Good afternoon, and welcome to the Fourth Quarter 2016 HP Inc. Earnings Conference Call. My name is Amy, and I'll be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Diana Sroka, Head of Investor Relations. Please proceed.

Good afternoon. I'm Diana Sroka, Head of Investor Relations for HP Inc., and I'd like to welcome you to the Fiscal 2016 Fourth Quarter Earnings Conference Call with Dion Weisler, HP's President and Chief Executive Officer; and Cathie Lesjak, HP's Chief Financial Officer. Before handing the call over to Dion, let me remind you that this call is being webcast. A replay of the webcast will be made available shortly after the call for approximately 1 year. We posted the earnings release and the accompanying slide presentation on our Investor Relations web page at www.hp.com. As always, elements of this presentation are forward-looking and are based on our best view of the world and our businesses as we see them today. For more detailed information, please see disclaimers in the earnings materials relating to forward-looking statements that involve risks, uncertainties and assumptions. For a discussion of some of these risks, uncertainties and assumptions, please refer to HP's SEC reports, including our most recent Form 10-K and Form 10-Q. HP assumes no obligation and does not intend to update any such forward-looking statements. We also note that the financial information discussed on this call reflects estimates based on information available at this time and could differ materially from the amounts ultimately reported in HP's Form 10-K for the fiscal year ended October 31, 2016. For financial information that has been expressed on a non-GAAP basis, we've included reconciliations to the comparable GAAP information. Please refer to the tables and slide presentation accompanying today's earnings release. And now I will hand it over to Dion.

Thank you, Diana. Good afternoon, everyone, and thank you for joining us today. I'm pleased to announce another quarter of solid progress in both innovation and execution. As we wrap up our first fiscal year as HP Inc., we continue to deliver on our financial commitments, and I'm proud of the progress we are making in our core growth and future framework. In quarter 4, we delivered non-GAAP diluted net earnings per share of $0.36, within our outlook range. And we achieved net revenue growth nominally and in constant currency. For the full year, we delivered non-GAAP diluted net earnings per share of $1.60, within the original outlook range provided at the start of the year. We exceeded expectations for free cash flow, delivering $2.8 billion, and returned over $2 billion to shareholders, at the high end of our 50% to 75% target range. This time last year, we faced industry-wide headwinds and difficult market conditions. But as I said to you then, we believe change equals opportunity and that we would reinvent ourselves and our business to drive long-term success. We accelerated restructuring activities and adjusted our tactics to deliver on our commitments with operational discipline. What's notable is we did this while maintaining key investments in innovation to help us drive long-term profitable growth. And what you have seen during the course of the year are perhaps the most competitive and disruptive products ever. While the road ahead will continue to be challenged, we exited fiscal '16 with momentum and confidence in our ability to execute. Before we provide our view on Q1 of '17, I want to spend a few minutes on some of this quarter's highlights and achievements in Personal Systems, Printing and 3D Printing. Personal Systems delivered the trifecta once again with year-over-year and sequential…

Thanks, Dion. Overall, I'm pleased with our strong finish to the fiscal year. We delivered net revenue of $12.5 billion, up 2% year-over-year as reported or up 4% in constant currency. We expected revenue declines would moderate in the back half of the year, and in Q4 we saw revenue growth in EMEA and APJ both sequentially and year-over-year. Gross margin of 18.3% was down 1 point year-over-year due primarily to business segment mix, partially offset by Personal Systems rate improvement. Gross margin was flat sequentially with Print rate improvements offsetting unfavorable segment mix. Non-GAAP operating expenses of $1.4 billion were down 8% year-over-year driven by reductions in SG&A, primarily due to corporate governance and other overhead costs related to Hewlett-Packard Company included in the prior-year period, combined with nonrevenue-generating cost savings. These reductions in SG&A were only partially offset by a deliberate 13% increase in R&D, supporting incremental investments in A3 and 3D Printing. For the year, we achieved productivity and restructuring savings which well exceeded $1 billion. With a net expense of $88 million in OI&E, a non-GAAP tax rate of 21.5% and a diluted share count of approximately 1.7 billion shares, we delivered non-GAAP diluted net earnings per share of $0.36. Non-GAAP diluted net earnings per share primarily excludes, net of tax, defined benefit plan settlement expense of $117 million and restructuring and other charges of $36 million, partially offset by net tax indemnification credits of $38 million and nonoperating retirement-related credits of $19 million. As we noted on the last 2 earnings calls, the tax indemnification changes relate to the tax matters agreement with Hewlett-Packard Enterprise Company. We expect that certain tax matters and the related indemnification effect will continue to change each quarter and will be excluded from non-GAAP results. In Q4, GAAP diluted net…

[Operator Instructions] The first question is from Jim Suva at Citi.

You did very well in the PC segment. And previously, you made some comments about you were using your balance sheet to procure components. And it turns out that, that ended up being a very wise decision. Can you help us understand 2 things? First of all, are you continuing to do so? And if so, how long do you think you'll continue to do so or have the need to? And second of all, with the shortages of supply and you were able to get the components, how come your gross margins for PCs were not -- your operating margins for PCs were not stronger quarter-over-quarter as the revenues grew considerably quarter-over-quarter but operating margins didn't? Did you like reinvest some of the money? Or how should we think about why more of the PC didn't flow through?

Okay. Great. Thanks, and thanks, Jim. Let me say, broadly speaking, that the basket of components that make up a PC, there's some components in there that are in ready supply. There's other components in there that are in tighter supply, as we alluded to on the last call. And indeed, we did say we would leverage the balance sheet to go off and ensure that we procured. That is one of the changes that I've often talked about and a common theme that we have in the business, to take that change and turn it into opportunity. I think the team executed really well in the course of quarter 4 against that backdrop. I think the team did trifecta squared last quarter: They grew revenue, margin and share and they did it again this quarter, and I was pleased with their performance. Specifically on the margin rates, I'll let Cathie chime in.

Sure. Thanks, Jim. In terms of the margin rates, it was competitive pricing on a sequential basis but also normal seasonality, because we're really talking about kind of the sell-in for the holiday period of time, and that tends to have a higher Consumer mix. We did see ASPs basically up in Commercial on a sequential basis. But again, normal seasonality drove ASPs down for Consumer and overall down.

Next question is from Kulbinder Garcha of Crédit Suisse.

Just a clarification from me. On the supply side, Cathie, you said it's not going to be linear, which you said before, I think. But when I look at this quarter, if you back out the 7-point hit on growth in supplies from the inventory drawdown, I know there's probably some currency impact in there as well. The supplies business is probably down quite low single-digits. You're quite close to getting back to stability. Is there a reason why, let's say, in the first half of the year that could get worse before it gets better, if you can just explain some of those dynamics. Maybe it's comps, maybe it's how you're placing units right now, anything along those lines as we think about the next few quarters before you hit that more stable point by the end of '17 would be helpful.

Sure, Kulbinder. In terms of the -- what we are now coining the Four Box drivers, the Four Box drivers actually had a decline in constant currency for the quarter in minus 3% to minus 4%. So when you make all of the adjustments that you need to make to get to that -- and that's pretty consistent with the last 3 quarters, okay? So I think that's the way to think about it. I think it's also important, if I could add a point here, and that's just that we use the model to determine what we think is going to happen in the quarter as well as what we think is going to happen over time. And we were operating pretty much in line with what we had expected. So the quarter came in, in line. For next quarter, we are calling for a mid-single-digit decline, and that's really due to how we were placing units. If you go back to last year, in Q1 we were down 20% in terms of unit placements. In Q2 we were down 16%. Kind of Q2 to Q3, Q3 to Q4 we started to grow sequentially and, in fact, from Q3 to Q4 we grew sequentially units about 10% this quarter. And so we're starting to get an improvement, frankly, in the absolute level of the installed base. And so that's one of the boxes in the Four Box Model, and that's putting some pressure on -- early on in FY '17. And so it's really more the back half. But the way I think about how you all can get comfortable believing and having confidence that we're going to stabilize the supplies revenue by the end of '17 in constant currency is really because we're reporting out what the model said we would do at the beginning and how we're reporting -- beginning of the quarter and we're reporting out how well we did relative to that. So far, the model has been pretty predictive. And certainly over a longer history it has been very predictive. And so we feel good about the progress that we're making.

The next question is from Katy Huberty of Morgan Stanley.

How does the return to growth in printer units impact the Four Box Model and your confidence exiting the year with flat supplies? And then just a follow-up, you had talked at the Analyst Day about potentially reducing Printer Hardware channel inventory during fiscal '17. Is that something you still expect to happen? And is the impact baked into guidance?

Okay. So in terms of the units, Katy, what we talked about almost this time last year was the fact that we expected the overall environment to continue to be challenging, as a result of that we would need to consider this the new normal and we went to work on taking costs out of the business so that we could turn negative NPV units into positive NPV units and expand the TAM. And through the course of the year, that bridge that Cathie just walked you through, negative 20% in quarter 1, negative 16% in quarter 2, negative 10% in quarter 3, plus 1% in quarter 4 was a plan that we began executing after the Q1 earnings call. And so we have built that into our model, and our model is, therefore, predicting that we will indeed return to stabilization by the end of '17 in constant currency. So it's running according to plan, but it's not just the units, as we've often talked about, Katy, it's the quality of the units. Our Managed Print Services had another very strong quarter from a TCV perspective, as did our Graphics business, 13th consecutive growth quarter in constant currency for the Graphics business. Instant Ink, which is an important initiative for the home-based business, had strong enrollees yet again. And so many of the dimensions that we've talked about, not just the unit placement but the quality of the units, is operating according to our outlook.

And Katy, to the second part of your question about whether or not we have made a change to the sales model for Hardware as we have done for the supplies within print, the answer is that our outlook today, as is the same at SAM, does not include a change in that go-to-market model. We are still analyzing whether or not we want to do that and what it would take to do that.

The next question comes from Toni Sacconaghi of Bernstein.

I'm wondering if you could comment on the planned marketing investments and demand stimulation investments that you were planning for Q4 and whether you made them at the level that you thought and whether you got the acceleration in units that you thought. The reason I ask is it looks like Printer Hardware sort of improved with normal seasonality in Q4. And certainly the way you talked about last quarter was that your demand stimulation efforts would yield something significantly higher than that. So I'm wondering if you can comment, did you invest what you expected to invest? And did you get the kind of demand stimulation that you thought? And then I'm still struggling with how you can be looking at supplies growth being so weak in Q1 given that your comparison is so easy and your supplies is a function of your last 3 to 6 years' worth of sales. And so you shipped $100 million less in each of Q1 and Q2 in hardware. I don't know how that can mathematically translate into a deceleration against an extra comp on supplies growth going forward. Is there anything else there in terms of your plan to take down further inventory or anything else happening in the channel that might explain that? Because the math doesn't seem to work.

So let me start with the first question around marketing. So yes, we did execute on our marketing plans in Q4. And just to be clear, our marketing plans related to the supplies change that we were making is really not about stimulating demand at the hardware level. It's really about stimulating demand for HP-branded supplies. So it's about awareness and -- building awareness and brand preference and print relevance. So kind of helping people understand why they should want to print. And we did execute on that. The unit acceleration was actually ahead of what is normal seasonality for us. So sequentially we grew units 10%, and our normal sequential is kind of the 7% to 8%. So we're feeling good about the progress that we made. We did get acceleration on the Hardware side. In terms of your second question around supplies growth, why is it that weak in Q1, at this point in time, Toni, when we put through all of the different variables and all of the assumptions that we've got within our model, we are calling for a mid-single-digit decline in supplies in constant currency on a year-over-year basis in Q1 and that, even with that, the model is still basically supporting the forecast that revenue in -- supplies revenue in constant currency will stabilize by the end of '17.

Our next question is from Rod Hall at JPMorgan.

I wanted to go back to the Printing business and the margins. Margins dropped off more than we thought that they would in the quarter. And we see this unit number stabilization is a little bit better than we thought it would be. So I'm just curious how you would expect that margin to track through the beginning of the year, especially given the yen strength. Because it seems like, if you guys want to achieve your goals in supplies, you need to keep placing these units. If the yen -- or I'm sorry, the yen weakness. If the yen continues to weaken, then you may find that more difficult to do. So I just wanted to check that in light of the currency movements.

Sure. There's actually a few different questions in there, so let me see if I can hit them. The first one, in terms of the OP rate of 14% in Q4, that was, in fact, very much in line with what we had expected and what we talked about on the Q3 earnings call. And the reason it is off -- significantly off of Q3, which was 20.4%, is really the result of the last stage, the last quarter of the supplies sales model transition that we were going through without having the compensating software divestiture gains. Those all showed up in Q3 at the same time that roughly half of the plan for supplies transition was going through. So if you actually normalize over the year, the OP rate for Print was in line with what we've seen in the past, mid-teens at 17%. So I don't think there's any big surprises there. And that 14%, obviously consistent with what we said on the Q3 earnings call. So we had in our own forecast the fact that we were going to place these incremental units already. In terms of your question about kind of the Japanese competitors and the foreign exchange environment, I have to tell you it's a little bit hard to answer that one with clarity, and let me explain why. First, I think it's a very uncertain kind of macroeconomic environment, and it's hard to know what's going to happen on a go-forward basis, like from the U.S. administration, what kind of policies are going to be put in place and what -- the impact that's going to have on currencies. And then it's even more complicated because in many ways we didn't see broad-based kind of relaxation on aggressive pricing from the Japanese competitors when the yen was stronger. So now that it's weakened a bit in the last few weeks, it's unclear whether or not they're going to be more aggressive or this is just an opportunity for them to hold the pricing that they've had all along. It's just not clear. What is clear to us is that in our outlook for FY '17, we have assumed no change in the pricing environment. So we haven't assumed that even though the yen is a bit stronger kind of relative to '16, we have not assumed that the Japanese ease up on pricing, nor have we assumed that they get more aggressive.

The next question is from Sherri Scribner of Deutsche Bank.

I was hoping to get a little more detail on the strength in the PC business, the linearity in the quarter and also how sustainable is that strength into next quarter as well as further out?

Thanks, Sherri. So I would say that the PC market is operating as we expected it to. I still think there's uncertainty in the market. The market as a whole hasn't returned to growth. At the beginning of the year we anticipated that -- we expected the declines would moderate through the course of '16, and they did. And we were able to adjust to that market I think much more quickly than many of our competitors. As a benefit of being a separated company, the speed, flexibility, focus of the organization was able to react to these market conditions. And as a result of that, we've performed significantly better than the market and taken a solid premium to the market. I think longer term the business will continue to evolve and develop. There's a very large continuum of devices, everything from a smartphone all the way up to a workstation. Some of that market we participate in, not all of that market, but the lines are blurring between the different categories within that spectrum. And indeed, categories are being created in the x3. Elite x3 is a great example of a device that bridges from sort of a phablet all the way through to a PC and a laptop. So I would characterize that the market is changing, we're ahead of that curve, we're skating towards where we believe the puck is going and investing in the heat of the market that we find particularly attractive. I think the team did a great job in our Gaming platform, in the Premium segment, in Commercial Mobility, whether it be x2 or x3, and we're unlocking part of the market that we are still attracted by. Let's remember, it's a $320 billion TAM, and about half of that are things like services, displays, accessories that we have lower market share and we're looking to expand our business and the team is expanding our business there. So we still think there is great opportunity within the Personal Systems environment. It's a changing market landscape. It has improved from the beginning of last year. And we don't broadly disagree with the outlook from the analysts, but I think what you can expect us to do is continue to deliver ahead of the market.

And let me just -- you also asked a question about linearity in the quarter. The linearity in the quarter was normal, so there was nothing particular to call out. It was normal, historical linearity.

The next question is from Shannon Cross at Cross Research.

Dion, can you talk a bit about what you're thinking with regard to A3? You've now had -- well, you've announced the Samsung acquisition a couple of months ago, had some time to digest it. So I'm curious as to what you're hearing from your channel partners, if there's been any change to how you're thinking about the approach, relationships with Canon, what you're planning on with Samsung's printers, just if you could give us a bit more color.

Sure. I would say, Shannon, that the acquisition is -- and the integration is running according to our timeline. We expect it to close within the 9 to 12 months from the original announcement date. The team is on the ground working very closely with Samsung counterparts to get this done. We continue to be incredibly impressed with the quality and the caliber of the people as well as the technology. Of course, Samsung represents more than 10% of South Korea's total GDP and attract the very best talent in the entire country. And having that group of very high-caliber engineering and other folks join our company is very impressive. The 6,500 patents are very high-quality patents as we continue to work through that. And it gives us all the opportunity to disrupt this $55 billion market. So that's on the Samsung side. We've been running a separate track really through the course of the entire '16 as we were looking to really aggressively enter the A3 market on the go-to-market side of things. And I have traveled all around the world, met with the largest A3 channel partners, most -- many of which are not channel partners for HP today, some of which are. The Venn diagram is not mutually exclusive here. And I think we've made tremendous progress. We've shared with them the value proposition of working with HP and our disruption in the space. And we have an incredible amount of interest right across the globe from these go-to-market partners as we begin to unlock and even begin quoting on opportunities that we expect to deliver on as we launch the products in the April time frame.

The next question comes from Simona Jankowski at Goldman Sachs.

Cathie, I think you began to touch on this, but I would love to hear more of your takeaways on the potential implications of the U.S. election, in particular as it pertains to the potential changes to the tax code as well as tariffs.

Simona, it's really too early to have a strong opinion on all of the different proposals that are out there because there are so many. And so it's unclear at this point in time exactly what the situation is going to be and how it might impact HP and what actions HP might take as a result of those policy changes.

I would add that we obviously support comprehensive tax reform that makes us more globally competitive. We support multinationals having fair access to overseas markets and the flexibly to operate global supply chains. But I think Cathie's quite right. It's very early days. We operate in 170 countries around the world, and our mission here is to deliver experiences that amaze and we want to be able to do that in an environment -- in an appropriate tax environment and in an appropriate global environment.

The next question is from Maynard Um at Wells Fargo.

Just to clarify, can you clarify whether your guidance includes any real estate sale gains from your San Diego campus? And then for the question, can you just talk about PC channel inventory out there and whether you think there's a risk of greater than seasonal decline into the calendar first quarter given the relative strength we've been seeing?

Sorry. I didn't catch that last one. You're talking about PC channel inventory levels?

Right, PC channel inventory and whether you thought there was greater risk going into Q1 given the relative strength we've been seeing recently.

So I think PC channel inventory from our perspective, from an HP perspective, is well under control and well within our ranges. Of course, you all know my view on the profile of the inventory. Not just the absolute amount of inventory but the aged element of the inventory is also very well under control. This is a situation that I think is incredibly important to maintain the momentum inside this business. We're well under control. Given we're operating now in a different environment than we have been for many years where we've had an oversupply, we're in an environment now where there is more of an undersupply. And so as a result of that, I think overall channel inventory levels across the broad landscape are lower than they have been, let's say, this time last year.

And in terms of your question about the San Diego sale, we don't typically go into that level of detail. If at any time a transaction is material enough, then we will call it out.

The next question is from Steve Milunovich at UBS.

I just wondered, relative to the Analyst Day, if there are any material changes in either the EPS or free cash flow bridges that you provided? And in particular, I wanted to ask about the productivity improvements, which I think were tagged at $0.43 to $0.47 for fiscal '17. Could you be a bit specific about where those are coming from and your confidence level on achieving those?

Sure. In terms of the EPS bridge and the cash flow bridge, the answer is no, there's no material change to them. If you want more, I'll follow up on that. I'll let you give me a follow-up in a minute. On the productivity side of the house, it is -- there is not a single silver bullet for us to -- or a lever to pull. It's really going to be across a number of dimensions. And it's all the things that we've been talking about in '16 that, frankly, have opportunity in '17 as well: simplification of our portfolio, really focusing on the BOM cost and making sure that every interconnector is exactly what -- we need that interconnector and every piece of metal is -- we need metal, we can't use plastic. I mean really reengineering constantly the new products at the same time we're simplifying our portfolio. We're also doing process reengineering. And that -- we're doing process reengineering in finance, we're doing it in sales ops, we're doing it in legal, we're doing it everywhere in the company. And technology enables us to take new processes and automate pieces of those processes. And so we're looking at that basically across the company. And my view is that's probably never done. There's always new technology coming out that helps you improve a process from an efficiency perspective. And then also just broadly staying completely focused on reducing nonrevenue-generating cost everywhere we need to do that. I think there are opportunities in warranty we've seen. There's opportunities in making sure that the discounts that we're giving are giving us the appropriate return. I mean, it's just all of these items. And they're probably the same list of items that I would've given you a year ago. There's just more to do and there's always more costs that we need to stay focused on taking out.

That's great. Maybe I would ask what PSG and printer operating margins are implied by your full year EPS guidance.

So we don't break them out specifically. But the way we think about the Personal Systems business is that it's roughly a 3% to 4% operating margin business. Now there are quarters in which it's higher than that and there are quarters when it's a little bit lower than that. But that's kind of how we think about the rate of the business.

We also think about absolute dollars, more importantly.

I was going to add that. In the big scheme of things, what we're really focused on is operating profit dollars. So if there's kind of some low end SKUs where we can scrape out some gross margin dollars but it will dilute the rate, we still do it. We're focused on profitable growth, and profitable growth is designed to be basically dropping dollars to the bottom line. And so -- but I think we think about it in the 3% to 4%. On the Print side of the house, we've seen in '16 kind of mid-teens. If you go back a few years, it's kind of generally been in the mid-teens space, and we would expect that, that would be true in '17 as well.

And from an entire business perspective, we've always said for the long term expect us to be in the 8% to 10% range.

And I will also -- just if I can put a plug in here for the Print business, if there's an opportunity, because of the cost structure actions that we've taken, that we actually create a significantly bigger pool of NPV-positive units that we can go after, the team knows that we will drop below what -- the mid-teens. What's important is setting up -- making the right investments every day in that business and setting this business up to maximize the area under the curve. Right now, our range is kind of mid-teens.

The next question is from Amit Daryanani from RBC Capital Markets.

This is Irvin Liu calling in for Amit. As it relates to your supplies channel inventory actions, I know it's still early, but can you talk about if you have seen these actions contribute to progress toward a more stabilized supplies pricing environment? And if so, how does that compare with your internal expectations?

I would say, broadly speaking, the shift from push to pull is operating according to our expectations. I think we have much less product on promotion than we had in the past, and that's in a more stabilized pricing environment in an omnichannel world that is incredibly sensitive to large fluctuations in end user pricing. So that was the desired effect. I think we've seen significantly lower gray marketing from region to region. That was also one of the key design points. So still very early days but the signals are the right signals and the model is operating according to how we expected it to operate.

I would say that it's -- add to that, it's -- we feel like we've really successfully executed over the last couple of quarters and that we are now making changes to operational metrics and how we drive that business because of the new environment. We specifically have reduced our channel inventory target ranges and narrowed them. And we exited Q4 -- if we had applied those same ranges in Q4 of '16, we would be within those ranges. So we feel really good about that -- the progress there. And then the other thing is that we are really hearing from our channel partners that they believe this was the right thing to do, that given the omnichannel realities that they have to deal with and we have to deal with, these actions were the right things to do.

Completely unquestioned support from the channel partners.

The last question is from James Kisner at Jefferies.

I want to drill down on the Desktop unit strength. I don't think we talked about this in the call. But I think it's the first unit growth quarter we've seen in 8 quarters. Wondering what the dynamics are there. Were there specific promotions happening there? Are you seeing a turn in the desktop market, any particular models driving that? Just any color on that would be helpful.

Yes, look, we're really pleased. I mean, of course Notebooks had another really strong quarter of growth, units up 9%. But it was great to see Desktop revenue grow 2%, units up 1% year-over-year. No magic here; really hard work. The team went to work at the beginning of -- actually midway through '15 began redesigning the entire supply chain to take costs out of that, redesigning the entire lineup. I think we've got some incredibly innovative products here that are really resonating with customers. They're now in the right price function value equation. And when you get that right, when you do the segmentation and you get the cost right and there is value, then you end up with a better result, and that's what we're seeing with the performance of the Desktop business.

I mean, do you think the market is also doing better? Is it really just you outperforming, or are we seeing an inflection in the market also?

I'd say broadly speaking the market -- depends what your relative point is. If you look at this time last year, the market is doing a lot better than it was a year ago. And it was -- if I recall correctly, it was double-digit negative. It was like negative 12%. And we're in sort of mid-single digits now. We're executing better than the market at a significant premium, and we're getting upside as a result of that. So thank you for those questions. I know it is late on the eve before many of you are going to take off here for Thanksgiving. I do want to sort of close off with saying I was really proud of what the team did in quarter 4 and how we rounded out the year. I think we enter FY '17 on an upward momentum trajectory, and that's a very different position to what we were in this time last year, as you will recall. I think there's a lot of change going on within the industry, within the macroeconomic environment, but we're adapting to that change and we're turning it to our opportunity. We know how to operate in both up and down markets. We believed that this was going to be the new normal, and we set ourselves up from a cost position to be leaner athletes as we enter this environment. And I think through the course of last year, we were able to demonstrate quarter after quarter that we would do what we said we would do, and I feel proud about that. I think we're entering '17 with the right strategy, executing on core growth in future and leading in the market where we choose to play and not chasing share for share's sake. But profitable growth is very important to us. And stabilizing supplies by the end of '17 in constant currency is also incredibly important to us and I know for all our investors as well. I have great confidence in HP, and I'm really convinced that the best years lie ahead of us. Thank you for taking the time. Happy Thanksgiving.

Happy Thanksgiving.

Ladies and gentlemen, this concludes our call for today. Thank you.