Tenneco (TEN) 27 Jul 182018 Q2 Earnings call transcript

Good morning and welcome to the Tenneco Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Linae Golla, Vice President of Investor Relations. ahead. go Please

Chief morning. earnings Good today we our Brian released take Thank related related up and comments our questions. the This Section financial our quarter Kesseler, are call results are and through Officer. call Officer; information. comments, second you our Investors prepared website. the you. for the to morning, Executive On to After Jason on we Financial Hollar, of Chief Slides available will open our

aware be on and please release begin, our all discussion which website. information we Before earnings with attachments press include will that on our in non-GAAP of release today available attachments. The our measures, financial are GAAP are reconciled measures

mind projected actual from will that differ materially Additionally, that, any And over in could to our Brian. forward-looking of some comments in will results those our our the call I include with forward-looking of turn statements. keep statements. Please

and call. morning, our thanks joining Good Linae. Thanks, for

and Before of a I Roger has get into of at been joined XXXX a call that Tenneco's all this Wood. be will Technology of Powertrain today's the the by Roger next week Company then and as mobile was new Chairman earlier the year acquisitions member federal results, be in that CEO reminder since we spend. the board created our and will second named suing quarter end

we in with spend, quarter quarter I asked of today's lead on us will as as we've of second up the revenue quarter, Beginning the and production. consistent suspension the Air, & delivered join currency Off-Highway, doubling Commercial organic Tenneco Co-CEOs. Clean Roger Roger, with before another X; And growth in Revenue from In interested are highlights line. portion revenues you last many Ride well during strong up X% and was revenue to I to second intelligent constant of Slide industry with as close expect the hear call. delivered and Following underlined product him Aftermarket. Performance Q&A quarter Truck higher record, the the we so together from were we X%. our growth double-digit

strength with points, we guidance quarter EBITDA our previous improvement sequential and delivered basis line records share. in of margin topline and of On XXX our for the second also per adjusted earnings growth, adjusted EBIT

Our cash with performance you operations. a in from Truck quarter, production in look this in Taking at revenue flow segments. each major see X% portfolio was product quarter up in second the outpacing was industry value add a closer of strong on revenue the our $XX again was constant the growth add & Commercial X; all currency, cash in value was diversified Off-Highway Higher Slide of contributor revenue but reported can applications. also strength million

EBIT year, while margins continue three in on we Slide factors. Turning slightly showed manage added three improvement and value versus we adjusted all to X; main reporting as last to earnings sequential down was adjusted EBIT segments

last First, steel continued lesser our but margins, recovering quarter, progress mechanisms. than thanks to extent cost impacted a on to

that team for XX,XXX around These point major to I plus and a At every program to America production third quarter. costs ramp America, another launch our last first South up of global related the XX quarter. improving production would begins growth year. recognize world margins who Second, basis improved lower in Tenneco members even in committed launch the results quarter higher revenue by a impacting versus North are Ride OE truck and And continued are from this in versus Asia OE growth with third, like strong the to relocating our aftermarket mix Pacific day. sequentially Performance but points double-digit revenue aftermarket cost

first-hand witness the help and the in plants opportunity quarter place to Clean meet to Aftermarket a half segment our had Air Europe to During commitments them North ability I to visit and turn work. make dozen and for want a to special customers dedication. With passion second America their their for over I Tenneco results. thank the the and fulfill the our call Jason daily to challenges, that, and I'll

revenue Thanks, that Clean Slide Beginning Reminder the in segment results, as the X% look at X, Brian. we quarter. results with in calculated constant up are currency. on was year-over-year all value-add, revenue the with numbers performance Air

the new business Commercial from Six highlights with China more Some including quarter platforms. include; China, majority OEMs domestic wins the XX National Truck than in two

stage We the customers. continue plug-in program with broad America. four to-date we been top year-to-date and hybrid in to SUV win awards received have awarded commercial India, two and have including with hybrid North six variance in in in And selling programs business Europe, six China, truck new seven

Looking The Truck continues ramp-up and program our truck new Daimler launches in business & with on Americas, Deutz year. Daimler in to versus commercial contributed first higher growth for duty revenue for all truck revenues strong with geographic and and at all medium to contributing three with Commercial growth XX% Off-Highway, volumes, the higher Caterpillar last drove in MAN, gains regions content, programs volumes new truck stronger Europe new and revenue regulatory-driven EMEA.

as the well India, Asia in platforms off-highway the new driven Pacific volumes Bharat ramp was as Japan. existing Stage growth up in content by IV higher meet Kubota on of for to regulations

in light second line were revenues in global revenues production Air down production X% were light by the and America vehicle versus vehicles, Clean at Looking our with industry Ford trucks. the In the year. both last disruption up on Tenneco's impacted North quarter X% F-Series

discussed and to on revenues lower In and new launch we up ramp due last addition, mainly models VW we quarter. GM changeovers, model timing saw with year-over-year

our addition results In first VW with mainly with increased new current remain XX, on The quarter. growth the and the our on is higher positions. MFA-X Installers, programs industry EMEA Daimler. Monroe launched Asia quarter. Brazil. future outpacing higher growth Daimler in adjusted improved their Monroe XXX continued X. and focus and Higher expand the from EBIT revenue market quarter. coverage revenue big programs in managing mainly mature in including part China tightly the year, outpacing revenue program quarter customers and was the in Revenue Americas business region, production saw flat, as last vehicle Air with America including The for some up platforms our market versus including, by XX% in on expanding ramp progress Aftermarket with America the Golf, with improvement America in the presence with Pacific volumes America key in well while up quarter to customers the was BMW GM revenue North XX year-over-year Ford growth. adjusted and and we essentially volumes driven for Focus, Clean were still the the up the and shock revenue strengthened X% Italy. Light strut retail up coverage in the South revenue in as Daimler, volumes content on of the customers margin South X% India in BMW existing drove distribution was industry XXX Slide new EBIT numbers higher inventory and and current with also wins in and volumes for Fiat. SVW was $XXX a new market with was of in X% production million ultimate wholesalers Total the investing quarter quarter higher in the we launches quarter Aftermarket China new sequential XX.X%, in product and our North Mexico, with

sales door the out did in quarter. customers our the Although improve late

EMEA The Italy. new versus South stocking double-digits America in returned with last strong growth X% quarter for the in had with another year-over-year. revenue revenue driven part region by Aftermarket to year distributor up higher orders

was Pacific it from continued adjusted fueled making going in to turn India. the Brian revenue now double-digit by XX.X% door discuss Aftermarket with and with Aftermarket improvement margin in the brands was investments Asia and $XX high million growth China EBIT distribution sequential first to over growth and quarter. from to I'm Solid [ph] EBIT performance. networks the

Jason. Thanks,

revenue. second XX. Revenue two including of and a represent mainly about was FCA highlights in four by outperformed the program five Performance electric NVH by and gains, higher XX% me intelligent up Ford revenue including with with growth content segment production and Land Let at new million with VW revenue. in higher are growth These $XX PSA; in Ride Light look Americas, that EMEA with NVH of four suspension finish launches, delivered again Daimler. suspension on review we with programs wins vehicle. this driven incremental the revenue outpace the intelligent platforms stronger quarter suspension In intelligent quarter on geographic with double-digit annualized which battery and Slide wins higher and include another suspension each the a new quarter four new on for vehicle on systems, BMV, three regions Rover, vehicle. our new the and incremental battery intelligent new are strong driven and which overall platforms, volumes, content growth content VW of revenue growth continue to market electric with

We Truck, Pacific Beijing was X.X%. South America. launched higher and programs China and and India growth [ph] DAF was driven current we well business strength double-digits Asia Scania. also production million in recently Performance Daimler EBIT again of Americas, increased quarter with Paccar, Volvo by in the and continue as growth Hendrickson this Hyundai, adjusted as in was as margin to by revenue [indiscernible]. with with grow CTOH EBIT of SGM volume in EMEA supported outpace China and revenue $XX by Ride volumes at Year-over-year

we has growth has positive upside I'm other Performance and our lower the in in margin performance in and margin suspension growth pleased performance to intelligent that than but earnings continue. systems two our Ride business Our trend potential. segments tremendous expect with

highlighted are our with growth intelligent new China. including suspension the in take quarter at here seeing I'm pleased margin we're Asia for also region particularly first rates China. we have continue we deliver before, business to and in sadly winning in Pacific production how improving every program and performance As more

their OEMs. gaining in business that launch share continue support ready and growth To begin aggressively third technology, planning In and Ride for addition intelligent manufacturing with XXXX. to construction conventional we suspension be our we're a to will this for global introducing domestic facility Performance leading grow there

highlighted solutions importantly, and product as in of have both in [indiscernible] And delivering is eyes benchmark gaining our on our top growth most the previous also their customers. NVH eyes, both and we capability discussions, Our engineers line. business the is the bottom team

growth invest is in on future to our and quickly with Ride in there an address technologies North cost recoveries, and new intelligent pressure competitive suspension product steel have engineering products damper business. continue we build to in and the on for position, capital continue development America North cost We in for and the We for new been conventional maintain long-term negotiations Higher customer to particularly and structural while North a commodity do capacity evolving for America. Performance market. cost we progress put improvements more Pacific to And and to address Asia strong that Europe America. making for need position ensure our

two For is program the identified the our mind structure major a on we quarters, that mobile separate relocating step first and the cost second Keep the operational in our from federal position acquisition. of completely in actions from in this improvements up launches this lands the production our costs last planning these that are related fundamentally we've region. that associated to number This we've half truck of and actions lower mentioned with year. fixed are improve competitive synergy in

XXXX. We detail result annual by to to are in expect our we've more $XX $XX fixed actions the which identified provide identified run implemented. cost and as savings million on that begin We'll the rate of would these of additional and we expect would end opportunities million they

the it to some turn of he from financial quarter. highlights will and I'll Jason Now cover the back

Thanks, Brian.

costs, in of for incurred We related advisory walk XX, through Performance. reduction of million second to by the results. headcount cost plant in we cost million XXXX. adjustments quarter year-over-year affecting salaried quarter Performance closing completed structural and including the the the Moving to and reducing move Beijing headcount by expect in onto improvements of the Europe in improvement Clean acquisition Ride in transaction. of related our of comparability We expense advance Manufacturing I'll initiatives cost $X $XX our Air, recorded restructuring including the to be end which Ride $XX our the additional accelerated this million Federal-Mogul cost costs Slide acquisition of related

to the us that site Pullman bankruptcy quarter $X indemnities reverted operated. acquisition environment to the charge Mark of also XXXX This recorded we that as industries. million a environmental related remediation was [indiscernible] part never of was at a The that result IV of

taxes XX. Slide to on Turning

tax the to and was tax of year-to-date, year quarter adjustments, full for at XX% the $XX payments million tax quarter million, that in in rate of million the payments tax full effective XX% expense rate to XX%. in our we range still is of were range second an midpoint million. Before year the $XX the $XXX effective tax guidance and quarter Cash $XXX of cash expect for

flow Moving of acquisition-related solid performance cash XX; $XX to generated payments million. from was with and in The payments anti-trust Slide second $XX on $XX of included operations. our cash cash million performance the from million quarter

quarter working million, Capital year. for these due items, that's primarily Before operations quarter spend the from improved million second from capital improvements. to down $XX $XX cash million $XX were year-over-year last expenditures the in

the range stockholders $X.XX share of quarter million dividend million. to $XX In totaling to We million. the $XXX year paid we expect in a $XXX to continue second CapEx full per

Slide billion, our million, to debt year, than net was rate expense debt. Turning primarily floating interest was at interest last million higher $X quarter end, higher XX; rates due in $X.XXX to $XX

We net ratio and that, million leverage full year Brian. call around I'll back to expense With the X.XX. turn $XX expect of interest was

Jason. Thanks,

quarter. Turning our Slide now outlook third XX to and the for

revenue percentage will forecasted expect points. X% We constant growth vehicle X light growth by currency, industry and of production that in outpace

the cost tariff which recovery. their Regarding in XX be steel timing points enacted EBIT we basis our mix first the expect down the lower. Aftermarket improvement XX costs year-over-year, outlook XXXX newly flat last year-over-year. points XX revenue versus slightly versus better of we about basis expect And OE value-added will to points This and an continue the revenue to was quarter, margins margins to while year to commodity be basis reflecting Aftermarket represents half third increases, down from adjusted of

we outlook year, are growth percentage reaffirming by organic full in X% with revenue production constant X XXXX outpacing the points. industry For currency our of forecasted

half second year primarily the to revenue due strong in moderates year's the with CTOH outpace Our comparison year-over-year of this last increases.

value-added EBIT just the the adjusted the For margin range third the the expect X.X% year, factors to of we to I X.X% in mentioned quarter. full due for continuations of

optimistic and trends positive hybrid drive about technology I growth be and CTOH opportunities ahead, continue Air, and to In Looking choose profitability. highly content to can our power Tenneco's improved for Clean continued including applications. growth

than wins XX mentioned has Europe Tenneco hybrid so this America, vehicle programs this China quarter, global the XX in over secured decade powertrain we hybrid light OEMs to for program and North addition In we year. past have supplied more and additional an far

more control require heat as present hybrid engineered Hybrids advanced high customer engine constraints. meet for mentioned, growth opportunities with exchangers administration requirements high performance order value we've technology value and the missions for valves packaging regulations and As to in highly system and [ph] comply also such content electronic acoustics. to

two-valve intelligent the evidence year that CUV SUV G-Class application of Premium to will and our outlook benefits our all the that the advanced innovative Investments we and position duty developing suspension in and future our the seeing drive of suspension will we're and solutions Treatment strength half Daimler's to today strategy help Commercial trucks In reflect system the medium which and Earlier on-road confident expectations the recent VI us a of our India we're portfolio We of continue Diesel suspension in structural Air future vehicle quarter businesses consumer meet initiative Clean we for suspension interest into architecture put This those Stage continue are results the and the for tracking for I'm to quarter growth first growth technology expansion excited and an we growth And innovative identify this identify summary, platforms. what opportunities wins the will complete solutions systems are in Off-Highway research earlier and focused and and second for that and can shaping trends the third technology Tenneco's We X examples. Act intelligent our capabilities to leverage into announced and industry and move capture XXXX, key our to Truck and tomorrow. is are Daimler advanced the this our System our laid that to growing North define change future. SUV the we've new our engaged, for off suspension global on & great week the we in is global in needs. fully [indiscernible] feature latest the new Performance technology know segments. of about of America SUV foundation including significantly technology. Bharat the Ride as control the CVSA success. for in in Aftermarket kicked second our the team drivers the groundwork

continue focus execute strategies, move satisfy profitability. to to we ahead, As work our we improve speed, with will and commitment customers our our and growth

to greater we our strong Through now strategic markets. a purposeful update leaders on strategic on two Tenneco will came acquisition XX. this scale Turning industry and Federal-Mogul Board and to each two CEOs Slide combination of for of with when the separation, the create financial their drive major creation. with businesses unique milestone value Directors transformational week acquisition a ultimate beginning brief This of respective creates A the selections this new focused their announced companies. long-term in Monday and flexibility

and is I I'd to words. As him with us him call like few Roger to a for welcome Woods today. mentioned, the say to

of powertrain markets one in OE Having serving will I'm feel worldwide. right creating the that opportunity. with the play largest about a home and at new Brian. BorgWarner I Powertrain this spent company Dana, excited outstanding years you, company be XX pure Thank with business

be involved acquisition the two from been no output can match beginning. There diesel criteria for with been to on is and other electrified the significant to this closely unique I spend get as more I'm company a range the gasoline, Brian powertrain technology I next the the complete address This will fuel part lead you continuing will that with through to the and truly powertrain and pollution to generate of work for business and years have and of product closed looking value, forward. board for deal it. successful see I've company excited power integration today that know move late and very As and year. shareholder significant a one process I've I'm to than is new we economy, opportunity really help requirements know, the forward the company capabilities and powertrains. opportunity

Thanks, Roger and very see made will you on recent XX team. have Slide the the of you acquisition. I'm on summary pleased to On progress the

quarter for of the the a companies completed During communicated future and facility. have the new the some second credit expectations for leverage [indiscernible] we net

retained In by addition the will name that powertrain selections, CEO board to the Tenneco be determined technology the the Tenneco company.

make for and the set we received planning for meeting your to good to U.S., on-track and early are Tenneco key both the and and The continue stockholders only integration take quarter. for the with see for In ahead two questions. China, have from close, September we're that we're others, anti-trust for jurisdictions there approvals new We integration we're new fourth among special ready at this Europe companies the companies. and in with has and hard separation clearance the that, that excitement and in Federal-Mogul India the the been Brazil, teams for opportunities growing the work is Mexico and With summary, year progress teams date regulatory confident remaining. including XX closing

Fargo. with [Operator Instructions] Rich comes question from Kwas The first Wells

now guess of tariffs, for I I terms balance the but maybe is that year? guess anyone the outlook the into the in Section here for incorporated -- is the margin Jason. question of incremental XXX either

small there detail base what other ensure baked outlook increase course, well we're we less possibly out certainty and organization $X to We lot don't we that about little fully XXX for many as all in are pressure Federal locked understood is amount have of tariffs as continuing But the possible for into of to don't there exposure this not working have to point certain, have portion we onto on in what's as and books with and that the $XX whatever to well as this additional speaking, as a have and we that and but in. in place, that have this, in generally the the the the announced provide to what understood million has did XXX mitigate. within options at also million actions that mitigating been on is we as and pieces related to locked out

at So you're as that's the impact should that evaluating far billion, now because you initial there incremental point? as effect. no XXX we read And right least this as $XX the know that at is in then

That's right.

of talked end bit little key the how quarter, you the Aftermarket at for the better second retail -- half of U.S. getting saw the some of year? your the Brian, POS growth growth customers about about Aftermarket market towards thinking you're of

certain half that's of of key expect great but growth the revenue -- wholesale of And to are is what's in the the it with driving that year-over-year do their two to seeing and in We're slightly the of overly seeing seeing second flat up in order enough good makeup the enthusiastic year-over-year profitability the inventories. year tightly pattern There a growth. pickup be the very couple change we We're little between in and to the managing some bit our not we're distributors. retailers but still difference be a from them.

a was on retailers. couple latency So I here a with that of these we're

packaging technology the will -- now? going this think terms And powertrain from takes about this should suppliers it given Roger, about obviously or offering take in think bucket -- content in right OEM on a of or customers of does this system. good if on changes, a terms products took you question the for do regulatory potentially company's existing how into changes we you very job, is to where just terms the of you content the front then How some other opportunity it's kind side in of feel a new you of

it's of in ladder maybe that I have the going else a I strongly nobody our able be than customers can industry companies to we're value we're we the more with this to offer. -- in combustion think the offer combination my the that between a One, feel in end the through from do the changer We to what pipe the providing in-house of tail engine a provide solution to an can the what system emissions. technology exhaust do trade-offs engineer to for and to system in optimized solution. opinion,

be there is for we're may real will part as on any internal for at provide several component there suppliers, need going regard. be variety that to solution we So what there be engine and in in to most total other a of decades any disruption system and a with of a offer applications here the combustion a opportunity but looking this to believe the

The with next Colin question UBS. comes Langan from

main I year, margin Just what quantification full are mentioned mean the recap, further the of and just any -- drivers? issues of weakness steel I those I the are mean the mean managed buckets two Aftermarket, there? the -- to You

Those two main the are issues. really

in have good cost on are and bit those tariffs already motion -- us the the and really is steel that the in scheduled the and the half year the Aftermarket are which to our on higher two -- those that's major enactment we're a mix, those pretty margin, be for Aftermarket growing know, is but second that You things the that in relation motion to half half. which of in And of is issues; side the and the revenue in on the about changed think October. well OE

is any six I this And -- won to deal the further pack share; had mean of then quantification there…

talking million year-over-year and $XX continue the year we that. incentive beginning since we Well, to the about of couldn't see to

it's that couple steel effect of million As managing have earlier in to XX% increased is -- and extra our million, we $X the about and $XX outlook. that tariff we our locked buyer this million mentioned last XX% updates, in still normal, of kind that year, we $XX in of so what's is see the really last has cost; of in so

the that all I material When risk have from that there color are part brought mean for or… comes you it do on actually in lot XXX tariff, of potential at China; a is any

on opportunity on side state much the of business, little so to OE necessary. Aftermarket but the also into the in-store as the we sales our Not so bit have back

that of And is it's a course, overall is works what's there in certainly it's pricing primarily going as competitive that's where happen that to as the marketplace happen the given piece and What through effect. other of supply exactly this of Aftermarket. the the to total chain with uncertainty way environment; will with lot the net

mean, that today. there isn't does you China comes a that because Aftermarket from of create of opportunity for I parts competition They an that are out chunk case? good or is not the

product point, opportunity an in entry some offshored. for No, that it Aftermarket versus of creates been we believe the

percent any of currently Aftermarket? China what out for that of idea mean part are I

total, Not in no.

general not is but the of exactly a tuned market, then have there serve the idea we're rest the We of customers we into.

Dana. maybe different from I your mean assets mean is in mean sort see you initial and mind what strategy about you sort going and for And just lastly, on, [ph], I forward. have Borg of powertrain Federal-Mogul move pretty of what differently thought progress of is Tenneco in Roger I your

exciting for rear that combination the else of is the and it over it we last one of decades have last I together really think couple has I three the now contemplate and the real. and the what again, decades of might mean vehicle we of it's that it that think actualize it's an can a the it this vehicle of to of the been both to and in nobody opportunity is we and powertrain. the make reason of So those pieces I've comes is data because and have There that always the front kind contemplated of business; combination part part the opportunity when unique

my question's. again, So was to answer

each solution an of to on will; do having in two Off-Highway, it. But work what for those different together an the be if engineers think there powertrain there three them is think even be you better in-house, optimized this optimized than of the opportunity ways sectors. unique to to to And to have vehicle. light may provide able I of that that or sides industrial both application about trade-offs is the is I what's solution provide

your it opportunity grow is I on what and think you start -- EVs, -- of like mean hedge you you do do view think need but really there? to And seemed that

has engine most four the there will. in world in people place believe lot related have an will a or that the strongly you all decades regulatory OEMs supporting a definitive the EVs least if business. is hybridization awful right to and components We short-term internal think electrification of you don't and it, combustion of are near-term EVs think focused now We lot requirements you or just to have next actually on is now the and if of the vehicles, that major shared an combustion system the and of industry. I to on most the at about a believe that's for around the EVs focus by people And with hybridization we and vehicles be them believe of it's line-up which internal going of that as three a the meet better no completely not to the in place question in going I view have there is the right vehicles electric the changeover will.

it's of electrification future going So, to definitely engines decades. don't we that our but piece I a combustion for obsolete internal is think think

with And RBC next from Capital question the Spak comes Joseph Markets.

organic of so fourth half, And some growth know what Europe comps think the is WLTT, commercial for factors vehicle even have just on and back for and issues you're tougher just about in year, you're coming also some quarter. the the maybe factors the little growth the X% you half is the -- in the first third in question first for performance in it's of expecting I back in back much the maybe can for talk X% in the a softer half? some we because something saying the The bit given quarter, CVs those there with half you

have the we're you wouldn't on in second that the going affecting second softness got the the platforms Europe that. comp the the strongly the in and view of that timing do are a yet we're have CTOH given of in in We really that So the half affecting platforms year growth tough of that some of some second year. started is and some year rebounding that for last of half on returning also we've exactly launches year-over-year a mentioned, seeing half CTOH year, and but new the are

the just at think is day the really -- the moderating we think good as of I to growth, going show down year year. little end the here I whine bit

was think and structure have of just and then envelope the At that guys metrics on capitalization you the some the the I that you in deck back and least which out leverage. and on for based the the put And in of initial maybe EBITDA initial out slide back deal put April. with you some at interfere

bit your business, net with out little And then on surprised you to also a Aftermarket the targets so those didn't that? of leverage the put the EBITDA, some maybe a like know, you Powertrain, more bit on [ph] that maybe discussion of there guess bit just each confirm little I little level for want was try I that. on I are they less to synergized comfort and the seem a business point You

after after synergized it So see like one EBITDA for what the year is expect close. figured I EBITDA, the we we that's that on

we that expect year. that to first in synergies the So achieve

The believe Aftermarket leverage ratio business if is business. technology will the of currently what breakup second higher into Powertrain the be be will thing than the the look we you

come out an and the of X.XX gate. both will X.XX make be XX about on Aftermarket which range it estimate, the when we companies different the on the cyclical to as because spin year our of we about right talk Powertrain out So to set on business will that come be up [ph] highly businesses responsibility X.XX, be as out are characteristics is -- successful new a Aftermarket chassis sure are and

into I that's [indiscernible]. So think already -- our factored

I more initial synergy you something were did I back change that of like and so you that but because sort two-year that mentioned -- Okay, -- check realized thought -- this sort synergy the I -- there? but a thought could rate; of and

of that leverage within just No, and months I achieved the but million within first ratios expect cadence we would think our indicated included of rate. the within to year in achieved $XXX the synergies we the XX% be we've will what XX said that clear these be was, we run be also that

portion a that $XXX all but to rate. about close, after would million expect a separate we be and run year that not included within as you so And

over question-and-answer conference closing session. Golla Linae like This to concludes back any remarks. I turn for to our would the

you, on be replay Thank will an in available website An hour. Phil. about audio our

call can of a joining playback information You our Thank today. is telephone. for release. in us you this available The also press recording by access

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