind all embedded in what we're talking about today. And I think it's part of the elements that skew our view in terms of the guidance range towards the lower end as we talked about.", "duration_s": 100.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0532.mp3" }, { "study_item_id": "MR-0533", "partition": "development", "call_id": "2346012", "exchange_index": 19, "question": "Okay. And were loan fees meaningful in the second quarter?", "answer": "Not really. I mean no. I mean any time you have recoveries, you have a little bit of a benefit associated with that, but nothing of significance.", "duration_s": 8.680000000000291, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0533.mp3" }, { "study_item_id": "MR-0534", "partition": "development", "call_id": "1646974", "exchange_index": 4, "question": "And then on the caustic export market, volumes were pretty low in -- as you noted in Q4. Do you expect that, that weakness in offshore exports to continue? I guess, 2 offsetting factors here, obviously, [indiscernible] comes back online, that'll be positive. But are you anticipating some softness projected in demand out of Australia this year for U.S. Gulf Coast exports?", "answer": "Don, this is Jim Varilek. As far as the export volumes go, you're right that fourth quarter was impacted. And quite honestly, exports have been impacted somewhat by the Norte outage as that was a direct export out of the U.S. We do expect obviously if that gets solved, as that gets solved, we'll have an increase in exports. Out of Australia, the alumina business, as it continues to settle and improve I think the end-use demand, I think we'll see pretty steady demand, and it's just a matter -- out of Australia and it's just a matter of where it's sourced. I think that's the issue. But we'd expect exports to continue to improve and we'll see a stronger export year this year than last year.", "duration_s": 51.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0534.mp3" }, { "study_item_id": "MR-0535", "partition": "locked_confirmatory", "call_id": "1700948", "exchange_index": 30, "question": "Just 1 lingering question for Jim. Jim, when I look at the kind of classification has its relative to the side of the manifest network of Union Pacific and compare it to some of the other railroad, the Canadian railroad and some kind of in the other railroad that implemented PSR. You still have significantly larger classification and that would as to the other railroad with PSR. So is there a specific reason why maybe because of mix or other issues, you would have that larger classification network? Or is it fair for us to kind of interpret that as a potentially long-term strong opportunity for rationalization?", "answer": "It's a good question. Every railroad is different and intimately knowledgeable of one another, okay, to the point where I understand how the setup is. So you have to be careful in that -- a hump yard, there is nothing wrong with the hump yard. It's the most efficient way to handle 1,800, 2,000 cars a day. There is nothing better. It's low cost. It works well. So if the business is such that if you need it, it would be remiss to start fooling around by moving cars to other places. My focus is, you take the touch points out. You go longer whole trains. You have trains that can handle more cars. And if we need a hump yard, then we put it in place. I think there's opportunity, but never judge 1 railroad over the other because of the traffic mix and the kind of flow of traffic that we have.\nSo I know how many [indiscernible] has and I know how many of the other railroads have and I can tell you that we will get to the point where we have just enough hump yards to handle the cars most efficiently. And in some places, it's more important for us to shut down multiple yards that we have in a city where we go down from 3 to 2 or to 1. Just when we look at the intermodal that we mentioned in Chicago. We've got a number of work sites in there, and we think we can give our customers a better product by dropping and consolidating and be able to operate in a smoother manner in Chicago and give a better product to our customers and be more efficient. So that's what's it's all about, [ Benny. ] Hopefully, I explained it.", "duration_s": 98.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0535.mp3" }, { "study_item_id": "MR-0536", "partition": "development", "call_id": "1705263", "exchange_index": 18, "question": "Okay. And just a point of clarification. I think one of the questions was the April flows, and I apologize if you shared that number. But can you just repeat what that was.", "answer": "We didn't actually share the number. So I think we've said that, going forward, we're not going to be discussions about flows into the next quarter. So we're going to keep our commentary to March ending quarter. And certainly, we'll be having our April AUM release and you'll see those numbers [indiscernible]", "duration_s": 25.120000000000346, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0536.mp3" }, { "study_item_id": "MR-0537", "partition": "locked_confirmatory", "call_id": "1834035", "exchange_index": 36, "question": "And I guess the question I was really trying to get to is at what stage we are processed shifting that strategy to the dealers or other costs associated with the?", "answer": "Yes, Mike, we're in I would say a little bit more than a year. The first early on, that was the trial stage, so some real bit positive with that, now we've accelerated it. There's no real additional cost. There is some -- we need to make sure when they pick up in our dealer stores that they're getting the PPG price. So there is some transfer of data that has to happen, but that's electronic and, so I would not regard this as any material cost. And as Vince said earlier, typically is a lower cost to serve channel to support our dealers.", "duration_s": 31.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0537.mp3" }, { "study_item_id": "MR-0538", "partition": "development", "call_id": "1647101", "exchange_index": 31, "question": "Got you. So the $1 billion you have, is that all in guidance for sources of funding? That's all just condo sales?", "answer": "No. So Tayo, this is Kevin. So essentially conceptually, we sell assets for one of 2 reasons. One is to fund development. The other is related impaired trade basis to help fund acquisition activity. We don't have any acquisitions in our budget for the year, and so correspondingly, we don't have any related disposition activity paired with acquisitions in our capital plan. However, the external capital of $1 billion, which represents roughly a 50-50 blend of disposition equity from selling wholly-owned assets to fund development and unsecured debt is what you see there. So we do have disposition activity related to funding development.", "duration_s": 37.52000000000044, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0538.mp3" }, { "study_item_id": "MR-0539", "partition": "locked_confirmatory", "call_id": "2049390", "exchange_index": 33, "question": "And when you talked about the new service offerings, is that fair to say that those are new intermodal lanes or new intermodal corridors? And then the question is, are they, I guess, new to Intermodal as if a shipper did not have that intermodal choice versus truck in those lanes before? Or are they just new to Norfolk Southern?", "answer": "They are certainly new -- they are a new level of product that is not out there in the marketplace right now or had not been. We're confident that it's going to be -- it's going to help us grow moving forward. And as I noted, we are going to be very aggressive in launching new products based on the capacity dividend and the service product that Mike and his team are delivering. And the good news, most of that folds into the current intermodal network that we have now. And we've got our investments in place in our intermodal network.", "duration_s": 36.20000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0539.mp3" }, { "study_item_id": "MR-0540", "partition": "development", "call_id": "2260761", "exchange_index": 8, "question": "So 2 questions. First, Mark, as you were talking about the sort of the markets or sort of the change in the demographics of people moving in. Is your view simply that based on the commentary of the income levels that you're seeing. I'm really talking about San Francisco and New York because it sounds like the other markets are doing much better. Is your view that if you remove the concessions that the new renter profile can afford the standard face rents? Or is your view that it's going to be a slow trickle of easing back into the historic face rents that, let's say, we were at in 2019?", "answer": "Well, I mean, I think from an affordability index, it's clear that the new residents moving in are going to be able to afford increases as we return to those pre-pandemic levels. As we've been pulling back even sequentially into April and as we think about where we sit today, even from last weeks, kind of applications coming in, we're pushing really hard, and we're not finding that resistance point yet. \nI mean, that's our goal, is to keep pushing and trying to find that resistance point. We haven't seen a change in the demographic profile. So I think from an affordability standpoint, the applicants coming in, they're all approved based on the gross rent. So regardless of concessions, they're approved on that gross rent and they're used to paying us that gross rent after they get past that first or second month. So I think that's something we'll have to watch in the markets where we -- like New York and San Fran, where we really kind of have momentum to dial back even more on that concession use. But to date, for the month of April, we have not seen any material change in that demographic.", "duration_s": 66.90000000000009, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0540.mp3" }, { "study_item_id": "MR-0541", "partition": "locked_confirmatory", "call_id": "1970773", "exchange_index": 7, "question": "Just staying on this for a second. Is there a way to think about your exposure or your parts with regard to ABCD checks? Have you ever looked at that? Are you more heavy checks? Or are you just the more routine frequent checks that would?", "answer": "Yes. We're really all over the place. Some of our parts get replaced by time on wing. Others, it's number of cycles. Others, it's like seatbelts or passenger-related, passenger volume-related, not take off and landings. So we've looked at this across the board and not really seeing a -- not really seeing any trend that we need to exploit or there's an opportunity, too.", "duration_s": 33.220000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0541.mp3" }, { "study_item_id": "MR-0542", "partition": "development", "call_id": "2064936", "exchange_index": 35, "question": "Great. And do you think that additional tenants will get added to the cash basis bucket as we go through the third quarter? Or do you think that 6.4% is really assessing the risk of the tenant base at this point?", "answer": "Again, Tammy, it's going to really depend on what happens. So if any further tenants go into bankruptcy, they're going to wind up on a cash basis. So we're going to have to watch it pretty closely for what's happening. It's really just going to depend on how we assess collectibility of each tenant that we go through each period. It will also depend on the course of the virus. I mean that's obviously outside of our control, and we've been mindful of that as soon as we feel like we have a good handle on our projections, then we can disclose those. But as things continue to change daily, we've just been taking it a day at a time. We want to thank everybody that participated on our call today. If you have any additional follow-up question, please reach out to me or my IR department. Otherwise, please continue to be safe, social distance and enjoy the weekend. Thank you so much.", "duration_s": 69.69999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0542.mp3" }, { "study_item_id": "MR-0543", "partition": "locked_confirmatory", "call_id": "1838324", "exchange_index": 19, "question": "Just the outlook on the commercial, is there some benefit from the lower rates there as the earnings credit on deposits are less and get picked up in fees, is that one of the drivers as you think about next year?", "answer": "Yes, I wouldn't think that earnings credit is going to be a big addition to that line going forward in 2020. I mean, we managed earnings credit pretty tightly, but I don't think that's going to be a big driver.", "duration_s": 14.480000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0543.mp3" }, { "study_item_id": "MR-0544", "partition": "development", "call_id": "1787710", "exchange_index": 11, "question": "Okay, and are you able to disclose the spread between asking rents and what was accepted, what was signed?", "answer": "In terms of renewal offers?", "duration_s": 1.900000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0544.mp3" }, { "study_item_id": "MR-0545", "partition": "locked_confirmatory", "call_id": "2280113", "exchange_index": 10, "question": "Okay. And then following up on Rob's question. So from a cost-reduction standpoint, I know you've highlighted the headcount reduction. But can you give us some, I guess, specific examples of what maybe you've done for more of the structural cost standpoint, any facilities that you've taken out during this or are things that for sure aren't going to come back when we get to the other side?", "answer": "Yes. We have fundamentally looked at some of our businesses, some of their locations. They have satellite facilities and offices that we have looked to close, consolidate underperforming business segments for them. We've taken this opportunity to streamline, combine effectively to lower cost. There's also been a number of, of course, cost productivity programs, automation that we've been able to implement. This has been an ongoing effort. We've continued to invest at the same or in an even accelerated rate in some of our facilities for automation and cost reductions during this time. So it continues to bear out for us.", "duration_s": 45.819999999999936, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0545.mp3" }, { "study_item_id": "MR-0546", "partition": "development", "call_id": "1961614", "exchange_index": 10, "question": "Do you expect trade paint to be sequentially up in the September quarter, I guess, a different way to phrase it?", "answer": "To Michael's comment earlier, the visibility is just not there for us to make those comments on that far out.", "duration_s": 5.420000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0546.mp3" }, { "study_item_id": "MR-0547", "partition": "development", "call_id": "1849084", "exchange_index": 25, "question": "I just some of the commentary here and to give you some context before my question is that, some of the third-party multitenanted core location providers reported some of the strongest backlog quarters data center capacity commencing in Europe in 2020. Now the fair majority of those book meetings are actually driven by cloud titans. So as these cloud titan expand internationally, is there a difference in architecture that is taking place because of the way they are building, with the way they are connecting that means that possibly alternative vendors will be more favorable? Or is this just a completely different -- are we looking at that something uniquely different than we have seen before?", "answer": "Typically, the cloud titans deploy as globally. As you know, we have a lot of international data centers that they have built with us. And as they expand to additional data centers, the only difference is not architecture, but size of the data center. So depending on where they're going to highly populated densities or smaller, they will repeat the same architecture but the scale and size may vary, which means they are really, really wanted to be one uniform delivered one consistent software environment. So it is a very rare to see that they would be repeated with the different window. So I don't see any uniqueness international data center except that side.", "duration_s": 43.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0547.mp3" }, { "study_item_id": "MR-0548", "partition": "development", "call_id": "1833434", "exchange_index": 23, "question": "Just a real quick question, I know maybe tough because of the team marketing of the Lanes and intermodal, but I'm just curious when you look at domestic versus the international intermodal, can you give a little color on both of those pieces of business relative to order of magnitude, weakness or thereabouts?", "answer": "Our international business has been stronger than the domestic business so I talked about just a minute ago, the domestic business has been impacted by number of factors that the economy is certainly one of them, but I think clearly a lot of capacity, we saw a very tight capacity last year, clearly a lot of new trucks came into the market, lot of new drivers, open up a lot for additional capacity and so I think intermodal has been competing with that truck capacity this year, prices obviously truck spot prices have come down since -- from last year, there is still 5-year average, but really prices have come down. So I think the domestic business, while good, it's just been soft and our international business is still relatively okay.", "duration_s": 67.59000000000015, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0548.mp3" }, { "study_item_id": "MR-0549", "partition": "locked_confirmatory", "call_id": "1789488", "exchange_index": 18, "question": "Don, on Consumables, is there any categories that you would call out in particular, that drove the underperformance in the quarter? And then you mentioned the need to be more disciplined with promotional activities going forward. Could you maybe just talk about what that entails? And kind of how quickly some of these changes can be implemented as we think about the go-forward?", "answer": "Yes, may be -- we've kind of [indiscernible]. But our lab business was an underperformer in Q2 in the U.S. [indiscernible] we don't talk a heck of a lot down. But it's kind of 4 teams and some equipment business that goes there. And we will help against a tough comp in Q2, and that was based on some programs that had been done in the prior year that led to some significant orders that we're not anniversaried.\nAnd then in terms of the discipline approach, again, it's going to take a couple of quarters. And we saw some of that in Q2 -- we saw some in Q1, some in Q2. And we think we come out of that in the back half of this year.\nAnd what it means is, let's just really be focusing on programs that impacted the dents. We're working with our dealers. It's like how do you instead the dealer rep? How do you incentivized our reps to really get excited about some of the new products that we're launching, and make sure that we're spending in there versus -- maybe look at a quarter end program where it might be a little bit more wholesale-oriented.", "duration_s": 77.65999999999985, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0549.mp3" }, { "study_item_id": "MR-0550", "partition": "development", "call_id": "1995197", "exchange_index": 3, "question": "Clarification before I hop off on Lasergen. It sounds like you -- this is a full write-down. Is that correct? You're kind of [indiscernible] the project? That seems a little bit different than what you talked about back at our conference in January. So can you clarify what changed there?", "answer": "Yes. Well, actually, you referenced your conference, a lot changed after the conference where we saw a number of new announcement indicating there was some changes in terms of how certain competitors in the space were thinking about access to the platform. So that caused us to rethink our current investments, and we had an opportunity to really move our program forward without needing to invest directly in a sequential platform of our own. \nAnd Bob, I'll let you comment on the financial side of that. Yes. It is a full shutdown, and we will have a write-off in Q2.", "duration_s": 32.559999999999945, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0550.mp3" }, { "study_item_id": "MR-0551", "partition": "development", "call_id": "1838015", "exchange_index": 0, "question": "I want to get the fundamentals, guys. But just real quick, just in case, we will get this information. Could you give us any sense of how do you identified and a rough sense of what you hope to complete the investigation? And if not, I'll jump to some fundamental questions.", "answer": "David, as we said before, the investigation is in the early stages. Beyond what we shared in our press release, I cannot provide additional information but the investigation is still going glowing. So let's move to the business fundamentals.", "duration_s": 11.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0551.mp3" }, { "study_item_id": "MR-0552", "partition": "locked_confirmatory", "call_id": "1915754", "exchange_index": 18, "question": "Okay. And then my second question is on your fund. Can you just discuss how much you're going to earn in fees this year? Is it just your typical asset management fees? Or if there's any origination or acquisition fees that would be included in your normalized FFO?", "answer": "Yes. It's a -- it's just a market structure, and I'm surrounded by a phalanx of counsel, who's encouraging me to restrain my comments, so I will. But it's just a market structure.", "duration_s": 15.940000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0552.mp3" }, { "study_item_id": "MR-0553", "partition": "development", "call_id": "1641855", "exchange_index": 4, "question": "Okay. And that's all we had announced in terms of food and refrigeration right now?", "answer": "The only thing we've announced in terms of that segment is the consolidation in United brands bringing the footprint from 3 to 1, which is underway.", "duration_s": 8.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0553.mp3" }, { "study_item_id": "MR-0554", "partition": "development", "call_id": "1890919", "exchange_index": 0, "question": "Congrats on a pretty good year relative to pretty difficult conditions. Jim, or I don't know if Mark Wallace is on the line. But do you guys mind digging a little bit deeper into your macro assumptions behind the flat to down 2% revenue assumption. And I think you did call out some headwinds in coal as well. Do you mind just repeating that again.", "answer": "Yes. Sure, Brandon. It's Mark. So going into 2020, we expect a continuation of the current macroeconomic trends to continue. As we know, the consumer economy remains strong, but PMI and IDP and other macro indicators suggest that we're not going to see a near-term increase in industrial activity. IDP is projected to be relatively flat for the year. And the PMI read in December was 47.2%, which was the second worst since '09 and the fifth consecutive month signaling contraction. So given this, we're not forecasting a hockey stick recovery, but any improvement in the macro environment would be upside for us. Despite these challenges, we're going to continue to get better on what we can control providing high-quality service to our customers and executing. We have not changed our outlook for long-term revenue growth. Intermodal, as we've said many times, we -- I think -- we think we can grow 2-ish x GDP and merchandise GDP plus. So we're going to stay close to our customers, watch things and see if the sentiment improves throughout the year. But clearly, as I said, we're not forecasting any type of big recovery in the year.", "duration_s": 86.56000000000017, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0554.mp3" }, { "study_item_id": "MR-0555", "partition": "locked_confirmatory", "call_id": "2351784", "exchange_index": 32, "question": "My first question, just a quick one. You guys are now the only U.S.-based Class 8 truck manufacturer. Do you think this could, in any way, help you competitively in the U.S. Class 8 market longer term?", "answer": "I don't know. We're proud of who we are. We're proud to be a great company. We love our Kenworth and Peterbilt operations here in Mexico, our DAF in Europe, our DAF in Brazil. So we feel like we represent the markets where we operate really well, have great relationships with our customers and dealers in those markets, and that's how we think about the world.", "duration_s": 21.11999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0555.mp3" }, { "study_item_id": "MR-0556", "partition": "locked_confirmatory", "call_id": "1902228", "exchange_index": 4, "question": "Congrats on a solid quarter. Ken, it looks like you're seeing good growth in large deals and multimillion dollar deals. And I know that you said that SD-WAN is a leading contributor to strength there. But I'm just wondering if you could provide more color on what those deals look like? Is it your existing customers that are refreshing at the branch. Or are you displacing some competitor solutions that are coming in, you're coming in because of the SD-WAN capability?", "answer": "So half the SD-WAN customer, a new customer, especially come from about enterprise. That also enable us to get into the traditional enterprise network security space or even the internal occupancy. The traditional parameter based network security now need to be expanded to the WAN side like SD-WAN, 5G and also to internal, like whether the internal segmentation switching the internal Wi-Fi. So that's where we see that probably internal even bigger market compared to the SD-WAN side. And so we see a huge opportunity, especially, we introduced the new NP7 so the first product leverage NP7, which is about 5x faster than the previous chip NP6 will help us get inside a network in a very high-speed environment within the cloud. So that's also what drives additional growth. So I do see -- so that is one, go to the 1 side and also go to internal on our side, help us expand a lot of our new market inside enterprise and also in a lot of new customers for us.", "duration_s": 71.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0556.mp3" }, { "study_item_id": "MR-0557", "partition": "locked_confirmatory", "call_id": "1772350", "exchange_index": 12, "question": "So just to make sure I understand it's neutral for the coming quarter but does it flip positive when premium amortization goes away?", "answer": "You mean in terms of the investment portfolio?", "duration_s": 3.520000000000209, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0557.mp3" }, { "study_item_id": "MR-0558", "partition": "development", "call_id": "2252496", "exchange_index": 16, "question": "Okay. Great. And then just as a follow-up on mortgage, obviously, not a bigger line for you guys. But just given some changes in the business you guys have been making and the relatively new platform. Just do you see share gain opportunities? And is the fight just against gain-on-sale margins in terms of just how resi can continue to build over time?", "answer": "Yes. I mean, hey, mortgage isn't as big as a percentage of our business as others, but we're very excited about what we've built and the opportunities that we have, particularly, the market will do what the market will do, but particularly around building out the purchase side in terms of our consumer customers, which will be expanded with the BBVA acquisition.", "duration_s": 20.09999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0558.mp3" }, { "study_item_id": "MR-0559", "partition": "locked_confirmatory", "call_id": "1787043", "exchange_index": 12, "question": "Right. So the economic value in total, so the combination I'm assuming of tax credits but you could split the tax credits different from the 50-50, is that a fair way to understand that?", "answer": "Any category could be, within the categories split differently than 50-50, but if 1 category is 40 then another category has to be 60 to offset. So overall, all the categories that relate to the economic value are shared 50-50, but if not each one of them have to be 50-50.", "duration_s": 21.199999999999818, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0559.mp3" }, { "study_item_id": "MR-0560", "partition": "development", "call_id": "1642899", "exchange_index": 24, "question": "I did want to follow up, drilling a little bit more here may be James was entered into an 2020 a little bit and your implications for the current state of bookings also out of Europe. So it appears that Germany is okay, it a little volatility from the U.K., but Harvard certainly, obviously how about the bookings with the JV out of the Germany. And then considering 2020 and some changes with ships coming in and out JV fleet, how should we think about the JV contribution in '19 and then '20 just to make sure that's become a pretty significant and very nice JV operation obviously?", "answer": "Yes. Sure. So first talking on the which also ties in your comment around on Germany. First, on the U.K. piece, we really said there's been a volatility, but that volatility has certainly stabilized and again the volatility typically happens on the new cycle in the U.K. Broader Europe has actually done quite well. Germany is doing well and typically TUI also doing well. So we don't comment specifically on TUI's yield guidance or specific lead to profitability. The one thing I would say in '19, our TUI does take on another ship, which is good for us as it relates to the income that we will get out of the equity pickup will get from to TUI. So that will continue to expand our equity pickups. In 2020, they do not have a new ship and so some of that uplift that we've seen over the past several years will be a little bit lighter, we've driven off of a margins that they get of their existing fleet for the next couple of years. And so that's how I think about those 2 items.", "duration_s": 75.61999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0560.mp3" }, { "study_item_id": "MR-0561", "partition": "locked_confirmatory", "call_id": "1641895", "exchange_index": 1, "question": "So just in terms of the quarter versus the flat EPS expectation and your results, I think, Patrick, you mentioned it was driven basically by higher sales. Where did you actually see the surprise to the upside, and you think those trends continued for the rest of the year?", "answer": "Yes. So for the first quarter, all regions, except EMEA, came in better than expectations, particularly, the Latin America, which was up 20%. From a industry perspective, some of the heavy industries were better than we expected. In those, we include the metals, pulp and paper, oil and gas was a little better as well. And in Consumer was better, particularly, life science, which had very strong growth. So I'd say across multiple regions, and particularly, Heavy and Life Sciences.", "duration_s": 37.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0561.mp3" }, { "study_item_id": "MR-0562", "partition": "development", "call_id": "1719407", "exchange_index": 19, "question": "And then I just have a follow-up question. Just wanted to be clear. So the $1.2 billion investment on Mon Valley obviously need to support that with capital. Are we expecting that $1.2 billion to be syndicated right now? Meaning, are you going out and raising those funds in the market today? Or is that going to be staggered through time?", "answer": "Yes. So we went through this a little bit. But the bulk of the requirement is in 2020 and 2021. So again, we're in good shape right now. We can be opportunistic. We want to take the timing. We don't need to get out too far ahead of it. So when the market's right, and we're ready, we'll go in, but there's no hurry here for us.", "duration_s": 19.460000000000036, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0562.mp3" }, { "study_item_id": "MR-0563", "partition": "development", "call_id": "1636956", "exchange_index": 14, "question": "A question about your new store opening strategy. You mentioned that you're closing some stores. You're opening some new stores in some areas. So how many stores do you plan to open in 2019 on a [ web ] basis? And do you want to accelerate that growth in '19 and '20?", "answer": "Yes. So I think, as we've talked in the past, P.J., we do run a global architectural business. So we have probably, in the U.S., somewhere in that 10 to 25 store range. In Mexico, it will be over 200. In Europe, it'll be in the 10 to 15 range. So in Australia, we're still -- we don't have a firm number, but it's at least 3 to 5. So I think those are the kind of numbers you can be expecting.", "duration_s": 29.63000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0563.mp3" }, { "study_item_id": "MR-0564", "partition": "development", "call_id": "1833834", "exchange_index": 23, "question": "[indiscernible] $50 million. So should like I know you don't want to guide for next year, but you gave that number. So just curious if we should be thinking about that weighted to 1/2 of the year versus the other?", "answer": "[indiscernible] with the seasonality, can you? $50 million is all you've got. Thanks, Pat.", "duration_s": 5.1599999999998545, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0564.mp3" }, { "study_item_id": "MR-0565", "partition": "development", "call_id": "1776145", "exchange_index": 17, "question": "Correct. Yes. But you're not ready to give us as you did in the past where you gave us the exact price of the pulp at this point?", "answer": "If you're after what we are thinking in terms of our fiber commodities, what I'd say is that on eucalyptus, which is a major input for us on the fiber side, we've reduced our outlook range to 1,050 to 1,100 per metric ton. And that's down $75 per metric ton.", "duration_s": 26.980000000000018, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0565.mp3" }, { "study_item_id": "MR-0566", "partition": "development", "call_id": "1833434", "exchange_index": 38, "question": "Looking at way out, is there anything and maybe Jamie you might have seen some of it hasn't James is there anything way on the horizon conceptual that if implemented really could hit the ball out of the park here in terms of those type of disruptive technologies?", "answer": "I think a lot of the technology that we're on to the only thing that I would really mention on top of train inspection portals, not only we're looking at the track, we're also making sure that we x-ray vision and take camera footage of cars run by through inspection we've got a very strong IT development department within CSX, probably the most impressive I have seen in the industry. We are developing some yard intelligence, crew intelligence, the crew intelligence is really something that I surely believe that's been working on for about a year now, almost done that project that's going to allow us to look 12 to 24 hours advance to make sure that our crews are lined where they need to be and in position where they need to be so as much as we bounced the railroad, we still availability and that crew intelligence and some of the yard intelligence that our team is on working here at CSX is going to really help us carry forward. Thank you, everyone, for joining. I believe that concludes our call for the day.", "duration_s": 74.22999999999956, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0566.mp3" }, { "study_item_id": "MR-0567", "partition": "development", "call_id": "2247395", "exchange_index": 26, "question": "Got it. And then with regards to 2 things, just the PEO, just when -- under what conditions do you think that really does transition where people will say, ASO is great, but PEO is really what would be better. Like how confident are you in terms of seeing that? \nAnd then the second question is just on the service footprint, just as you cut back on the geography, and it seems like retention is doing extremely well, so it seems like your client satisfaction must be really doing well. But are you seeing any sort of -- are there any negatives with regards to the cut back with regards to the geographic footprint on the service side?", "answer": "I have not seen a lot of it, Mark. It's really, I attribute it to our operations leadership team and how we've handled that. Many of those tenured employees that were in the offices that we closed are working from home. So the clients have not seen that disruption from losing their payroll specialists that they've had for many years. We've been able to transition to that work from home environment, which was accelerated by the pandemic. We had already planned on doing some of that over the next few years, but accelerated it. And frankly, my hats off to the technology teams here, the operations leadership that have really done a very good job in making sure that, that continue to be handled. And they've also positioned clients into the right service centers. So if they were normally calling in, we're transitioning them to different service centers that can handle them from that standpoint. So I think we've done a really good job and have not seen a fallout on that. \nOn the PEO question, I think, again, it's going to come back to as compliants feel a little bit more things are calm down. Now it's going to be, again, how do I recruit, retain and really make sure I get the employees that I need, while there's still some disruption to the employees. I think even through the summer with child care, with unemployment having an additional higher rate payment to them, so they're going to be interested in, hey, what are the benefit plans that I can offer them? How am I going to be able to provide those benefit plans? Are they good benefit plan? I think the PEO interest will pick back up as we get into the second half of the calendar year and into our next fiscal year, we expect that, that will start to pick back up again.", "duration_s": 99.5, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0567.mp3" }, { "study_item_id": "MR-0568", "partition": "locked_confirmatory", "call_id": "1854893", "exchange_index": 30, "question": "That's helpful color. I know it's really early, and I appreciate you giving us some color for 2020, your volume outlook seems very reasonable to me, but it's also reflecting some modest deceleration from the last few years. With housing reaccelerating and pretty healthy backlogs in public, just curious what's driving some of that deceleration? And are there any end markets that are a little less strong from your perspective?", "answer": "I think I would describe that this way. I think we're just trying to be thoughtful because it's very early and we don't have our plans. This is our best estimate at this time. So it's not trying -- we're not trying to signal at all any deceleration. I think what we're trying to do is just be thoughtful because we don't have the plan yet. Thank you, and thank all of you for your time and your interest in Vulcan Materials. As you can see, the business continues to operate well, and we look forward to discussing this with you throughout the quarter. Thank you.", "duration_s": 44.72999999999956, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0568.mp3" }, { "study_item_id": "MR-0569", "partition": "development", "call_id": "1636956", "exchange_index": 8, "question": "This is Alex Yu on for [indiscernible]. So it seems like based on Q1 guidance, it appears to imply sequential deteriorations. I was just wondering, in the second half, based on your 2019 full year guidance, it goes back up sharply. Could you maybe just give some insight into what's driving that?", "answer": "Yes, Alex, this is Vince. As I said in, I think, in the opening -- my opening remarks, we do have a variety of headwinds in the first half and in Q1 that we anniversary mid-year, and those include the assortment change. We do expect automotive globally to get better in the back half of the year in the first half of the year. We have currency translation impacts and several other headwinds in the first half that we have talked about throughout all of '18. And again, most of those anniversary as we approach the middle of the year. Plus, we're continuing to get pricing in place, and we have growing benefit from restructuring. So those will be the big causation factors that give us confidence that the back half will be better than the first half.", "duration_s": 50.87999999999988, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0569.mp3" }, { "study_item_id": "MR-0570", "partition": "development", "call_id": "1784885", "exchange_index": 10, "question": "I may have missed. As you talk about maybe some sort of ballpark of what to expect in divestments now that the deal is closed in terms of size, maybe by sales and then I have a follow-up.", "answer": "No. I don't think we're going to sort of size it today, but only because the decisions aren't yet made, and we are at the front end of the process. It's going to take some time to get alignment, work the process. And what I'll do, as I've done before and as Chris has done before is, rather than talk about something that we're going to do, I'll talk about what we have done one that is done. So we don't have a predetermined target for what we're trying to do. Again, what we're looking at is we want to make sure the management team is focused on the businesses that are strategic. Once they are technology driven have great returns, and we can win. And Chris and I spend a lot of time in the last few months on this. We work with our Board. We've got a meeting coming up in a couple of weeks on it, so we're on it, but I'm not going to size how much the divestiture might be until we really get around to making some decisions on that.", "duration_s": 50.720000000000255, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0570.mp3" }, { "study_item_id": "MR-0571", "partition": "development", "call_id": "1944952", "exchange_index": 33, "question": "Great. And then one last one [indiscernible]", "answer": "Mark, you're breaking up there. Could you try that again?", "duration_s": 7.199999999999818, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0571.mp3" }, { "study_item_id": "MR-0572", "partition": "development", "call_id": "2064936", "exchange_index": 0, "question": "I wanted to maybe just start with a higher-level question about rent deferrals and bad debt. And I'm not asking you to give a guide by any means, but I'm wondering if you can give us some historical views into how much of bad debt you ultimately end up collecting and then how much of deferrals you might not collect?", "answer": "It's Glenn. I mean, it certainly varies. I mean, up until the pandemic, if you look at what we've done in the past, right, credit loss reserve has ranged somewhere in that 75 basis point range. And for the most part, that is what you really have wound up writing off over time. Look, the pandemic is a lot different. You have really retailers that are closed, not because they want to be closed or not because they were in financial trouble because of the situation, they've been forced to close. So trying to estimate what the uncollectible amount is going to be is just really, really challenging. \nWhat we are doing is spending a lot of time with the tenants, trying to help them say that they can stay open and give them the opportunity to get the other side to help manage it as best as we can. But really, I can't actually give you a number of what we would expect here.", "duration_s": 58.74000000000001, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0572.mp3" }, { "study_item_id": "MR-0573", "partition": "development", "call_id": "1830153", "exchange_index": 24, "question": "I wanted to follow-up on real-time and on-demand pay, the offerings roll out that you have. Can you comment on you maybe partnering with those? I'm curious if it's strictly for account deposit or is there a call offering as well. I just want to understand the mechanics of that offering and how it rolls into your model?", "answer": "Yes. Bryan, I think we'll announce that probably a little bit later as we get into the last quarter -- calendar quarter of this year or the -- for the pay-on-demand. And because -- I guess, I just want to be sure we are altogether on it before I announce it publicly who the partner is. There certainly is a partner there that we're doing it with. And then on real-time payment, it's the same thing. One of the major banks, and I would wait until we get closer into the first part of the year just to make sure that everything is -- from a competitive standpoint, I want don't want to give out too much too early. But we have partners in both, very solid relationships, everything is, we feel, is in place. I just would like to announce something as we roll it out. One will be in the next October and then a couple of months and then One will be early 2020 real-time payments.", "duration_s": 49.01999999999998, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0573.mp3" }, { "study_item_id": "MR-0574", "partition": "development", "call_id": "2363396", "exchange_index": 37, "question": "I mean, like it's just such an unusual market to go through, right? Sorry, Jeff, you were saying?", "answer": "Yes, to answer kind of the second part of your question, Michael. If you look at the acquisitions we got done in the second quarter, one of the common threads across those deals was the owner, for whatever reason, was unwilling or unable to invest capital in the property going forward. And those are perfect, well-located shopping centers where that's the owner's mentality. Those are perfect acquisitions for us. We like those because we will come in and put in the capital in a great location and show virtually immediate results, and leasing are very strong results in the short term in leasing. So yes, to the extent the pandemic causes more of that to happen, that will put more properties on our radar screen, for sure.", "duration_s": 52.07999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0574.mp3" }, { "study_item_id": "MR-0575", "partition": "locked_confirmatory", "call_id": "2255631", "exchange_index": 19, "question": "Okay. That's super comprehensive. So really appreciate that. And just really quickly, Mark, maybe going back to Andrew's question, on the FMS side, the increase that you're seeing in marketing for card solicitations and the like. Is it too early to know if the success rate or the hit rate for the banks are in line with what they saw historically as they rolled out those programs?", "answer": "Yes. We wouldn't have visibility to that. But what -- I'll tell you what we do find is that all of our finance -- this is a macro that started before COVID is that all applications, all uses of data, whether it's in banking, credit cards, mortgage, auto, lending, telco, all of our customers want to use more data. And they want to use more differentiated and alternative data because it enhances the predictability of the decision they're making. And let's use originations. And that's why you're seeing more alternative data being used. We think our cloud transformation is going to differentiate us and the ability to house that data to -- and as well as surface and deliver that data to our customers. And then, of course, Twin, we talked earlier in this conversation in the call this morning about the power of that data set in that credit decisioning, meaning, is someone working, how much are they making added to the credit file and the other alternative data is very, very powerful.", "duration_s": 59.88000000000011, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0575.mp3" }, { "study_item_id": "MR-0576", "partition": "development", "call_id": "1641855", "exchange_index": 25, "question": "But in the big picture, Rich, even if it takes several years, could footprint/Phase 2 be as big as the SG&A?", "answer": "I don't want to size it, but that was a relatively small start that we've taken, and we've forecasting $18 million. So we look at this as a multiyear program.", "duration_s": 10.900000000000091, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0576.mp3" }, { "study_item_id": "MR-0577", "partition": "development", "call_id": "1920686", "exchange_index": 9, "question": "Got you, great. And just to confirm, I think you had said $50 to $55 is kind of the price deck that you guys are employing when you think about this guidance going forward?", "answer": "Yes. From a crude activity perspective, that's the level we're thinking about it.", "duration_s": 4.1599999999998545, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0577.mp3" }, { "study_item_id": "MR-0578", "partition": "locked_confirmatory", "call_id": "1850143", "exchange_index": 9, "question": "I was wondering if you can give any preliminary expectations on how to think about 2020 EBITDA. I mean, just given the softness you're seeing demand, do you think it's fair to think about it as annualized fourth quarter EBITDA expectations plus perhaps the quarter and the new Winchester contract?", "answer": "What I would say is we intend to give full year 2020 when we report our fourth quarter earnings. I would just go back to the comment I made to Frank about how strong the slowdown was. And I would say based on that and the ability of this industry to move very rapidly one-way or the other, it would be imprudent to really give 2020 guidance at this moment.", "duration_s": 23.59999999999991, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0578.mp3" }, { "study_item_id": "MR-0579", "partition": "locked_confirmatory", "call_id": "1692960", "exchange_index": 30, "question": "And then maybe just a quick follow-up. Like new data around new sectors what does that mean for your CTS business? Does that help on that front as well?", "answer": "It certainly does. We're great at monetizing data both in the workstation of as well as platforms. So sometimes more data the better right in terms of how quantum data scientists want to look at it. So as we build that up, we'll be able to turn that around very easily, and so within fields over time.", "duration_s": 19.620000000000346, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0579.mp3" }, { "study_item_id": "MR-0580", "partition": "development", "call_id": "1772345", "exchange_index": 9, "question": "And you're also baking in a little bit of a benefit, a little bit of an offset them from expanding margins and trading book on the rate cuts in that guidance?", "answer": "Yes, in that guidance, we're putting in a little bit, yes.", "duration_s": 3.5799999999999272, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0580.mp3" }, { "study_item_id": "MR-0581", "partition": "development", "call_id": "1718461", "exchange_index": 28, "question": "So just to be clear. There are a number of product cycles around 400-gig around servers around some other key components and most of the other companies in the broader macro [Indiscernible] competing in. Have indicated that the expected weakness in the first half of the year from cloud, you are bucking that trend, now you seem to be more in line with the prior commentary from the other companies that are in the space. To the extent that they were expecting a resurgence in the back half of the year is that something that we should expect from you as well?", "answer": "I think we will refrain from what you should expect from us, we don't want to conclude that for the second half, we want to wait watch and see stay tuned for more. I mean, I think we were very optimistic about Q2 in cloud spend as well and it didn't quite turn out that way. So before we get optimistic on Q3 and Q4, we want to be more sure. Alex to complete that we are ready with the products, but as I mentioned transition is longer than what many of you expect and we just have to go along with that, rather than. Can't change the facts that there is no objective connected. Right. So a 400-gig only solution will be a week solution, but LX that answers your question I think there is a lot of promise and this is going to be a mix and match of 100-gig and 400-gig for a long time to come. James? We can't hear James?", "duration_s": 73.50999999999976, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0581.mp3" }, { "study_item_id": "MR-0582", "partition": "development", "call_id": "1705068", "exchange_index": 24, "question": "Just wanted to follow up on issues, just comment about DHI Communities. Wondering I guess would you -- I guess are you considering a build to hold strategy? Are these all going to be built for sale at some point? And also would you consider JV partners or some other capital structure to scale that up more quickly?", "answer": "Currently, we're in a kind of a build-for-sale operation. We would evaluate alternative capital structures. David mentioned before we're looking for something that's scalable and sustainable, and that would certainly be more accretive to returns in that business. First thing for us was simplistically wanting to figure out and kind of understand the business and looking at how we can build that business as sort of combination with our homebuilding platform across the country. So a lot of the initial pipeline that we have been working with current projects have largely been on land parcels that are part of larger master plans we've been developing and building homes in. And rather than in the past typically selling off those corners of land to other developers, look to develop the capabilities to monetize that land and add that value to our sales. So as we look to roll that up forward and accelerate it, we would certainly be looking at the capitalization of that business with a lot of options open in front of us.", "duration_s": 63.899999999999636, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0582.mp3" }, { "study_item_id": "MR-0583", "partition": "locked_confirmatory", "call_id": "1642852", "exchange_index": 22, "question": "Earlier last year before you announced the Oppenheimer deal, there was a lot of focus and chatter from you guys around 2019 optimism on flows from newer initiatives, in particular Jemstep getting ramped up with some new distribution pipes. Can you walk through your expectations on that? Now has the ability for that to generate a little bit more incremental flow changed? Has that pushed out or go forward? Really focused on Oppenheimer, but wonder to get an update on that as well.", "answer": "Yes. So we're still second quarter 2019 is when all the largest client that we've sort of have business from is going to start using and putting into production the Jemstep capability along with our models. So we will begin to see flows and revenues coming from that immediately into the second quarter. Again, I think it's one of these things, as we said, is going to build. It's not going to be a flood are revenues and AUM immediately. But given the size of this client and the breadth and scope of the advisers that are using and how these models are going to play out, I think it will build into a material number as we get into end of 2019 and into 2020. The pipeline for Jemstep is still very strong and continue to win business. And so that is, again, progressing, but it is as we said, possibly originally imagined in terms of the actual going from the design to production to execution just takes time. I'd say the other thing just in terms of the things that we are excited about around ETFs and institutional business, China, [indiscernible] investing and all these capabilities is growth engines and so called characterized and just growing as a percentage of sales every quarter. So we do see that as being increasingly important factor in terms of our success. And so the investments that we've made, which we've talked about, I believe, are paying off for some and even more so into 2019.", "duration_s": 98.46000000000004, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0583.mp3" }, { "study_item_id": "MR-0584", "partition": "locked_confirmatory", "call_id": "2048567", "exchange_index": 14, "question": "I got you. Okay. And then just a question as we manage to this 35% decremental here for the balance of the year, question just is around, as we manage into next year around what's discretionary on the cost side, what our investments are on the cost side, how do you start to think about incrementals for PI and Vontier? What do we manage to there? I mean, we have more software content, we want more recurring revenues. What would be the appropriate view on an incremental margin for PI and IT or Vontier?", "answer": "Yes. Rick, this is Chuck. I would think that a good starting place is that we'd come back up, the same amount that we went down because we want to reset back to starting to growing on our 2019. So recovering that revenue, if it went down to 35%, I think of it coming back to 35%. Beyond that, it really depends on where we're growing. As you mentioned, some of the software business, obviously, have higher decrementals as you move forward in time. So it kind of depends after that, but first thing is to get it back.", "duration_s": 39.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0584.mp3" }, { "study_item_id": "MR-0585", "partition": "development", "call_id": "1776132", "exchange_index": 6, "question": "Okay. That's helpful, Don. And then as a follow up and your response to Ken's response about the NIM going down 2 to 3 basis, if you get that points additional card. Is that about the math of what you would expect per 25 basis points cut [ 2 to 3 ]?", "answer": "Well, initially we would. And so, for example, on our average rates paid on deposits, the first quarter after that rate decrease we think that the deposit rates will go down by about 5 basis points in the second quarter, that cumulative reduction will be about 10 basis points. And so that's how that 2 to 3 basis points initial hit will go away over time.", "duration_s": 19.700000000000045, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0585.mp3" }, { "study_item_id": "MR-0586", "partition": "development", "call_id": "1833434", "exchange_index": 6, "question": "Congrats on the solid operating ratio. Great to see. Jim, may be just your thoughts on you mentioned that kind of nothing has changed in the outlook, but maybe get a little bit more specific if there is anything shifting in particular coal, metals, fertilizers taking a step down, is there anything in the market that you look at that alters your view as you look out?", "answer": "No. All of the external metrics to try and get a sense for where the business is going have seemed to somewhat stabilize at this lower, softer numbers. It's my personal opinion is, it took a while for them to get them there and if they're going to turn round, it's going to take a while for them to turn back off, and while there is some sense, more sense to date of optimism than maybe there was 10 days ago, these metrics and these numbers are not going to turn around in a couple of weeks. So we see this kind of slow growth environment throughout the quarter. And as we get nearer to the end of the year, hopefully we can see, have a little more light shown on the pathway beyond the end of this year and will be in a better opine on it.", "duration_s": 64.2800000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0586.mp3" }, { "study_item_id": "MR-0587", "partition": "locked_confirmatory", "call_id": "1970773", "exchange_index": 22, "question": "So just wanted to ask about the -- so the mix shift here, the defense part of the business still holding up and probably in line with what you expected. You talked about over 75% of the EBITDA coming from the aftermarket, but that includes the defense aftermarket, which is a decent size. I've always thought of the defense aftermarket margins being not quite at the level of commercial but still solidly healthy and solidly above the company average and maybe the defense OEM margins being, I don't know, in line or slightly below the company average but better than commercial OEM. Is that a fair way to think about it?", "answer": "Yes. I think that's a fair way to think about it. In total, we make less money on our defense business than we make on our commercial business. And the mix between OEM and aftermarket, a little different in defense, but directionally, what you're saying is correct, but not miles less, miles. Yes. It's not a big difference.", "duration_s": 21.440000000000055, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0587.mp3" }, { "study_item_id": "MR-0588", "partition": "development", "call_id": "2269101", "exchange_index": 23, "question": "All of them. All of them.", "answer": "We'll need an hour for that one. We'll do more in the call back. But to answer your specific question on cloud titans, definitely, Anshul and the team are very involved with the projects. And yes, those tend to be 1 to 2 quarters. But because of their long-term planning and our supply chain constraints, both go hand-in-hand. They're making some CapEx decisions, and we have some supply constraints. We are getting beyond that 2 quarter visibility to at least a year's visibility. So I think you're absolutely right in saying it's going beyond the project 1 to 2 quarters to 1 year because of supply constraints and because of their long-term decision. \nOn security, we -- I'll give you the short answer and there's a longer discussion. We will continue to partner with best-of-breed security vendors, number one. Our approach to zero trust networking will really be holistic and network centric. And there's really 3 parts to it. One is how do we provide the right network segmentation. We introduced the macro segmentation, how do we provide the right encryption capabilities at the DCI layer. This has been a huge differentiator for us and our data center products. So how do we do the wireless intrusion protection, all of those are network-related security. \nThe second area I would largely call visibility of situational analysis. The combination of both the awake products as well as the real-time telemetry and streaming and big switch dance monitoring fabric really allows us to attack security from a visibility perspective. And the third is the proactive acquisition of Awake itself. We didn't acquire Awake just to be a point security product. We really acquired it, and Anshul and Rahul are working on this, to make it a more seamless network and proactive network detection and response capability that's AI driven. \nSo stay tuned, you'll hear more from us on that, but all of this basically is our Zero Trust networking strategy, different from our partnerships with firewall vendors or cloud security vendors.", "duration_s": 115.57999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0588.mp3" }, { "study_item_id": "MR-0589", "partition": "development", "call_id": "1890919", "exchange_index": 16, "question": "And in terms of the inflation indices, do you have a lot of exposure in the contracts that are just going to naturally reset lower in this coming year? Or is that not", "answer": "Yes -- no. I mean, the -- on the thermal side, those are annual contracts. So they will reset sort of now on the met, as I talked about earlier. They reprice every quarter, but clearly -- so the met benchmarks being 140-ish or 150-ish $150 a ton in Q4, we'll sort of reset those contracts in Q1. So yes.", "duration_s": 35.48000000000002, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0589.mp3" }, { "study_item_id": "MR-0590", "partition": "locked_confirmatory", "call_id": "1780827", "exchange_index": 23, "question": "Sure. And then lastly, trying to make sure I understand. So on the tax rate, so for the full year, as I understand it, you expect that to be a 20% benefit. Is that correct? And I also believe you said that from a cash perspective, it basically would -- maybe if you could just restate what you would expect, if anything, on the cash side.", "answer": "Yes. So this is Russell. So that's correct. We expect a 20% benefit for the full year, and that's really just recalibrating our tax provision to factor in the lower wood products pricing. So as far as cash taxes, we'll pay minimal cash taxes. We have some refunds associated with the pension work that we did last year. And so we would expect to see minimal cash taxes in 2019.", "duration_s": 26.340000000000146, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0590.mp3" }, { "study_item_id": "MR-0591", "partition": "development", "call_id": "1640196", "exchange_index": 31, "question": "Okay, all right. And then, I guess, Mike, if you can just on the your KPIs that you talked about. You've noted you've taken out locomotives. And I presume that's accelerating as your performance improves. And you plan to improve that. But your gross ton miles per locomotive chart that you had there was flat year-over-year. Just wondering as you step back and think about that given the Clean Sheeting, is that something that we should have seen improvement that we should going forward seeing improvement. Is that something that you focused on whether it's train length growing or improved sightings? How you think about that metric?", "answer": "Yes, it is absolutely one of our KPIs now and going forward. But if you look at the fourth quarter, you'll see that in December, it really changed. It was a big step function up in the quarter. So we took the locomotors out near the end of the quarter. we've continued to take locomotors out even into this year. So absolutely train length, train weight are all part of the operating plan changes we're putting in place. And again, we're not waiting when we see opportunities, we're taking advantage of it. But the more holistic operating plan will be the next quarter or 2.", "duration_s": 48.79999999999973, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0591.mp3" }, { "study_item_id": "MR-0592", "partition": "development", "call_id": "1835804", "exchange_index": 12, "question": "Okay. And so the follow-up question is -- thank you for giving a client in terms of your net margin expectations for next year. And Jamie, I'm wondering, just wanted to clarify, that range of 3.2% to 3.25%, that includes 2 rate cuts from here and if that's the case, then the contribution from the $4 billion in hedges should be a positive $40 million annualized with LIBOR at $150 million in given significant at high?", "answer": "Yes. So the guide we have is, because in October plus 2 more in 2020, March and September, and in order to help let's just look at all of that hedges that we have in place from a cash flow perspective. So our cash flow hedges in our first 3 quarters of 2019 made about $2 million. Over the next 5 quarters, if this rate cuts play out, those $11 billion of hedges are going to make $155 million. So that's $15 million in the fourth quarter and then the rest is spread across 2020. So that's really the backdrop for our confidence in the NIM overall not compressing going forward the way you saw in the third quarter. We just unfortunately did 1 year forward starting swaps so we probably done 7 months forward starting swaps to protect the third quarter. But when you look at first quarter 2019 versus first quarter of '20, our guide is that NIM will be down 5 or 6 bps with those July, September and October cuts and I get to believe that that's going to be best-in-class performance over that period of time. Actually, Eric, when you look at the cumulative change in NIM this year, we are ahead of our peers. I mean, it's been a very actually, very good performance for the first 3 quarters for this year when you look at it on a cumulative basis, also when you look at it as people are guiding out for the first quarter and the way we are getting fourth quarter, in 2019, NIM performance is very strong.", "duration_s": 108.36999999999989, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0592.mp3" }, { "study_item_id": "MR-0593", "partition": "locked_confirmatory", "call_id": "2205718", "exchange_index": 14, "question": "Conor, you talked about the occupancy and lease spread likely widening before it starts to narrow again. So you can talk a little bit about the cadence that you expect throughout the year between leased and occupied space?", "answer": "Sure, happy to. And Dave can comment as well. What we're seeing is the demand continuing, as David mentioned earlier. The anchor side of it never really been flowed. it Was Pretty consistent through the pandemic as most of our essential retailers saw a lot of market share up for grab and improving their portfolio by locating in high-quality assets that weren't typically available to them before. I do think that the big change that we've experienced is on the small shop side. And that's what's really, I think, is going to continue to improve the spread between physical and economic occupancy as we go through the year. I think historically, we were noted Glenn, probably around 275 basis points wise between those 2. I wouldn't be surprised if we eclipse that. I wouldn't be surprised if we hit 300 million just because I think there's a lot of pent-up demand, a lot of market share up for grab. And when you look at how retailers are thinking about this, the deals they're signing today are really more like 6 to 12 months out before they open. And so they feel like now is the time to grab market share so that when the reopening occurs, they're in the best position possible to soak up that market share. So we feel like with the transformed portfolio, we're in really good shape to have that spread widen out to potentially its all-time high. Yes. And then just to give you a little -- I was going to say, if you want just a little perspective. At the end of the third quarter, the spread was 150 basis points. We ended the year at 190 basis points. On a historic basis, our peak, I think, was about 330 basis points. So as we continue, obviously, this lease-up, and you're seeing the leasing momentum, to Conor's point, I would expect that we should exceed 300 basis points before it starts coming back down as those rent start flowing.", "duration_s": 118.17999999999984, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0593.mp3" }, { "study_item_id": "MR-0594", "partition": "locked_confirmatory", "call_id": "2048567", "exchange_index": 8, "question": "Just 1 quick clarification, if I could. Chuck, that revenue color, I think, you gave to Julian's question. Was that reported revenues? Or was that organic revenue commentary you were giving?", "answer": "It's organic, although we're lapping most of our acquisitions here, I think, for maybe Censis. But organic was my comment.", "duration_s": 9.420000000000073, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0594.mp3" }, { "study_item_id": "MR-0595", "partition": "locked_confirmatory", "call_id": "1777483", "exchange_index": 20, "question": "Good job [indiscernible] quarter on 5G trend. Mark, we hear in Taiwan that you entered [indiscernible] interposer market. Can you just talk about the strategic rationale and how big that opportunity is? And then I have a follow-up.", "answer": "Yes. I'm not exactly sure what you're referring to. Certainly, interpose is are part of the sandwich that makes the tester docs wafer. But we haven't made any announcements around specific products there, and we're not ready to talk about any of that.", "duration_s": 17.279999999999745, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0595.mp3" }, { "study_item_id": "MR-0596", "partition": "locked_confirmatory", "call_id": "2048567", "exchange_index": 30, "question": "Got you. And then the second one is the Group III and Group IV. So the sales on those businesses a little bit heavier. And the second quarter was kind of all about lockdowns, and people were doing break and fix as needed, which tends to be higher-margin type of sales. So I'm just wondering, was that the case for you guys in the quarter -- in the second quarter sort of the as-needed stuff, which maybe help enrich the mix, particularly in PI? Or was that not the case? Because I'm just wondering if that's maybe a headwind 2 quarters from now?", "answer": "No, not at all. I think when we look at what -- really, we have a very tight margin spread in our product lines. This is the power of FBS, quite frankly. So we don't necessarily distinguish that. The price metric, it really has to do with the fact that as we said from time to time that our high-valued brands are critical at these times for everyone. And so I don't think -- I'm looking across the groups right now and trying to think of where I could point to, where I could think of a margin situation that might be different from what I just commented, and I can't find one. So I think we'll -- more consumables is obviously higher margin. More Matco is higher margin. So a number -- obviously, the software businesses are high margins, but they're some of our newer businesses. So they don't necessarily represent the highest operating profit margin. So I think as our core businesses come back that, in some respects, you might suggest, is certainly a help as we look at margin expansion in the -- over the next year or so.", "duration_s": 64.07999999999993, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0596.mp3" }, { "study_item_id": "MR-0597", "partition": "locked_confirmatory", "call_id": "1639762", "exchange_index": 22, "question": "Saw you, Jim. Don't put your feet up just yet.", "answer": "I was just wondering whether you thought -- listen. I'm over here just relaxing. So I really appreciate it, Ravi. Thank you very much.", "duration_s": 6.7599999999997635, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0597.mp3" }, { "study_item_id": "MR-0598", "partition": "development", "call_id": "2400486", "exchange_index": 35, "question": "Sorry. And on the operating side, I mean, considering you are hiring so many new employees, I mean, 1,000 net is obviously much more than that gross. I mean if that -- what that's translating in terms of some of your real-time operating metrics relative to the past? And if there's an opportunity to maybe improve on the margin given how new your overall staff is?", "answer": "Yes. I would say if you think about the percent of our team members that are in the first 90 days, they're not as productive as team members that are -- have been with us for a year. And we do have a higher percentage of team members that are with us for the first 90 days than we were 2 years ago. So there are some productivity improvements that we can do for those new team members. And we are spending a little bit more in training than we did 2 years ago because of that. And so there might be some chance to offset some of those things. But that will just come from inflation down the road. But yes, operating, we're operating well all of our operating metrics. If you think about our guest satisfaction metrics, they're still at the same level as they were over the last 3 or 4 months, even with these new team members.", "duration_s": 46.31999999999971, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0598.mp3" }, { "study_item_id": "MR-0599", "partition": "locked_confirmatory", "call_id": "1700948", "exchange_index": 25, "question": "Kenny, I'd like to come back and international Intermodal. You obviously had a very nice increase year-over-year, and you called out some business wins. Can you give us a sense of the timing of those wins and how much left of the comp spaces that, that's going to drive and if there is any when you look at your pipeline of what might be coming up, do you feel good about any upcoming potential new business wins that will allow you to keep growth going forward?", "answer": "So we lap those here over the next couple of quarters -- next couple of months here. And yes, I do feel very bullish about the pipeline that's our business development pipeline. And as I stated, the beauty of what we're seeing with this more reliable service products, we saw that before the floods is that it opens up rail-centric market for us. And as we get more confident, we're expecting it to open up truck-centric type opportunity. But we've got a good cadence of opportunities that we can compete on, and we just want to make sure that we can win those at the appropriate levels for us.", "duration_s": 41.49000000000024, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0599.mp3" }, { "study_item_id": "MR-0600", "partition": "development", "call_id": "1778699", "exchange_index": 24, "question": "Nick, just to clarify. So the $0.20, when you say it's not on the guide, just to be clear, the $9.25, $9.75 would not include $0.20 of pending gain from the sale of gas and flame?", "answer": "John, that's correct. It does not include the pending gains from the sale of our gas detection business, nor does it include any impact that will come from Acelity when and if that closes, which we expect will be later this year.", "duration_s": 17.019999999999982, "episode_reconstructed": false, "eligibility_warning": null, "audio_filename": "MR-0600.mp3" } ] }