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Becton, Dickinson and Company (NYSE:BDX)

38th Annual Deutsche Bank Health Care Conference

May 30, 2013 10:40 am ET

Executives

William A. Kozy - Chief Operating Officer and Executive Vice President

Analysts

Kristen M. Stewart - Deutsche Bank AG, Research Division

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. Thank you all for joining me. I'm Kristen Stewart, the medical supplies and device analyst at Deutsche Bank. I am pleased to introduce in this session, Becton, Dickinson.

With us today, we have Bill Kozy, who is Executive Vice President and Chief Operating Officer. And just to remind you all about the format, we do have the option to submit questions online through Yorn at yorn.com/db, and you can also just raise your hand and a microphone will be passed. So I just ask that you wait for the mic so that everything can be webcasted.

So just to kind of kick it off, just kind of more very big-picture, what are you guys seeing kind of in the broader environment of late? It seems that if we look at most of the companies that have reported, they've seen a little bit weaker trends, although you guys actually have seen some level of acceleration over the last couple of quarters. Can you maybe just speak to just what you're seeing kind of in your end markets and if there's anything out there that is giving you any level of concern or maybe some reasons for optimism?

William A. Kozy

Sure. The environment right now, if you just take a bit of a global cut, for sure, the U.S. is a constrained environment. Stable, but constrained. Europe probably falls in a similar category. We also pay equal attention to what's going on in the emerging markets and -- particularly the areas like Brazil and China and India, very important to us. And in those markets, we see a steady higher growth, high-single digit type of market growth, and that helps to offset what we think are some constraints that we see, particularly in U.S. and Europe.

And from a company perspective, we probably have our eye most closely on the research spending in the U.S. and Western Europe, which continues to be probably the area of highest uncertainty.

Kristen M. Stewart - Deutsche Bank AG, Research Division

And can you just remind us just in terms of the research spending, what the exposure is for Becton within kind of just Biosciences and what you guys are sending within the guidance for this year?

William A. Kozy

Sure. the Bioscience business is about, what, it's about 16 -- it's about $1 billion of the company, $8 billion base, and we're guiding at about 1% to 2% growth. We actually have done a little bit better than that in the first 2 quarters of the year. But again, on this theme of uncertainty in the U.S. and Western Europe, we're just playing the sequestration factors and those related Western European constraints as things we manage months at a time, literally. And we're looking every month at spending trends as best we can.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Perfect. And then you guys might want to just spend a little bit of time talking about your more recent announcement around BDRF and your entry into the generic injectables market. Can you maybe just provide us with kind of a general overview on just the rationale for why you're expanding in this market? Why now, and why kind of in the format that you have in terms of building it up from within and not necessarily going out and looking through external sources for M&A?

William A. Kozy

Sure, Kristen. A couple of thoughts. If you went back a few years, probably one of the segments of the company where we were challenged with growth strategy -- and I'm going back now to the '07, '08, '09 windows -- was the Medical segment. Included in the Medical Surgical business was an area of strategic focus in terms of the expectation that a new platform would be needed. So at that point in time, the company stepped away from just looking at hypodermic and catheters, or injection and infusion, which has been the basis of the business, and tried to take a fresh look at parental delivery and what some of the key trends would be in the 5 to 10 years ahead.

We're obviously, coming from the medication side. I think everyone in the room is very aware of the generic trends and what was going on there. And then if you looked at our prefill business and then you also looked at the success we've had with a flush product -- so if you would accept the premise of recombination here, what the Medical Surgical business tried to do was to take a look at organic capabilities within the company and to determine what the best growth opportunity might be. Significant market research for a couple of years was done on this generic injectable market and what was going on particularly in U.S. hospitals. We identified a market in total of about $1 billion. There was an addressable market within that piece of about $600 million, $700 million that focused only 1 and 2 mL. So why the 1 and 2 mL comment? That's where prefill kicks in.

So by taking advantage of our glass syringe capability, leveraging the Flush competence that we've created with the Flush launch, this idea of creating a 1 and 2 mL prefilled injectable product platform was the basis of BD Rx.

For the other part of your question, we did look on the outside. We looked for a little over a year for either plans or external capabilities that might help us to pursue that strategy. We came to a conclusion that we preferred to do it organically. We did that for a couple of reasons. Number one, if you looked at the production capabilities that were out there, many, many of the facilities that we looked at where antiquated. They were behind the kind of the times and the expectations of the regulatory bodies. And by the way, one of the big reasons for all the generic drug shortage now is because of that manufacturing issue. So we knew it would take us a little bit longer. We chose to go the pure organic route. We built a brand-new facility in Wilson, North Carolina that, of course, does the complete drug device combination from the raw material arrival of APIs and glass syringes to a finished good going out the other end of the facility. And that's the basis of the direction there. We also found value in doing it on our own in terms of what we deemed to be crucial in terms of control of quality and cost. And we are, as you probably know, very operationally focused, and cost has always been a key basis of competition across most of our portfolio. So that decision fit well with the historic outlook of the company, but we also felt we could create operational advantage over the long term with our own facility.

Kristen M. Stewart - Deutsche Bank AG, Research Division

And then on the kind of announcement through the conference call in conjunction with making this announcement, you identified, I forgot the exact number, of products within the pipeline. I know you have 2 currently approved. Can you maybe just talk about what's been the -- first, the initial [indiscernible] experience now? I think it's only been maybe 1 month or 2 since you've had those products out in the market. Anything that kind of surprises you in terms of how that's rolling out and the reception? And then maybe just talk more generally about the different targets and just kind of the cadence that we can expect in terms of approval for additional generics?

William A. Kozy

Sure. The -- let me take the short-term part of that first. We shipped our first BD Rx the third week of April. And for you, that wouldn't matter; but for us, that was a big day. The order would not even buy lunch here for anybody today. But having said that, we have shipped product. We're producing product across those first 2 drugs, and we're confident that we'll be able to really get a brand-new sales force. We've got 20 dedicated people in the U.S. focused on those 2 drugs. We're also putting significant effort around making

[Audio Gap]

at both IDNs, major individual accounts and targeted GPOs. It's way too early to suggest that we've got any kind of a signal. We -- like I said, we -- it's been about 5 weeks since we shipped our first order. But our funnel, we do have -- and obviously, we'd be tracking all 20 sales reps with a funnel across IDN, GPO and major accounts. And our funnel is extremely active and very much on target. We've got good support from the drug wholesalers, first time that we've worked with them. So we're encouraged by the first 6 weeks. But I can assure you that our targets, in terms of revenues for FY '13 and '14, is still moving, and we haven't been able to finalize that. We'll keep our eyes on that. We're committed to having a $100-million business by 2017 with BD Rx. We think that we need to get to 25 or 30 drugs over time to deliver on that kind of revenue. There is a nice opportunity here. We have 10 drugs planned -- first 10 drugs, we have planned for launch. 6 of those

[Audio Gap]

current government U.S. government shortage list. So we hope that, that will help us to gain customer acceptance. And we will be working -- we're working as closely as we can with the FDA in terms of approval process. We don't know exactly which of those 10 drugs will come along first. I can tell you that the 2 that are out now weren't exactly the 2 that we thought would arrive first, but they did. Every drug is a singular process. There's no bundling. So we take these through one at a time, a dedicated regulatory group that works only on BD Rx within the company to help expedite that.

Kristen M. Stewart - Deutsche Bank AG, Research Division

And you mentioned 10 drugs planned. Is that planned over -- which horizon? [indiscernible] 25 to 30 to get to the $100 million by 2017? Is 10 like for the next year? Or...

William A. Kozy

It's such a good question. The -- Kristen, what we've already learned is that predicting when a drug will get approved and the timing of that is very uncertain. I can -- let me just give you a little anecdote on that

[Audio Gap]

statement. We hired our sales force last October. So we put the 20 dedicated people in place last October because we were very sure. At least one person here at this table was very sure that we would have approval and be ready to go sometime in our first quarter, that October, November time frame. I just mentioned to you, we launched in April. So it is very difficult right now, because of the backlog on generic approvals, to say when those first 10 will get there. All I can tell you is that we've got very serious intent to get those through the pipeline as quickly as we can while still meeting all the FDA expectations. And probably the safest thing for me to say is maybe, by the end of '14, we would have a good number of that original 10 out the door. That's what we're planning on right now. And again, the 6 that are on the shortage list are very important to us.

Kristen M. Stewart - Deutsche Bank AG, Research Division

How do you just kind of get, I guess, comfortable that as a new entrant into this market, we've seen -- there's a lot of other very competent players that are out there, and some of which are struggling on producing products, and they have their set of challenges, and that's why their [indiscernible]. So how do you get confident as a company new to this space that you'll be able to be successful? Probably a very broad, general question, but -- I mean, what is it about Becton or the core competencies that you have, and maybe the unsterilized, kind of to your earlier comment on being in prefilled and with the Flush products that -- how do you know that -- or how do you be assured that the investments that you're making are going to be ones that really do allow you to be successful in this market? So I guess, in your mind, what does it take to really be successful? And I guess how confident are you in getting to that $100 million by 2017?

William A. Kozy

We did a couple of things that we thought were important. We were relatively confident on the device side. We didn't have any concerns about filling. We had done that. We had no concerns about the sourcing of the glass prefilled syringes. Obviously, our challenge, I think, was on the pharmaceutical side. Since 2007, the company has hired approximately 200 people into BD, all with pharma backgrounds. Those people include 80, 90 people on the formulation side in France. That includes a whole new manufacturing team in Wilson, North Carolina of over 100 people focused on that. So we have completely changed, if you would, the capability side of the company down the pharmaceutical side. We opened that plant intentionally and at some expense back in late 2009 so that we had plenty of time to get that new team up to speed and, by the way, to give ourselves some assurance that technically and operationally, we could handle the challenge of both the drug device tracking side. And by the way, the regulatory approval route for these BD Rx products includes both. It's not just the drug approval, it's not just the device approval, you go both ways. So we put significant investment on the competency side on both tracks, and we feel good that, that plant will perform at BD expectations, as well as regulatory expectations, and deliver on the products we're planning on.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. And then how -- I know you said earlier that you have looked towards doing acquisitions. You chose to go more doing organic sales. But just thinking, had -- is this an area where you would consider adding in acquisitions that gain better critical mass? Will that be of importance when you're dealing with drug wholesalers? And just kind of how do you think about scaling up this business so that it's not just simply more of a niche area, especially looking at -- even if you are able to get to $100 million in sales, which should be -- obviously a great thing, but relative to the size of your competition out there, that's still very small.

William A. Kozy

I think right now -- and let me emphasize the window of now. There is an executional mode and a set of expectations in the company that we've made a sizable investment, and we're going to deliver on that investment with the organic approach that we have. So we do not have, at this time, any targeted activities underway to look on the outside. There's an [indiscernible] instead. There's a significant focus to deliver on the 25, 30 drugs, the volumes and the sales revenue that I referenced earlier. So this is not a high-target area for us at this time. I wouldn't preclude anything being looked at if it came along around our theme of tuck-in, but our game plan right now, which I think is the basis of your question, is to do this organically.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. And just from a -- more from like [indiscernible] up the P&L impact of this, it sounds like you've been doing a lot of hiring and investment moves since 2007, so it's probably more dilutive to numbers, which we haven't necessarily appreciated since this wasn't something that you've been talking about for a while. Just how should we think about, going forward, what the financial impact could be in 2013 and more of, I guess, more 2014 and beyond? At what point would this business kind of get to more of a break even? Is $100 million kind of where you kind of cross that line? Or how should we just think about the contribution from more of a profit standpoint?

William A. Kozy

Yes. Very good question. For sure, BD Rx was a critical factor, especially in that 2011, 2012 window where we talked about we were investing heavily and hoped to come out with some new products. The best analogy I can give you operationally and profitability-wise with BD Rx would be to think about safety. When we spent significant amounts of money to retool our facilities, we had told all of you that it would take us a couple of years and we had to get to scale before that would start to turn into a positive contributor. So we're very comfortable, and we planned all along that even post-launch, we had minimally a couple of years to get this back up to some point of positive contribution. The other way to think about this is -- but we did peak our investment windows, if you would, in that '11 and '12 period without any revenue to show forth. So at least, now, we're expecting to see some revenue. '13 is negligible, it's not even worth talking about. In '14, you start to see a little revenue impact, and that starts us on the track, if you would, to turn this profitable. Even right now, we don't know the exact window -- we can guess the fiscal years, but we can't even guess the quarters right now as to when we might turn this around. But we do like this concept of scale and somewhere upwards, well beyond $50 million of revenue. We'll have our eyes on what's happening with our costs. A lot of moving parts in here, raw materials, scale. We'll have a close eye on that. And that question, we can probably give you a better answer about a year from now. It's going to depend how fast we scale.

Kristen M. Stewart - Deutsche Bank AG, Research Division

I would imagine that out in that 2017, be hopeful that it would be at least...

William A. Kozy

More than hopeful.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Yes, yes. Me too. Okay. So just kind of moving beyond that, I think just kind of talking about some of the other opportunities, one of the key areas that you guys have been talking about more within the diagnostics realm is the launch of BD MAX. Can you just frame kind of where you are today and just kind of the products that you do have approved for? I know there's a couple in the pipeline. What are some of the more important ones to kind of continue to see this platform just share growth?

William A. Kozy

Sure. I can -- let me give you kind of a high-level cut on the assay situation with MAX. We've got 11 assays around the world that are launched. And by the way, you can refer to our 2Q presentation, and you can get into the details there. I wouldn't even take a shot at giving you which '11 are in which geographies. We've got 12 others that are in BD organic development, internal assay development. And we've got 12 more that are underway with our partners. So we're in a planting window, if you would, right now, where, because we've got the instrument out now, no surprise, you would expect us to really ramp our assay menu significantly over the next 2 to 3 years. And so we're hoping to have the array that I just talked about available in the next couple of years. And that really catches us up to our competitors and also really helps us with the MAX acceptance. Now to your question about the key assay, we we're probably most focused on getting Cdiff out, which we did get out back in the quarter. And so the combination of MRSA and Cdiff on the MAX platform minimally gives us, in the developed market, that HAI scale that we wanted to have. Additionally, we're getting a lot of customer response on the LDT capability at MAX. This is the lab developed test. A lot of these molecular laboratories do get requests from physicians within their hospital or in their network somewhere for specialized tests related to transplantation or infection or something like that. MAX is very, very capable around the LDT side. So at this point in time, right now, today, you've got our MAX group driving the HAI message and the LDT capability, and that's been the basis again of the building funnel that's in that area. We've had good production capability validated here in the last 60 days. Remember, we just started shipping MAXs in April. We're now at scale. We're not behind on any of our shipments. We've got a funnel that's reflecting a steady TO [ph] per week number, pretty much in line with what we had hoped for in a very early stage. Almost all the geographic focus right now is on U.S. and Western Europe as the key markets.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay, perfect. And then just kind of more broadly, I guess, on Diagnostics, you've added in some companies through the years. You bought TriPath and GeneOhm as well kind of bringing in this whole platform. How do you just think about the Diagnostic business in terms of whether or not it's at the scale that you want? There are some assets out there, I guess, potentially, certainly on a larger side with changes [ph] in business, I guess, being -- but even more so, a lot on the smaller side. Is this an area where we should expect M&A activity, where you think you need to kind of bring in different platforms or look to broaden it out to be a much broader player, especially since there's a lot of other competitors out there with much greater scale?

William A. Kozy

We're actually in a similar mode in Diagnostics. To your point, if you think about the last year or so, KIESTRA has come in to the company. The partnership with Bruker has been announced related to the KIESTRA platform. Our focus on infectious disease, inclusive of MAX, is significant. So we're -- we've kind of moved into a mode here also of really deep execution around the production, menu expansion, automation and sales execution mode. So we've got that Diagnostics system group really locked in on those areas. Right now -- here again, if something came along and made sense, would we look at it? Well, we've got a lot to do. Let me add a little bit on that. First thing with MAX here, we've got to get out to the GeneOhm customer base and get them converted to MAX because of the ease-of-use, the efficiency, the WalkAway capability which we did not have. So that's an A priority and a lot of time and effort from the sales organization to get that done. We've got the KIESTRA platform launched globally at this stage, and we've got a lot of major funnel activity associated with that as we're trying to drive that acquisition. And of course, that acquisition is important because it allows us, when we approach a major customer, particularly a centralized lab, a large reference lab, gives us the chance to also present or represent Viper, some of the other high-throughput capabilities that we bring on the diagnostics side. So we kind of are zeroed in here on the organic commitments that we've made.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. And then maybe just kind of touching on this, more from a high-level financial perspective, over the past several years, you guys have, as we've talked about with the BD Rx program and also with emerging markets, been spending a lot on really -- I guess spending up for future growth. And can you maybe just speak to where you are with the incremental investment spending between investment and emerging markets that [indiscernible] I guess, BD Rx sounds like it'll continue to be maybe more of a dilutive effort, I guess, at least in your term, that kind of -- how should we just think about the opportunities as you start to kind of actually see the fruits of all waiver here put in? And how do you just think about, longer term, margin expansion?

William A. Kozy

Sure. Let me start at -- maybe at the highest level, and maybe you can throw some follow-up questions. But if you went back a little bit, we had talked significantly in that '11 and '12 time frame that we were making significant investments. They included ERP. They included some acquisitions. They included emerging market infrastructure, particularly in Asia and Latin America and additionally, a number of products developed things like BD Rx that we just talked about. We also said that by the fourth quarter of FY '12, that we were expected to start to come out of that investment mode and to start to display a much higher quality of earnings performance. And I think we had signaled that the fourth quarter was a really turning point for us in terms of trying to deliver on that commitment. We're encouraged by what happened in the fourth quarter of '12, the first quarter of '13 and the second quarter of '13. And I guess there's 2 things going on there. Number one, we've stabilized our top line, as well as moving it up a little bit because of the new products and acquisitions, all of which was planned. And then there's a focus across all geographies now and all businesses now to get at this quality of earnings performance. This is -- we look at it the exact same way you do. We're looking for attractive P&Ls where somebody is approaching the company with something larger on the bottom than it is on the top. And so that expectation is what we're really looking to sustain. We made a lot of infrastructure investments in that '11 and '12 window that we don't have to continue. Now let me -- and I'm going to distinguish between infrastructure and pure go-to-market. We were adding people in the sales areas in '11, '12. But more importantly -- and I'll just use the example of time. We were putting in expanded manufacturing, quality, dedicated Chinese medical affairs, dedicated government relations, dedicated regulatory. There was no regional capability going in there. We were fundamentally creating the capabilities of a BD China as one example. Similar investments like that in a few other markets. Now we've got the infrastructural piece, the core infrastructural piece, behind us. We'll now make targeted investments on the go-to-market side in those geographies where we think the opportunity is the best. China continues to be one example of that. So you would expect us to see -- to continue to invest on the selling and marketing side in China, but much less so on the other areas like I mentioned. And that kind of view, where we're now looking for regions and emerging markets, trying to become more profitable, is kind of the expectation.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. So I think -- as I just think about the emerging market investments, I think you guys quantified that as $60 million or something like that? I mean, I think -- is that $40 million?

William A. Kozy

$40 million.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Is that something that we'll bump [ph]? I just want to make sure I'm understanding your comments. Of course, we've already...

William A. Kozy

That'll roll off.

Kristen M. Stewart - Deutsche Bank AG, Research Division

It just kind of is something that doesn't continue to be incremental every year...

William A. Kozy

It's in the base.

Kristen M. Stewart - Deutsche Bank AG, Research Division

In the base.

William A. Kozy

It's in the base. And by the way, it's not flat to down. It'll be impacted -- what's the -- we're just starting budgets, so the -- as you would expect, the comments on inflation in China, important factor. It's not what we're seeing here in the U.S. So you've got to deal with that. So it looks like there is investment going on there. Reality, we're just managing [indiscernible] ways we can in tougher inflation environments because these markets are really important to us.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Right. And the ERPs just from that is something that should -- that incremental -- it kind of flattens out in 2014, and that isn't necessarily something where you would turn from any headwinds and to like a tailwind? That kind of again goes into more of the base. Is that the best way to think about that?

William A. Kozy

Yes. Think about -- I mean, the timing is moving. It's a moving target. But think about '13 and '14 and how it exactly shakes out. I can't predict the spend to a granular level, but those would kind of be peak years. You get your major go-live work behind you in '14. And from thereon, as we have done historically, you would expect to see that become much less of a drag. And we had to do that. We're trying to put in the operating infrastructure for a much larger and more global company, particularly on the supply chain side.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. Any questions from the audience before I keep going? How should we just think about, I guess, just the longer-term growth profile of Becton? You've just walked through, I guess, some of the opportunities that you have. There's definitely some uncertainties with Biosciences, you mentioned earlier, with funding and [indiscernible]. I think, this year, if I just look at kind of your goals, or roughly -- I think it's like 5% top line or 4.5% to 5% top line. And then if you exclude out that med tech tax, you get somewhere around 11% on the bottom line. Do you feel like that is generally sustainable? Not asking specifics for '14 because I know you guys don't have that yet, but just kind of how do you think about just kind of that profile? It seems like, based on what you're saying, that there's opportunities for margin expansion. Is that something, I guess, you would agree with?

William A. Kozy

I think we really are focused on 2 things, and I'm going to take a little bit of a simple-minded tact here, okay? But trying to get top line growth in the environment we're in is a real focus of the company. And we're going to do and take actions that we think are appropriate, to try and ensure, as we've guided for '13, somewhere around 4.5% to 5%. With the markets we're in, the products we have and the environment the way it is, we actually would be pleased if we got to that 4.5% or 5%. Now at the same time, this quality of earnings thing is now a core expectation. We spend a lot of time with all the leaders in the company, particularly over the last 6 months, making sure there's deep clarity on what we mean by quality of earnings. And it's not just for here or here or for that business. This is the way the leaders in the company are to think about management of the business. We've not done any '14 work yet, but we're looking forward to getting that work done because we've seen a little progress in '13, both in terms of sales performance and this margin stability. We're probably more on the "steady as it goes" mode than we are on driving any expansion thing, because there's a possibility that we'll see something that augments one of the strategies, and we'll step in and make that decision. But growth is going to be really important for us while we're maintaining profitability.

Kristen M. Stewart - Deutsche Bank AG, Research Division

How do you think about just '14 in terms of -- with the Affordable Care Act and kind of health care reform? Would you expect, given your businesses in which you participate in, any sort of uplift? How do you think about the -- being a swing factor, I guess, as you're going through your '14 [indiscernible]?

William A. Kozy

It's a very good question. And just thinking about the Affordable Care Act, we don't see much of an -- I don't see any kind of an impact there. I've spent too many Saturdays or evenings in an emergency room in some big hospital somewhere, and there's a lot of people that are getting health care delivered to them. Now I think Affordable Care Act will make it easier for them to get, and hopefully more convenient, but we don't see a very large population of people that never got health care emerging. We're not in that mode at all. We think these people have been taken care of in the past. They'll get taken care of better and differently. We believe that, but it's not going to move any dials anywhere for us.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. And then just thinking if -- probably last question since we're running out of time, but speaking about 2014, I guess, what would be kind of the thing in the back of your mind that kind of concerns you from like a volatility perspective environment of kind of Europe and the environment there, the pricing environment, maybe a continued uncertainty within Bioscience, or if it's more from like a competitive standpoint, if you're seeing any emerging competition across any of your franchises? What's kind of the things that you think about, that you worry most about as you enter into '14?

William A. Kozy

Well, let me distinguish between worry and "think about," okay? We do really think a lot about uncertainty. And that is something that we can't project. You would expect us to be able to say, "Well, we know exactly what the U.S. government is going to do on the budget. I know exactly what the NIH is going to decide." We've always, in the past, been able to give you some insights on that. Right now, I know I'm supposed to be able to bring insight to that. I have no insight. We have a sense of uncertainty in these markets, particularly around the research side. And like I said, what we do, do, and I'd leave everybody with -- every month, we're understanding what happened where, on what platforms and what geographies so that we've got a fresh understanding. We didn't use to have to do that. We do that now. So when I say, "think about it a lot," that's what I mean by think about it. I'm looking -- steering that every month, what's going on in areas like that. We can't worry about that. We -- what you do is just make sure you've got performance contingency thoughts that are well established. They're not to be called in a meeting. They're sitting right there on your desk. If something goes wrong, you know what to do. And by the way, that helps to cut down the worry thing and keeps you more focused on how you grow the place. I think that's maybe what we've gotten better at the last 2, 3 years, at least I hope.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. Any further questions?

Thank you very much...

William A. Kozy

Kristen, thanks for having us.

Kristen M. Stewart - Deutsche Bank AG, Research Division

For joining us. I hope you -- thanks, everyone, for attending the session.

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