Hello, everyone, and welcome to Ingersoll Rand Q3 2022 Earnings Conference Call. My name is Emily, and I will be coordinating your call today. [Operator Instructions] I will now turn the call over to our host, Matthew Fort with Ingersoll Rand. Please go ahead, Matthew.

Thank you, and welcome to the Ingersoll Rand 2022 Third Quarter Earnings Call. I'm Matthew Fort, Vice President of Investor Relations. And joining me this morning are Vicente Reynal, Chairman and CEO; and Vik Kini, Chief Financial Officer. We issued our earnings release and presentation yesterday, and we will be referencing these during the call. Both are available on the Investor Relations section of our website. In addition, a replay of this conference call will be available later today. Before I start, I want to remind everyone that certain statements on this call are forward-looking in nature and are subject to the risks and uncertainties discussed in our previous SEC filings, which you should read in conjunction with the information provided on this call. Please review the forward-looking statements on Slide 2 for more details. In addition, in today's remarks, we will refer to certain non-GAAP financial measures. You can find a reconciliation of these measures to the most comparable measure calculated and presented in accordance with GAAP in our slide presentation and in our earnings release, both of which are available on the Investor Relations section of our website. On today's call, we will provide a strategy update, review our company and segment financial highlights and provide an update to 2022 guidance. [Operator Instructions] At this time, I'll turn the call over to Vicente.

Thanks, Matthew, and good morning to all. I would like to begin with a big thank you to our employees worldwide for their hard work in helping us deliver another record quarter in Q3. You consistently exemplify our purpose and think and act like owners to deliver on our customer needs. Every day, I am impressed with how you're leveraging our IRX process to outperform in a continuously challenging environment. Our performance this quarter and year-to-date reinforces the impact we have as owners of Ingersoll Rand. And now let's review how we accomplished these results on Slide 3. Our achievement is reflected in the numbers and also in our commitment to Lead Sustainably. We continue to position Ingersoll Rand for long-term value creation through industry-leading innovation that offers intrinsically sustainable benefits to our customers. Through Q3, demand remained strong. And while macroeconomic, geopolitical and supply chain uncertainties continue to be a concern, we remain focused on what we can control while leveraging our strong balance sheet and operational mindset to execute on our commitments. Remaining agile in today's environment is critical, and you will see today how we continue to accelerate organic growth through demand generation and product execution. In addition, we remain committed to our capital allocation strategy, which is focused on inorganic growth through bolt-on acquisitions. Today, we're highlighting 6 new companies we have recently acquired or have under contract that will strengthen our position in core categories and broaden our exposure to high-growth, sustainable end markets. Turning to Slide 4. Today, we will discuss 4 critical elements of our compounded model to demonstrate how we stay focused on controlling what we can control. Moving to Slide 5, we have some exciting news to share. We recently earned a score of 81 on the S&P Global Corporate Sustainability…

Thanks, Vicente. on Slide 9, we continue to be encouraged by the performance of the company in Q3, with a strong balance of commercial and operational execution fueled by IRX, despite ongoing macroeconomic uncertainty. We remain on track to deliver on our $300 million commitment in cost synergies from the merger. And as we have indicated many times, we have a funnel that stands in excess of $350 million and we are ready to take incremental actions, if warranted by macroeconomic conditions and market activity. Total company orders and revenue increased 10% and 14% year-over-year, respectively. We saw strong double-digit organic revenue growth in both ITS and PST at 19% and 15%, respectively. Overall, we posted a strong book-to-bill of 1.09 turns for the quarter, and we remain encouraged by the strength of our backlog, which is up over 40% year-over-year. The company delivered third quarter adjusted EBITDA of $376 million, a 20% year-over-year improvement, and adjusted EBITDA margins of 24.8%, a 110 basis point year-over-year improvement and a 160 basis point improvement sequentially from Q2. Free cash flow for the quarter was $253 million despite ongoing headwinds from inventory due to global supply chain challenges as well as the need to support backlog. And total liquidity of $2.6 billion at quarter end was up approximately $200 million sequentially. Our net leverage continues to improve and is at 1.0 turns, which is 0.1 turns better than the prior quarter. Turning to Slide 10. For the total company, Q3 orders grew 18% and revenue increased 22%, both on an FX-adjusted basis. Total company adjusted EBITDA increased 20% from the prior year. And the ITS segment margin increased 70 basis points, while the PST segment margin declined 60 basis points, driven primarily by the impact of prior year acquisitions as well as…

Thanks, Vik. On Slide 12, our Industrial Technologies and Services segment delivered strong year-over-year organic revenue growth of 19%, split evenly between price and volume. Adjusted EBITDA rose 15% year-over-year, with an adjusted EBITDA margin of 26.2%, up 70 basis points from prior year, with an incremental margin of 32%. We also delivered sequential margin expansion of 80 basis points from Q2 to Q3. Organic orders were up 16%, with a strong book-to-bill of 1.13 turns. And note that on a 2-year stack, the ITS segment organic orders grew approximately 50%, which is in line with the Q2 2022 2-year stack, meaning that thus far, we continue to see strong demand for our products. Moving to the individual product categories. Each of the figures exclude the negative impact of FX, which was a 7% headwind across the total segment on both orders and revenue. Starting with compressors. We saw orders up in the high double digits. And a further breakdown shows orders for oil-free products grew 20% and oil-lubricated products grew in the mid-teens. The Americas team delivered solid performance with orders in North America up high 20s while Latin America was up mid-30s. In Mainland Europe, orders remained strong with growth in the low single digits, while India and the Middle East were up high double digits. The Asia Pacific team delivered orders growth in the high single digits driven by low single-digit growth in China and low 30s percent growth across the rest of Asia Pacific. In vacuum and blower, orders were up low 20s on a global basis. The global Power Tools and Lifting team continues their strong performance, with orders for the total business growing in the high double digits. Moving to the sustainable innovation and action portion of the slide, we're highlighting the relaunch of…

[Operator Instructions] Our first question today comes from Mike Halloran with Baird.

Two questions here. First question, obviously, the orders trends are really healthy and pretty impressive considering the backdrop here. Maybe just talk a little bit about the volume trends you saw through the quarter. Anything notable? Any areas of weakness? And when you look at those leading indicators that you talk to, any signs of concern in there? Or do you think there's just a lot going on that is unique to Ingersoll Rand that allows you to be able to continue a pretty healthy clip going forward on the order side?

Yes. Mike, I'll say nothing that I will classify as major significance up or down. I mean very good, stable, robust across the portfolio or the regions, the segments. Clearly, as we kind of highlighted here on the earnings call, it's a lot of that has to do with controlling what we can control. And clearly, our demand generation, it's a great example here that we're showing some proof points in terms of how that is helping us overcome any market dynamics that we see out there. Clearly, aftermarket continues and services continue to be a very important piece of our equation. And then -- so I think it's just continue the teams driving the initiatives that we have in place.

And I heard Vik's comments about if things change, you have the ability to leverage into some of those synergies to drive some upside to the range. And I know, Vicente, you've got a history of being able to act quickly if the environment changes. And so I guess what I'm just wondering is, what kind of things are you guys looking for to be able to pull that trigger in a more real-time basis?

Yes. Mike, as you could expect, we're quick and pretty agile and nimble in taking action. And a lot of that has to do with the proper planning that we have in place. So we already have several downplay scenario playbooks that we have with the team that, as we cannot look at the demand and we see that order patterns, if those materialize in terms of reduction or decrease, we will definitely take immediate action. So I think it's just one of those that we continue to look at, the leading indicators, the MQLs, the order rates, and we're ready to pull the trigger. I mean if you can think about it, one example of this is that over the past couple of years, as we integrated the two large companies, Gardner Denver and Ingersoll Rand during a period of -- in the middle of pandemic, we didn't do much on footprint. And footprint could be another area of continued expanding our synergy creation here from the merger of the two companies.

Our next question comes from Julian Mitchell with Barclays.

Maybe just a first question on the very short term. I know you get asked this hundreds of times in the last few months, but help us understand that fourth quarter EBITDA ramp one more time. I think it implies sequentially, sales are down slightly and then EBITDA is up about $20 million sequentially even with a wider sort of corporate cost. So maybe just help us understand between the 2 segments how those earnings are moving up sequentially.

Yes. Julian, I think the way to think about it sequentially, think about revenue to be kind of fairly, on an absolute dollar basis, consistent, maybe slightly up Q4 compared to Q3. And this implies kind of on a year-over-year, the organic growth is going to be in the top end of the organic growth guidance, kind of mid-teens growth versus what you saw here in the third quarter. Fairly similar, slightly above. But FX continue to be a headwind of an additional 100 to 150 basis points. And M&A roughly 200 basis points lower than Q3 as some of the M&A falls off and we move through the fourth quarter. So when you put all this together, kind of comparing to the total company from an EBITDA perspective, and this is fairly similar, I would say, in the segment level, is that you would continue to see improved price realization Q3 to Q4, given the actions that we have already taken and inflation staying flat, I mean relatively flat to Q2 exit level. So again, we expect to see a moderate improvement as we go quarter-to-quarter. M&A synergy realization for the deals we closed in the second half of 2021, particularly PST, we'll continue to see some acceleration on that as we kind of move ahead. And also don't forget that we still have roughly -- in the year, we had about roughly $50 million of the merger-related synergies that tend to correlate to volume. So again, we'll see some of that here in the fourth quarter. So those are kind of the 3 core variables that allows us to, to your point, with a prudent revenue being roughly consistent Q3 to Q4, we still see improvement in the EBITDA even though we're getting a big headwind on the FX. So again, it just speaks loudly to what the teams continue to execute really well despite a lot of headwind that we continue to see.

That's very helpful. And then maybe just my quick follow-up. There's a massive good color on IT&S orders and sales by region. Maybe then to focus on PST, how you're thinking about the sort of organic orders trajectory there. They were up kind of low single digit for a couple of quarters in a row. Understood the COVID headwind. So maybe how do we think about orders next few quarters in PST play out?

Sure, Julian. I think you said it well in terms of kind of reflecting here in the Q3 and Q2 ex COVID impact that we saw from these kind of large orders into 2021 not happening now. When you exclude that, PST was -- in the Q3 was up 8%, which we view as relatively healthy and in line with our stated Investor Day targets of growing PST in the mid-single-digit plus range. As we continue to move forward over the next few quarters, we expect that the teams will continue to deliver that kind -- in that kind of range as we move forward.

Got it. And the COVID headwind kind of drops out as we enter '23.

Yes. That's right. I mean there's a -- yes, it was mostly noted Q2 and Q3. A little bit here in the fourth quarter, but more -- I mean, less significant. And obviously, as you're going to 2023, there's definitely nothing.

Our next question comes from Joe Ritchie with Goldman Sachs.

So just starting off, I guess, Vicente, thinking about ITS, the order strength has been notable throughout the year. I guess it might be too early to think about the 2023 framework, but I'm curious, do you have any preliminary thoughts on growth, particularly in ITS? And then also, pricing has been very strong. Maybe some comments around the carryforward in pricing and how to think about that for '23.

Yes, Joe. So as we think about 2023, and clearly we're not going to provide kind of a detailed guidance here on this call on 2023. But a couple of items to consider, is that from a revenue perspective, I mean we had a very strong book-to-bill in Q3 over 1, and particularly much even stronger in the ITS. And so again, we continue to build more backlog. We built more backlog in Q3 as compared to the second quarter, even though obviously we had increased revenue output. So heading into 2023, we're very pleased that we're going to have much more backlog than we have ever historically had. And I think a lot of that has to do with how we have continued to align to the megatrends that we spoke about, around sustainability, digitization, that those are kind of gathering very good momentum. And it is then what will allow us, as we continue to move forward, perhaps continue to deliver or outdeliver the commitment that we said that the ITS segment can continue to grow at this kind of organically mid-single digit over the horizon and the period that we committed to. I mean in terms of price, we said that even in any market we can generate at least 1% to 2% of price regardless of the market conditions. And again, that's just because of the nature of our product being so mission-critical. So as we kind of go into 2023, you expect that we'll definitely continue to generate some of that new price as well as carryover, that will definitely a plan to carryover that will be much higher than the 1% to 2% of price. But I think the good thing that -- is that as we think about 2023 is that inflation seems to be fairly stable or stabilizing, which when that starts turning more favorable or kind of inflation decreasing, we're holding the price. So I expect that, that continue to drive continued margin expansion. And that we recognize that as we move forward, we'll continue to see also very good momentum on the integration of the M&As that we're doing here.

Got it. That's super helpful. And then if I -- maybe one question for Vik. You saw that this quarter, you guys had a $33 million LIFO adjustment. I think last year, it happened in the fourth quarter. Can you just maybe just provide some context around the timing of the adjustments? Like what to kind of expect that -- I guess maybe there aren't any surprises kind of like going forward in that regard.

Yes. Sure, Joe. I'll take that one real quick. So just kind of just high level, first and foremost, one, the LIFO adjustment, it's a noncash adjustment. It's done, frankly, more so for book or really tax purposes. We do state our books each quarter on a FIFO basis, which we believe is a more accurate assessment of our true operating performance. And as such, we do adjust out the LIFO reserve adjustment from our non-GAAP results. It's also worth noting, as you indicated, this is 100% consistent with our historic practice. You saw in Q4 2021, we did exactly the same thing. And in fact, the dollar impact was, interestingly enough, almost exactly the same amount. Now with regards to the timing, and I'd say really much more in line with accounting requirements, we do monitor materiality on a quarterly basis to determine when the adjustment should be made. And obviously, it was deemed that just given the inflationary dynamics that we've seen that it was appropriate to make that adjustment here in Q3 of 2022. So again, I would say not being inconsistent with what you've seen historic. It's just the facts and circumstances here that have dictated that we take the adjustment here in Q3. And it's also worth noting, obviously, that our guidance, the way we report all of our non-GAAP financial metrics, whether it be adjusted EPS or adjusted EBITDA, 100% consistent. So whether it's the adjusted EBITDA number you saw or the $0.62 of adjusted EPS, that excludes that impact, but that's 100% consistent with how we've guided and how we've historically reported.

Our next question comes from [Bastian Sosa Marin] with Wolfe Research.

So congratulations on the quarter. I was just curious and I wanted to ask a follow-up question on the LIFO reserve. Maybe you could shed a little bit more color on why it was so large. And are you seeing any add-backs on Q4? And if you can, something about the future of inflation.

Yes. I'll keep it pretty short here. I mean the LIFO reserve adjustment is obviously correlated to the inflationary levels that we have been seeing in the market. And as you would expect, given where inflation has continued to trend, whether it be last year or this year, you're obviously seeing the impact commensurate there. So again, I would tell you, it's reflective of the current operating environment that we're in. It's not being, quite frankly, more than that. But I think that's quite frankly the easy direct answer there. And then I'll reiterate kind of what I've said before, our practice with regards to stating our non-GAAP metrics is 100% consistent. And as such, that's what you've seen us report, whether it be -- whether it's our guidance or our actuals or our comparatives on a year-over-year basis.

Great. That's helpful. And my follow-up question would be about orders in compressors. So you had a low 30% order book in the Americas, while Europe and China were more middle single digits and high single digits. Could you maybe shed a little bit of light on your marketing qualified lead and how do they stack up against softer orders in Europe? And maybe if you could shed a little bit of light on what's the pipeline of MQL conversion order looks like?

Yes. In terms of the MQL, I mean you saw on one of the slides, we provided a little bit of color in terms of that increase in MQLs that we saw particularly in Europe, again, driven to the activities that the team have been doing. And as you saw, I mean over 60% increase in MQLs. It does take time to convert those leads. What we typically say is that it's anywhere between 6 to 8 weeks to go from the marketing qualified lead to the sales qualified lead that kind of generates the order. And to your point, I mean, there's a percentage of conversion rate. We don't really actually talk about that externally because, obviously, we think that this whole system that we have is really strategic and proprietary to us, which is very exciting what we have been able to build here together internally. But again, I think the exciting piece is that whether you look at it by region or by product line, MQLs continue to be stable, if not continue to look a bit upward momentum, as we kind of go into here in the fourth quarter. So...

Our next question comes from Andy Kaplowitz with Citigroup.

Vicente, it seems like a relatively difficult time to get M&A done given the volatility of the markets, but you've obviously been able to maintain or even step up your M&A activity. I know you mentioned your funnel is still 5x larger. Could you talk about the sustainability of your recent made momentum? Obviously, you announced some larger deals pretty recently. So just talk about sort of what you're seeing out there.

Sure, Andy. I will say that we continue to see pretty good momentum and activity on the M&A. And again, I think we have said it before, which is that a lot of our M&A, call it 90% of that, it is sole sourced, meaning that we are proactively going to the owners and cultivate that relationship in order to execute the M&A at the right moment in time. And I think what you saw here in a lot of these deals is exactly that. I mean think about even Everest, that vacuum and blower Indian manufacturer, I mean that has been a relationship cultivation of over 2 years. And clearly now is the right time to move on and transition mutually from the ownership of the family to even also us. So I think we continue to leverage a lot of our processes. I mean as you can imagine, we're utilizing IRX processes as a way to drive M&A through the funnel and increase the velocity. So I would say that we still see continued demand. We still see that there's a lot of companies that we're also walking away from. So in the same amount that you see deals that we're transacting, I mean we're walking away from a very, very large number of deals and transactions. So over 80 companies that we have said no to over the past kind of couple of quarters. So you can -- that tells you a lot of the kind of velocity and movement that we see in the M&A funnel. But again, yes, we're excited that, as you said, over 5x the funnel size and still already 8 LOIs currently on negotiation in addition to, obviously, the transactions that we have announced.

Got it. And Vicente, maybe give us a little more color regarding what you're seeing in China. Order growth looks like it maybe decelerated a bit in China in Q3 versus Q2. I think it was up low double digits pre last quarter and up low single digits this quarter. What's your visibility like there? I know you've done a lot of work there. The RMT has helped you. So what's your visibility there going into Q4 and into 2023?

Yes. I would say, Andy, that we still see fairly stable demand, I mean even as we kind of go here into the month of October. October on a year-over-year basis, actually, from a percentage perspective ex FX, even accelerated from the numbers that we posted here in Q3. So again is we continue to see good, stable demand. And I think important to note that Q3 of 2021, I mean this is the time when the -- when China, we were seeing really a 50% type of growth number. So again, it's a bit of a tough comp. But still, even the team was able to deliver a 2-year stack that is really impressive and see that continued momentum as we go here into the fourth quarter. And as you pointed out, a lot of that very important self-help. We show the example of compressors. But you can imagine that vacuums and blowers is very similar story that the team is driving and doing, localizing products, making it more for -- in the market for the market and then leveraging the commercial footprint to execute with the help of IRX.

Our next question comes from Rob Wertheimer with Melius Research.

So my question is really on Europe. You obviously used IRX to offset some choppiness in the European markets. And it's really just the fundamental question again about the rising need for energy efficiency in Europe as energy prices have gone way up versus the obvious potential hesitancy on spending CapEx. So aside from what you've done there, do you see customers coming to you with a need for energy efficiency? Do you see them being hesitant? How would you characterize the market?

Absolutely, Rob. That's definitely one of the core fundamental things that is definitely happening in Europe is that, clearly, natural gas prices, and you've seen a little bit of a drop here or dramatic growth of natural gas prices, but it takes time to digest that also through the system. But yes, long term, yes, I mean, we see that continue rising energy in Europe, but also in other places of the world as a way for us to drive that return on that invested capital to be very, very palatable when you think about generating less than 1-year payback when you buy a compressor. And not only a quick payback, but also you're doing something good for the planet because you're saving the energy and helping these customers achieve their sustainability targets.

And so do you think that Europe is getting worse or better on the underlying demand dynamics through the quarter and into 4Q? And I'll stop there.

Yes. Rob, in terms of what we saw in the third quarter, again, fairly stable. But the stability comes in really driven by, I would say, a good loan cycle CapEx kind of getting released. And that is in the sense of, again, related to sustainability, relating to energy transition activities. A lot of the things that we've been talking about in terms of getting ourselves aligned to these megatrends of sustainability and even digitization. I mean the team continues to do a very good job on driving that service and aftermarket capability in Europe. And as we kind of look into the -- into here into October, again, we still see FX-adjusted positive growth in the month of October from an orders perspective in Europe particularly, to your question. Yes, sure.

Our next question comes from Josh Pokrzywinski with Morgan Stanley.

This is Brandon on for Josh. Just two follow-ups on some of the questions that have already been asked. But first on the MQLs. When you turn to this MQL process in places like Europe where demand may be slowing, does that come with some sort of margin impact versus the more typical order process?

Brandon, the cost of customer acquisition for MQL is really low. So I would say, think about it as even perhaps it might be a margin accretion or margin improvement because we're not sending the sales guy to knock on doors and we're doing all this kind of digitally. And so we're really increasing and enhancing the efficiency. So if anything else, I'll say that we -- because we're more prone to specifically put products with a higher margin through the MQL process, it's actually good news that you see a total average margin improvement.

Got it. And then just on M&A. With all the deals recently, how are you guys thinking about synergies for 2023 in what's been announced?

Yes. Brandon, I'll take that one. The way I would think about it here is, again, the framework with which we have done all these deals, and again I'll talk about it kind of in totality, you've kind of seen very much in line with historic practice. The pre-synergy adjusted EBITDA purchase multiple across effectively the suite that already you've seen us do has kind of been in that low double-digit-type range. We typically are able to drive anywhere from some roughly 2 to 4 turns of EBITDA multiple purchase reduction as we think about a 3-year out view. And so whether you want to look at it from a purchase multiple perspective and the ability to reduce that through synergies or, alternately, the ROIC kind of calculus where everything we're doing is very much in line with kind of our stated return criteria, mid-teens ROIC or greater than our cost of capital, so again double-digit type returns, that's the way I would probably describe all of these. And as Vicente mentioned during the prepared comments, these are all core technologies or close adjacencies. They are technologies, businesses, companies we know very well. They are split nicely between the 2 segments and, interestingly enough, actually across the different geographies, which is great because the integration happens in the business. And I would tell you, right now, we don't see any reason why these won't be in line with the types of deals and the types of returns and the types of synergy profiles you've seen from our historic bolt-on acquisitions.

Our next question comes from the line of Nathan Jones with Stifel.

I'm going to ask a couple of questions. E-Max, the E-Max heat recovery device that you highlighted, you talked about that being $1.3 billion of potential cost savings for customers in the U.S., 5x that globally at less than a 1-year payback, which kind of implies that's more than a $5 billion revenue opportunity for Ingersoll Rand. Customers are typically looking for 2 years or less payback on those kinds of investments. What's the limiting factor to getting those out there? Like how do you think -- how do you view the rollout of something like that and the customer adoption for something like that? What do you have to do for education, marketing, those kinds of things, to get that product out into the market?

Yes. Nathan, I think I would say that, that is basically the, I'll call it, limiting factor or not. But this is why we think and why we believe the demand generation in terms of digitally educating customers in a better way more efficiently and more proactive, is the way to go even in industrial market space that we are today. So I think it's just a matter of continuing to educate customers. Customers see that technologies like this, what can drive for them. Clearly, you hear a lot about water heat pumps and other things in Europe. We think this is also another avenue of technology that can really help a lot of companies save energy, not only in this case, for how we do it on the heat recovery unit but in many other applications. So again, it's just one of those that -- it's just all about educating customers and customers seeing that they can grab that activity and implement it in their businesses. So -- but yes, you could imagine that we're leveraging -- as you can imagine, we're leveraging the demand generation team and a lot of our digital transformation activities towards educating customers on very unique innovations like this.

And then my follow-up around the drying side of the business. I think it's pretty obvious you guys have decided that having the drying capability to go with compression is a strategic advantage for Ingersoll Rand with some of the acquisitions you've been making. Can you talk about why you think being able to supply both the drying and the compression is a strategic advantage and how you can leverage that in the marketplace?

Yes. So Nathan, in simple terms, the more you can actually optimize the total system versus optimizing or suboptimizing multiple systems separately, then you're better off. Meaning if you have a compressor that is attached to a dryer and you can actually work in a way to really optimize the 2 at the same time in an ongoing operating basis, that, I think, is a very winning proposition for us to drive that to the customer and then potentially create new revenue streams that could be very good for us. So again, it's just one of those that we believe that air treatments whether you design it or whether you're really utilizing the air treatment as a way to generate nitrogen or oxygen at point of use, it's a good thing for the customer, it's a good thing for the planet and it goes really well aligned with our just total holistic company strategy.

Do customers see the value in you having that -- the dual capabilities?

Yes. Yes, yes. Because then again, you can -- when you sell it, you're talking to the customer about the best optimal solution between the 2 versus having a customer buy a compressor and then buying something else from someone else and the 2 of them have just not been optimized together. So the better optimization which then drives better -- yes.

Those are all the questions we have for today. So I'll now hand back to Vicente for concluding remarks.

Yes. Thank you. Concluding, I just want to say that you have seen our culture continues to be a very unique differentiation and differentiation based on the performance that we're driving, and this is driven by our employees, which we pass on with a big thank you. I mean our employees continue to be highly engaged, and it's driven by a load of activity that we do internally in the company as well as this ownership mindset and thinking and acting like owners because all the employees are owners in the company. And we're very excited about what's ahead of us and continue to drive performance and be very transparent with all the investor community. So with that, thanks so much, and look forward to seeing many of you as we go into the road. Thanks.

Thank you for joining us today. This concludes our conference call, and you may now disconnect your lines.