Good morning, and welcome to the Federated Department Stores Third Quarter Earnings Release Conference Call. Today's conference is being recorded. I would now like to turn the call over to your host, Ms. Karen Hoguet. Please go ahead ma'am.

Thank you. Good morning, and welcome to the Federated Department Stores call scheduled to discuss our third quarter earnings. I am Karen Hoguet, CFO of the company. Any transcription or other reproduction of the statements made in this call without our consent is prohibited. A replay of the call will be available on our website, www.fds.com, beginning approximately two hours after the call concludes. Please refer to the Investor Relations section of our website for discussion and reconciliations of any non-GAAP financial measures discussed this morning. Keep in mind that all forward-looking statements are subject to risks and uncertainties that could cause the company’s actual results to differ materially from the expectations and assumptions mentioned today due to a variety of factors that affect the company, including the risks specified in the company’s most recently filed Form 10-K and Form 10-Q. The third quarter was a big one for us. September 9th marked the combination of all the hard work and effort that went into preparing all of the former May doors to be converted to Macy's. The brand launch was very successful and we are very proud of what we've accomplished in the first year of owning The May Company. While we would have liked to have seen more progress in the performance of our new Macy's or former May doors post-launch, we did see a lot of progress and reason to be confident about the future, especially in the soft goods part of the business. Customers in the former May doors responded well to our private brands and the market goods that were more interesting and more differentiated, and as you know we were pleased with the sales performance of our legacy Macy doors and Bloomingdale's, as well as the profit performance of the total company. Sales in…

The question-and-answer session will be conducted electronically. (Operator Instructions). And, our first question will come from Deborah Weinswig of Citigroup.

Good morning. Karen, you mentioned that the May customers had responded well to the Federated private label, what is the percentage of private label right now at the legacy May doors and when should we expect that to be at the same level as the legacy Macy stores?

I don’t know what it is currently in the third quarter. But historically, it was more like 12% -- 13% versus our 18%, and Marshall Field's was at the 9% level, so clearly growth in there. And our thought was it would take 2 to 3 years to get the penetration the same in the old Macy doors -- I am sorry in the old May door as the legacy Macy doors.

Okay.

The reason for that is you don't -- just don't want to throw the products and force it on the customers prematurely.

Right, that makes a lot of sense. And then, you had also mentioned beside to your value for the holiday period, which would be compelling, especially in the home store, can you elaborate a bit on that?

I mean the fourth quarter is always an important time to offer great value and in the home store that is particularly true. So that’s something we always do as we move into the fourth quarter. We did learn a lot from May company last year in the fourth quarter, that did a terrific key item business that we are emulating and together moving forward with this year, which is driven by very good value.

The reason I had asked is there has certainly been in the media a lot of discussion about the idea that promotions and discounts will be stepped up during the holiday season, so I just wanted to kind of get your insight in terms of how we should think about kind of maybe third quarter versus fourth from a promotional perspective.

Quarters, by definition more promotional in third.

Okay.

I mean always. So I don’t think there is anything unusual about this year.

Okay, that’s it. I think that there has just been a lot of questions around, so I just wanted to get cleared out, so that’s very helpful. Thanks so much Karen.

Thanks, Deb.

Our next question will come from Michelle Clark of Morgan Stanley.

Good morning. Hi, Karen. One, are there any regional differences in the performance of the former May company doors? And then second, can you comment on the level of markdown activity at the former May company doors? Thank you?

Really there is not huge differences across the May doors. I had heard last week there was some rumblings about, I think, it was Southern California, has been weaker which is not true.

Okay

It's an overall former May problem. Sure there is regions that are better than -- or worse, but there is no major learnings from that. So it's an overall issue.

Okay, and then the question on level of markdown activity at May, one were relative to your plan and then second relative to year-ago levels?

Well, I mean, what's going to happen in the May doors as the sales have been weak particularly in home, there will be more markdowns than what we had anticipated, but the blend as we look at our forecasted margin for the fourth quarter is still the same. So I don't see any dramatic shift there.

Okay, thank you.

We will now move on to Stacy Turnof of Merrill Lynch.

Thanks so much. Karen you talked about home being weak and private label apparel being strong. How about some of the other categories -- accessories, men's, shoes, what's going on there at the May division?

No. No, soft goods (inaudible) I am sorry including women's apparel, men's apparels, [standard core] which really is the non-home parts of the business there have been much better results.

And in the home area could you may be give us a little bit more color on is it across the board in all categories that's weak or is it more of the furniture type items?

It's really across the board.

Okay, and then my final question, any comments on inventory levels between the legacy stores and May?

In total we are pretty comfortable with the inventory levels at both places. In some of the May legacy stores we think the inventories are light and we think that may have contributed to the sales trends, but overall I would say the inventory levels are in good shape.

Great. Thanks so much Karen.

Thanks Stacy.

Our next question will come from Adrianne Shapira of Goldman Sachs.

Thanks. Karen you had mentioned as far as offering very good value in the fourth quarter around home at the new Macy's doors. Can you tell us have you -- did you take any of the early markdowns related to this in third quarter.

No.

No, okay.

Our planned program for the holiday shopping period.

Okay. And then just share with us -- you shared what is offsetting the synergy savings, can you just give us maybe the pace of the synergy savings, where they are coming from, are they tracking to plan and how comfortable are you with where you are year-to-date?

I mean we are very comfortable that we will achieve the $175 million of synergies this year and at least $450 million next year. Most of what -- in fact, everything that we were going to achieve was achieved by the third quarter for this year. So, we're really at the run rate for the fourth quarter and there will be slightly more savings next year as you can tell. It's not only annualizing the savings this year. But most of what we're accomplishing has been accomplished on the synergy side already.

Thanks Karen.

We now move on to Dana Cohen of Banc of America Securities.

Hello, good morning, Karen. Couple of questions. Going back on the gross margin, with the company being flat, as I recall last year you had made for September/October but not August, which is a promotional month, does that sort of imply that the gross margin on an apples-to-apples basis was up year-over-year because this year you had the promotional month and you were flat?

It is something I don't know. I haven't looked at it that way. I mean this is what we had planned the quarter at.

Right, I just wasn’t thinking about it and in light of the fact that you did have a markdown month in there and you came out flat, it seems to imply an underlying benefit for the gross margin, but maybe you can get back to me on that. My second question is, going back on the top line given your comments, does that imply that apparel was on plan or was apparel still like to plan?

Well, soft goods is really what I had referred to. Apparel was very close to being on plan. Soft goods in total was close as well not on the close.

Okay, and then in terms of Q4, you sound more optimistic about Q4, what will be different in Q4 than Q3?

Well, Q4, it's retailers is what we live for and as have listened to all the conversations about their marketing, about the key items, about the in-store execution, and we've had a track record of having very good fourth quarters vis-à-vis third quarter, so I felt really good about what's happening. And we'll see but the trends going in on the legacy doors have been very good and I think there is enough that’s going to change in the May doors that we are going to feel a lot better.

Just specifically though, what do you think changes in Q4 in the May doors?

Well, you're going to have gotten assortments better because you are going to have known what's sold in September -- August, September, October. We are going to have more marketing as you always do in the fourth quarter. We are going to have these value-oriented key items, which will be good and we'll have had another three months under our belt in terms of the store people understanding the new assortments, the new systems, the new processes, which should help also. There is a lot of change that has happened. And I think with more time under our belt, we’ll get better.

And when should we see the impact of the new marketing person, I mean when will we see her marketing efforts?

I mean she's been involved since she joined. The first real campaign that will be heard from [Susan] will be in the spring season. But that’s not to say, she hasn’t been involved in the third quarter and has obviously had a bigger impact on the fourth.

Okay, great. Thanks so much.

Bernard Sosnick of Oppenheimer has the next question.

Yes, thank you. Karen, could you give us a little bit of more finite guidance with regard to the SG&A for the fourth quarter? The rate of decrease would seem to have to accelerate versus the third quarter, and like you said that most of the synergies have already been in place, I would assume that there'll be an absence of launch cost of various other things, so could you help us out on the rate of decrease in SG&A?

No, I really -- I mean I've given you the guidance we’re going to give. So, I'm sorry, I can't be more helpful.

What other changes might there be beyond the synergy?

That are unusual, none.

Okay. Was there -- has -- there wasn’t heavier advertising in the third quarter of significant degree because of the launch, or was there?

No.

Okay. Finally if I could just -- is there any impression in terms of your market research that the message to the May customers has not been fully or clearly conveyed that Macy’s is not more of an upscale retailer by a large measure, might there be some misperception among May -- former May shoppers?

We are still looking -- I did not see in the research yet that we have been doing post-launch, so I can’t answer that question.

Okay.

Maybe that perception, I don’t know at this point.

Okay. Thank you.

I mean the reality though Bernie is that that's not the case, but as you know we have to deal with perceptions as well as reality.

And, we'll now move on to Jeff Stein of KeyBanc.

I am wondering if you could just talk a little a bit about the fourth quarter expectation in terms of top-line in the sense that it would seem to me that the dye is pretty well cast and that perhaps, the May doors will continue to under perform in the fourth quarter. In order to make your guidance for the fourth quarter, do the core doors have to continue to beat expectations in order to get to that 1.40 to 1.50 range based upon the way you have the plan laid out now?

Well, I mean let’s address the sales guidance, if the May doors continue to under perform as they did in the third quarter, the Federated -- legacy Federated doors will have to do better than that to get to the sales range as what happened in the third quarter.

And is that what you are expecting currently, I am just kind of curious as to the way you have the quarter laid out internally.

Jeff, this is very difficult time to forecast, and we have different scenarios, and we will see as we get into the quarter.

Okay, and as you look at 2007, Karen, and you look at kind of 3% comp. If you would kind of dissect that a little bit, where do you see the May doors contributing on the comp side for next year?

Well, we said first half is 3+ comp, so I don't know what the plan will be at and obviously won't know until we get through the Christmas period this year. So until then, I won’t be able t answer that question.

Okay. And final question, can you bring us up-to-date on the status of the Bridal business and if you are close to completing a transaction there?

Obviously, I can't say anything until we complete the transaction.

Okay, thank you.

We will hear next from Christine Augustine of Bear Stearns.

Hi Karen, thank you. Is there anything that's unique about the systems or the processes in the home area that would cause those associates to be slower to get up speed?

Well, couple of things. One is that there has been very dramatic changes in assortments in home, and home often requires very experienced selling people so that they understand the product attributes. So, I think that's one thing that would make a difference. The big ticket systems change is much more complicated than the rest of the stores, so that would be another answer, Christine.

Okay. Are you doing anything, I guess, I am just thinking about kind of regional support for the stores, is there any way to kind of bring in experienced sales people from the Federated side in the fourth quarter that kind of cross-pollinate, or is it more a matter of just kind of additional training for some of those May stores?

I think it's frankly a matter of time. I think our store people have done a spectacular job of bringing the May people on board at all levels of the organization and have really --I have been in a lot of the former May doors and have been so impressed by the fact that they are now ambassadors to the Macy brand. So, I think it’s a question of time as opposed to anything else. We will obviously continually be training and watching for those situations, but the attitude and the effort, I think, will pay off in the end just taking a little more time.

And the [Miada] store launch, I know that’s not till next year, but that’s all doors correct or is that going to limit the doors initially?

All doors and will be extraordinarily exciting when that gets launched at the end of next summer.

Okay. Would you be willing to comment on your traffic trends and whether there is any variation between legacy Federated and May?

You know something, we don’t keep those. So, I couldn’t answer the question.

Okay. Then how about AUR, could you --

I don’t have that data.

Okay. Thank you.

We will hear next from Liz Dunn of Prudential.

Hi. Good morning, thank you. Is it fair to assume that the underperformance in the home store was both sales and margin and therefore can we assume that excluding home gross margins were up? And then is there any color you can share or any quantification of what percentage home is and was there a big change there versus the legacy May business? Thank you.

We don’t comment on margins by category. But in terms of percentage just around 15% of the store.

Okay. Thank you.

And moving on to Bob Drbul of Lehman Brothers.

Hi Karen, just have one question. One of the comments that you made was that the May customers wasn’t -- was used to more of a highly promotional cadence and I guess as you look to the fourth quarter, can you maybe just elaborate a little bit on how you've planned to address that in the May doors?

It is true for the whole company, I mean, for the fourth quarter. The fourth quarter is much more promotional than the third quarter. So there will be less dramatic difference in the May doors and but there is not going to be special promotions in May versus -- new Macy's versus old Macy's door.

Okay, okay. Thank you.

It's interesting and I should clarify that people often think that when you are less promotional there is less value in the store. One of the things that are on the Macy's side and the reason we’ve been so successful as we've reduced our public promotion, is that we’ve been giving the customer value in other ways throughout the store in everyday prices. So please don’t read fewer promotions as higher prices, less value or even higher gross margin rate which some of you have intimated. We just think it’s a more -- it’s a clearer way of pricing to the customer to give better value day in day out than having these major coupon events; and as you know, we've been doing this on the Macy's side and have been very successful at transitioning the customer.

Our next question will come from David Glick of Buckingham Research.

Good morning, Karen. Up to this point your national advertising has been very strong in terms of the Macy's branding message with obviously some value messages as part of your share of advertising. Will you use your national advertising platform in the fourth quarter to convey a stronger value message relative to your approach in Q3? And I guess since you have a national advertising platform this year and you didn’t last year, is that a real sales driving opportunity?

Yes, we are and yes, we hope so.

So yes, that’s a sales driving opportunity?

Yes so.

Okay, thanks a lot.

Our next question will come from Michelle Tan of UBS.

Great, thanks. Karen, on the SG&A, you mentioned that the dollars were less than you expected, and it doesn’t sound like a lot of that was because of expense, but can you give some color as to why that was, did you realize synergies a little quicker than you expected?

No, I think it is the expense slots other than selling.

Okay.

It's really the answer.

So the synergies in terms of the timing they were basically what you anticipated. Alright, and then one other question, just on home, as you look at the mix in the third quarter versus the fourth quarter, is home typically a bigger piece of the third quarter than fourth quarter or the opposite or is about the same?

It is something I don’t know the answer to that, sorry.

Okay. Thanks.

Our next question will come from Dana Telsey of Telsey Advisory Group.

Good morning Karen. Can you talk a little bit about, as you look at the home area, any thoughts on allocation of square footage to home and any adjustments that you see going forward? And also as you look out to 2007, how do you look at the allocation of dollars of CapEx and marketing spend being different in '07 versus this year? Thank you.

In terms of the square footage allocation on the Macy doors we are very comfortable with how it's allocated in total, not just home related, and on the May doors overtime we may tweak the allocation, frankly less related to home and more trying to get more space into the center floor area. And in terms of -- I'm not sure I understand the question, on allocation next year, obviously, we don’t have to spend the conversion capital that we’re spending this year, but taking that out of the mix the breakdown would be fairly similar to what it's been in the past.

And, on the marketing spends.

I am not sure -- the allocation in terms of what?

As you look at the May door -- the legacy doors -- the Bloomingdale's doors, are you spending the same amount this year on those doors as you had or do you think -- see marketing spend going up?

It's going be -- I don't know the answer. It's a really complicated question because this year we had the two nameplates for a while this year until we changed in September, so I don't know how to answer that question.

Okay. And how is Bloomingdale's in San Francisco doing given the new mall opening?

Yes, it is a spectacular store in any view. If you are going to be in San Francisco, please do stop by. It is a spectacular store physically, but more importantly it really represents what Bloomingdale's is trying to do on the merchandising front and the people in that store are so wonderful. It's just terrific. I am glad you asked Dana, thank you.

Thank you.

We will hear next from [Sam Classik of Edison Capital Partners].

Hi. I have quick question about your -- you mentioned home sales, I have a quick question about watch and jewelry, can you comment on sales there, both in the old and new Macy stores?

We don't comment on all categories, we just break out some that are doing better than others.

Okay. Thank you.

(Operator Instructions). We will now hear from Todd [Jones] of Legg Mason.

Yes, thanks. Karen just a clarification on the home percentage of sales, you said it was around 15%, is that the case for both the new May stores and legacy Macy stores?

Legacy Macy are a little bit higher and the May are a little bit lower.

Okay, so going back to -- your answer to a couple of questions ago, we could expect sort of that bifurcation to continue with the May doors may be going down a little bit more?

Well, ideally they are going to be the same. I mean we will bring May up to the Federated level, not in the fourth quarter, but over time. There is no reason to think that a legacy Macy door will look any different than a former May door.

Okay, thanks.

[Doman Amin] of Barclays Capital has the next question.

It's actually Tom O'Neill from Barclays Capital. Just a quick fixed income question, Karen, there was one article in the Wall Street Journal over the quarter noting that one equity investor thought it made sense for you to go private. Given Federated's history, you know the ongoing integration and the re-bouncing of your debt maturity schedule, it doesn't seem like a great time for that kind of transaction, so just wondering if you -- if this is something that you are considering?

Tom, I think, the key thing to say as you have heard is that we are committed to keeping our investment grade status. So, I think that probably answers that question.

Okay, very good. Thanks Karen.

Our next question comes from Teresa Donahue of Neuberger Berman.

Good morning, Karen. Quick question, in terms of your productivity sales per square foot or whatever, how much does improvement there at the old May doors figure into your 14% to 15% long-term EBIT target, my impression is they are about 10% below the legacy Macy doors at this point?

I don't focus on sales per square foot that way Terry, but in terms of the comp growth obviously we need to get the productivity of the stores back up to where they have been historically. Typically, the faster the comp store sales grow, the easier it is to get an improvement in EBITDA margin.

Okay. I guess -- Well I guess I was also figuring and to follow on to Dana Telsey's question about what you are thinking about space allocation etcetera, but I am sorry. thanks.

No. At this point, there are not major changes expected in space allocation. It's really weak.

Thank you, Karen.

Our next question comes from John Barrett of Columbia Management.

Hey Karen, just a follow-up sort of on that last question. In terms of looking to get to that 14% to 15% long-term level, can you give us any read on the margin improvement in '07, sort of what you've learned in the mix coming from gross margins versus SG&A?

I really am not going to be able to answer that question until we get through the fourth quarter. As you know, it's such a big part of our year. To be commenting until I see that I think is tricky.

Right, okay. I just look at this sort of a -- this quarter and even next quarter sort of a -- you are consolidating a lot and sort of neutral on margin here. But just looking out based on what you are doing in the stores with accessories and in apparel -- you are more comfortable with gross margin, driving more of it next year?

I think I am going to wait and comment until we get through the fourth quarter.

Okay. Thanks.

No, thanks John.

And we will next hear from Kim Galle of Pioneer Investments.

Hello Karen, I was wondering if you could talk a little bit, you seem to intimate earlier in the large ticket home department that it had to do with the selling cycle. Could you talk a little bit about maybe order trends relative to delivery trends, and how that might have compared to the overall sales pace in home?

The issue is the same.

It’s the same, so that’s not an issue then with a lag between the orders and the delivery.

No. I mean there is obviously a lag, but the big ticket business has been weak.

Okay. The second question is, somebody asked about markdowns and given that the comp performance is really strong in the legacy Macy's doors, could you comment a little bit on markdowns at the May divisions versus the Macy's division and did we see perhaps a somewhat worse markdown trend at May and a somewhat better markdown trend at the legacy Macy stores?

I don’t track it anymore, look that way in terms of margins, the common sense would tell you the margins did better where the sales were stronger.

Okay, and in terms of systems and markdowns in general, I think, Macy's has historically had a better markdown system than May. Could you just maybe talk about the impact of your systems on May's performance there?

Really not a system issue, it's a discipline, and we instituted a process that we call 20-20 that forces the merchants to look at the bottom 20% of their inventory based on sell through in the top 20%. And it has $0.04 to take markdowns quicker than they otherwise would have, and in some cases deeper to address that bottom 20%. And at the same time, this led to discussions with the market or ourselves in the case of private brand about reorders on the top 20%. So that’s not really a system, it’s a discipline. I mean interestingly I think yesterday in St. Louis was our new Macy's Mid-West organization and they are finding this process, this 20-20 to be very helpful as they are going forward. So I do think that's going to help in the legacy May doors.

But I mean apart from the terminology whether it’s a system or a process or a discipline, I mean, how has that impacted markdown trends at May?

Well, so far it's just going in, so there is no impact yet. But what it really does is it helps sales also because you are clearing out stuff that’s clogging the floors faster and reordering with better selling. So it really helps comp store sales, it should lower markdown somewhat and it speeds up inventory turns. So it's not just looking at the margin line.

Okay, terrific. And then finally, you commented earlier that May door merchandise was being actively tweaked based on what was selling and what wasn’t, I mean, realistically speaking, given where we are in the calendar, how much tweaking can actually be done to affect the fourth quarter?

I remember we started tweaking -- we are constantly tweaking. So when things weren't selling in August or early September, we weren't reacting. I mean that’s what good merchants do. So you can't completely overhaul an assortment, but you can make changes. I mean and again, that’s what any good retailer would be doing.

Sure. Sure, I know, but just given your inventory turn speed and lead times and so forth, it would strike me that there's probably not a whole lot that can be done for the fourth quarter?

Well on the margin there is things you can do. If you missed a fashion trend that’s probably harder but that isn’t the issue here.

Okay, great. Thank you very much.

And we have a follow-up question from Bernard Sosnick of Oppenheimer.

Yes, Karen. I wonder if you could revisit for us some of your earlier comments because you were talking about exciting momentum in the legacy Macy stores and the ready-to-wear, they are selling well, could you amplify a little bit on that? And maybe etch out for us a little bit better why the May stores may not have participated with ready-to-wear or whatever, or maybe they did, and how that might affect the fourth quarter?

I think the key thing as I had said was that in the May doors, the soft goods, the non-home part of the business did significantly better than the home, and in some of the private brand in the market group where the assortments were more interesting and more differentiated, the product sold very well in the May doors. The Macy doors, which were obviously much more established in these lines, have done even better. But we do think that what we are doing in the May doors is the right answer. It's just taking a little longer than we had hoped, obviously, driven largely by home.

If we look at the soft lines in May, would they have approximated your plan?

It was asked earlier and the answer was they came close but didn’t make it.

Okay. The entire soft line that is including soft home, I think, you've said they didn’t make it including soft home, but apparel was better than that?

No. I said soft goods as opposed to home was off plan but not by a lot. Home was off by a lot and apparel did very well within the soft goods mix.

Okay. All right. Thank you very much.

Christine Augustine with Bears Stearns has a follow-up question.

Karen, for the end of the year do you anticipate inventory levels to kind of be flattish or do you think they could be down kind of the similar magnitude that we have seen here at the end of the third quarter? And then, could you just update us on where you are with the planning and allocating function at former May? Is that -- that’s all rolled into the divisions that they report into now? Could you just update us? Thanks.

The planning and allocation, which you all remember, May company didn’t do. There assortments were far more consistent location to location, whereas we at Federated have always tried to localize assortments far more and tailor them to the needs of the individual trading area. And we've done that through a planning and allocating organization. For the divisions that were integrated into a former Macy division. So, Filene's, Hecht's, Rob-May, Foley's; in those cases the legacy Macy's planning and allocating group took those stores over. In the case of Macy's North, which is the former Marshall Field's and Macy's Midwest, which was the formal -- former Famous Barr. In those cases, we have put in planning groups and they are getting up to speed. It's new, it's difference. The merchants have to operate differently. The planners are obviously getting up to speed. We have sent a significant number of resources from the legacy Macy's division into the new division to help them get up to speed faster, so I would say a lot of progress is being made, but they are obviously not as proficient yet as the legacy Macy's division.

Thank you. And then just on expectations for inventory by the end of the year?

Okay. You know something, Christine, I don't have that in front of me, but -- and so I don't know how to answer that. Sorry.

Our next question will come from Elizabeth Armstrong of AllianceBernstein

Yeah, thanks. Karen, could you just breakdown for those that haven't been in a lot of the new May stores. What is the presentation of home is relative to what the presentation would look like in a Macy's store. And I know that it is somewhat different depending on the individual market of the May. I am just trying to get a sense on how that is and then also maybe if you could do on apparel also?

It should be identical. I mean there shouldn’t e any differences in a store just because it’s a May store. As you pointed out, we do assort stores differently based on good, better, or best, or the lifestyle of that trading area, but a good traditional store that was a May door will look the same as the Macy door. or a better O'Neil's store will look the same whether it's Macy's or May.

Any guess then why the home is lagging relative to the apparel.

I mean how well those assortments worked in individual trading area or how the receipt levels were, it's really the execution as opposed to the strategy. So, I would tell you that the home assortments today don’t look as good, not for a strategic reason but more for execution.

But home in May -- traditional May stores is not as strong as home in traditional Federated stores, or is that--

Tells you the execution was done as well.

Okay.

For the assortment.

Okay. That’s great, thanks.

And we do have a last follow-up question from John Barrett of Columbia Management.

Yeah Karen, quick, just this is first year-to-year we have seen with a consolidated balance sheet, we saw nice improvement in your payables inventory number versus October of last year. Are there any permanent changes or benefits you are getting with vendors that are structural in nature in terms of pushing back on terms that we should expect because has been -- it's nice flow through to your cash flow.

There is really nothing happening in that front.

So, that improvement from 83% to 91%.

I mean I have to look at and see if there is anything unusual.

Okay. Thanks.

Okay John, thanks.

And Ms. Hoguet, it appears there are no further questions, I would like to turn the conference back over to you for any additional or closing comments.

Well, thank you all very much to the degree of more questions as the day goes on, feel free to call Susan or me. And again, thanks for your interest.

That does conclude today's teleconference, thank you for your participation and have a great day.