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TRW Automotive Holdings (NYSE:TRW)

Q3 2012 Earnings Call

October 30, 2012 8:30 am ET

Executives

Mark Oswald - Director of Investor Relations

John C. Plant - Chairman, Chief Executive Officer and President

Joseph S. Cantie - Chief Financial Officer, Executive Vice President and Treasurer

Analysts

Brett D. Hoselton - KeyBanc Capital Markets Inc., Research Division

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Operator

Good morning, and welcome to the TRW conference call. [Operator Instructions] As a reminder, this conference call is being recorded. Presentation material for today's call was posted to the company's website this morning at trw.com/results. Please download the material now if you have not already done so. [Operator Instructions] I would now like to introduce your host for today's conference call, Mark Oswald, Director of Investor Relations. Sir, you may begin.

Mark Oswald

Thank you, and good morning. I'd like to welcome everyone to our Third Quarter 2012 Financial Results Conference Call. This morning, I'm joined by John Plant, our Chairman and Chief Executive Officer; and Joe Cantie, our Chief Financial Officer. On today's call, John will provide an overview of the current automotive environment and its impact on TRW. John will also provide a brief summary of the financial results and discuss other related business matters, including our outlook for the remainder of the year. After John's comments, Joe will provide an expanded review of the financial information. At the conclusion of Joe's comments, we will open the call to your questions.

Before I turn the call over to John and Joe, there are a few items I'd like to cover. First, today's conference call will include forward-looking statements. These statements are based on the environment as we see it today and therefore involve risks and uncertainties. I would caution you that our actual results could differ materially from the forward-looking statements made on this call. Please refer to Slide 2 of the presentation for our complete Safe Harbor statement.

The Risk Factors section of our 2011 Form 10-K and our first and second quarter 10-Qs contain additional information about risks and uncertainties that could impact our business. You can access a copy of our 2011 10-K and 2012 quarterly SEC filings by visiting the Investors section of our website at trw.com or through the SEC's website. On a related matter, we expect to file the third quarter 10-Q within the next day or so. Once filed, the 10-Q can also be accessed through either website.

In addition to the financial results presented on a GAAP basis, we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials, which are posted on the Investors section of our website at trw.com. Finally, a replay of this call can be accessed via dial-in or through the webcast on our website. Replay instructions were included in our release this morning. We have not given our permission for any other recording of this call, and do not approve or sanction any transcribing of the call.

This concludes my comments. I'll now turn the call over to John Plant.

John C. Plant

Thank you, Mark, and good morning, everyone. TRW's Q3 results continued the positive momentum established earlier in the year. The third quarter achievements demonstrate the strong market position of TRW, especially against the backdrop of the difficult industry conditions in Europe.

During the third quarter, our sales were $4 billion, an increase of about 9% adjusting for currency and divestitures. This is a strong and positive outcome and continued evidence of the increasing demand for TRW's technologies considering the decline in European vehicle production. For your information, Europe accounted for 40% of Q3 sales.

Operating profits before special items was $265 million, an increase of about 10% compared to last year. Net income was $157 million, and earnings per share were $1.24 on the same basis. This is a 13% year-on-year increase compared to last year's adjusted results for the tax valuation allowance reversal. And finally, in line with company expectations, the company generated cash from operations of $156 million during the quarter.

In addition to the solid financial results posted this morning, the company recently announced a $1 billion, 2-year share repurchase program, which will commence in the fourth quarter of this year. The repurchase program signals confidence in our ability to sustain positive earnings and cash flow and demonstrates our commitment to maximizing shareholder returns over time. Joe will discuss our recent financial results and capital structure in more detail in just a few moments.

The company's solid operating performance through September will support another strong year for TRW despite the weakness that we are seeing in Europe as we exit the year. I'll expand on the year-to-date results in just a few minutes. First, just a few additional comments on the third quarter.

In North America, vehicle production remained strong and tracked in line with the expectations industry observers established at the beginning of the quarter. The strength within the region continued to partially offset the year-on-year decline in vehicle production in Europe. Overall North American production was up 14% compared with the third quarter of 2011. As expected, normal seasonality resulted in a sequential drop of about 350,000 units compared to the second quarter of the year. Within this quarter's vehicle build, the Detroit 3 manufacturers lagged the overall growth for the region, with production up 5% year-on-year.

Consumer demand in North America remains solid as the third quarter's seasonally adjusted annual selling rate returned to the mid-14 million unit level. In fact, September's annual rate of 14.9 million was the strongest monthly rate achieved since early 2008. The steady upward trend in demand appears to support this level of production.

In contrast, the automotive industry in Europe remains weak as the prolonged debt crisis, high unemployment and banking concerns wear on consumer confidence and vehicle sales. For the quarter, total European vehicle production was down about 6% compared with last year's third quarter. Sequentially, compared to the second quarter of the year, vehicle production was down about 735,000 units or 15%. Normal seasonality, combined with decelerating demand within Europe, were the primary drivers of the production decline during the quarter. In addition to weak consumer demand that is being experienced in markets such as Italy, Spain and France, the German market, which had held up relatively well earlier this year, also showed signs of softness as we progressed through the third quarter. The only European market showing resilience was the U.K.

For TRW, the company's favorable customer and product mix softened the negative impact of the lower production level. In China and Brazil, the vehicle production -- the vehicle industry trended higher after a somewhat sluggish start to the year as actions implemented by the governments within those countries to spur demand for automotive sales are producing positive results. Combined sales for China and Brazil accounted for about 19% of TRW's total third quarter sales, and they were up 16% year-on-year. Similar to earlier results this year, I'll also mention again that our sales rose in the rest of world regions and North America and fell in Europe. TRW's European exposure dropped to only 40% of total sales during the third quarter.

With respect to our year-to-date results, we remain solidly on track. Sales totaled $12.4 billion, an increase of 8% excluding the impact of currency movements and divestitures. Operating profit, excluding special items for the first 9 months of the year, was $937 million, which resulted in an operating margin of about 7.5%. Net income on the same basis was $590 million -- $589 million, and earnings per share were $4.58 per share. The performance achieved through September provides a good foundation for a strong 2012 as our operating results allow us to further position the company for long-term success.

Moving on to third quarter business developments. Product launches during the quarter continued to strengthen, and our diversity in leadership in intelligent solutions continued. A few examples include the electronic park brake, driver's airbag modules, seatbelts and steering wheels on the Mercedes-Benz GL-Class in North America. In Europe, VW launched its Golf vehicle with TRW's side and curtain airbag modules, brake actuation and seatbelts. And BMW launched its 1 Series vehicle in Europe with TRW's driver and passenger airbag modules, seatbelts and steering wheel. As a result of our ongoing quality and Six Sigma programs, we continue to launch products with world-class quality. For the first 9 months of this year, our initial quality averaged about 3 parts per million across all products and customers worldwide.

In addition to the broad range of products launched during the third quarter, TRW has recently highlighted a number of technologies that demonstrate the company's commitment to safety that everyone deserves. The company's advanced video camera technology, and S-Cam forward-looking camera, as well as plans to invest in a third-generation camera in the anticipation of increasing regulatory focus for forward collision warning and lane-keeping systems.

This next-generation camera will focus on improved pedestrian protection and functionality while building on the current feature set, which includes headlight control, lane detection, traffic sign recognition and vehicle detection and classification for automatic emergency braking. This is going to be particularly important in Europe.

TRW also highlighted the launch of its AC100, 24 gigahertz forward-looking radar technology. The AC100 radar can provide several safety and driver comforts functions, including distance and collision warning. It can activate the reversible restraint systems, i.e., seatbelts, and integration with brake systems to provide a follow-to-stop adaptive cruise control system, a precrash filler brakes and adaptive brake assist and automatic emergency braking. Legislation demand -- mandates automatic emergency braking on new European truck models starting in November 2013, and future changes to European NCAP ratings will continue to drive the fitment of these driver-assisted technologies, which, as you know, will be a very good outcome for TRW.

The company is confident and excited about our future as our existing and future technologies will continue to strengthen an already strong market position. When you consider the opportunities and benefits that are expected from our significant investments made in the emerging markets and the resulting future growth for TRW, this excitement gets magnified.

Although having the right technologies and global footprint is essential to positioning the company for long-term success, we also recognize the importance of reducing certain of the company's legacy liabilities. During the quarter, we also made good progress on this front. We started offering voluntary lump sum payment opportunities to certain of our U.S. retirees and former employees. The voluntary offer is intended to allow participants a choice in managing their retirement planning while allowing TRW to reduce its long-term pension obligations and administrative costs. The one-time payment option will be funded primarily with pension assets and is expected to be fully executed before the end of 2012.

Having a rebalanced focus on our strategic priorities, our best quality, global reach, innovative technologies and lowest cost have served us well, and this will sustain our success into the future. But before I hand the call over to Joe, let me comment on our expectations for the remainder of the year.

For the fourth quarter and similar to the trend established in the first 9 months, we expect global vehicle production levels to be influenced by the macroeconomic environment relevant to each region. In North America, we expect fourth quarter production to be roughly 3.6 million units, an increase of about 5% compared to the fourth quarter of last year, as the upward trend in consumer demand supports this level of production. I'll also point out that for the first time this year, Detroit 3 production is expected to grow in line with the overall region for the quarter.

For the full year and slightly ahead of our previous forecast, we expect the production to total 15.2 million units, an increase of 16%. Detroit 3 manufacturers, due to their lagging growth rate given the post-earthquake recovery of the Japanese manufacturers, will differ from the overall growth rate for the region and will result, for them, an increase of about 7% year-on-year.

In Europe, we remain very cautious as the negative economic conditions within the European Union place downward pressure on the vehicle demand and production within the region. During the fourth quarter, vehicle production in Western Europe is projected to be around 2.8 million units, down about 16% compared with last year. This will be the largest quarter-on-quarter percentage decline experienced in several years. Total European production is forecasted at about 4.3 million units. Given our expectations for the fourth quarter, full year 2012 production is expected to be about 18.7 million units for total Europe and within this estimate, Western European production is estimated to be about 12.3 million units.

Beyond North America and Western Europe, we do expect vehicle production levels to end the year higher compared with 2011 in both China and Brazil, as these countries have implemented a variety of actions to spur economic growth. Although the sluggish start to the year has resulted in full year growth rates below the double-digit rates experienced in prior years, we remain confident that these regions offer substantial growth opportunities for TRW over the longer term.

Returning to the situation in Europe for a moment, we continue to monitor the production plans of our customers. We are cautious about the industry environment and as a result, we are currently assessing our cost base in Europe, and we have a view that a higher level of restructuring is called for before the end of the year. And this will increase compared to our previous guidance by advancing some actions which were planned in 2013.

Although our plans are still being vetted in terms of timing and scope, we now anticipate restructuring charges of between $65 million and $75 million in the fourth quarter, which will include -- which is higher than the level we've planned for previously. Our actions include 2 plant closures, adjustments in our workforce and certain of our fixed costs, all of which are in Europe.

Moving back to 2012. Based on the forecasted production estimates, currency assumptions and our performance over the 9 months of the year, we expect sales to range between $16.2 billion and $16.3 billion for the year. Capital spending is expected to be about $650 million, which is a lower end of guidance we provided in August.

With regard to 2013, we have not yet finalized our operating plan assumptions. Our thoughts are for increasing production levels in North America and continued weakness in Europe. At best, we're hopeful that European production remains flat in 2013, but improving maybe in the second half of the year. China and Brazil are expected to expand, albeit at a pace probably in the single-digit range, which is lower than the pace forecasted at the beginning of the year. We'll provide our 2013 assumptions when we report our 2012 full year results early next year.

In summary, we're pleased with our performance for the year-to-date, and we remain very focused on finishing 2012 in a good manner. We remain confident that we are executing the correct strategies to ensure the long-term success of the company. Our solid balance sheet, our strong technologies and market position will enable TRW to continue with its positive momentum.

And with that, I'll now hand the call across to Joe to discuss our financial results in more detail.

Joseph S. Cantie

Thank you, John, and good morning to everyone. Our results published this morning demonstrate the strong market position and resiliency of the company given the negative industry conditions that continue to weigh on our largest market. The company is working hard to mitigate not only the effect of sharply reduced production volumes in Europe, but also the continued stress related to the robust volumes in North America. And as John just discussed, we're taking the actions necessary in Europe to mitigate the challenges in that region as we move into 2013.

We recognize a lot of hard work lies ahead in order to finish the year strong and to prepare us for next year. Our Q3 results demonstrate that we're up for the task. Key highlights for the quarter included sales of $4 billion, slightly higher compared with last year's level, despite lower production volumes in Europe and the negative impact of currency movements. Operating income, excluding special items, was $265 million, a resulting margin of 6.7%. In this year's quarter, earnings per share were $1.28 on a GAAP basis and $1.24 after excluding a few special items. And finally, with regard to TRW's capital structure, as you're aware, the company announced the completion of our credit facility refinancing and a $1 billion, 2-year share repurchase program. No doubt, great news as the company continues to take positive steps forward.

I'll discuss our capital structure further in a few minutes but first, let me go through our third quarter numbers in a bit more detail. Starting with the income statement for the quarter, we reported sales of $4 billion, an increase of $50 million compared to the same period a year ago. Currency translation had a $253 million negative impact on sales during the quarter, as the euro-to-dollar exchange rate averaged $1.25 this quarter compared with $1.41 last year. In addition, divestitures completed over the past year resulted in a decline of $30 million of sales in this quarter. Adjusting for currency and the effect of the divestitures, sales improved by about 9%, including an increase of $155 million of module sales in the quarter compared to last year.

Adjusting for $3 million in restructuring charges in the current period, we had an operating profit of $265 million compared to $240 million in the 2011 period. The year-on-year increase of $25 million was primarily driven by the profit from the higher level of sales and lower SG&A costs in the current quarter, partially offset by about $15 million in planned cost increases to support future growth and the negative profit impact of currency movements between the 2 periods. Although we're encouraged with the direction commodity inflation is trending, inflation continued to have a negative impact on the quarter, but to a much lesser immaterial degree compared with our previous quarters this year.

Moving down the income statement. Interest expense totaled $26 million, which is equal to last year. Just a reminder, last year's third quarter included a loss on retirement of debt totaling $19 million compared with a minor $1 million loss this year. Finally, tax expense was $68 million in the quarter compared with $37 million last year. Similar to our previous quarters this year, the increase in expense year-on-year is attributable to the higher effective tax rate in the current period resulting from the reversal of the company's valuation allowance on deferred income tax assets in the United States that occurred in late 2011. In addition, the current period includes a tax benefit of $10 million primarily related to the reduction in corporate tax rates in the U.K., which we're holding out as a special item in the quarter.

At the bottom line, we posted GAAP net earnings of $1.28 per diluted share compared with net earnings of $1.22 in the prior year. On a pro forma adjusted basis, earnings per share of $1.24 this year improved 13% compared to last year. In terms of EBITDA, for the quarter we had $361 million, excluding special items, compared with $354 million in the prior year.

Moving to a brief review of our year-to-date results. We reported sales of $12.4 billion, which is an increase of $154 million compared with the previous year. Increased vehicle production in North America and continued growth resulting from our portfolio of safety products were almost entirely offset by production declines in Europe and the negative impact of currency movements between the 2 periods. Excluding currency and divestitures, our sales through September improved about 8%.

Our operating income in the first 9 months of 2012 was $930 million, which compares to $980 million last year. The $50 million year-on-year decline was primarily the result of a higher mix of lower-margin business, planned increase in costs to support future growth and the negative impact of higher raw material prices. I'd also add that the negative impact of currency movements between the 2 periods also contributed. Below operating income, interest expense was $82 million compared to $90 million last year. In the prior year-to-date period, we had a $39 million loss on retirement of debt compared with a $6 million loss this year.

Tax expense for 2012 was $253 million, which compares to $127 million in 2011. As I mentioned earlier, the company's interest tax expense results primarily from the valuation allowance reversal. Special benefits totaling $13 million were recognized in the current year-to-date period compared with $20 million for the first 9 months of 2011. At the bottom line, we reported GAAP net earnings of $4.58 per share, which compares to GAAP net earnings of $5.57 last year. Again, on a pro forma adjusted basis, year-to-date earnings per share were flat year-on-year. And finally, in terms of EBITDA, we had $1,244,000,000, a very, very good result considering the difficult conditions in our largest market.

Let me shift now to our cash flow and capital structure. First, on operating cash flow, for the quarter, we had $156 million, which compares to $160 million in 2011. Capital expenditures for the quarter were $125 million, slightly lower compared with last year. Free cash flow, which I'm defining as operating cash flow less capital expenditures, was a positive $31 million this quarter compared to $23 million last year. For the first 9 months, we had an outflow of $80 million compared with an inflow of $208 million last year. Capital expenditures at $325 million during the year-to-date period was $21 million higher compared to last year's level.

Despite the year-on-year decline in free cash flow through September, which is consistent with our internal projections, the company continues to expect a strong cash flow result in the fourth quarter, resulting in a good outcome for the full year 2012. At the end of our third quarter, our total gross debt was $1,464,000,000, while net debt outstanding was $491 million, both in great shape. In fact, total debt established a new low for the company.

In addition to ending the quarter with a very manageable level of debt, the company took steps to further enhance the flexibility and strength of the capital structure by completing the refinancing of our credit facility. The new credit agreement, which serves as a key component of the company's capital structure, offers many benefits. In addition to increasing the size of the undrawn revolver from $1 billion to $1.4 billion and extending maturity to 2017, the agreement also decreases our borrowing costs. The terms and covenants have also been revised to reflect TRW's recent operating performance and significant deleveraging that has taken place over the past few years.

With regard to the repurchase program, as we announced on October 1, TRW's Board of Directors authorized a $1 billion, 2-year share repurchase program. Purchases will commence during the fourth quarter of this year. We view this as an important step in demonstrating the company's ongoing commitment to delivering value to its shareholders. The program should not be considered a one-and-done event as the company has and will continue to evaluate various options to provide value to our shareholders over time.

Switching subjects now to the remainder of 2012. As John discussed, TRW's full year 2012 production forecasts are for 15.2 million units in North America and 18.7 million in Europe. We have also updated our currency assumptions to current spot levels. These assumptions should translate to full year sales for TRW ranging between $16.2 billion and $16.3 billion, up slightly from last year. A very positive outcome considering the decline in European vehicle production and the negative impact of currency movements between the 2 periods.

This would imply fourth quarter sales ranging between $3.8 billion and $3.9 billion, slightly lower than last year. Similar to the quarter just ended, currency is expected to negatively impact the year-on-year comparison. At this point, that impact is estimated at about $100 million. Our capital spending forecast for the full year will likely come in at the lower end of the range we provided earlier. Let's call it approximately $650 million, due primarily to timing of certain projects that will move into next year.

Restructuring expense for the full year will be about $75 million to $85 million, reflecting John's earlier comments. Primarily all of that expense is concentrated in Europe. In addition to the restructuring, TRW's fourth quarter results will be impacted by a noncash charge associated with U.S. retirees and former employees that elect to participate in the buyout program currently in process. The exact size of that charge is not known at this time as the election window has not yet closed.

Moving on. Full year interest expense is expected to be about $110 million given the cost and level of debt for the company. And although difficult to predict, we don't expect any impact for net commodity inflation in the fourth quarter. With that said, the full year impact will be about $30 million, most of which occurred in the first half of the year. Costs associated with our growth plans will be approximately $15 million in Q4.

Based on the items just mentioned and the volatility we're seeing in Europe, we anticipate that our Q4 operating margin will improve sequentially compared to the quarter just completed. However, it's unlikely margins will approach the mid-7s level achieved in last year's fourth quarter. Finally, given our expected results by geographic location, you should continue to assume a full year 2012 effective tax rate of between 30% and 32% for modeling purposes.

In closing, we're pleased with our performance posted during the first 9 months of the year. However, as I mentioned at the start of my comments, we recognize a lot of work -- a lot of hard work lies ahead in order to finish the year strong. Our focus and commitment to growing the business, generating substantial cash and strengthening our market position has served us well in the past and will continue to drive long-term success for the company.

We'll now move to the question-and-answer portion of this call.

Question-and-Answer Session

Operator

[Operator Instructions] We will take our first question from Brett Hoselton with KeyBanc.

Brett D. Hoselton - KeyBanc Capital Markets Inc., Research Division

I guess we have one question. So restructuring, $65 million to $75 million. Joe, can you talk a little bit about the potential savings and timing, maybe what the payback period is or the amount of savings, and then when do you think it might impact your results?

Joseph S. Cantie

Right. So it's $65 million to $75 million will be the estimate that we provided for the fourth quarter. We have taken about $7 million or $8 million year-to-date restructuring. So the full year, probably somewhere in that $75 million to $80 million zone. When I look at the restructuring that we're doing, as we mentioned, it's all primarily in Europe -- not primarily, it's all in Europe. And as you know, the payback to those types of investments tends to be longer than what we're typically accustomed to or used to in North America. So I do expect it to follow that typical 2- to 3-year payback. There is a portion of those charges that are relating to adjusting our headcount. A lot of it is salaried and indirects, but there are some that are directs. It will involve 2 plant closures, and that, I see, is just being adjusting the workforce to the new reality of what volumes are expected to be over the next couple of years. So in taking all that together, it will be a bit of a longer payback than we're used to in North America.

Brett D. Hoselton - KeyBanc Capital Markets Inc., Research Division

And then as you think about the kind of the full implementation of it, do you think that you're going to have it completed by, let's say, midyear 2013 or sooner or later?

John C. Plant

We're going to have an extended period. So some will start in the first quarter, some won't finish till the fourth quarter of 2013. And so it's basically, it's a 2013 implementation for the majority of this.

Brett D. Hoselton - KeyBanc Capital Markets Inc., Research Division

And then also on the CapEx, $650 million guidance for the full year, it looks like you spent $325 million year-to-date. So obviously a fairly material step up as you move into the fourth quarter. I know that typically, you do spend a lot of money in the fourth quarter, but that seems like a very material step up. Is there a -- what's really driving that?

Joseph S. Cantie

Yes, it's very seasonal, and it's very close to what we did last year, Brett, as well. So if you compare it to our last year's fourth quarter CapEx, it's that -- not that far off. One of the biggest things that's going on obviously, is we're in the process of these 11 plants that we're either building brand-new or some of them are expansions. And a lot of the CapEx timing into this fourth quarter goes into the timing of when those plants are coming up. So nothing unusual compared to last year, maybe slightly higher. And that slightly higher component is really related to the timing of when we're bringing up some of the plants and especially in the emerging markets.

John C. Plant

I think the most important thing about CapEx, though, is you look at it, it's been an upswing in last year, an upswing this year. And it will be, I suspect, heavy in 2013, really to measure up that future growth rate we've talked about from '14 onwards.

Operator

Our next question comes from Chris Ceraso with Crédit Suisse.

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Maybe just a question to start on the pension buyout. I think I missed some of those comments. Can you give me an idea of the size of the population that's being offered the buyout and maybe just to help us scope that? If 100% of the people took the buyout, how much of the liability would go away?

Joseph S. Cantie

Yes, I can provide some scoping. We don't know what the actual results will be because the election period is still open. It basically pertains to our U.S. deferred vesteds and retirees. That's a total population of just over 20,000. Based on our -- based on what we expect to have happen, Chris, we expect that the liability associated with those taking the offer could be somewhere in that $300 million zone. So the scope at our total liability at the beginning of the year for our U.S. pensions was about $1.1 billion. And if successful, $300 million of that hopefully will be defeased [ph] .

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Okay. Perfect. And then maybe looking ahead a little bit to next year or second half of next year, I know that there's a lot of new business coming up. One of the things that we've seen with some other suppliers is when they have a lot of new business, they're finding some trouble in their Tier 2 and Tier 3 supply base, where a lot of capacity has come out. Can you give us some idea or some comfort around your launches for second half '13 and into '14 that your Tier 2 and Tier 3 supply base is in good shape and you're not going to have launch issues when the time comes?

John C. Plant

We've been on this multi-year march in terms of improving the overall quality of our supply base, Chris. And if you look at it, despite all of the increases that have been coming at us in, say, in North America and China over the last -- and Brazil over the last, let's say 2, 3 years, we probably had very little by way of supplier disruption. I'm not going to say 0. We've had our moments on castings in terms of supply constraints. But essentially, we've been, I think, clear thinking, very, say, planful about these step ups. And so we're hoping that we continue the current trend, which is basically very limited and hopefully no supply -- supplier issues at all.

Christopher J. Ceraso - Crédit Suisse AG, Research Division

Okay. And then just the last one housekeeping item, did you buyback any stock in the quarter? Did you mention what that was?

Joseph S. Cantie

We did not. We hit our max under the previous approval limit. And the new $1 billion program, we couldn't actually buy until we got into an open period.

Operator

[Operator Instructions]

John C. Plant

I think we are very cognizant of the fact that we have major disruption in the financial district in New York at the moment. So we're expecting possibly a light attendance on the call this morning, and also maybe we have other companies going at the same time. So unless there are any other calls?

Mark Oswald

With that, I think we'll proceed to wrap up. Mandy?

Operator

Yes, sir. This does conclude today's conference call. We appreciate your participation. You may disconnect at this time.

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