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Financial Services Innovation Lab, Georgia Tech 19

BIO

Q4

Brandon Couillard

Christine A. Tsingos

Thanks. Just one follow-up for you, Christine. Could you quantify the actual dollars related to ERP that was in the P&L in 2016? And I know you already said that that's $3 million to $5 million higher in 2017. Just curious if you could give us what the base actual dollar number is for the project?

So, when we think about the project, there's spend directly associated with the project and then there's kind of this ancillary spend where we have a lot of temporary help that's backfilled while our good people are working on the project. And where we've been running, and as you know, is kind of that $25 million to $30 million a year for the project itself and then maybe an extra $10 million or so in the related costs, if you will. That doesn't include depreciation, but really more about this backfill. So if you add those two together, we're high 30s for 2016 and 2017 is pretty similar and then should go down from there. And again, the reason is pretty similar is we're anticipating a fair amount of health in the stabilization and continuing to need to backfill as we go through that period.

HLX

Q2

Roger Read

Johnny Edwards

Okay, but I guess, so you haven’t necessarily seen more demand for the vessel. It’s just you’ve had an opportunity to prove the vessel out, the value of the Q4000 here on this Macondo well.

And another Roger, assuming the government tightens up regulatory requirements on P&As and decommissioning, that’s where we see the potential upside here in well intervention as well.

B

Q4

Matt J. Summerville

Christopher J. Stephens

Chris, is there any color you can give us then to button it up in terms of the EBITDA generated by the Distribution segment, and then we can make our own Raymond adjustment?

Yes -- no, I'd say again that the SBU level, we were cautious to that. And as you mentioned and I'll comment again, this relates to the BDNA divestiture within our Distribution segment, and we'll take the Associated Spring Raymond business, the remaining part of our Distribution business and move that to the Industrial segment.

GGG

Q1

Charlie Brady

Pat McHale

Kind of spread out pretty evenly then?

No, I think we'll start lapping some of our investment decisions for 2014. So we'll get more relief, I'd say, in the latter half of the year.

MPC

Q3

Doug Leggate

Timothy T. Griffith

Okay. And maybe just related to that, can you offer some color on the pace of how you would redeploy that cash in terms of buybacks? I guess it wouldn't all be instantaneous, so how would you expect the buybacks to be ratable over next period?

Well, we'll manage it in a way that we think optimizes our ability to access to market without influencing the price. Again, we'll – this is certainly going to be a big slug of proceeds all at once, so I think we'll evaluate more accelerated forms to see if those make sense. We've been very successful in open market repurchases and really delivering at or below daily view apps

LBRANDS

Q2

Marni Shapiro

Sharen Jester Turney

Stuart, I actually have a bigger picture question here. Victoria's Secret, obviously, is a huge brand, a big brand in direct business. You have a solid business there, away from some ups and downs in apparel. At what point should we be thinking about, or -- either an investment or will you guys start to seriously think about omni channel or even a situation where returns aren't getting mailed back to the DC? And I'm curious if you guys have the systems in the DC to support this kind of shift or is this something that would have to be a multiyear investment in technology and your distribution system?

Marni, I'm going to take that question for Stuart. This is Sharen. We have had what we have called omni channel, really, in our sights and have been working on it and investing in it for the last 2 years. We are so encouraged. Well, we call it, give her what she wants. So now we have the systems in the stores to take the direct channel return. We also have the systems in the DC to take those returns. It is working very well for us. The customers have been very excited about the customer service that we have been able to provide. What it's been allowing us to do now are people that haven't bought from direct before because if you're out of stock in something in the store, you can buy from direct, and we'll have it there the next day. And now what we're seeing is moving more customers slightly to being dual-channel customers, which we now have dual-channel customers spend more with us. But it's really about the customer service model that Victoria's Secret is after is making sure that we're servicing every single customer.

B

Q4

R. Scott Graham

Christopher J. Stephens

The second part of what you just said is a full year number, or...

Yes, full year number. Year-over-year is 2%, quarter-over-quarter was also 2%.

B

Q4

Edward Marshall

Christopher J. Stephens

I got you. Okay. So on to the guidance, and you made a few comments about the MRO business in the fourth quarter. Did you actually give up -- give the number for the fourth quarter?

In terms of MRO in the fourth quarter? Yes. So quarter-over-quarter, we were down actually 13% in MRO. And on the Revenue Sharing Programs, we were down 21%. So net-net, our aftermarket had a tough quarter. But I did comment sequentially the good news is that we saw sequential growth in our spare parts, our Revenue Sharing Programs from third quarter to fourth quarter.

ENTR

Q4

Aalok Shah

Patrick Henry

Okay. And last question, Patrick, in terms of what customers are asking you for, are they hammering you on price more so now that you are starting to pick up some more of these bigger customers, potentially bigger customers down the road? Are they saying, hey, we may start to go to the other supplier down the road, and if you give us a pretty good price, we will lock you in for a year? Can you walk us through kind of how this selling process works right now for MoCA?

Yes. In my experience, customers always want lower prices and they always beat you up on that whenever you see them. But, we feel like, we are negotiating long-term pricing contracts with people, so we have pretty good predictability on price. We rarely provide that kind of long-term perspective. Whenever we win new designs, there is a service provider base, so we have pretty good visibility. We have a pretty good felling that we will be able to stay in our gross margin target range of 50% to 52%, because we continue to invest in the product lines, in terms of cost reductions like moving our MoCA 1.1 products to 65 nanometer as well as the R&D that we are doing around the pre-MoCA 2.0 stuff. So, we felt pretty good about stuff and we feel we have competitive pricing and we continue doing business based on that.

PRCP

Q3

Greg Palm

David Watza

And I guess going into the intra-quarter comments, you mentioned that some of the underlying activity quarter-to-date, so I guess, presumably that would be the month of April and early May has shown some improvements. Can you quantify what that is? Or at least give us some sort of expectation or indication of what type of rebound that is?

Yes. It gives me some confidence that some of the programs, there are smaller orders. Some of the programs that we have been waiting for, we keep getting better news as we go through the last several weeks and getting a couple of those orders in hand just helps us with our confidence there.

HY

Q4

Joe Mondillo

Al Rankin

Wanted to ask you about sort of a competitive environment over the last couple of years, you guys have certainly been focusing on -- you talk about in all different kinds of your business segment, strategic investments. It's really weighing on your cost structure in the near term. Obviously you are hoping for a long term benefits. But even, say for instance Bolzoni, you saw 22% rev growth and you saw a decline in the bottom line there. So could you talk about your overall competition? Are your competitors economically -- is their behavior appropriate? Is there more competition? Because certainly, you guys are pumping a lot of investment for the long term that's hitting sort of cost of goods sold and SG&A?

Well let me just comment first on Bolzoni, because I don't think it should be included in the -- particularly in the investment comments. There will be some investment in Bolzoni, but the issue was two things; number one, in a modest way, currency, which drove up the revenues without having as large an impact on gross profit. But most importantly, gross profit was constrained by material cost increases in the fourth quarter in a significant way. That in no way, was an investment. That's something we have to look to correct over the next few quarters. So I think the investment issue is not a major one at Bolzoni. Although, we will be building the U.S. portion of the business and making investment in that, as we look forward, and that if -- that will be worked into our thinking in that business. You know the Nuvera story, that's essentially -- it is an investment story, and it is going to operate, we hope, with the timeframe that we outlined for you. With regard to the forklift truck, and I would just say, in regard to competitors that, we have one significant competitor today. We think that -- we are hopeful that the business will have a somewhat different cost price relationship, in the context of the new tax benefit for fuel cells, that is in the new tax legislation. I think we will have a better feel for that, as the year goes on, that it would certainly be our hope, that that will help us to moderate the cost price discrepancy in the marketplace that we are seeing now, and we have a hunch that our competitor --

ANET

Q1

Ittai Kidron

Ita Brennan

Thanks. Hello, ladies. Congrats, and I must say you're very brave to offer our second quarter guidance. So I hope it works out. Let me see. A couple of questions for me. First of all, on the supply chain, can you tell us how much revenues spilled over from 1Q into 2Q because of that? So we can understand the true run rate of your business? In 2Q, and again, going back to Alex's question on the 2018 investment levels?Ita just to fine-tune this, does that mean total OpEx 2020 equals total OpEx in 2018? Or is this a run rate comment? I just want to make sure, I appropriately capture that modeling wise.

Yeah. I mean, I think as we sit here today, we would say we're managing it to an overall plus or minus 2018 total OpEx number, right? And again, obviously, as we know more, Ittai, as we go through the year, we will continue to address that further. But for now, that's how we're seeing it.

FOSL

Q1

Dana Lauren Telsey

Kosta N. Kartsotis

Hi. Good evening. As you think about the wearables business and the margin on wearables and given that you're distinguishing whether it's the sports watch category, whichever type, is there a difference in the margin profile? And where do you expect the business to go in terms of percentage of sales on wearables?

I think we're on record of saying that we think the smartwatch display category at a sustainable level should be 45% plus gross margins. I don't think we've given guidance this year on where we're going to be. And then hybrid should be over time more like a traditional watch margin. So that's the way to think directionally where we're headed. We feel like we've got line of sight to that and I think are executing pretty well.

MPAA

Q2

Bhakti Pavani

Selwyn H. Joffe

Okay. Also, could you provide, in addition additional customers, any other expectations for that particular line for the second half, of how do you see to pick it up or maybe you have anything else on the marketing side that you may be trying.

Bhakti, I'm sorry, it faded out a little bit. I don't know why the call faded a little on my side. Can you repeat the question for me?

BGS

Q2

Kevin McClure

Robert Cantwell

Good afternoon. This is Kevin McClure standing in for Brian. Thanks for taking our questions. Two quick ones; one just drilling down on the guidance reduction for the remainder of the year, thanks for all the color around the distribution challenges. I am just hoping you can maybe buck it for us, what percentage of that reduction, about $5 million reduction in second half guidance would you say is distribution related versus some of the other factors you called out? Thanks.

Well I think as we look at where our guidance was and what I just said before is, distribution related, which is warehouse and delivery is about $3 million of that $5 million change. And as we looked at reducing guidance, we really just looked at our shortfall here in the first half of the year, especially the second quarter, and just so, we couldn't make that up in the second half of the year. Yeah, we will be very close to the numbers that were out there in the second half, it's just that we are not going to make up the shortfall we have seen through the first half of the year. The majority of this shortfall is our distribution and the other piece of the shortfall is our shortfall on sales of the Rickland Orchards brand. We did a little over $15 million on that brand in the first half of the year. We expected that to be substantially higher than that, and that has affected our EBITDA. Those are the two biggest pieces of our shortfall on an annual basis.

IM

Q2

Unidentified Analyst

Gregory M. Spierkel

And lastly, the last question from me is, obviously there is a lot of concern in the marketplace about the sub prime market and potential impact on the financial vertical as well as the broad retail and consumer verticals in aggregate. I know you have made a number of comments on North America in general but do you have a sense of if we look at those three areas in aggregate what kind of an exposure you guys might have as a percent of revenue in North America?

The housing sector clearly has thought we are going to have an impact on the psychology and with days like we just came through with the stock market today or this week for that matter, I don't think its going to help the outlook in the medium term or the short term quarter two out. But we have been fortunate in one sense, the Avid business which we haven't mentioned so far has been pretty solid for us in light of a soft marketplace, a home marketplace that is. So we are still growing at a healthy double-digit rate albeit a little lower than it was a year ago but its still very healthy and we review that pretty carefully which says the high end of the consumer market is still opening up their wallets and still providing us ample opportunity. But the more volumes in commoditized space I think is a bit more sensitive right now, and that's probably factoring in on the overall retail sector as we are selling into that sector.

BBBY

Q2

Bobby Griffin

Robyn D’Elia

I guess I was maybe looking on the 20 basis points for the quarter. Did it exit the quarter at a stronger rate than that, where we can see that it’s improving at a faster rate and we’re on pace for greater than 20 exiting the quarter? I guess just on a consolidated basis is what I was asking.

Yes, I guess the way I’m doing is quarter-to-quarter, I mean last quarter we were down 50 basis points. It was unfavorable and now we’ve trended positively this quarter by 20. So we are moving in a positive momentum.

SCHL

Q4

Barry Lucas

Maureen O'Connell

Okay. And the restricted cash that's sitting on the balance sheet, when those restrictions get listed, or is it somehow tied to these payments that you'll be reimbursed for by the Houghton?

So the way that the restricted cash works is most of it is tied to our service agreements and meeting certain standards of service. And the money begins to be released in August. It's about $2.4 million will be released in August, and our expectation is that escrow will be released during the year. Right now we are meeting all service level requirements, and we feel we are in a good place with our service agreement.

RHT

Q3

Edward Maguire

James M. Whitehurst

Great. And just a follow-up on Red Hat Storage, I know you've had a lot of active proof of concepts. How close are you to starting to convert some of the POCs to revenues, and can you at least characterize what your expectations may be, if not quantify, over the next year what you expect from Red Hat Storage?

That's not the large healthcare deal, that's a different one.

DOV

Q2

Alexander M. Blanton

Robert G. Kuhbach

But that's already been taking is what you are saying?

What I'm saying is the lion's share of it we think has been absorbed in the second quarter delta.

GLW

Q2

Brian White

James Flaws

When we think about Gorilla Glass on the notebook, I just want to be clear, are most of these wins primarily coming at the screen level? Or are you also providing Gorilla Glass for the back casing and the keyboard?

That’s a level of detail I just don’t know. I’m sorry.

BMY

Q1

Andrew Baum

Samit Hirawat

Thank you. So questions for Samit please. In terms of attending 9LA data at ASCO, what is the follow up of that data for both OSN for PFS? My question is all physicians going to come after that presentation and rethink that strategy for first line non-small cell lung on the back of that data, is there enough follow-up there? Second, in terms of the 9ER trial, could you talk to cover that too? I remember that when you ran the Phase 2, there was a question about toxicity and making sure and be use the low dose. So given it's a much more promiscuous TTI, should we assume a favorable or comparable tops profile? Anything you could share that would be interesting. And then finally on TIGIT, Roche's pushing forward very aggressively with that TIGIT antagonist. Merck clearly is interested and active with as your program seems not to been very much. Is that a function of resource allocation or is it a function of what you're seeing with this particular molecule? Thank you.

Thank you, Andrew, as always very thoughtful questions. And certainly a thought provoking from our 9LA perspective certainly we're looking forward to the first presentation of the data. At ASCO, virtually, but certainly going to be very meaningful. As you recall we had finished enrollment towards the beginning of last year. So at the first readout of the data, the interim analysis, the follow-up is short. What we will be able to share is follow on data from that perspective. It's very important I think to realize from 9LA perspective a few things that are questions that we will be looking towards the data to answer. One is as we continue to follow on and as you continue the follow up, what happens to that OS curve? Does it start to flatten out? Number one. Number two, what happens to that beginning part of the curve that we saw in CheckMate227 where we have the early progresses and how a limited amount of chemotherapy can impact that? I think those are the very important answers that we be looking for as you look towards the presentation of the 9LA data. We remain excited. I think both of them have to be considered together with 227 data and the 9LA data in overall management of a patient as you look towards non-small cell lung cancer management as we go forward. So I think that dual IO inhibition becomes very important along with that shortened duration of chemotherapy for some patients required. I will obviously ask towards the end of when I finished that to Chris also to comment from commercial perspective was that really need. On the 9ER side, as you mentioned, a couple of medics will use a dose of 40 milligrams and certainly that is going to be important in terms of management of the safety profile. As we've already said, that overall what we have seen is generally quite manageable safety profile. Chris also spoke about, that this provides an opportunity for further use of Opdivo in all the risk categories in combination with this potential. So certainly very exciting news there the trial has met all three endpoints, the major endpoints if you look at from an overall survival benefit, as well as looking at DFS and response rate, in addition to a very well managed safety profile. And I'll finish off on the TIGIT and then I'll pass it on to Chris to comment further on both9LA as well as 9ER. On the TIGIT perspective, we are looking forward to see the data that Roche will be presenting, certainly a very complex mechanism, as you very well know. We have our molecule which is in Phase 1. We continue to evaluate the Phase 2. And the overall dose profile for that agent and certainly there's no data to be shared yet, but we will certainly learn from what Roche is going to present and then we'll see if we can manage differently. Chris, do you want to add things?

LABL

Q3

Stephen O'Neil

Nigel A. Vinecombe

I'm looking through your adjusted figures here. Is the $3.8 million both a pre-tax and in after-tax figure?

Correct.

BGFV

Q2

David G. Magee

Barry D. Emerson

I just have a question regarding the e-commerce business, that you will have up and running next year. Can you talk a little bit about the -- what you sort of envision as the ultimate profitability of that business? And whether there is a risk of cannibalization as well?

Did you say the ultimate profitability, David?

CTXS

Q3

Sanjit Singh

David Henshall

Thank you for taking the question, and congrats on a really solid Q3. As we look into 2021 and beyond and you guys make your push to the cloud, can you frame out for us what are the initiatives that you guys have in place to drive that adoption of cloud? What do you feel is under your control versus what's more left to the customer in terms of thinking about moving the cloud, as they think about their broader cloud migration strategies, like if you could sort of address the initiatives you have in place versus what – what you're up against in terms of the broader priorities customers are facing.

Sanjit, I'd say there's kind of two ways to look at that. One is a more short-term tactical answer and one is the broader strategic direction of Citrix. And on the tactical side, when you're working with a customer, it's really predicated on a number of different things

BGFV

Q2

David G. Magee

Steven G. Miller

Is there more work to be done because I know you're sort of lapping in the period last year, which is, again, a bit of a master strategy. Is there a meaningful change in the mix this year versus last with regard to the price points?

Well, it continues to be a work in progress. I do believe there is more work to be done. We're still consistently evaluating our product offering and looking to make improvements on an ongoing basis, certainly.

MPC

Q3

Faisel H. Khan

Raymond L. Brooks

Hi. Thank you. Good morning. Just a follow-up on the IMO regulations. So when all this sort of high-sulfur fuel oil ends up back in the market and as companies marine buyer (36

Yeah. This is Ray. I'll take a first stab at that. Our goal every day is to fill up our resid processing capabilities. And we can do that via couple of different ways, having up the crude slate to take advantage of that, or looking at shrinking our lower-valued sales. What I will say is, even ahead of IMO, we've taken a lot of steps to reduce our residual fuel sales by increasing our process – existing processing today through our cokers and resid the asphalting units.

RAIL

Q4

Michael James Baudendistel:

Charles F. Avery:

Yes, it’s good detail. And then the covered hopper orders and the covered hoppers a lot of different sizes moving the large different types of the freight, which markets are being targeted there?

If you look at where the lion share of covered hoppers ran in the other and the small capacity for cement and sand and medium capacity for grain and larger in some plastics where I think Ted commented on the enquiries we’re seeing enquiries kind of for all three of those as you get now out in the future.

HAE

Q4

David Roman

Brian Concannon

Thank you and good morning and I appreciate all the detail that you’ve provided this morning. I wanted just to start with the whole blood business. I guess sort of implied, and Brian you have walked through this a couple of times in your fiscal ‘16 mid single-digit growth targets, sort of half the business growing at a double-digit rate which would say half the business flat. I guess I'm just trying to understand a couple of moving parts here on the whole blood side. On the one hand, you have the adjustment of utilization rate in the U.S. But if I take a step back it seems like globally there is a continued trend to minimally invasive surgery conversion to laparoscopy in emerging markets, et cetera, that would seem to put sustained downward pressure on the business on a global basis. Can you maybe just help me think through that first?

Sure. Well think about a global -- global whole blood or global blood collection market, because roughly 90 million collections worldwide, about 45 million of those are in the leukoreduced collection, and that's really the market that we look at, we target. So if you think about the U.S. being 12 million of that, you can see where we look at the remaining part of this market being much bigger. And leukoreduction is increasing, even in emerging markets our customers are looking at implementing leukoreduced technology because it produces a better red cell product at the end of the day. So we're seeing the leukoreduced market continue. We’re going to see the overall 90 million contract as part of what we're seeing today but you’re going to see the leukoreduced grow as a part of that become a big piece of it, but then you’re going to see that 90 million start to grow again. I don't expect it's going to have growth like we see in the plasma market today. But it’s going to grow because when you think about it, about half the world's population, when you look at emerging markets, sits in those markets and they can't meet demand today for their populations. Now that demand isn’t there but it's increasing, if you think about the U.S. market alone, 12 million collections for 300 people, China today has about 25 million collections for a 1.2 billion plus. So you can see that today they're not meeting the demand for their blood. So we expect that to continue to grow and we expect importantly leukoreduced portion of that to continue to grow. And that’s why we stay so committed to this and focused on this and believe our strategy is the right strategy.

BGFV

Q2

David G. Magee

Steven G. Miller

Are you getting a lot of requests right now from consumers that wish to use that channel with you guys?

We certainly do, absolutely. No question.

UNVR

Q1

Unidentified Analyst

Carl Lukach

Good morning and thanks for taking two questions. The first one is on the U.S. volumes that you actually intend to keep, so not what you are trying to de-market, but the volumes that you actually like. Could you talk about what you are seeing there in terms of demands? You seem to talk about softness, so I am just wondering where you're seeing the softness. And the second question is on guidance sequence. I guess you are going to face tougher comps in Canada and in Europe in the second half. And that's exactly when you are trying -- when you are intending to accelerate. Can you talk about whether this will -- this should come from I guess acceleration in Canada and in Europe? Or, is it just the U.S. business seeing traction from the turnaround and accelerating extremely fast between the first half and the second half? Thank you.

Specifically with Canada and Europe, I think you're right that it's going to more front-ended profile for growth for those two segments this year, but I guess to underline what you assumed with U.S. two-thirds of the company it's those programs taking hold that gives us that confidence of growing, accelerating growth rate. Then in terms of the market demand I mean there are no real standouts. It's spotty, but the real driver for us is our win/loss and increasing our wallet share with customers. That's the biggest thing that will drive our performance.

SXC

Q1

Sam Dubinsky

Mark E. Newman

Okay. And then my last question is just housekeeping. I know you're pushing some corporate overhead from the parent to the MLP, once you do all your dropdown, how much corporate overhead is leaving the parent and going to the MLP, do you think? If you could provide that.

Sam, it may be a little bit too early to comment of that. I think what we would like to do is as we think about the parent without the operating assets, we want to get to something that's more nominal than what we retain today. Obviously, today, the retained corporate overhead is approximately $35 million. We're taking steps, as Fritz mentioned, to reduce that in view of selling the coal business. And then further, we've done a pretty in-depth assessment as to where we're spending our time, vis-à-vis, the operations and the GP, and really what we're trying to do is do a fair rational allocation of cost and reduction of cost, so that when we get to a parent that has no operating asset and you look at the retained corporate overhead, it makes sense.

HLX

Q2

Joe Gibney

Tony Tripodo

Thanks, good morning. Tony tightened up on CapEx a little bit here, $270 million in cash and improved liquidity. Just, could you help us a little bit with net debt expectations in the second half and how we should be thinking about interest expense into the next year?

Yes, I think that we expect net debt to go down marginally in the second half of the year. I don’t think you’re going to see a number like a $100 million lower, but you’ll see some marginal improvement based on our own internal forecast. I think in terms of interest expense, assuming no sale of E&P assets, I think you’re going to see interest expense somewhat consistent with quarter two from this point on.

RAIL

Q4

Sal Vitale:

Charles F. Avery:

Is that a significant number or is that just not a level at this point?

It was a good position of the 700.

ROLL

Q4

Edward Marshall

Daniel A. Bergeron

Okay. And in the prepared remarks, we talked about maybe timing being and to look on a 12-month basis. Over the full year, it looks like it was up about 2%, 2.5% for aerospace. Do you have the mix between what the impact in commercial and what defense was for either the full year or the fourth quarter? That'd be helpful.

No. We don't have that broken down yet.

TTE

Q4

Lucas Herrmann

Patrick Pouyanne

Patrick and Pierre, thanks very much for your time. Patrick, [indiscernible] is still looking very well. Two, if I might as well. I wanted to start with Russia. We've been hugely successful. And the value of the assets has obviously increased considerably. But so too is obviously the value of the cash flows. I just wondered if you could give us an indication of what's the dividend that you now received or expect to receive from Novatek? What's the benefit if you can provide it that you derive from the volumes that you take from Yamal LNG? And I think most importantly, what cash flows or equity cash flows has the company actually received now from the Yamal LNG plant or to what extent are they still directed paying down debt? And second, if I might, probably for you, Jean-Pierre, is just -- when I look at the associate line in iGRP, how much of that now is coming from liquefaction? And how much of the associate line ballpark percentage is coming from the power business or the integrated renewable business?

The other question was LNG versus renewables, it was the question. So I will just give you the global cash flow from Russia because, of course, with the crisis, we look at the figure to know what was the risk is around $1.5 billion in 2021 which honestly, at the size compared to a $30 billion is not -- yes, it's sizable but it's for 5%. So in the past 1, 1.5 figure, I remember Yamal LNG when it's stopped was around $1 billion per year as well. So we experienced this type of situation. But I hope not because I think for Europe, it's very important. By the way, I can tell you the consequence of any energy sanctions on Russia. I think globally, the company is winning because the impact on the oil prices and gas prices will be huge. So yes, I would say, our operations in Russia, our assets in Russia might be given us some headaches and to manage it. But having said that, we have been -- by the way, I said $1.5 billion, it's a big mistake. It's EUR 1.3 billion because I must not speak in dollars about Russia, just to give you the magnitude. So it has increased a lot. The dividend. I think the Novatek dividend represent more or less $500 million per year, more or less. I mean it has increased but it's the idea. Okay, thank you, Lucas.

TAP

Q3

Christine Farkas

Peter Swinburn

Thanks so much. I just want to clarify based on your earlier statements about not pursuing a share buy-back at this time. Is that strictly based on the challenges of the current market and accessing capital, or is it because you might think you’d rather keep these dollars earmarked for other strategic initiatives? I mean it was always part of your plan to really study that return in the form of a buy-back, so I’m curious what’s changed.

Not at all, Christine. As you know, we’re building cash. We don’t have a huge amount of cash yet, but we’re in the process of continuing to build cash. And we’ll have a number of options in terms of how we use that cash. So it continues to be one of the options that on the table. It’s not the only one, but it’s on the table. We haven’t taken it off the table. Does that answer the question?

CMN

Q1

Thomas Gunderson

Jorgen B. Hansen

Okay, thanks. That helps. And then I forget the initial intro, Andy. Is Jorgen there, and if so, can we talk a little bit about international expansion? You've got U.K. and Italy. Maybe a little bit more focus on emerging markets, if you could give us some color there?

I'm here, Tom. And in fact, I'm calling in from Sydney, even though that's not really an English market. So obviously the focus, Tom, as you could imagine, for the entire organization has been Italy and U.K., two very important transactions that impacted our revenue in Europe. So that has been the focus. As you know, as well outside Europe and in emerging markets, our key focus is China and we continue to be very active in China, have managed to now launch our top-of-the-line automatic industrial reprocessors into the Chinese market and have [virtual] [ph] machines now at the largest endoscopy center, GI center in Beijing. So we are moving ahead with our strategic focus building and marketing leadership position in China leading with our Endoscopy products and that will be followed by several products in some of our other businesses including sterility assurance and other key products that are getting through registration the next several quarters. So I think that's the key point. We have had also good growth in some of the [east European] [ph] markets where we have some good distributors that are [buying] [ph] business as well, but I think from a sort of a Company focus, the strategic focus, China is definitely our focal point at active time.

TTE

Q4

Alastair Syme

Patrick Pouyanne

Thank you. Patrick, can you talk about unit development costs in the Upstream and I mean both across oil and gas. If I remember rightly, you used to talk about a figure of about 50,000 barrels per day on unit development costs. And I just wonder if you could update that figure for the current cost and environmental portfolio. And what I'm getting at here is that the Upstream CapEx that you're guiding to in 2022 is well below where it was in '19. So I'm just trying to understand how much of that has changed in emphasis versus lower cost versus any assumptions on disposals that you're making in 2022. And then the second question which is a point of a clarification on your reserve replacement ratio because 121% was sitting on the slide labeled oil. I wasn't sure whether that was just for the oil part of the business or that was across the entire Upstream?

You need to listen. The second answer is -- it's in the slide oil but it's oil and gas, it's a global one. We didn't know where to put it. We put it there yesterday evening because we got the figure quite late. So there was not a perfect position. We could have done it elsewhere. So it's oil and gas. So reverse replacement rate global one 121% on 1 year and 116% on 3 years. So the second answer is this is the first 1. Yes, it's true but we report in net investments and that clearly, there are some sales on the E&P side embedded in the budget. So the organic part of the CapEx for E&P is higher than the $7 billion, you could -- or $6, billion, $7 billion -- I think it's $8 billion, more or less. And but you fully have an assumption of around $2 billion of sales, more or less. It's more as the metrics but I think if I remember well, what we have. Obviously, the $50,000 per barrel per day of flowing barrel is a metric where today, we don't see any inflation in the projects at this stage, a little inflation. We've seen some inflation on steel, I would say, in the Uganda project. I think we -- in the last -- the delay in the last year costed us a little -- some extra but we are managing that, I think, some flexible contracts. So at this stage, the $50,000 per barrel flowing barrel because we are targeting some low-cost barrel, I would say, is -- you can still consider it.

SXC

Q1

Neil Mehta

Frederick A. Henderson

First, can you talk a little bit about the M&A landscape as you talked about driving growth. At your Analyst Day, you highlighted about a dozen smaller-sized M&A opportunities, where do you stand in that process? And which verticals seem the most promising, and which verticals seem the least promising?

I would say -- I'll have Mark answer the question, but one of the things I would say, Neil, is we've been -- the last certainly 30 to 45 days, we've been working hard at both the dropdown transaction as well as the -- getting our ducks lined up on coal. So relative to the Analyst Day, as I think about what we've doing for the last 45 days, we've been working on those, too. But I'll let Mark talk about the prospecting and what we're doing on M&A.

MPAA

Q2

Steven L. Dyer

Selwyn H. Joffe

Great. Last question, I may have missed this, when is the exact -- the close of the debt refi, is that today, yesterday?

It closed when did it close there?

GME

Q3

Colin A. Sebastian

J. Paul Raines

A quick follow-up on the pre-owned margin questions, it sounds like there's a cyclical element to this. And I think I asked about this in the last call, but why wouldn't it be logical to assume that the pre-owned margins remain a bit lower for a period of time at least just given the mix shift to higher-value next-gen software where maybe that having both sides of the trade doesn't give you as much flexibility? And then secondly, Paul, back to the comments on technology retail and leveraging your assets, that brings up the point of Simply Mac, which I don't think you mentioned in the script. But curious if there's any interest in acquiring the remainder of that company. And then more broadly, if you can talk about synergies beyond the back office between GameStop, Spring, Aio and Simply Mac, perhaps sharing footprint or floor space or anything like that.

And then as far as Simply Mac, Colin, yes, we're pleased to announce that we did complete our transaction, and we own 100% of Simply Mac. And in fact, Steve Bain and the team from Simply opened up their 19th and 20th stores this weak. I think it's Missoula, Montana and Lubbock, Texas. So any investors who are based in those cities, you'll have a beautiful Simply Mac store to go shop. As far as synergies, we mentioned them. We see ourselves as having built this platform that includes real estate, talent management and training, buy-sell-trade, PowerUp Rewards and capital and many others. As far as the real estate synergies, there are multiple synergies. Marc Summey, our Senior VP of real estate, has identified a real long list of targets and locations where we have adjacent opportunities on the same pad, in the same mall. If you go to Shreveport today, you'll see that the GameStop and Simply Mac are very close. If you go to some of our other locations, you'll see that we're leveraging our landlord relationships. So it's very early, and yes, it is a -- there is a significant real estate opportunity between the Aio, Spring Mobile and Simply Mac businesses with GameStop.

GIS

Q1

Eric Katzman

Ken Powell

Okay. And then I guess the second question has to go with the new products. It seems like you’re really emphasizing all the new product launches both in your last call and at the Analyst Day. Can you make the point that this year is really all about growth? Is this first quarter where U.S. retail albeit in a very tough environment? Do the new products not as successful as you would've hoped initially? Or was it just promotion on the core that overwhelmed what is new product success, maybe you could kind of expand out a bit?

We like our new products lineup which I commented on in my remarks. Cheerios Protein is off to a very strong start. The snack products, Strudel, the Nature Valley, they have been good. We think the soups, the light cream soups will be very good. The OEP products that we’ve launched -- Old El Paso, I beg your pardon. Chris, those flavored shelves will be quite good. I mean, as we go down that, our U.S. portfolio, we feel very good about those. The Foodservice -- Convenience and Foodservice business is entirely driven by new product innovation, whether it’s Go-GURT and McDonald’s or new varieties of Greek, new chips, new offerings to K-12s. We like the innovation there, and we have good innovation across Haagen-Dazs and Old El Paso in Europe. So the new products are very much important for us and part of the mix. The issue in Q1 is primarily the trade and the merchandising impact, which, as we said, will normalize as the year goes forward, and those new product contributions I think will be more visible.

IM

Q2

Unidentified Analyst

Kevin M. Mura

Okay and now on the product mix side of the equation any particular areas that you guys would highlight as areas of broad strength or broad weakness, obviously the PC unit numbers that have been prior... previously disclosed look pretty solid maybe any other broader comments could be helpful?

Yes, again we have four key broad product categories that we always talk about. We stayed within those norms of ranges again, peripherals being 40% to 45% of our business. Peripherals grew slightly less than our overall company rate and then the other three categories of systems, software, and networking all grew just slightly more. So it was interesting this quarter there was no real stand out category as you may although there is individual vendors or individual products in there but really they were all cupping the 11% growth rate that we had a few above and one area just below but very close to that 11% growth rate.

GCI

Q3

Craig Huber

Gracia C. Martore

Yes, good morning and welcome back, Craig. Glad to hear your back is doing better. I guess a two- or three-part question. Can you just tell us, Gracia, your daily and Sunday circulation decline in the third quarter, how was that year over year? And then also, this roughly 28% ad revenue decline in the newspapers in the quarter, how much of that would think is from advertising rate as opposed to volume? I think last quarter, you thought it was about 5 percentage points.

Yeah, on the circulation side of things, I think the declines were similar to what we saw in the second quarter and I think at that time, when Bob Dickey talked about it, he mentioned the fact that we’ve taken a number of aggressive pricing actions on virtually every one of our newspapers. We’ve also reduced permanently some of that out of NDM or an area that’s important to our advertisers, so some of that circulation has been moved out. We’ve also seen some morphing to e-editions, like at USA Today and some other things that we are doing. Clearly we are going to be very careful on continued pricing actions and it is not dissimilar to what we’ve seen in the past where when you take aggressive pricing actions, you see a fall-off in circulation and then you spend some money on retention efforts and on start pressure and the like, and that circulation builds back up. But net net, you see the benefit and we continue to see the benefit of those pricing actions in our revenues. As to rate, I don’t think we can probably add much more than what we said on the second quarter earnings call that you know, again rate there’s not on monolithic rate. There’s online products, there are mobile products, there are all kinds of products that are in the mix and you know, in that 5% range, whether it’s give or take a couple of percentage points, hard to hone in particularly and specifically on that, other than to say that I think we are trying to be sensitive to our advertisers and the situations they find themselves in and trying to be more creative with them and helping them get through this difficult economic period for them as well. And then I think we will have tremendously solidified those relationships and as the economy improves, we will see more dollars flow out of them, as we always had hoped.

SYK

Q2

Pito Chickering

Kevin Lobo

Okay, great. And then we submitted a lot of hospital systems during the quarter. We talked about a pretty significant move of orthopedics from inpatient to outpatient, but not necessarily into the ASC which obviously get a lot of investor attention. As the certain moved into the outpatient department of hospitals, does it impact surgeon selections of the products at all or has it no impact from the move?

Yes, no we're not seeing any impact on implant choice, moving to the hospital outpatient, or even frankly to the surgery center. Thus far, we're seeing surgeons continue to operate with the same implants, regardless of which facility they're operating in.

NAFC

Q4

Karen Howland - Lehman Brothers

Alec Covington

And do you expect most of the costs to be spread evenly throughout the course of the year or do you think most of these initiatives will be more in the second half of the year?

Well, they are going to build throughout the year as we layer on additional projects. However, there is a little bit offsetting effect because there is others such as the Avanza in Omaha. I mean we felt some of that in the fourth quarter. We are going to feel some more of it in the first quarter. Well, that ought to begin to wane by say the third quarter but then we are going to have others that are layering on. So because of the fact, Karen, that we are layering these things on starting projects in the first and the second and third, we are going to see that those costs are going to build throughout the year. But again, I still remain steadfast with the fact that I believe that by the time we end the year we will have inked out a slight improvement and we'll still have fully absorbed those costs even though your point is very valid, they will build throughout the year.

RDUS

Q4

Jessica Fye

Gary Hattersley

And maybe just last one on the patch study. Can you talk about your assumptions for enrolment? I just want to make sure I understand, as you're starting the study in mid-19 and expect to see data on a 12-month endpoint in 2020. Is it fair to imply you expect to get 500 patients enrolled in six months?

Obviously, we're not providing specific guidance around enrolment. Certainly, Radius has a long history of conducting many BMD studies through the course of development for abaloparatide. So, I think we have a very good handle on what it would take to enroll these patients, how many sites that we would expect to be able to enroll these patients quickly. We certainly think with the study design in which patients are going to receive either the subcutaneous injection or the abaloparatide patch that this could be quite a -- study of patients may be enthusiastic about taking part in.

VRTV

Q4

Daniel Jacome

Mary A. Laschinger

Okay. That's helpful. And then on the FS segment, I think, you said you're getting out of wide format, what's the tail on that, when would that be completed, what's your best estimation on that?

So the wide format is geared in our Print business. And so those are wide format where you have huge, how do I describe, a sheet essentially of either resin-based products or paper-based products that printers have to support on big signs that you see outdoor signage, as well as some of these big things you see -- markings you see on the airport floors, for example, just to give you an idea of what it is, it's all in the Print space, we were supporting that business both from a paper-based and a non-paper-based and we're exiting the non-paper-based element of that. And we expect to have that exits complete here in the first half of the year. And there will be some implications to that in terms of inventory as well as revenue.

POWL

Q4

George Gaspar Robert W. Baird:

Don Madison:

Do you anticipate that you have got additional cost structure that you are going to have to swing through there on that particular issue?

At this point in time, we have a judge ruling that is in our favor. What is in front of us is going through any appeals processes that we anticipate. That could impact, from a timetable standpoint, could impact throughout fiscal 2009. But should not be to the same magnitude as we saw in 2008.

PM

Q3

Judy E. Hong:

Hermann G. Waldemer:

Okay. And then, Hermann, just following up on David's question about EU region. I guess just in terms of the persistent market share losses that you've been experiencing and obviously, more the macro challenges and the fact that you're more exposed to the premium segment than others, are you rethinking sort of your brand portfolio strategy in any meaningful way to be a little bit more aggressive in some of the value segment? I think you talked about this a little bit at your analyst meeting, but just wanted to get an update on how you're thinking about sort of share versus maybe a mix or profit in that region.

I mean, we certainly want the EU region to return to OCI growth. Now in the European context, we have seen a number of markets, their brands over the last years have been repositioned to the low end. We have answered that in the markets, where it was necessary, this brand out of our portfolio. I mean, Germany is a much different situation than it has been a couple of years ago. We have Marlboro there. Yes, but we also have today there an L&M, the fastest growing brand in the market. The market -- the brand with the highest young adult smoker share in the market, and we are right now complementing that with Chesterfield at the same price level in the German market. Taken all together, well, the market share in the German market actually has been growing. So our team there, and we have a very strong team in Germany, is doing an excellent job, and it begins to pay off. If you move over to France, that's a different situation there. There, actually, we have 2 growing premium brands. Both Philip Morris and Marlboro are doing extremely well in an otherwise stable market. The market where we are underrepresented at the low end, clearly, is Italy, where our share at the low price segment of the market is well below our overall total market share in the market. So it's a marketing, it's a brand challenge. It's a sales challenge, but we have the portfolio to do something there. And it's not that we wake up to it now. We do something already for the last years.

SXC

Q1

Sam Dubinsky

Mark E. Newman

Okay, great. And then just on your revolver, I know you're paying down the revolver. Technically, I don't think you have to, but I know you're doing it. In theory, does this mean that you now have more gunpowder to make logistics acquisitions? With the revolver paid down, a little extra cash at the MLP's balance sheet?

Yes, Sam, it's Mark. We thought it was -- since we're accessing the capital markets and this was a draw that was ready to buy a long-term asset that it made sense to term it out. And so with the refreshing of the revolver, we really are then able to do acquisitions, and candidly fund some of the remainder of the environmental remediation. But your answer -- your question is right on. We want to be able to do acquisitions without financing contingencies or accessing the capital market. It made sense to just add this on when we went to market.

NWSA

Q2

Robert Andrews:

Chase Carey:

Hi, thanks. So back to MySpace, you’ve mentioned that the company’s interest maybe best served with another owner. So if the company is (Inaudible) I wondered if you might try to comment on what climate will you have on best served MySpace interest and most of this they want probably MySpace could you provide to percentage of data.

Not sure I got all that, but we’ll just try to interpolate on it. Yeah, there has been a lot of interest, because there has been some indication, we’re pursuing that path. In other words peruse all options that can range not just a sale, but it could be you know a sale could be an investor coming into it, it could be us staying with a restructured ownership structure with management. We just think in fresh perspective with given flexibility and opportunity to really get a new life is consistent with the re launch of the product end up right sizing up the cost. The interest to-date is ranged from A to Z, from industry players, financial players, to foreign to domestic and that’s without really being out there. It’s sort of incoming. We’re not soliciting anything at this point, but we think we’ll look at all of those. I'm not going to speculate on value. We think it's a business that has got a unique level of reach and while it’s in a restructuring place has proven, put forth a path that we think has a real future to it and that we think, it has an opportunity to really be something special, but we think we ought to put it in the right place to really maximize that opportunity. I think management, the senior management there is excited. I mean obviously there has been a lot of challenges for them, but I think really believe that I’m – that they can do something special. But I think there’s, the interest sort of ranges from A to Z.

SMCI

Q3

Aaron Rakers

Howard Hideshima

Okay. And your assumption that therefore you're implying that your gross margin this quarter given that that's stabilized now that you've been able to possibly readjust those pricing with your suppliers that you're assuming that we get back to a 15% level in the current quarter?

I have not – I've said that our current month it looks stable right now. So it looks stable. However it's really early in the quarter. Aaron, so we tempered our forecast with some of that. Because again if price decreases happen again and again we're still susceptible to that in our inventories. If price is maintained stable, we're going to be okay and then if prices go up, we may see some benefits. So again it's very early in the quarter. We're seeing stability right now but again it's very early in the quarter.

UHS

Q2

Gary Lieberman

Alan Miller

Good morning. Thanks for taking the call. Alan I would be interested to get your perspective on Washington heading into the elections and with the fiscal [inaudible] coming up, the potential that congress addresses sequestration either in a lame duck or in a new congress?

Yeah. Thought you were going to ask about anything that is new. Nothing happens before the election, and lame ducks are difficult. So we don’t really have any indication except that – Vice President Cheney came out a sort of seclusion and went up on The Hill and talked about the defense. So I think they are going to have to try and address something but we don’t have any indication as to where and how we accept that. The other thing I will say is that we all are in good shape with the administration. The hospitals are and I think we have got them on the defensive a little bit because of the state’s reaction to Medicaid. So I think that – I know for a fact that the administration is going to try and be helpful to hospitals.

RH

Q4

Adrienne Yih

Gary Friedman

Wonderful news on the momentum continuing. Gary, we've spoken before about demand creation, how it's not no longer a single number on the P&L like a percent of sales but a confluence of the investments you're making in Aspen, London, RH3, etc. It seems RH is building more of desire creation and a pipeline of future customers. So who wants the RH lifestyle, right, and everything that comes with it. So how should we think about that advertising demand creation line in and of itself going forward? Thank you very much.

It's a really good question. And so the right way to think about it. Building one of most admired brands in the world, desired brands in the world whichever adds to it you want to use really it takes a different path, it takes a different way to communicate and I think we're in a world where it's harder and harder to get your message out because there's so much information out there. I read a study and I think it's about a year ago that humans are consuming 700% - 7 times the information than they were 20 years ago and it's an astonishing number if you think about that from 20 years ago we're consuming 7 times more information because of these devices we have and the amount of information, the amount of platforms we're communicating on and the ease of communicating to us. So the way to kind of breakthrough, right? Steve Jobs said something if you watch his original kind of YouTube presentation when he's on his shorts and flip flops on a little Apple stage when he came back to Apple and he was talking about he was reintroducing to think - reintroducing Apple and introducing the think different campaign. And he said we live in a really noisy world and it's going to be really hard for anyone to remember anything about any of us and that it is so important to - that he talked about marketing and about values, right? About those things you deeply believe in and connecting with people about values and he talks about some of the great brands. He talked about Nike being one of the great brands in the world. And he said if you think about Nike they're selling a commodity, they're selling tennis shoes, right? They're selling shoes for the most part. And he said - but yet in their advertising they don't talk about the shoe. They don't talk about the sole. They don't talk about the laces. They don't talk about - they talk - they celebrate great athletes and great athletics, right? And he talked about Apple believed that they could - that people - that they're passionate enough really could change the world. And that in that Apple brand, the Think Different campaign, it was also a campaign that was more than anything else is about the absence of the product, right? You didn't see an iMac. You didn't see anything in the campaign. You don't really - think about Nike. It hasn't built their brand based on any particular shoe. We all remember the Jordan shoe. But why do we remember that Jordan shoe? Because of Michael Jordan, not the specific shoe, right? So if you think about the great brands and you think about how they built them and how they communicated, they - it's very unique path. Think about this. The standout. Tesla is the fastest growing most valuable car company in the world. They've never had a TV commercial. Think about that. People line up for Teslas, right? So we say inside our company, like, for example, we don't have a marketing department, and that may shock a lot of people. We don't have a marketing department because marketing a lot us about putting lipstick on a pig, right? It's like taking an average idea and trying to dress it up and spin it and make it something better than average. That's really hard to do, right? It's just really hard to do. And we don't have a marketing department we say it's not what we say, it's what we do that defines us, right? So we have a truth group and our truth group, in the past, they'd come to me and say someone wants to write a story about this and they're going to put us in that story and go well, that's not what we believe. Like why would we want to be in that story? It's not our truth. And so our work is our truth. And we define ourselves through our work. And we connect with people through our work. And that's why launching kind of a fully integrated revolutionary ecosystem in a place like Aspen where the wealthy and affluent vacation - visit and vacation and doing something extraordinary there, you've got it - you've got the attention of the right people. And we're not going to bang pots and pans and say look at us, we're going to do some extraordinary work. That's why I say when climbing the luxury mountain and taking the path we've taken, all the luxury brands were born at the top of the mountain, right? Like you think about any luxury brands, they're all born at the top of the mountain. We weren't born there. We were - we weren't in born at the bottom of the mountain, right, we were born underground. We're basically a bankrupt company. So we had to kind of dig ourselves from out from under the ground and then decide like we're going to make a climb that no brand has ever made. No one's ever tried to make this climb. And so we're - and people on the top of the mountain, they don't really want you to make that climb. You're not from the neighborhood, you don't get invited to their parties. And so you have to got to do work that is so extraordinary, so remarkable, so amazing that it creates a forced reconsideration of our brand, that it forces people at the top of the mountain to tip their hat, right? To kind of say nice job. We have to earn their respect. So there's a famous quote that says, when you don't come from royalty, you have to earn it, right? And so this work that we're doing, the things that we're doing to build this brand we believe is the right kind of work. We believe if we do extraordinary work that breaks through the clutter, people are going to talk about it. And by the way, we put out a press release, a single page press release talking about Aspen. And I don't think I've ever had more billionaires reach out to me and send me notes and say what are you doing in Aspen? Like I personally had three requests to buy one of their homes. Our partner has had about 12 requests. Nobody's even seen a home. We even didn't put a rendering out. So when you think about that, it's like, we are about - we're about spaces. We're about design and architecture and living, spaces and places. And that's what we're about. And so, doing incredible spaces, creating inspiring environments, we believe will break through the clutter. And it's way more powerful than just doing it at and trying to talk about. That's why we don't have social media. That's why we don't have an Instagram account. We don't have a Twitter. We don't do this. Everybody has told me, you need to tweet. You need to you need Pinterest, Pinterest account. You need to have an Instagram account. People will follow you guys. Gary, if you tweet, you'll have all of these followers. I'm like, I don't want to spend my time thinking about what to tweet tomorrow. So, I don't want to spend my time, I don't want to have a department that's reviewing what pictures to put on Instagram that day. And by the way, just as a point of reference, we don't have a Pinterest, a Twitter and Instagram, yet we're the most pinned brand of our kind in the world. We're the most tweeted about brand of our kind in the world and we're the most Instagram brand of our kind in the world. And so like that's why we believe it's about our work and that's why we're doing the things we're doing and by the way by doing the good things we're doing like even building and aspiring galleries we're building, we're now looking at the model and we're saying in these galleries and especially the ones with the restaurants, right, that are driving significant traffic. We don't believe we need to spend as much money mailing catalogs in that market because with thousands of people we feed every week. And so when you think about our financial model and opportunities and leverage in investment just because we used to invest a certain way doesn't mean we should keep investing that way because we're - as we continue to innovate we can see around more corners, we have more data, we have more learnings and I sit here today and I go like gosh, we haven't mail the source looking how long. A year, right? Yes, a year. We won't have mailed the sourcebook for 18 months or something by the time we mail the fall sourcebooks, I don't know do we need to go back to mailing sourcebooks twice a year. Do we need to mail this deep like in the markets where we have these magnificent architecturally significant spaces and places we built. How much are those worth to marketing, right? And I get it. Yes, you might be closing stores if you're building kind of crappy stores that are in line in a mall that everybody's got a glass storefront and all you have is your logo up above it that's different. But that's not what we're doing, right? So we're doing something different. So you can't - that's why I say you can't put us in the pandemic pile, right? You can't put us in the pile with everybody else; you'll miss the whole story here. I consider it one of the best questions I got in a long time.

OCX

Q1

Steven Mah

Doug Ross:

Okay, great. Yes, that’s great color. And maybe just one more question. On your pharma services business, again kind of the same line of questioning, how COVID-19 shutdowns affected your pharma customers? And again, do you expect a gradual recovery or short ramp back up as research and academic labs begin to open up?

No, I think you’re hitting it pretty well. I’ve divided it into two pieces. One is the legacy pharma services business independent of the IO opportunity and then the second is the IO opportunity enrolling trials where we could test out the biomarker with new agents. And I would say believe it or not, sheltering in place has greased the wheel a little bit of conversations and negotiations where, as Ronnie said, the actual execution of these things have been delayed a little bit. So it’s a mixed bag. We did have some delays in our conversations with some clinical trials we were trying to access that were in areas where there was pretty bad pandemic outbreak. And so some things got pulled down and some things got speeded up. It’s not a homogenous story.

LBRANDS

Q2

Paul Lejuez

Nicholas P. M. Coe

A question for Nick. BBW margins have been heading steadily higher. Just wondering what are the opportunities from here to continue to drive margins higher. Is it just productivity gains or are there opportunities on the gross margin line as well?

Thanks, Paul. Let's see. I think, if I could just kind of answer that slightly differently. One of the goals that we're really looking at is to continue to figure out how to really evolve the brand and figure out ways to get the right price and read the right customer expectations. So that being said, we continue to invest into the products. So a lot of the product launches that we've done have taken on incremental cost increases, but we've been in a position that we've been able to charge the appropriate price. So for me, it's going to be less about continued gross margin gains and more about are we able to continue to reinvent the brand, continue to elevate the brand, and then work closely with the customers to make sure that we're not letting retail prices get too far ahead of us, which is probably looking more at a sustained gross margin rate.

PM

Q1

Judy E. Hong:

Jacek Olczak:

Okay. Got it. And I guess presumably, then some of those strategies would benefit as you move into the first part of 2016 as the hedges roll off.

Yes. Yes. Well, as I said, I mean, because we always look 12 months, 18 months ahead, there is already some portion of the 2017 expected cash flows from Japan for – in yen which hedged. But obviously, they hedge also at the rate which are more corresponding to the – some of them to the more recent relative strengthening of the yen.

GGG

Q1

Liam Burke

Pat McHale

Now is the balance on new product introductions or is it just general end market improvement?

The U.S. is both - I mean our contractor business they’ve got a great track record of launching pretty exciting new products every year and they definitely get some incremental growth over that. But certainly, the construction market in the U.S. is continuing to strengthen and we are riding that wave.

CTAS

Q1

Michael Schneider:

Michael L. Thompson:

Okay. And then kind of different way, when you look at your different product lines now, what product like do you think stands the benefit most from Project One Team?

I think out of the gate first, it’s the other services emerging businesses because you are bringing a lot of customers to that with Fire and Document Management especially, Fire. If you have a lot of customers that we have that you can use that service when you have thousand business customers, most of this are in a rental business as you know. So, I think out of the gate those emerging businesses should have the best opportunity, but we also believe this new sales organization… for the fact that we talked about previously are going to benefit all of the divisions.

GERN

Q3

Ryan Martins

Stephen M. Kelsey

And what was the last update in terms of enrollment that you had provided?

We haven't provided any information on that.

BMY

Q1

Geoff Meacham

Chris Boerner

Hey, guys. Good morning. Thanks for the question. I just had a couple of quick ones. On your new launches, highlighted on Slide 12, what were some of the headwinds you saw for Reblozyl this quarter? I mean, what do you think could be the tipping point for Zeposia and Onureg for the current indications? And then, the second question is with your cell therapy franchise. I know it's early, but just given the proximity of the two launches, are there synergies that you're seeing just with respect to site activation or reimbursement, etc.? Thank you.

Sure. Thanks for the questions, Geoff. There's a lot there, so let me try to hit on each of these relatively quickly. So Reblozyl, we're very pleased actually with the continued strong execution of the teams. And what we are hearing on Reblozyl and our expectations for growth this year, and certainly in the long term, remain unchanged. As for the dynamics that we saw in the quarter, sales were relatively flat Q4 into Q1, and there were really two factors underlying this. First, as you will have heard from some of our peers, we have seen new patient volumes down in hematology generally. They were down about 10% to 20% versus pre-COVID levels in the MDS population and so that was one of the factors at play, at least for the quarter. And we have seen specific to Reblozyl, a bit of a prolonged bolus wash-out period. And to give you some context around that, in Q4, we estimate that bolus patients for Reblozyl often were roughly around 40% of the overall business. In Q1, that has come down to about 20% to 25%, and we would expect those patients to continue to come off therapy over the coming months. Those two dynamics, notwithstanding, we are very encouraged by the continued uptake of new patient starts in this setting and continue to see new trials and an expansion of the prescriber base, which is critically important at this point in the launch. So continued excitement from our perspective with respect to Reblozyl. Onureg and Zeposia in terms of pivot points, I would say, as we have discussed in MS and as you've seen with some of our peers, it does take time to transition patients from written scripts to commercial dispensation in MS. That said, it was a big focus area as we discussed last year, and we are seeing very nice acceleration for Zeposia in MS. And of course, we have the opportunity in UC coming up with the PDUFA date in a month or so. And that's, obviously, another important opportunity for Zeposia and very much look forward to bringing this differentiated product and mechanism into IBD. Onureg, we're in the process of creating a market with Onureg, and that launch is going very well. In fact, we saw patient demand volume increase about 50% from Q4 coming into Q1. And I would say in that space, we are very excited with what we're seeing. Now again, it's a market where we're creating a new treatment paradigm, and that's going to take some time. But all indicators are that the efficacy profile of this data is landing well with customers. And again, the teams are executing well. And then, pivoting to your question on cell therapy, we're very excited about the two cell therapy launches. Both products have been very well received. Given Breyanzi's got a little bit more data in terms of the launch timing, let me start there. The launch there is going very well. We've had over 50 accounts that have been activated already. Our highest priority accounts, in fact, were activated within eight weeks of approval. The messaging around the best-in-class profile for Breyanzi is landing well. Physicians are clearly seeing a differentiated safety profile. And in fact, we've already infused -- apheresed and infused patients with Breyanzi and so I would say the execution there has been exceptionally well. And just quickly on Abecma. Obviously, a bit earlier in the process for Abecma, but we have the advantage of launching that product on top of the infrastructure that we've built with Breyanzi. So we've actually been able to more rapidly activate sites there. We've had 25 centers were activated within 10 days of approval. The physician feedback has been very positive, and there's a lot of enthusiasm for us bringing the first BCMA-targeted cell therapy into multiple myeloma. So, so far, early days, but the launches seem to be off to a very good start.

UIS

Q1

Joseph Vafi

Peter Altabef

Hey, guys, good afternoon, nice to see the Services business momentum. Peter, can you go back to that Brazil you were talking about on ClearPath and that renewal? And how is ClearPath renewals looking in terms of convincing these banks, especially these banks to step up again and maybe a little more color on the thought process of the Brazilian client. And then I have a follow-up.

Sure. Well, as Mike indicated, we think that the ClearPath business as a whole is relatively stable from 2019 compared to 2018. Renewal cycles vary from year to year. And they vary from quarter to quarter, because these are dependent on when they come in. With respect to the Brazilian bank in particular, we did mention that also in the press release, Joe, so you can get the specific name there. It's really a good example of the way we're approaching the business. So that is a bank that historically has used ClearPath Forward as an operating system for some of its applications, but not for all of its applications. And so, what we've done there is in addition to extending and renewing the license there, we're expanding it, because there are applications that can be put on to ClearPath Forward or ClearPath Forward related applications, they weren't taking advantage of. So specifically with respect to loan processing, you got a bevy of things that banks can do with their core processing. And so, we're actually expanding our footprint in that Brazilian bank. That's a little different from, let's say, using Elevate. So most of the ClearPath Forward, what we're talking about in that Brazilian situation is what I call a backend core banking system. The promise of Elevate, which we just announced a major new release this quarter, is really on the frontend. It's that omni-channel, which really faces the customer. And the idea behind the open banking system, which is our omni-channel approach to banking, is at this point banks really want best of breed. And there are a ton of fintechs out there that are really putting in some really interesting innovative ways. There is an article in the paper this morning. I think you saw that fintechs are finally striking at core banks. Well, by using Elevate, we're allowing banks to take advantage of these fintech innovations by actually kind of a plug-and-play approach. So that's kind of the yin and yang if you will of our financial sector, which is strengthening the core banking, the kind of behind the scenes large processing approach, while also being pretty innovative at allowing people to start doing customer facing banking, which Unisys historically has not been engaged.

PM

Q3

Christopher Growe:

Hermann G. Waldemer:

Okay. That's helpful. Just one follow-up then on the Russia activities. I'm just curious if those -- obviously, it's a broad brand building activity, but obviously, Marlboro has been quite weak there. So is it targeting that brand? Is it -- explicitly that's -- it could help your performance in that market.

Yes. We are not happy, I've said that before, with the performance of Marlboro. I mean, it's just 2% share of market in a market that big and that important like Russia is, of course, disappointing for Marlboro, and we definitely think that Marlboro can do more. There is -- again, there is a marketing challenge. It can be that we have such little volumes for that brand in the markets. We will invest behind. We will build the brand equity, and we want to bring that brand also on a growth trajectory as in so many other markets in the world, in most markets in the world, actually.

ANET

Q1

Amit Daryanani

Jayshree Ullal

And if you did not have the supply chain issues or bottleneck what you are dealing with and if you did not have the supply chain issues in theory, what would the June quarter guide have looked like? Would it be towards the high end or something different?

Well, it's difficult to speculate since we have supply chain issues. But -- and the reality is different than the theory.

MNST

Q3

William Chappell

Rodney C. Sacks

Thanks for the color and just on the October sales I know one month doesn’t make a quarter but that’s all for I think 31% growth in October of last year. Is that sign that some of the issues are behind you or just a timing of shipment. How should we look at that October number?

I think it’s a timing issue, they ship when they orders, we ship when products are ordered, whenever we can and it just falls where it falls. So going forward we’ve obviously – we are encouraged by that factor. We did see a little bit of a fall off towards the end of the quarter. Again, it was what is was and we’ve seen it pick up both – we deal with it as it comes.

NWSA

Q2

David F. DeVoe:

Chase Carey:

Yeah it’s going to be something, it's going to be work in progress.

But I know it’s in service.

CAJPY

Q2

Benjamin Lu

Toshizo Tanaka

Hi, thank you for doing this call. I have two questions. My first question is you raised your fiscal OP to 380 billion from the original guidance of 335 and at the same time you lowered the impact of the quake from 198 billion to 122 billion, but the OP excluding the quake was actually reduced from 533 billion to 502. Can you tell me why you actually reduced your OP excluding the quake and which segments are seeing the downside? And then I have a follow-up. Thank you.

Answering your question about difference in the operating profit, we divide the impact of this earthquake and also we divide the exchange rate. We appreciate both U.S. dollars and euro by ¥5 each, so it’s reflecting ¥51.3 billion. So this means that the difference that you are mentioning. Do you understand?

EXPE

Q3

Ross Sandler

Dara Khosrowshahi

First, on TripAdvisor. The margin there compressed a little bit for the first time in a while. Can you talk about what investments you're making and what's driving that? And then second is more of a hypothetical question around ITA. But according to Hitwise, you guys get around 25% of your traffic from the search engine, the majority of which comes from Google. So if we were to hypothetically assume that the Google ITA deal goes through and that worst case scenario, a couple of years down the road, you lose a meaningful chunk of that organic traffic, how would your marketing mix or your kind of go-to-market strategy change under those hypothetical circumstances?

And Ross, on your ITA question, it's difficult to answer a hypothetical, but a couple of notes there. First of all, the majority of, at least Expedia's, and I believe hotel.com's traffic that comes from search to our site actually come through people searching for Expedia, for example. So in typing in Expedia in Google or so on, typing in hotels.com in Google. So of the 25% for Expedia, for example, the majority of that traffic is someone who's already looking for Expedia, and that person is going to find Expedia one way or the other because they are searching for something very specific. Of the searches that aren't Expedia searches, so to speak, there are other searches that we compete for and other players compete for. That traffic tends to be significantly less profitable than the direct traffic, the TripAdvisor traffic, the email traffic, et cetera, that we get. So hypothetical, that minority of traffic might come down. But certainly, it would not affect our profits in the same way because that traffic tends to be much, much less profitable traffic. That is one of our most expensive channels, so to speak. And we do continue to make investments in loyalty channels and loyalty programs, et cetera, to keep consumers coming on a direct basis and build up loyalty and build up reasons for them to come back directly to us, which is the most efficient customer acquisition tool for us.

PRM

Q2

A.J. Guido - Golden Tree Asset Management

Kim R. Payne

As far as the insurance recoveries, you said there may be more recovered. Can you provide more color on that and maybe the magnitude?

There’s another $0.6 million, yes $600,000 out there that we are working to recover.

SMCI

Q3

Amelia Harris

Charles Liang

Hi, this is Amelia in for Alex today. Thanks for taking the question. Basically given the volatility in your business model, wouldn't it make sense at this point to acquire some system level management software or virtualization software that can potentially, I don't know, buffer to your business model and save you from having to aggressively cut OpEx when you experience maybe a less than favorable quarter?

Yes, indeed we are aggressively improving our system management software, including a certain demand management, some virtualization and some storage related tool, so including switch, our high performance switch product line. So we are doing those products now.

MPC

Q3

Doug Leggate

Timothy T. Griffith

Okay. Thanks. My last one, guys, is I guess a little more convoluted because it relates to some of the GP drops that have been done by some of your peers. I think in the past you've talked about a kind of target range multiple perhaps something in the 15 – 20 range, the recent drops or the recent conversions have been done a little bit lower than that. I'm just wondering if you could offer a perspective on that. And related, and Gary, I know, we've talked about this in the past, but it does give a lot of transparency to your ownership of MPLX going forward. But obviously, as you take distributions, your tax basis there would essentially ultimately go to zero over time. So how should we think about the after-tax value at the MPC level for what is a tax-free entity and as it relates to the public market quote? And I'll leave it there. Thanks.

Sure, Doug. It's Tim. Let me try to take both of those. Your first question with regard to maybe precedent transactions or other GP transactions we see in the marketplace, for one thing, our 15 to 20 that we provided in January was really illustrative. And frankly, that's not where we started on multiples. We really looked at what would be the appropriate premium of cash flow pro forma for the transactions vis-à-vis what the GP cash flow would have looked like otherwise. We turned it into a multiple because we know everyone loves to talk about multiples, but the – I guess the thing that is worth pointing out is that the situation that both of the recent transactions that have been done, the situation of the GP and the situation that MPLX's GP finds itself are very different. And so, it's I think very difficult to compare two transactions and say those multiples should be about the same because it's really not an apples-to-apples comparison. You really have to assess what the cash flow growth profile of those GP distributions will look like on their own sort of at the point the transaction's conducted. So, again, we're not going to re-guide to ranges or what the value is, I mean that's a process that's in front of us. We'll have all the appropriate dialog with the conflicts committee and the MPLX board. As we've stressed on multiple occasions and maybe worth repeating again this morning, pro forma for these transactions, MPC will be a substantial holder of LP units. And really striking a balance on the GP buy-in to make sure that it both illuminates value of the GP and provides an affordable and sensible transaction for the partnership becomes very important, because any action that MPC takes that harms the partnership hurts no one more than MPC. So, I think we – again, we'll be very careful about striking an appropriate balance on the transaction. And again, we'll share our color on valuation at the appropriate time. I don't think we want to get in front of a process just now. Your second question if I understood, it was really – relates to the tax basis and the distribution that come back. There is certainly a tax advantage of LP distributions versus GP distributions which are fully taxable from an MPC perspective. So MPC although it will not be afforded the full benefit of the return of capital that LP holders will, is going to get a tax benefit on LP distributions vis-à-vis what would have been available otherwise. So again, I think as we get closer, we're certainly happy to share some more color around it. We certainly understand the desire and interest in understanding exactly how much of those distributions will be taxable and we'll share some color with you once we get through that transaction and are in a position to give you that guidance.

EXPE

Q3

Herman Leung

Dara Khosrowshahi

First, ADR trends looks like it's in a pretty good position right now, increasing 4% year-over-year right now. It looks like it's stabilizing there. Can you give us a bit of a breakout in terms of how it trended in domestic versus international markets? And second question is, you guys raised some money on the debt and you guys used it for some buybacks. And there's been some speculation about some potential expansion into Europe through acquisitions. Curious on what your thoughts there are from an acquisition standpoint.

Sure, Herman. As far as ADRs go, I'd say on balance, domestic ADRs are a bit stronger than international ADRs. I'm not sure what effect FX had on that, whether that was a positive or not. So domestic ADRs in U.S. dollars this quarter were stronger than international ADRs in U.S. dollars. And I would expect, again, we've talked about in the past, which is we think we're a bit of a leading indicator as far as ADRs go. We're not sure, we're not counting on ADR strengthening further in Q4, but we certainly don't think they're going to get weaker. If anything, they might get a little bit stronger. Mike, you want to talk about capitalization?

B

Q4

Edward Marshall

Gregory F. Milzcik

Makes sense. Is there any way you can kind of look at the position on your debt assuming the $400 million proceeds are paid off on debt, and what that interest expense for the year might look like, or at least the rate of interest that might look like, assuming you pay down certain tranches of debt that you like to?

We've discussed this at length that there's so many variables involved. I'm just going to add, we'd love to be open kimono right now to give you guys an ability to build the model going forward, but we just can't.

KLAC

Q4

Romit J. Shah

Bren Higgins

Would you consider raising your debt levels to bring your net cash down to a level below $2 billion?

Well, I don't want to get in the specifics. I think to your point and the point I made, I think there are opportunities to -- and I think this has changed a lot in the last 12 months and I think as we look at it today, I think there are opportunities to use more leverage to drive more value over time. And I'll leave it at that.

EXPE

Q2

Brian Nowak

Peter Kern

Thanks for taking my questions. I have to just go back a little bit, kind of drill into the U.S. Can you just help us better understand where your U.S. lodging business, excluding Vrbo, is now versus 2019? And then secondly, again, focusing on the in lodging. What can you sort of tell us about the customer dynamics? Are you -- is it mostly existing customers, talking about the contribution from new people you're bringing into the platform? What has sort of driving the growth of the core lodging business in the U.S., in the U.S. ex Vrbo so far?

Yeah. And all those go into the customer dynamics a little bit here, Brian, which is to say, I think during COVID broadly, as everybody was marketing somewhat less, we saw a lot of direct business. We're all -- we're happy about that, but it's more of a function of not going on the searching market unless we have people out in the market searching. I think as rebounded tethered more towards usual norms, but again, we've been perhaps somewhat more conservative on the performance marketing side because we -- with cancellation rates so high and other things -- other factors going on, closures, et cetera, it’s easy to spend a lot on performance marketing and not get the return because people don't end up traveling. So, we are seeing, I would say, a mix relatively towards existing customers. I think that's what you'd see across the industry. Its why app usage is up and other things are growing. But, again, I think as the market is rebounding and more people are out in the market searching, you just start to see us get back to a more normal relationship between all the new Now, I will say a big part of our focus as an enterprise is to create longer-term relationships and greater lifetime value and stickiness and love for our brands with our customers. That involves many things, obviously, on the marketing side, on the product side, on the service side, all things we're focused on improving. So that 360 kinds of end price efforts. But we do intend and we do plan to build those customer relationships in a different way. We hope, and historically, where we've all had to go fishing in the Google client or whatever and that was the only place to find their business. So, we're hoping to change those dynamics over time. But we have been -- we have seen, in general during COVID, a greater performance from existing customers.

RHT

Q3

Jason Maynard

Charles E. Peters

And maybe if I could follow up just one question on your comment around JBoss and the Middleware business. I'd love to get a little bit more color in terms of what you're seeing with customer adoption of your Middleware stack. How successful are you seeing that go from being -- maybe being initial deployment where you've got sort of maybe some of a -- the test and debt type opportunities, this is actually seeing full-on migration from other application servers or if you're seeing it in terms of net new project growth?

Well, I think we're seeing a couple of things: First off, we've actually done okay for a couple of years with people moving application servers from WebSphere, WebLogic to JBoss. I think one of the things where we're seeing a lot of growth now is actually in the higher-value products. We had really growth we felt very good about in our BRMS, our rules management, our SOA platform as well. Fuse actually we just announced, as I talked about, that ESB product under the JBoss brand, and those are higher dollar deals. And now we actually have a number of big companies, you know their name well, that are willing to standardize on JBoss as their Middleware platform, where historically it's just been the application server. So now that we have the portfolio, it's starting to drive kind of real strength in that business from a portfolio perspective.

MPC

Q3

Chi Chow

Gary R. Heminger

Great, thanks. Good morning. I guess couple of more questions on Capline. Maybe it's obvious, but does floating the open season suggest that all three owners are in agreement at this point on repurposing the line? And could you just talk about the strategic rationale for the reversal from MPC standpoint? Are you focused primarily on incremental growth for Midstream or is this developing crude optionality for Garyville?

Well, Chi, it's both. As you know, this pipeline flowing south to north has the capability depending on the crude slate of running 1 million to 1.2 million barrels per day. Has not – recently been running anywhere near that level. But if you look at the Eastern Gulf, so everywhere from Baton Rouge refineries through Garyville, I think over to Mississippi, there is a strong desire to have a steady source of heavy crude. And so, the Eastern Gulf does not have that steady source coming down today. So, from a commercial standpoint, it's very important to MPC. Secondly, it provides a good Midstream source as well and that, as you know, Capline is not yet a part of our MLP, and that's just because the commerciality of that pipeline as it sits today is certainly – is not at a level – at the value level that it should be. So, as this is reversed down the road, we think that, that pipeline is going to be much more valuable, and then it will be an asset that will be considered for MPLX.

TECD

Q4

Matthew Sheerin - Thomas Weisel Partners

Jeff Howells

Okay. That’s helpful and then just, lastly, on the balance sheet, you’ve got a net cash position now. In theory, you should continue to generate some solid free cash over the next few quarters, what are the plans with the cash now?

The current plans, number one is to harvest it and be ultra conservative in this market. We don’t have any debt maturities in the near term, we hear about companies that do and our point would be very unfavorably treated as far as rate and availability. And secondly, we will continue to look for small fill-in acquisitions and those would be the two main, and then of course, we would always present to our Board the opportunity for continued stock buyback, and they would probably be in that order conservative, small acquisition opportunities and may be continue our stock buyback.

DELL

Q3

Alex Kurtz

David I. Goulden

David, can you just remind us the bomb cost improvements in VNX versus CX4? How that helps you in your pricing strategy with VNX in the midrange and sort of what that leverage allows you to do in the market?

Yes, Alex, what we said when we introduced VNX and VNXe, and it's actually holding out pretty well, is that with VNX, we expect to get slightly higher average gross margins than the predecessor products. And with VNXe, we expect to get slightly lower than average gross margins in the prior products, so that is -- because we're aiming that at a price penetration point. But in total, the gross margins are pretty comparable in terms of the new family to the old family, and that's pretty much how it's being playing out. That's the strategy we talked about in January. And as you've gone through the year, that's what we've seen happening. Obviously, we've got a much more opportunity to sell software and upsell software packages on the VNX. We basically repackaged a lot of our standalone software products into 3 or 4 bundles on the VNX, and that's also being successful. So we're getting higher software attached rates which is also helping gross margins. So we think we're very well positioned competitively on VNX and also VNXe, and the margin profile is as we expected. A couple of other things I'd point out as well is that on the VNX, with the higher range models that kind of high end and mid-tier, we're getting over 50% penetration rates on both Flash and FAST, which is really driving the tier storage agenda which is, again, is relatively unique in the market place and is also helping with margins. So the strategy as we played it out in terms of bringing the tiering, bringing the differentiation and having the price point differences is working for us in the margins and holding it well.

PRCP

Q3

Greg Palm

David Watza

Okay. That makes sense. In the queue, you talk about traction for some new products. I was hoping you could just elaborate a bit more on that?

Yes. It's mainly what I mentioned on the phone. The AccuSite product is going to be – is very important for us, and we're making significant traction developing that. And we think as we get into the next cycle of programs coming through, that should help us with our win rate. I feel the same way with our gap and flash product. The algorithm enhancement that we've done over the past year allowing us to measure translucent materials should help us there as well. As I mentioned, we did get our first order for an AccuSite multi-robot product in China, and these are all things that have been on our road map. And it's just nice to see them finally coming to fruition. It just can't happen fast enough.

CMN

Q1

Thomas Gunderson

Andrew A. Krakauer

So some numbers questions first. Andy, in your closing remarks you commented on the higher R&D costs. We had forecasted higher R&D costs but you came in a little higher than even we thought. So I'm curious, do you expect these rates – my typical model is that a lot of R&D is human labor, getting those smart engineers in there and running the projects, do you expect those levels, dollar levels to continue through the year or is there going to be some waxing and waning as we go forward?

We're having a complete review of R&D expenses in a meeting coming up still next week. I can tell you, we did spend a little more than we had earlier budgeted. Some of the new projects that we're working on do have some significant on-site expenses, including programming software in different languages and some significant industrial designs and a few other things. So it's not just our own people cost. And those do come and go as you would say. So I think [indiscernible] to be a little more thought and maybe address it more next quarter, but I would not necessarily just take this quarter and multiply by four. But we're actually reviewing that now as well as some of the – R&D is a little more confusing, because we have a lot of R&D going on in some of the acquired businesses like in the U.K. and we have some things that we're going to be doing in Italy. So maybe in total, this level this quarter is probably a reasonable level, but yes, we have to do a little more work on this which I'll talk about in the next quarter.

TTC

Q3

Mark Rupe

Michael Hoffman

Hi guys. Mike, on the gross margin, you mentioned that obviously the rework expense was a big part of that, but could you walk through again the components of the decline? It looks like if the rework is all through the cost of goods, it looks like that's maybe 80 basis points to 90 basis points of the 170 basis points kind of, is that right?

I think 75% of the cost hit gross margin. The balance hit SG&A and warranties.

ROST

Q3

Brian Tunick

Michael O'Sullivan

And if I could throw in one more question, obviously, you guys have talked about wage pressure now and some of the things you are doing to absorb it? But are there other additional opportunities, both in the supply chain, on the store side that you guys are finding to offset the wage pressure?

There always are. I mean, as a company, we go through a rigorous and detailed budget process. There’s a lot of sort of expense discipline within different functions within the company. So we’re always looking for new opportunities to find efficiency and drive savings. And again, we will talk more about that when we give 2017 guidance. I mean, I would say that, we feel pretty good about our ability to offset the wage increases that we have absorbed in the last couple of years. There’s a limit to the degree to which we can offset those increases going forward.

AAPL

Q2

Gene Munster

Peter Oppenheimer

Any update regarding Steve Jobs and his return?

We will look forward to Steve returning at the Apple at the end of June.

AAPL

Q2

Charles Wolf

Peter Oppenheimer

Yes. In view of the explosion in the number of applications for the iPhone and the iTouch, I was wondering what steps Apple is taking to ensure that the iPhone Apps can be discovered? And are these any different from music discovery on the iTunes Store?

Charlie, we are doing a number of things. We include easy to find top 50 and 100 Apps, both paid for and free. We’ve got them associated in various genres as well and we’re expanding those. And so I think the team has done a fantastic job making Apps easy to discover and fun to discover.

PRM

Q2

Michael Meltz - JPMorgan

Kim R. Payne

Kim, your comment there on corporate costs, you fit $3.7 million in the quarter, that includes the $1.9 million for CEOs. You’re saying core underlying overhead was $1.8 million. But the transition costs are separate from that?

Right.

ODP

Q3

Neil Austrian:

Steven Schmidt:

I'll answer the first part. I don't see any significant change in the strategic plan at this point at all. I think it's an executional issue, and I think it gets back just to the blocking and tackling and doing what we do best. On the U.S. Communities, let me ask Steve to talk about that.

From a U.S. Communities standpoint, just to remind everyone, we are committed to our existing U.S. Communities contract through January 1 of 2011. Obviously, we are prepared and have prepared to retain as many of those customers as we possibly can. We haven't given any guidance relative to the percent of customers that we will retain, but we do expect to retain the majority of them. I mean, these are our customers. We've been servicing these customers, we've been selling to these customers, and we have the relationship with these customers. And we have all of the options that our customers will need to stay with the Office Depot Corporation. But again, that process will take place, as we move into the latter part of this year and early 2011, and we can give indications at that time.

KLAC

Q4

Christopher J. Muse

Bren Higgins

Okay. And I guess as a quick follow-up, in terms of roughly the $1 billion buyback, is that something that if you were to see weakness, you would look to be more aggressive or is that something you're still planning over the next 12 months?

Well, our plan is, as we put in the press release, was that we were going to execute that over the next 12 to 18 months. Obviously, there are conditions you would look at as you go through that period in terms of -- that would impact how you think about the timing. But that's as far as I want to go in terms of how we would execute that going forward.

EXPE

Q3

James Mitchell

Dara Khosrowshahi

It's James Mitchell calling on behalf of Ingrid Chung. Could you talk a little bit about what drove the improvement in U.S. hotel room night growth? And in particular, to what extent is the direct function of the incremental sales and marketing spending in the quarter versus any other trends?

I think it was a combination. First of all, the room night growth was fairly broad, and it was a combination of a bit more aggressive sales and marketing. I would say more conversion improvement, especially on the front of hotels.com. Since we have integrated the platforms last year, the team has been working pretty hard on conversion improvement, site improvement et cetera, and we're seeing some nice results there. So that certainly helped the U.S. room night growth, and Expedia room night growth in the U.S. is very, very solid as well. So I'd say pretty broad strength and something that we're happy about and something that we hope continues.

NVDA

Q2

Joseph Moore

Jen-Hsun Huang

Great. Thank you so much. You talked about deep learning in the hyperscale environment, but it seems like you're getting some traction as well in the enterprise environment. I know at least one IT department we've talked to has been doing some implementation. Can you talk a little bit about your progress there, and what does it take for you to sort of build that presence within more traditional enterprises?

Well, as you know, deep learning is not just an Internet service approach. Deep learning is really machine learning supercharged, and deep learning is really about discovering insight in big data, in big unstructured data, in multi-dimensional data. And that's what deep learning – that's the – I've called it, it's Thor's hammer that fell from the sky, and it's amazing technology that these researchers discovered. And we were incredibly, incredibly well prepared because GPUs is naturally parallel, and we put us in a position to really be able to contribute to this new computing revolution. But when you think about it in the context that it's just – it's software development, it's a new method of doing software and it's a new way of discovering insight from data. What company wouldn't need it? So every life sciences company needs it, every healthcare company needs it, every energy discovery company needs it, every e-tail, retail company needs it. Everybody has lots of data, everybody has lots and lots of data that they own themselves. Every manufacturing company needs it, every company that cares about security, every company that deals with the massive amount of customer data has the benefit of – can benefit from deep learning. So when you frame it in that context, I think I would say that deep learning's market opportunity is even greater in enterprises than it is in consumer Internet services. And that's exactly the reason why we built the NVIDIA DGX-1 because most of these enterprises don't have the expertise, or simply don't have the willpower to want to build a supercomputing datacenter or high-performance computer. They would just rather buy an appliance, if you will, with all of the software integrated and the performance incredibly well tuned, and it comes out of a box. And that's essentially what NVIDIA DGX-1 is. It's a supercomputer in a box, and it's designed and tuned for high performance computing for deep learning.

AVNR

Q4

Roy Buchanan

Keith Katkin

I assume off course you guys would appeal?

Absolutely. To the extent that we’re not successful, we would definitely appeal.

ODP

Q3

Joscelyn MacKay:

Charles Brown:

It's Joscelyn MacKay from Morningstar. I just had a really quick question for International. With regards to that annual sale, I believe, you said was moved to the fourth quarter of this year versus last year, it was in the third quarter? Would you be able to quantify the impact of that?

No, I can't quantify the impact. Every year, we have our anniversary sale. And it's a three-day event. It tends to drive -- it tends to be very promotional so the margins are not at the level that they normally are in our retail stores. But it does tend to drive a lot of top line sales. it drives a lot of foot traffic due to stores. So I think the main call out was that we were actually positive despite not having the positive sales percent perspective without that sale, and we'll not have those sales in of the fourth quarter.

AMD

Q4

Matt Ramsay

Lisa Su

Thank you very much. Good afternoon. Lisa, I wanted to just start with a question about the, I guess, comparing and contrasting it a little bit, maybe a little weaker than we had -- some of us had modeled. And, I guess, due to the console stuff for Q1 in the guidance versus a really strong, so 28 to 30% growth for the year. Maybe you could just sort of lay out the year a little bit at a high level? And just how you guys are sort of thinking about it coming together from the point of Q1? Thanks.

Sure. So with that, we're pretty excited about 2020. It's a strong year for us, certainly, with, you know, the expectations of being around 28 to 30% revenue growth. We do expect all of our businesses to grow. I think, relative to the Q1 guide, if you look at Q1 as an absolute number, it is up over 40% year on year, even with semi-custom revenues, you know, very low in Q1. And so, that should give you an idea of the strength of the rest of the business. From a sequential basis, Q4 to Q1, it's what we said on the call. There is some bit of normal seasonality, just as we are consumer-focused in our PC portfolio. So, you expect that that would go down from Q4 to Q1. And then we do have the factor that the semi-custom profile, when we're doing a product transition, has the revenue very low in Q1. You know, it starts ramp in Q2, but it's very heavily weighted in the second half of the year. So, you should think about semi-custom for this year, again, it's a ramp year, so it's a little bit different, that over 80% of the revenue for semi-custom will be in the second half of the year, compared to the first half of the year. So overall, we think a very strong year. A little bit of reprofiling of revenue, particularly as it relates to semi-custom. And you know, we look forward to executing it.

SWN

Q3

Arun Jayaram

Steven L. Mueller

Steve, I wanted to ask you a little bit about, obviously, you managed the business to the 1.3 kind of PVI target. Obviously, you've had a very big hedging tailwind, so to speak, where you've had some very attractive hedges. But if you look on a year-over-year basis, the level of hedging gains -- decreases relative to NYMEX, and I think that's a $300 million, $400 million kind of swing factor. You do have obviously lower cost in the Fayetteville today, $2.6 million a well, plus you're drilling perhaps at prime locations. So just trying to get a sense of how all that factors in to -- you've talked about maybe 350 wells, but what you’re thinking about the Fayetteville, given the fact that you won't have as much hedging gains as in – in '12.

I think a couple of things there. First off, we are hedged, as we talked about. If we had flat production year-over-year, it would be a little over 30% hedged, and those are $5 hedges. I wouldn't assume that those are the only hedges that we have for the year. We're still looking, and I think you may see some other hedges go on. But really your question is 2013 budget and what's going to happen in 2013 budget, and we're still working on that all the way to the point -- I'm not ready to say what we think the price will be in 2013 yet. We have to sort that out. So all of that obviously works into cash flow. Cash flow obviously is partially driven by how much capital you have and you have to marry the 2 of those together, and we're not quite there yet to say how many wells we're going to drill in each area. The only thing that we've certainly committed to is because of the 2 new rigs we're adding. One’s added already, one will be added in the Marcellus that have long-term contracts on them. We know the activity will go up in the Marcellus.

BKYI

Q3

Brian Kinstlinger

Mike DePasquale

In terms of the biometric locks, is there a visibility on partners that are buying them from you? Is that now selling - are you now selling that product completely, just take me through the [indiscernible].

So both. We are, as we declared months ago, we are pursuing retail and e-tail relationships through our distribution channels, similar in nature to what we have done with our finger scanners. So you will see our locks available online through e-tail channels as well as brick and mortar stores in the spring. We missed the cycle to get in brick and mortar for the end of the year, so we’ll be in brick and mortar as we approach the first quarter. We also, as I described in my comments, set up our own e-commerce site. You can buy the locks directly from our e-shop by site or you can go to Amazon and purchase them. We did not want to miss the holiday season as well and be able to provide these products directly to consumers. Plus, this gives us a really good way to gauge the buying patterns. We've got a full product line, so which specific products, price ranges, all of our products are available in different colors and different form factors. So this is a way for us to gauge what consumers really want to purchase and so that's why we went ahead and set up our own venue to begin moving and selling locks just about two weeks ago. I think we went live just about two weeks ago, our e-shop by site.

ROLL

Q4

Edward Marshall

Daniel A. Bergeron

Okay. And in the backlog, when I look at it down 4%, what's responsible for the decline? Is it aerospace or is it industrial?

Well, first, about $4 million is just re-measurement due to the drop in the exchange rate. And then the other side of it is aerospace, mainly defense. And that's mainly timing.

GGG

Q1

Kevin Mackza

Jim Graner

Okay. Shifting gears, can you address the decision to repay all but the $300 million in private placement debt versus buybacks or some other use of that cash?

Where - what we paid off was on our revolving credit. So we still have our revolving credit line of $450million available to us. $500 million – Christian signals. And so that's available to us for the right transaction. And should opportunities come about on the share repurchases, we have that available with a telephone call.

ASEI

Q2

Stephen E. Levenson

Kenneth J. Galaznik

Okay. So would it be fair to say heavily weighted towards international right now?

It's weighted that way, yes, sir.