Good day, ladies and gentlemen, and welcome to the Ingersoll Rand First Quarter 2016 Earnings Release. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Ms. Janet Pfeffer. Ma'am, you may begin.

Thank you, Lauren, and good morning, everyone. Welcome to Ingersoll Rand's first quarter 2016 conference call. We released earnings at 6:30 this morning, and the release is posted on our website. We'll be broadcasting, in addition to this call, through our website at ingersollrand.com. And that's also where you'll find the slide presentation that we'll be referring to this morning. The call will be recorded and archived on our website. If you would please go to Slide 2. Statements made in today's call that are not historical facts are considered forward-looking statements that remain pursuant to the safe harbor provisions of federal securities law. Please see our SEC filings for a description of some of the factors that may cause actual results to vary from anticipated. And our release also includes non-GAAP measures, which are explained in the financial tables attached to our news release. And to introduce the participants on this morning's call, Mike Lamach, Chairman and CEO; Sue Carter, Executive Vice President and CFO; and Joe Fimbianti, Director of Investor Relations. Please go to Slide 3. And I'll turn it over to Mike.

Thanks, Janet. For those of who that don't know, that's Janet's last time she'll need to read the safe harbor statement. She's retiring at the end of this month after a brilliant career here at Ingersoll Rand. We're going to miss Janet greatly. And Janet, we want to wish you and Ron [ph] all the best in your retirement.

Thanks.

So with that, we delivered a very strong quarter that exceeded EPS guidance and reflected excellent execution across the whole company. The quarter really demonstrated the consistency we're seeing in our strategy, which is to deliver sustainable, profitable growth, and I'd highlight a few areas here. First, we're leading in our markets in the innovation and development of energy-efficient, reliable and sustainable products and services. Second, we're deepening the penetration, the maturity of our operating system, and we're delivering operational excellence across our businesses. Third, we're maintaining a disciplined and dynamic approach to capital allocation. And finally, as I've said before, critical to any sustained culture transformation, our employees are engaged. Their scores are continuing to increase across the company. Employees continue to see Ingersoll Rand as a great place to work, which in turn leads to a better customer experience, and that ultimately delivers shareholder value. Our performance in the first quarter gives us confidence to raise our full year guidance, essentially flowing through the first quarter operational beat [ph]. Now this morning, I'm going to give you an overview of what we're seeing in our end markets across the globe and use the opportunity to talk a bit about how we're performing against this market backdrop to give you some color on how we're progressing for the year. I thought it'd be useful to highlight where our performance maps specifically to our overall strategy. And then I'm going to turn it over to Sue, and she'll take you through the quarter and our revised guidance for the remainder of the year. So over the past 16 weeks, I've spent the majority of my time on the road with leaders across the company, and during that time, I've met with customers from many of our business units across vertical…

Thank you, Mike. Let's go to Slide 6. Let's begin with an overview of the first quarter. Q1 was a strong operational quarter across all of our businesses. As you heard in Mike's comments, end markets continue to be strong in Climate and weaker than expected in Industrial. Our business operating system guided us through good execution in our factories and in our cost centers. Our focus was on good operating results in a low-growth environment. Our results show that we did not let cost get ahead of revenues in the quarter. Revenues grew slightly on a reported basis and were up 2% organically. The Climate segment grew 4% organically. Industrial was down 5%, both on a reported and an organic basis. HVAC revenues grew in each of our Climate businesses, led by commercial and residential in North America. Revenue in our Industrial businesses declined in the quarter with tough comparisons to the first quarter of 2015. Large centrifugal compressors and other industrial equipment were weaker than our estimates, but Club Car performed as expected, with low year-over-year growth. Our adjusted operating margins grew 140 basis points year-over-year, with organic operating leverage of 75%. Adjusted segment margins grew 150 basis points, which shows the alignment between our operating performance and our Q1 results. Our strength was in price, direct material deflation and mix. Earnings per share grew 32% year-over-year, exceeding our prior guidance. In Q1, our capital deployment actions, including -- included repurchasing $250 million of shares, and we increased our dividend by 10%. We completed the sale of our remaining interest in Hussmann on April 1, 2016. All impacts will appear in the second quarter. Please go to Slide 7. I've included a slide to reconcile our Q1 EPS actual results with our prior guidance. I've said on a…

Great. Thank you, Sue. And I'll be brief. As I started out this morning, we had a strong quarter. We improved operating performance in a volatile environment. We realized price in both segments. We achieved outstanding leverage and improved our cash flow. We're growing in the areas where we put a strategic focus. There's clear evidence the discipline we've created in our operating system is gaining momentum. And I'm confident in our management team, and we feel good about our forecast for the remainder of the year. So with that, Sue and I will take your questions.

[Operator Instructions] Our first question comes from Josh Pokrzywinski from Buckingham Research.

Just on the price cost equation here. Clearly, a pretty strong contribution in the first quarter. Can you help us with how that dimensions out, just based on the purchasing agreements and hedges you already have in place, over the balance of the year?

Absolutely. So you're right. The 160-basis-point spread between price and direct material deflation was a strong start to the year. What we expect for the first half of the year is strong performance on a year-over-year basis, because last year, we were still in an inflationary environment in the first half of 2015. So I think the second quarter will be slightly less favorable than the 160 basis points, but what we've adjusted the full year to now, Josh, is 80 basis points of favorable spread between price and direct material deflation. And so the first half, second half reflects basically the year-over-year compares to last year. And then as we look at the 80 basis points, so Q1 performance was driven by strong price performance, and we expect some of that to continue in Q2 and also strong performance from the materials side. Price is one of those areas where, I think, you never want to reach out and assume that you can continue to get price at a great execution level throughout the year in a strong deflationary environment. But as opposed to the commodities themselves, here's what we expect. So we have about 70% of our copper locked in for the year through our contracts. We expect that copper and aluminum are going to be fairly stable in terms of what happens throughout the rest of 2016. You'll see some ups and downs. But generally, I think those are going to be pretty stable. We're seeing a slight uptick in steel, but I don't think that's going to impact us in 2016. Because of the way that our contracts are written, we wouldn't start to see that until the very end of the year. So I think our -- I think our supply base and our commodity teams have done a great job of getting us the deflation that you're seeing in the results. I expect that to continue. All of the Tier 2 pricing really seemed to come in Q1 also. So I think we had a great environment, and I think we'll have a great result. So if you recall, we had given you a look at the full year, I think, 30 to 40 basis points when we last gave guidance, and as I said, we took that up to 80 basis points favorable spread for 2016.

Great, that's helpful. And then, Sue, just as a follow-up, I remember last quarter, you talked about some of the toggles for the tax rate and specifically mentioned intercompany debt. Could you just maybe update us where we're at on the total tax strategy in light of some of the treasury rulings?

Right. So I think the first way to start out that question, Josh, is to say that we -- we've looked at all of the proposed treasury regulations, and we don't expect those regulations to have an impact on our effective tax rate in 2016. As we think about the tax strategy that I've talked about getting us into a low 20s type of tax rate on an ongoing basis, I also don't expect those regulations to have an impact on us getting into those areas. And the reason that I say that is when we're looking at our tax strategy, intercompany debt is one element of some of the things that you can do, trading hubs, procurement hubs, making sure that your transfer pricing is absolutely aligned and other tax efficient projects can help us get to where we want to go. We've also been looking at a project that helps us look at effective tax rates by each of our SBUs, so that we're all working on tax as we do our plans and we do our forward looks, and I think that will help us with an overall tax strategy that doesn't get impacted by the proposed treasury regulations. We'll obviously continue to look at those and make sure that we understand all of the sort of derivative impacts that might be out there from the regulations. But no impact on the rate and no impact on our strategy going forward.

And our next question comes from Joe Ritchie from Goldman Sachs.

I guess my first question maybe starting on industrial, where you did see decelerating trends. I noticed that you didn't take up the restructuring at all for the quarter, and if I recall correctly, there were some Cam shipments that were expected to be released in the beginning part of this year. And so I'm just wondering, is there still opportunity for further action in Industrial? And what's the -- I guess, what's the strategy at this point?

Yes, Joe. So the $0.02 of restructuring that we spent in Q1 was related to Industrial. We are continuing to work on restructuring actions for the remainder of the year. And those are going to primarily be in Industrial. So we called out in the guidance about $0.01 for each of the next 3 quarters. I think what's important about the restructuring and the way that we've looked at it is that the restructuring really does have a payback within 2016. So we fully expect to realize the benefits of that $0.05 of restructuring. And that is also what will help us with my comment earlier in my prepared remarks about industrial margins improving in the back half of the year. So some of that productivity kicks in and some of the restructuring actions that were actually started almost a year ago are going to kick in. Now on the ECC [ph] side, we did have some shipments that had pushed out of Q4. We actually had some shipments that pushed out of Q1 also into Q2. But the ECC [ph] story is an interesting one. So if I look at first quarter bookings in total, bookings in total for the ECC [ph] business are actually up significantly in the first quarter. The majority of that is going to be in the products that are outside of the large centrifugal compressors. Those are really coming down. But -- so bookings are up, which is good. The revenues that we're seeing are really being impacted by the large centrifugals, but also importantly, as we think about ECC [ph] and that business is, we expect to really be on track with the revenue and the cost synergies for 2016 that we had outlined. So lots of moving pieces in the business, but I think you'll see some strength in the normal product and in the aftermarket and some bigger weakness and some shipments moving around in the large centrifugal compressors.

Joe, remember, too, that I think that we've been [indiscernible] restructures now for years, and that's both qualified and nonqualified. So we're always improving the cost base there. When you look at the type of paybacks that we're seeing in that business, we're getting numbers like 7 years, which is indicative of doing a good job around running the plants, the utilization that we've been able to achieve in our plants. You couple that with the lead time to bring on new capacity when the markets return, and that's a 24- to 30-month process, particularly in the machining centers that we would be moving or upgrading to do that. So we don't want to get whipsawed in doing any large restructuring when this thing turns around, because the margins come back very strong when the business volumes come back as well. So we're being cautious. Now we're always looking at the ideas that are on the table. If the underlying real estate values change or if tax incentives change from one location to another, it could swing something like that. We are very cautious about looking at an upswing in the lead time to bring capacity on when you need it, and we don't want to ever be in a situation at an upswing in the market to not have sufficient capacity at that point in time.

No, that makes sense, Mike. I guess, maybe my following question, I just want to make sure I heard this correctly. Did you say that 2Q North America commercial HVAC bookings are expected to be up about 25%?

Yes, that's correct.

And is that the reason for the organic revenue guidance raise?

No, it's more of an impact in '17. It's got a little bit of a positive in '16, a little bit of a positive in '18, but the bulk of that would be '17 shipments. So it's really the strength of the business across the board. Unitary continues to be strong. The pipeline looks strong for us. Europe has been a great success story. I think it'll continue as well. So it's -- and, of course, the residential business continues to put up some very big numbers. And so all of that combined has got more to do with the guidance increase than the large booking number in quarter 2. By the way, quarter 3 should look pretty good for us as well. Although I don't have a prognostication on the percentage rate, it should be a good quarter for us.

And our next question comes from Julian Mitchell from Credit Suisse.

Just wanted to say thanks a lot to Janet for all the help, and all the best. In terms of the first question, that would really be back on the Industrial margins. It used to be at sort of 16%, 17%, the odd-quarter here and there, down to 9% to 10% right now. And the guidance embeds that by the end of the year, I guess, they climb back into the sort of low-teens in the next 3 quarters. So maybe just help clarify what's driving that sort of 400 point plus margin recovery? Is it just about productivity? Or is there something going on with the mix as well of Industrial versus compression?

So Julian, great question. On the Industrial margins, your math is absolutely correct, that in the back half of the year, we do have the operating margins for industrial improving into the low-teens. And as we look at what's going to happen in that back half of the year, so it truly is productivity, still lower inflationary type of rates. So you've got productivity offsetting other inflation. You still have positive price in the back half of the year. And you have just a skosh more volume in the back half of the year than the front. I don't want anyone to think there's a lot of volume recovery that we've built into this. We have not. But there is, by virtue of how the quarters pan out, roughly $50 million of additional revenue in the back half versus the front half. But it's productivity. It is the restructuring actions that are kicking in, and it is the continuation of the actions that the management teams are taking to work through this low revenue and end market decline.

It was also, Julian, the cost control there is exceptional. So even though you're seeing kind of a headline $0.02 restructuring. There's at least that much, maybe more than that, which would be nonqualified restructuring. So it's sort of restructuring in place, not replacing or controlling spending. So there is a cost of that in the first half of the year and a benefit to that in the back half of the year, which is broadly in line with Sue's productivity comment. But a big piece of that productivity is literally the cost control around headcount, some of which is qualified, some of which is nonqualified, in terms of how we would actually account for it. The longer-term question that you asked about the profitability of the business, Sue did a little bit of analysis on this, and it might be useful to kind of walk through where we -- when we would see a 17% margin in the business.

That's great. So when I looked at it, so the first thing that we did is we went back and said at the time that we gave the original 17% margin guidance for the Industrial business, the revenues in the business were in the range of $3.6 billion to $3.7 billion. If I look at where we're at today, we're roughly in the $3 billion type of territory. So I think as we look at the business, we're doing all of the right actions today to get the costs in line, but I think what we need is market recoveries and, I think, the revenues to return to sort of that upper $3 billion range for us to get into the 17% margins. We think that's doable, but I think the timeframe is really highly dependent on when the markets come back. Right now, we haven't seen -- the markets actually stop falling. So we need to stabilize first and then the markets to return. But again, I think the way I'm thinking about it is, once of the revenues get back up into the $3.6 billion, $3.7 billion area, where they were when we gave that guidance, that we'll be nearing those 17% type of margins for Industrial.

Remember, when you look at the gross margins of that business and look at the fixed cost of that business, say, relative to the Climate segment, you can see very easily why that business snaps back very strongly on volume. So when volume returns to that business, we'll get very aggressive incremental margins out of that. In the short term, we're controlling the heck out of costs the best we can. However, we're not going to [indiscernible] as it relates to capacity.

And then just my follow-up quickly would be on your overall firm-wide margin bridge. Q1, you had about 10 points or 10 bps from productivity and other inflation. I guess, based on what you just said, should we think the number for the year ends up somewhere between that 10 bps and the sort of the 90 bps tailwind that you had last year for the year as a whole?

I do think that you will -- we do see other inflation to be higher in the first half versus the second half is when our salary increases take place. That's when a lot of the benefits take place. So when I look at what we plan for the full year, I would say it probably looks more like 40 to 50 basis points for the full year, Julian.

And our next question comes from Nigel Coe from Morgan Stanley.

So this North American order spent [ph] is really interesting, Mike. And I'm assuming that's really driven by these large pipe projects finally starting to break free, and I'm just wondering what's changed here. I mean, is it just a case of old equipment we're seeing here to the extent that replacement [indiscernible] coming through? Is it budgetary? I mean, any color there would be helpful.

Yes, Nigel, I think all of that is true, but the constant, persistent investment we've made over 5, 6, 7 years in that business, the constant investment in the channel and the service footprint is really paying off. And I just think the focus we've had on all of that development being around energy efficiency, sustainability, new refrigerant development, all that is just such a powerful story when you look at it. This is what we were waiting for. This is what we'd hoped to have seen, which is outsized growth relative to the market and outsized profitability or margin expansion relative to the market. So this is a huge effort by lots of people, all the way through to the technicians providing service on the street for us. This is a real accomplishment.

Okay. And obviously, very, very early to call '17 at this point, but if you just look at the North American commercial HVAC operations, based on the backlog of pipeline, is it reasonable to assume that perhaps you might see some acceleration next year?

Well, the thing you have to think about, though, is what happens to the office and retail business. As an example, our national accounts business has been doing extremely well into retail. Office building is doing really well, as you can see, kind of the high teens booking rates again for unitary. That's been strong again. At some point, you think that, that would begin to subside and be replaced by stronger applied growth, which I think will happen. So I think what you end up with is maybe a change in the mix between unitary and applied, but I do think continued strong performance through '17.

And our next question comes from Steve Tusa from JP Morgan.

On the Climate side, I mean, just a very big margin number, obviously. And I'm trying to just wrap my head around the seasonality dynamics 2Q to 3 -- 1Q to 2Q. In the last couple of years, you've had increases. Like in 2014, you guys saw a doubling or almost a tripling of the profit number in Climate. Can you just maybe speak to what you expect seasonally there or maybe just at a high level, what you expect for the margin in that business as we move through the year? And my guess is that seasonality is a bit muted because you're now seeing the onset of Commercial, which is a less seasonal business than some of these other things or just maybe help us square that. The first quarter base is just so high that I'm just having trouble kind of getting low enough in Climate?

Yes, Steve. I think that looking at something certainly in the 16% margin range for the entire segment is going to make a lot of sense for us. Again, to Sue's point, price, I think, subsides a little bit. Material inflation kind of clips along pretty much at the same rate. Bookings look good. Pipeline looks fairly strong. We're not seeing -- the container business on the transport side being down, of course, is not all that problematic for us in terms of margins so long as European trailer and North American trailer are doing well. So if you put that all together, you're probably doing something in the 16% range.

Can you, at some point, soon, kind to get to that 17%? Will you kind of hit that at some point this year?

I don't know. I mean, we haven't -- really looking at Q3 and Q4 at that level of granularity around guidance, Steve. I don't know. I mean, Q2 is seasonally a pretty good quarter for us. Quarter 3 can be. So we've got an outside shot at something like that.

Okay. And then just on the kind of go forward leverage, so you've had this nice pop off the bottom on margins. Should we continue to expect that if this kind of current mix holds that if commercial HVAC does really continue to roll on here and we have a bit more of an extended cycle than, I think, most people were expecting probably 3 to 4 months ago? Can you still leverage that business really well? Or do you have to add cost or anything like that? I mean, I feel like you got to have plenty of capacity here to let it rip a little bit before you start to throw money at the business from a capacity perspective, right?

Well, the service business and the controls business are growing so well, too. And our margins are obviously much higher. So it's a little bit distorting about how we might think about fixed cost being factory cost. I do think that there is some capacity we have even in our field service and controls capability that wouldn't require incremental investment. Obviously, it's feet on the street, but we stay in front of that, and we typically hire long in the Service business. So I don't see why having leverage for the quarter -- I'm sorry, for the full year that starts with a 4 would be a problem in the Climate business.

Okay. And then one last quick one. You guys took up the price cost year-over-year by, I think, 40 bps, you said, but you only took your margins up by 30 bps. And anything, what -- is it -- that just volume at -- and mix at Industrial, is that kind of what's that moving part?

Well, inflation kicks in, just in terms of wage increases beginning in April for the full year, and we tend to see sort of the cost increase there as well puts a little bit of a squeeze on margins there. But fundamentally, Steve, there's not anything really changing, other than the fact that it's hard to believe that price stays as high as it normally is, and material inflation should stay about where it is, but we're looking at just that -- closing that gap a little bit, probably from the price side.

And our next question comes from Jeff Sprague from Vertical Research Partners.

Mike, can you just elaborate a little bit more on kind of the booking strength? And was that a -- that 25% number, is that global? Or are you speaking to the U.S.?

It'd be the North American commercial business.

North American commercial. It does sound like Europe, though, is fairly strong for you on share gain. How do you see that playing out over the balance of the year?

Listen, I went -- probably, I saw 5, 6 of our factories and operations in Europe a month ago. I met with the engineering teams that saw product launching between August and December, Jeff. It's one of the best stories I've seen. Absolutely, the fastest cycle time between ideation and product launch. They're hitting it right on the money in terms of what the customers are looking for. It's been a great story for us. I don't see that stopping for us in 2016. I'm very optimistic, very proud of the work that's gotten done on the HVAC side in Europe. But I would also tell you, switching over to FRIGOBLOCK, FRIGOBLOCK was a family-run German company. If you put sort of a paradigm around that, you might think slow to change or difficult to incorporate on the operating system. What I found there was one of the fastest implementations of an operating system that we've put in place across the company. It's very exciting and the openness around that. And then, the openness of our transport refrigeration team to include that hybrid electric technology into the truck platform is also very positive. So I left Europe feeling very bullish.

And then could you address what's going on in 14 SEER, probably still early in the season to know for sure, but is that price gap versus legacy 13 holding in the 10% to 15% range?

Yes, Jeff. It is holding. And I think the great news about the 14 SEER is, what we saw was the balance of 14 SEER and greater product is still about 80% of the revenues in 2016. So we're seeing price. We're seeing the favorable mix that we expected out of the product, and we're also seeing that the balance between 14 SEER and even the 15 SEER and above has not really changed, which does create a good environment, as you alluded to with the price and cost differential.

So is that 40 basis points of positive mix, Sue, that you elaborated, all in residential? Did you actually have more than that in residential and it [indiscernible] somewhere else?

So it was not all residential. It was a combination of residential and also Thermo King. On the Thermo King side and one of the things that we saw was we saw more strength than we expected in truck and trailer, both in North America and in Europe. And then the big declines on Thermo King came from the marine container business that I said was down about 60%. So the 40 basis points of mix was primarily from res and from Thermo King, and it was -- my recollection is it was split pretty evenly.

Our next question comes from Jeff Hammond from KeyBanc Capital Markets.

So what's driving the 1Q order growth in residential? And what gives you the confidence to kind of move that forecast up ahead of the selling season?

Well, I mean, first and foremost, the product line really at this point has been fully developed. And we've hit stride on all the good success with the furnace product, all the good success with the new launches, the variable speed, growth in Nexia. All these things have just been really kind of coming together. Operationally, we just find the pipeline for projects and productivity and quality to be improving. Deliveries have been exceptional in terms of on-time delivery. And having product available where you need it, when you need it, really investing in the warehousing and investing in the product availability. So just a sense here that things have gone right for a long time here and that we'll do better, particularly as the mix moves up north of 14, which it has. So the mix moves more to 14 SEER, we do better anyway. And as the mix moves more toward replacement and away from new construction, we'll do better.

Okay, great. And then how's the M&A pipeline kind of informing how you're thinking about buyback through the balance of the year?

There's no doubt we want to grow the company and grow value over the long run. So we said we're looking at ideas and businesses that we know and run and are successful with. FRIGOBLOCK and Cameron were great examples -- different examples, but great examples of being able to take businesses, put them into an operating system, improve the businesses and deliver essentially what we said we were going to deliver from an accretion perspective. So we feel good about our capability in doing that. We also feel patient. We feel like we don't have to -- we're not compelled to do anything around and M&A. We've got great positions in the marketplace, and there is not a compelling need for us to go to do something and -- potentially do something where we pay too much in that process. So Jeff, we'll continue to evaluate that. When we see opportunities that fit the criteria, we'll pull the trigger. And we clearly want to grow long-term value for the shareholder. And that's probably the best way to do it. With that being said, you couldn't pass up in January stock price dislocated 20% from the peer group. I mean, we jumped in on that and acquired $0.25 billion in January at $0.51 a share. So we're going to be dynamic, we're going to be opportunistic, and we're going to grow shareholder value. If that means we find the right bolt-ons to do that, we're going to jump on those, too.

And our next question comes from Steven Winoker from Bernstein.

And also appreciate the additional detail in the disclosure today. That's helpful. Let's see. So first of all, Mike, how are you reconciling all of this discussion about commercial HVAC strong growth relative to what is pretty lackluster Dodge data, ABI, all these macro data points. So are you attributing it to -- all to share, renovation, control, service? Just maybe a little clarity on that would be helpful.

Well, it's sort of all of the above, Steve, which is probably hard to give clarity on that. But if you take Latin America, we're up mid-teens in Latin America. That's clearly our people out in the street creating demand, making it happen. Mid-teens bookings growth in Asia. I mean, Asia is not that strong. Again, our team is hitting the street. Europe, we talked about product development and the pace of product development. There it's best-in-class in the company. And product management, best we have in the company around getting it exactly right on these product growth teams and understanding where we're competing, how we're going to win against very specific competitors in the market. When these product's launch and they do exactly what they were supposed to do, that's a positive for us. So there's a lot of self-help here happening. And the backdrop on the markets, with the exception of the Middle East, isn't bad. So you've got decent markets and really strong execution.

Okay. And how are you doing on -- what's the growth rate on VRF in the quarter progress? Any developments there?

Last year, we were about 30% growth. This year, we're about the same, Steve. We continue to do well in the market. We continue to sell VRF. We're beginning to also see interest in what's referred to as 4 pipe chillers. So this simultaneous heating and cooling around water circulating through buildings versus refrigerant. It's big in Europe, picking up a little bit of interest in the U.S. The idea here is we're going to have whatever products are demanded in the marketplace, and then we're going to work with the customers to figure out what the best solution is for the building. And that's why our business was up 30% last year. It's why our business is up about the same this year as well.

And that concludes our Q&A session. I would like to turn the call back over to Ms. Janet Pfeffer for closing remarks.

Thank you, and thank you, everybody. Joe and I will be available for follow-up calls later today. And it's been a pleasure to work with all of you. Have a great day. Thanks.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may all disconnect. Everyone, have a great day.