Good morning and welcome to the Third Quarter 2020 General Electric Company Earnings Conference Call. My name is Brandon and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session [Operator Instructions]. Please note this conference is being recorded. And I will now turn it over to Steve Winoker. You may begin, sir.

Thanks, Brandon. Good morning and welcome to GE's third quarter 2020 earnings call. I'm joined by our Chairman and CEO, Larry Culp; and CFO, Carolina Dybeck Happe. Before we start, I'd like to remind you that the press release and presentation are available on our website. Note that some of the statements we're making are forward-looking and are based on our best view of the world and our businesses as we see them today. As described in our SEC filings and on our website, these elements can change as the world changes. With that, I'll hand the call over to Larry.

Steve, thank you. Good to be here with you and Carolina in the same room for an earnings call for the very first time. Good morning, everyone. I'm encouraged by our progress in the third quarter. Despite the ongoing effects of the COVID-19 pandemic on our year-to-date results, we're building momentum across GE. And our top-line remains pressured, but our actions are driving an improved profitability and cash performance. In the quarter, Industrial revenue was down 12% organically. This was largely driven by aviation and healthcare, renewables and power were all up. Industrial margin was 5.6%, an organic contraction of 310 basis points year-over-year. Notably, all segments returned to positive territory for the first time in two years. Adjusted EPS was $0.06 down year-over-year but up sequentially, and Industrial free cash flow came in at a positive $500 million. Our sequential improvement was largely driven by better working capital and earnings. While positive and a good sign, we have plenty more work to do here. Let me focus on orders down 28% organically for a moment. Over 75% of this pressure was driven by aviation, as well as part of healthcare, the places it hurt us by the pandemic. In power and renewables some pressure results from our actions to be more selective in our commercial activities, and some is timing, where we should see stronger conversion in the fourth quarter. Despite this, our backlog remains a real strength at $384 billion. 80% is in services where we enjoy healthy margin. And while services are hurting in the near-term, they have a long multi-year time horizon and keep us close to our customers. By business, at Aviation and GECAS, we're managing these businesses aggressively and saw sequential improvement. Aviation is on track to deliver more than $1 billion of cost…

Thanks, Larry. Diving into the quarter. Our results are better sequentially, but remain challenged overall. This is particularly true in Aviation, our segment hit hardest by the pandemic. So the recovery and path forward would look and feel different with each business, market conditions are stabilizing. We're also driving impact with our cost out actions. Year-to-date, we've reduced headcount by more than 15,000 or 8%. And we expect to reach about 20,000 or 10% by year-end, and we're seeing operational improvement, especially in Power and Renewables. Looking at our consolidated results, which I'll speak to on an organic basis. Orders were down 28%. On the services front, Aviation remains the most pressured while Power and Healthcare were each flat. Backlog was relatively flat in year-over-year and sequentially with puts and takes between segments. Profitability in our backlog remains attractive as the majority is in services. Industrial revenue was also down but to a lesser extent in orders down 12%. Despite the difficult environment, all segments delivered revenue growth, except Aviation. And all Industrial segments delivered positive profit in the quarter. Our countermeasures continue to accumulate with a more immediate effect in Healthcare, where the margins expanded 260 basis points. In our longer cycle businesses, results improved after second quarter lows, but at more measured rate. Turning to EPS. Let me highlight three differences between continuing and adjusted. On restructuring, we spent 200 million in the quarter. For 2020, we still expect to spend more on restructuring versus prior year, with most of the benefits accruing in '21. We also reserved $100 million for legacy SEC matters. And on the impairment charge, this was related to our recent decision to exit the new build coal power market within Steam. Excluding these items as well as gains, mark-to-markets and non-operating benefits, adjusted…

Carolina, thank you. Our transformation of GE is accelerating. In September, we introduced a new purpose statement for the company. We arrive to the challenge of building a world that works. This is more true than ever as we continue to deliver for our customers and tackle the world's biggest challenges, from precision health to the safe return to flight to the energy transition. Climate change is undoubtedly a massive challenge and one where the technology advancements we deliver for our customers will play an important role. We've also been reducing greenhouse gas emissions from our own facilities since 2004, and we met our most recent goal for 2020 early, reducing our emission by 21%. Now we're strengthening our sustainability pledge by committing to be carbon neutral in our facilities and operations by 2030. Our strategy to achieve this is threefold: first, we'll boost our operational investments over time to achieve energy efficiencies; second, smart power sourcing will enable us to reduce our emissions from the grid; and finally, we'll use lean practices to eliminate energy waste. Separately, we announced that we will pursue an exit from the new build coal power market. This decision highlights the interplay we are seeing between decarbonization, market dynamics and our own business strategy. Taking a step back, as I reflect on 2 years in at GE, what gives me confidence in GE's future are our fundamental strengths. In what continues to be a difficult operating environment, our team continues to show humility, transparency and focus every day. Looking across GE, we continue to build on our legacy of innovation, leading with technology. This was evidenced by some big wins in the quarter. Gas Power was awarded a large equipment contract with Taiwan Power Company featuring the 7HA.03, which optimally balances power output efficiency and maintainability. Additionally, renewables finalized the supply contract with Dogger Bank for what will become the world's largest offshore wind farm. In Healthcare, we introduced a number of AI-enhanced products to make our customer workflows more efficient, including our Vivid Ultra Edition and cardiovascular ultrasound. And Aviation received certification from the U.S. FAA for the GE9X, the world's most powerful commercial engine and designed to be the most fuel-efficient GE has ever built. And at the same time, our technologies are uniquely capable of helping solve the climate change challenge. We're raising the bar in reducing carbon emissions and increasing efficiency. We're delighted that Gas Power's 7HA turbines will supply the first purpose-built hydrogen burning power plant in the U.S. By 2030, the plan is expected to run on 100% hydrogen. And there's no company with the scale of GE's global reach, brand, talent and long-term customer relationship. In all, we're encouraged by our progress amidst a challenging backdrop. We remain focused on the long term, not only in terms of our ability to perform, but to realize our purpose in the full potential of GE. With that, Steve, go to questions.

Thanks, Larry. Before we open the line, I'd ask everyone in the queue to consider your fellow analysts again and ask just 1 question so we can get to as many people as possible. Brandon, can you please open the line?

[Operator Instructions] And from RBC Capital Markets, we have Deane Dray. Please go ahead.

Appreciate all the detail here. Since free cash flow is the primary operating metric that we're focused on. I'd love to hear from Carolina a bit more about the goals on inventory. You mentioned 2 turns. What's the target? How much more can you go? And then maybe, Larry, you can contribute on the thoughts on rationalizing CapEx. I know there are trade-offs that you're making every day here in terms of not wanting to compromise growth opportunities coming out. But where does the CapEx stand in that thought here?

Thanks, Deane. So let me start then on the working capital. I think to better understand working capital, you sort of have to take a step back. So I try to look at it for the full year so far and then I'll end with the opportunities because it's sort of 1 dose with the other. So it's a big focus area for us. And to start with, we have a lot more to do. I mean, there are several large moving pieces in our cash flow, mostly around Aviation and Renewables. So if we start with receivables, our year-to-date cash flow is actually impacted by 2 billion lower reduced factoring alone, right? So we've used 5.1 billion so far and $2 billion of that is really reducing factoring. Some of the lower volume, some was our decision. And underlying that, we are making progress on the DSO, especially in Power, Renewables and Healthcare, but we have seen pressure in Aviation. But I do see there's a big opportunity also going forward in improving our underlying DSOs. I would say, in all areas. And one good example is how gas is working. With Scott and the team improved both overdues, and they have significantly reduced their [daily associate] more than 10 days basically. So there's more to come there in all areas. And then, of course, it will be balanced between the growing sales and also factoring. Moving to inventory. I would say at this point of the year, typically, our inventory is a significant working capital drag, right, because we build inventory for the first 3 quarters and then we deliver a lot in the fourth quarter. So this year, basically, we started the year by building the first quarter, then COVID hitting and then working really hard to…

Deane, I would just add on CapEx briefly. We don't want to ever be in a position where we're underinvesting in innovation. There I say, safety or quality. But that said, I think 1 of the beauties -- 1 of the benefits we'll get from a true lean transformation at GE, if we'll just have a, I think, a sharper, more critical eye with respect to how we think about capital more broadly, not only in terms of when we need capital, but then when we see a need, how do we go about it, right? Because there's so many -- I was in a facility just last week, for example, I won't name the business. I don't know who I'm talking about, where it was clear that as we were tackling a particular project in that business that I'm not sure we had the shortest leash on the team with respect to capital, right? We were looking at other measures of success. So as we implement that philosophy more broadly, I think we'll have an opportunity to spend less. On the other hand, of course, we're going to look for every opportunity we can to put money to work smartly around new products, around new technologies, let alone, enhancing safety and quality in our facilities and in our field operations.

From JPMorgan, we have Steve Tusa. Please go ahead.

Just a quick follow-up on that receivables comment. Note 4 seem to have a lot of activity on that front. You said that the factoring was a headwind in the quarter. Maybe it was a headwind in the year. Can you just maybe clarify that? And then also, the messaging in July was definitely not confident on positive free cash flow in the second half. And the messaging with regards to the options pricing suggested that there was also not much improvement through August. So I guess like what happened timing-wise in September that really kind of flipped the switch on that? Or was -- or was it just -- you guys were just incrementally cautious sitting there in kind of late July. I'm just kind of curious, you talked about linearity of cash flows through the quarter. And it just seems like this is kind of a big inflection here late in the quarter given some of those dynamics.

Steve, why don't I start with the factoring? In the quarter, our factoring balance is slightly up, $8.1 billion versus $7.7 billion in the previous quarter and with penetration basically flat. But year-to-date, it's almost $2 billion decrease. And that's when you look at the working capital of $5 billion usage, $2 billion of that is decreasing factoring, and we expect to continue to do so.

Steve, I would say that what we've been dealing with, given the COVID dynamics, is a host of uncertainties with the passage of time, have become less so. I think our last public comments suggest that we thought the second half would be positive. We never talked about a specific number with respect to the third quarter. And again, given the progress on the $2 billion of cost actions, the $3 billion of cash actions, I think what was a very strong quarter on the part of our Healthcare business, and the lack of any further deterioration of note in Aviation, allowed us to put the quarter that you see here, the $500 million of free cash together. I mean I would just add, I think we're encouraged by the turnarounds at both Power and in Renewables. We came into the year knowing that 2020 was going to be an important year for both businesses to demonstrate traction in that regard. And whether you look at the sequential improvements, whether you look at the year-on-year margin expansion or the setup, particularly for our Gas Power business going into next year when we think we'll be cash flow positive, I just think there's a lot of progress in those businesses despite some of the timing dynamics that we've seen, particularly with respect to outage execution, again, more back half loaded than first half loaded. So it's a game of inches. We've never been in a more challenging environment. But I think as the year has played out, certainly, as the fall here has played out, we're, again, encouraged by what we see from the businesses broadly. But are taking little for granted.

From Deutsche Bank, we have Nicole DeBlase. Please go ahead.

So maybe we can talk a little bit about inheritance taxes. That's part of the bridge from 2020 to 2021. Can you just maybe talk about an update as to where that stands? Sure.

Nicole, I think we used that phrase from the early days when I joined the company, just to describe some of the things, some of the legacy issues that we were wrestling with. But we don't talk about those dynamics the same way internally. And I think we need to start talking about them in the way that is more aligned with how we're running the business. So you've got a better sense of those things that we have control of versus those that are running off, right? We've talked previously about those headwinds decreasing from $4 billion last year to $2 billion next year and a host of issues like legal pension, supply chain, finance, recourse factoring and, of course, restructuring. I think as we come in here to the fourth quarter, I think we're doing better in 2020 than we thought. And we know next year's restructuring cash is going to be higher given the announcement around the new build coal exit and some of the additional Aviation actions. So I think the lift next year is going to be a little less than what we thought, but on balance over the 2 years in line. I think as we go forward, let's think about 3 things. One, restructuring, which we're going to continue to evaluate on expected returns. I think those are very much within our control. Carolina mentioned factoring, right? Better part of $2 billion year-to-date of a headwind from a factoring reduction. Those are actions that I think are largely within our control. And then the other items that should come down over time, whether it's some of the UK and Alstom-related pension dynamics, and some of the legal settlements that are a little harder to predict. But I think on balance, it's part of the setup for us to deliver positive free cash flow in '21.

Next, we have from Goldman Sachs, Joe Ritchie. Please go ahead.

So guys, look, it's great to see the progress that you're making. Just across the entity and specifically on free cash flow. I know there's been a lot of focus there. But maybe just kind of focusing on the $2.5 billion number for the fourth quarter. Larry, your MO historically has been to be conservative when you set goal posts like this. And as you kind of think about the 4Q number, there's -- I'm trying to understand how much of it is within your control, whether it's your higher margin businesses, improving the cash restructuring actions that you have coming through? I'm just trying to understand exactly how much is already within your control versus what you need help with from the market to get to $2.5 billion plus in 4Q?

Sure. Joe, I appreciate that feedback on my MO. We're just trying to build and improve here at GE. But when we say at least 2.5 billion in the fourth, I think what we're saying is that, again, we're going to see the cash -- the cost and cash actions that we've talked about previously play through. I think we're going to see sequential improvement in profit in 3 of the 4 segments. I think renewables is likely to be more flattish in that regard, right? And as we get the $2 billion of cost fully implemented, that should play through and be a cash flow benefit.

Yes. And I would add to that, the comment on working capital then. We have typical Q4 seasonality that holds this year as well, especially from Power and Renewables. And then we have our own management actions. So I see for the fourth quarter really benefits on the working capital, primarily coming from continued inventory reduction and a lift from payables as the volumes start to normalize, although on a lower levels. We expect to see sequentially improved progress collections or basically less of a drag, especially with Gas Power and Renewables, more than offsetting the Aviation pressure. I think on receivables, we have a headwind just because of the sort of Q4 sequential growth, but we continue our collections work. So that one will also depend a bit sort of collections versus factoring.

And Joe, I would just add that when you ask about the market, some of the things that are outside of our control, I'd really say we're going to look to do the best we can across the board. Probably have a little bit more variability or uncertainty at Aviation, right? Departures is an important measure for us. We'll see how that plays out. I think we mentioned in our prepared remarks, external shop businesses where we don't have as much visibility compared to what we have with respect to our own activity. Shipments out of the airframers, triggers our AD&A obligations, our working capital dynamic there that could go against us. And I think we've shared before that we have past due, particularly on our military business. We're not happy with that. We can clear some of that. That will be helpful. If we don't, obviously not. So a few things that are still in play. But I think, again, between the cost and cash actions, earnings, working capital that Carolina highlighted, we think at least 2.5 billion is the right outlook at this point, given what we know and don't.

From Wolfe Research, we have Nigel Coe. Please go ahead.

So I guess, we've called cash quite well here. So let's move on to power. I think you mentioned, Larry, that the pipeline of activity and potentially orders in 4Q looks pretty good in Power. So maybe just talk about what you're seeing there. And on Gas Power services, I think you said sort of flattish to maybe slightly down in Gas Power services. I'm wondering, as we go into 4Q and as we start getting some significantly easier comps there, do you think that we are moving into kind of growth mode back of power services? And maybe just give us some indication of how the moving pieces there are tracking?

Sure. I think that in contrast to last year, Gas Power, that was more front-loaded from an orders perspective. We'll see things be more back-loaded there. I think some of the wins that we have referenced should convert into orders in the fourth quarter. That's what when we talked about the conversion. That's what we were alluding to. So we think that we're looking at a 25 gig to 30 gig market over time. That will bounce around. But I think as we exit this year, we're encouraged by what we see, both from a pending orders perspective and from a pipeline view. With respect to services, Nigel, I would say the story is not wildly different here in late October. Utilization has been fairly consistent. We've seen that read through to CSAs. I think Carolina referenced the pressure we have seen. I think that’s a function of COVID, frankly. On upgrades, at least in part, we need to evolve the product roadmap, but we know we had some opportunities in the Middle East, for example, that have just been pressured and then some, given the oil price dynamics. And then there's a transactional dynamic. What I'm probably most encouraged by, and we’ve referenced the strategic reviews, we were with the Gas Power team just a few weeks ago. Scott has reset his services leadership. So we have new leaders in, in many of the critical roles. I was just really encouraged by the way they're getting back to some fundamentals. We need to improve our execution, both operationally and commercially in the transactional book. The same thing applies with respect to upgrades, even though that will be tougher. I had the opportunity -- they took me to a little field trip a few weeks ago, I went to a CSA site and a transactional site. Fascinating to see how the differences in the work play out, given the nature of those transactions. So we need to show you that we can take better care of our customers if we can get back to driving a little bit of growth in this business and levering our best grower, but we think we can do better, and we can get good conversion on that activity. And that's what we aim to show you in the coming quarters.

From Barclays, we have Julian Mitchell. Please go ahead.

Maybe just wanted to circle back on to working capital, I'm afraid. So look, this year, it looks like it's maybe a $4 billion headwind on cash. Last year it was about $3 billion. So it’s sort of $7 billion cash out over 2 years. Given everything you talked about earlier in this call, should we expect a very material tailwind there next year? And perhaps more specifically, in Aviation, it's puzzling in a way on the outside, but working capital has been a headwind there, whether the market is very good or very bad. And you've seen 3 years in a row of working cap headwinds to Aviation. Given we've got 2 months to go until next year, what can you tell us about your expectations for Aviation working capital next year? I'm assuming some of these supplier terms that are written and so forth start to become a bit easier next year.

Yes. Well, thanks for the question. No, you're right. We've had a significant use of working capital. Of course, the reality is that you have to take working capital into context with the business and how it's growing or not growing, right? So it's been a significant shift this year from the beginning of the year with strong growth and then sort of the rest of the year in many places working on reducing to the new level. If we look at next year, again, specifically for Aviation, a lot will depend on how the top-line develops in Aviation, right? Because that also shows on the receivable side and also the level of DSO. We are working, and John Slattery and the team are working very hard on improving our collections and the processes to the collections. So I would say, on the receivable, it's really a function of where the top-line will be as well as our efforts in factoring, plus underlying improvement on the DSO. On the inventory side, having started with a strong growth trajectory and now working to take it down. There's clearly more to do on the inventory side for the term in Aviation, and they are working on it. And it's not a quick fix. So we expect to see improvement next year on the inventory to sort of come to the new lower level. Then on the payable side, I mean this year, payable for Aviation sort of took the big adjustment on lower levels. So it's been a big drag for Aviation this year in payables. But going forward, with sort of a stabilization of the situation, we would expect the payables also to be a positive. Progress, well, it's a little bit a mix of how much goes out and how much comes in, right? So it's very dependent on the order situation, but it’s just not going to be for us a big drag as it is this year. And you remember, we had the big MRO order also from military that we got in progress this year, which is sort of going to be used next year. So I would say that's all 4 of them. So good opportunities, both on inventory and receivables, but also on payables, more as a function of the situation and progressing sort of more market dependent.

From Citigroup, we Andy Kaplowitz. Please go ahead.

Larry. So you've talked about positive cash flow for 2021. I know everybody is sort of asking about it. Maybe if there's a finer point on the bridge into 2021. You've obviously got these cost actions in Aviation. You've talked about the inheritance taxes. Is there any other sort of puts and takes that we talk about by division? You did have very strong cash in Healthcare. So can you talk about the sustainability of that as you go into 2021?

Okay. So maybe let me start then. Rightly, as you say, I mean, earnings is going to be a key driver, and we will see some gradual improvement in some of the end markets, like in Aviation and Healthcare. A big, big part is our self-help, the 2020 cost and cash actions, right? We talked about that there is $2 billion this year in cash and -- sorry, costs entry in cash. But that annualizes to $1.5 billion to $2 billion of structural costs out and that flows down to the free cash flow, right? So that will see a carryover for next year on that. And we're working to increase that number, simply said. I talked about factoring. Factoring has been a significant headwind in 2020. So we don't expect this to repeat at the same level in 2021. Also, the non-repeat of the Aviation payables outflow as the market stabilizes will help. It will be partially offset by progress. And then we'll have what we talked about, or Larry mentioned on inheritance items, we see less of a lift from that in '21.

Andy, and I’d just -- I think we've got the line of sight that Carolina has talked about. We're going to go through detailed reviews with the businesses here in November to put a finer point on all of that. But to me, I hope what you see a little bit here in the third quarter, I think what we're going to demonstrate in the fourth quarter is this operational transformation is gathering momentum. And a number of the things we've talked about commercially, be it just increasing visibility, enhancing our win rate, while being more selective, turning that into better underwriting and then ultimately, execution, particularly in and around projects in Power and Renewables, all of that -- the cumulative effect of those small wins, again, that game of inches, daily management, I think is what we aim to deliver here.

From Vertical Research, we have Jeff Sprague. Please go ahead.

It's nice to see the positive cash flow. Can we just spend a minute on the SEC here? I guess the question is kind of the basis on which you reserve $100 million. I mean, do you have visibility on that number? Was it just untenable to not book anything given the fact that this has now been formalized? And just your comfort that that's kind of in the right zip code of what the total cost might be?

So Jeff, as we have disclosed, we've been cooperating with the SEC on its investigation on several legacy matters, and they relate to insurance, long-term service agreements and the goodwill charge at Power in 2018. And we recorded a reserve in the third quarter of $100 million, and we believe that that's appropriate under the circumstances, and that's to address all of the issues covered in the SEC investigation.

But that's based on some kind of historical analysis of prior situations. So I guess that's really the question, how you derive that number?

Jeff, I would -- as Carolina said, I think we're cooperating with the commission, and I think we take that reserve at that level, given our view on what's appropriate, given the circumstances. And other than that, we really are not at liberty to say more publicly.

From UBS, we have Markus Mittermaier. Please go ahead.

Just on Power free cash flow, please. If we -- I understand sort of the moving pieces in the near-term here. But if you look at the glide path specifically in that business, you provide a lot of helpful granularity, I think, in the appendix on the gas side. So I'm kind of intrigued by the exit on the new builds for -- on the Steam side. So how much of your capital infrastructure in place within Steam do you need or fixed cost, I should say, do you need to kind of keep that business going, I guess, on the service side, if you're saying is exiting ultimately the newbuild side? Because we've not really focused on the fixed costs that you have within Power on the Steam side. So I'm just wondering how much upside there could be on the overall Power fixed cost base here going forward?

Markus, you're exactly right. When you think about the Steam business, right, we've got both, if you will, capacity that serves the coal new build market in addition to the nuclear business and a service platform that serves both markets. I think that that's a business that has been challenged, where we have not necessarily made all the progress we have made in Gas Power. Part of the announcement that we have signaled with respect to the newbuild exit with respect to coal will allow us to take more cost, more fixed cost, as you say, I don't believe in fixed cost, frankly, but the cost there that we can lean out. And then we'll continue to look for opportunities throughout the rest of that portfolio. So the team has made progress a number of legacy dynamics in play, particularly in Steam. So we're not yet where we are in Gas Power, but working very hard. And I think as we remix that business more towards services we'll shed that cost, and it will be a better contributor to GE going forward, albeit one that's unlikely to have a robust top-line growth trajectory.

From Bank of America, we have Andrew Obin. Please go ahead.

Just a question on Aviation. You had lower charges around long-term service agreements in third quarter versus the first half. How much of the CSA book has been renegotiated, given lower schedule size? And sort of a broader question, and I think Larry sort of talked about working with customers, how do you work with your customers to keep them from sort of going to the third parties in this environment, in Aviation?

So Andrew, to start with the CSA charges, they're lower than expected. Well, I think we should keep in mind that in the second quarter, we really took an aggressive look at all our CSA contracts in relation with what happened -- what is happening with COVID and our expectations going forward. So we took a $600 million charge for COVID impact. This quarter, we saw some impact, but that was from higher costs coming out of the CSA margin reviews, it's about [100 million], but that's no change to our earlier forecast on the outlook on the CSAs, right? I think it's important to remember this sort of models that are really long-term in nature, and it's really bottom-up modeling, and it's sort of estimated future billings versus future cost to serve up to 15 to 20 years, right? So with that said, we are mindful of the situation. We are, of course, monitoring the sort of current utilization trends and looking at bankruptcies, frankly, but we haven't seen anything that is -- that changed our estimates from the second quarter, and that's why we don't have any other impairments on the book in the third quarter.

Andrew, with respect to how we serve and how we compete, I would just add that it's important for everyone to remember that we have an active network of partners that do shop visits for the airlines that we supply into, right? We don't do all that work in our own shops. So that support continues. I think part of what we wanted to do having Russell slide over to Aviation, take on that more broadly defined Aviation services business is to make sure that we are synchronizing better what we do from a repair and overhaul perspective with the commercial side of the business. So whether it be helping carriers execute different scopes, be it providing better delivery to our third parties, managing green time as everybody is as we work through cash conservation with the airlines. That's just a set of daily operational issues that, that business has managed. They manage well over really decades. I think we're seeing particular pressure here today, but encouraged by what we see already with Russell and the team managing through the COVID period here.

Thank you. We're out of time at this point. We will now turn it back to Steve for final remarks.

Thanks, Brandon. Thanks, Larry, Carolina, and everybody for dialing in. As always, my team and I will be available for follow-up. I know we're past the hour. But appreciate you staying with us and look forward to speaking with you. Thanks very much, everybody.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.