General Motors Company (GM) Q3 2013 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company Third Quarter 2013 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded, Wednesday, October 30, 2013. I would now like to turn the call over to Randy Arickx, Executive Director of Communications and Investor Relations. Please go ahead, sir.

Thanks, operator. Good morning and thank you for joining us, as we review the GM financial results for the third quarter of 2013. A press release was issued this morning and the conference call materials are available on our Investor Relations website. We are also broadcasting this call live on the internet. Before we begin, I would like to direct your attention to the legend regarding forward-looking statements on the first page of the chart set. The content of our call will be governed by this language. This morning, Dan Akerson, General Motors Chairman and CEO will provide opening remarks, followed by a review of the financial results, with Dan Ammann, Executive Vice President and CFO. Dan Akerson will then conclude the remarks portion of our call with some closing comments. After the presentation portion of the call, we will open the line for questions from the analyst community. In the room today, we also have Tom Timko, Vice President, Controller and Chief Accounting Officer; Chuck Stevens, CFO, GM North America; and Jim Davlin, Vice President, Finance and Treasurer. Now I will turn the call over to Dan Akerson.

Thanks, Randy. Every quarter on these calls, we talk a lot about what it takes to go from being good to great at General Motors. Fundamentally, I believe there are three drivers: building great products; satisfying our customers better than anyone else, and making sure the company has good bones. In my book, good bones means a fortress balance sheet and a strong organizational – an organization with capabilities and everything from IT to HR, to marketing to finance – all of these things, from products to people to technology have to come together to build a sustainable competitive advantage and they are doing just that. As you can see it in the numbers we are posting this quarter. Looking at the top of Slide 2, you can see that we increased our third quarter global deliveries by 5.5% and grew our global market share by one-tenth of a point. Net revenue increased by $1.4 billion and EBIT adjusted was up 15% to $2.6 billion. This $300 million increase was driven by higher earnings in North America and South America, a small increase in China and a smaller loss in Europe and another very solid quarter for GM Financial. GM Financial, I would like to point out, has now surpassed $2 billion in cumulative pre-tax earnings since we acquired the company in the second half of 2010. Two of our automotive operating regions also deserve special recognition. First, the team in North America has done a great job in executing a very aggressive product plan. We are talking about more than a dozen Chevrolet, Buick, GMC, and Cadillac launches so far this year. Combined, they represent more than 1 million sales on an annualized basis. In particular, the launches of the new Chevrolet Silverado and GMC Sierra have been nearly…

Thanks, Dan. Now on Slide 4, I will start with a summary of our financial results for the quarter. Net revenue for the period was $39 billion. The $1.4 billion increase includes an $800 million unfavorable impact from foreign exchange translation. Our GAAP operating income increased to $2.3 billion. Net income to common stockholders was $700 million. The decline from the prior year was due to stronger operating performance, being more than offset by an incremental $500 million in tax expense and the $800 million charge we took to redeem a portion of the Series A preferred stock during this quarter. Diluted earnings per share came in at $0.45 and our automotive net cash from operating activities was $3.3 billion, up $200 million from 2012. For our non-GAAP measures, EBIT adjusted was $2.6 billion in the third quarter and the EBIT adjusted margin improved to 6.8%. Adjusted automotive free cash flow increased $100 million to $1.3 billion for the third quarter. Slide 5 lists the special items for the quarter. Again net income to common stockholders was $700 million and our fully diluted EPS was $0.45. We took another impairment of goodwill in the GM Korea business that was less than $100 million. In addition, we booked an $800 million charge for our recent redemption of Series A preferred shares. These charges had a $0.51 unfavorable impact on earnings per share. On Slide 6, we show our consolidated EBIT adjusted for the prior five quarters. Our 6.8% EBIT adjusted margin is our highest in nine quarters. Our consolidated wholesale vehicle sales were 1.6 million vehicles in the third quarter, a slight increase from the prior year and our global market share increased to 11.7%. Turning Slide 7, we explain the $300 million year-over-year increase in our consolidated EBIT adjusted. As…

Thanks, Dan. For all of us successfully enjoying the third quarter let me make one thing perfectly clear, we have a lot of hard work ahead of us especially in our focus areas of complexity reduction, material costs, logistics cost and quality. I can assure you the team is very focused on making steady progress. Consistency is the name of the game. Given how far we’ve come and what is just over the horizon, we’re all pleased with our position and feel we’re well positioned for the future. And when we have great products that wed into competitive cost structure, I think we’re in a unstoppable position. Now, we’ll be happy to take any questions you might have. Thank you.

Thank you. (Operator Instructions). Our first question comes from the line of Brian Johnson at Barclays. Please proceed with your question. Brian Johnson – Barclays Capital: Good morning. I want to just focus on an overall strategic question, we can later on drill into the details afterwards, but there seems to be an emerging market SUV boom going on. Sales up 45% in China, other emerging markets gravitating towards SUVs and even the Europeans showing signs of following the SUV craze. A couple of questions, one, where do you think GM is positioned on that now? Two, quickly can you beef up your product lines in key markets for SUVs? And then three, what kind of factory flexibility do you have to be able to pivot between sedans and SUVs as perhaps gas prices fluctuate or tastes change?

First of all we would agree with the general observation of the market trends. Our position relative to that market trend differs by market around the world. There are places where we are the very forefront of the trend, like in Europe with the Mokka, I think we have really redefined that segment, there is an example. There are other places where we are not exactly where we want to be from a product timing point of view and so we are obviously working to make sure that we are going to capitalize on the trends as we see them emerging. And then finally from a plant flexibility point of view, as you know I think many of the SUV programs both for us and for other manufacturers, [indiscernible] car derived from an architectural point of view so we have a pretty high amount of flexibility from a manufacturing perspective to meet that demand once we have the product localized. So it is clearly an opportunity, it is clearly a longer term trend and we feel good about where we are in parts of it and we are working to capitalize it in other places.

Our next question comes from the line of Colin Langan with UBS. Please proceed with your question. Colin Langan –UBS: Okay, thanks for taking my question. Do you have any color on the reported production, or supply issues around the new pick-up, I think there was a new engine component that constrained and there was some axle issues, will that impact you at all going forward in terms of sales or production as we go in to Q4?

This is Chuck. We have had some short term issues with American Axle around some specific components. We are working very closely with them and it has had a small impact on production in the month of October but we expect to make that up here yet in Q4 and have no impact on the full size SUV launch. So there is a lot of focused attention being given to this and we expect to be resolved here in the relatively near term. Colin Langan –UBS: And what about the reported issue with some engine components, is that impacting your availability of some of the V8s?

No, the biggest issue is really around some axle components right now that impacts the mix of V8s. Colin Langan –UBS: And so we should, with the ramp rolling out, pick-up production will likely rise from Q3 to Q4 as two of the plants are on line?

Well I think those are two different questions. First, we lost some units thus far in the month of October because of some part shortages which we expect to make up. Secondly I think there will be a seasonal Q4 versus Q3 impact on full sized pick-up and SUV production as well as others specifically because we will have holiday shutdown in Q4 and we didn’t shut down any of the plants in July during the changeover. Colin Langan –UBS: Okay, very helpful. Any color, any update on the Peugeot Alliance, obviously I think they were out saying that some parts of the Alliance were under review, I mean how does that impact your restructuring plan in Europe and the potential billion dollars in savings that the Alliance is supposed to -- the savings to achieve eventually?

This is Dan Akerson speaking. It is fair to say that we still are working with regard to specific platforms that we see potential benefit for both companies. We are watching the situation carefully, there apparent need to raise additional capital, how that might fit with our plan, but I would say there is nothing new to report until we ascertain precisely what comes out of their capital raise endeavors.

The only thing I would add to that is that a year ago on this call when we outlined our plan to break even in Europe by mid-decade, we said then, and I will reiterate it now, that plan did not include any assumption of material synergies from the PSA Alliance. Colin Langan –UBS: Okay, great, thank you very much for your help.

Our next question comes from the line of Rod Lache with Deutsche Bank. Please proceed with your question. Rod Lache – Deutsche Bank: Good morning everybody. On North America you just did 9.3% margin in what is at least historically it has been a relatively weaker quarter, I would imagine maybe it comes down a little bit in the fourth quarter with a heavy duty truck plant down and seasonal costs. But can you talk a little bit about, if we look at this level of profitability, what happens from here as we look out to next year, is it conceivable that you might be able to get to that target, the 10% target, a little bit sooner?

I think Q3 in this year that 9.3% highest quarter since Q3 2011 obviously favorably impacted by the K2 launch as you indicated, you know, I think from a seasonal perspective there will be a falloff in Q4. And I don’t think you can necessarily extrapolate these Q3 earnings over calendar year. I would say this that we’re at an inflection point, we’re executing to the plan that we talked about earlier this year to drive the organization to 10% EBIT margins. And I would expect on a year-over-year basis to see some pretty significant margin growth next year. Rod Lache – Deutsche Bank: Okay. And just one last one, you’re sitting on $26 billion or $27 billion of cash, you’ve got obviously plenty of liquidity above and beyond that with the revolver, could you just remind us what you’re targeting as a normal level of cash going forward and what your priorities would be above and beyond the reinvestment in the business?

I want to say, we’re comfortable or more than comfortable with our current levels of liquidity. Recall that at the quarter end there was a $1.2 billion sitting there which we’ve now redeemed the Canadian Healthcare Trust note with in October, so the balance sheet was slightly grossed up as of the quarter end. The priorities for cash reinvestment haven’t changed, we’re obviously focused on reinvesting in the business, making sure we got a winning product portfolio going forward and our capital expenditure levels, I think, have reflected that and they’re being consistent with what we had previously articulated. My view is that we’ve come a long way with the balance sheet and we have it in very good shape. we obviously had a very, I think, compelling refinancing transaction that we executed in September, taking advantage of the market window there to clean up some near-term and expensive obligations and replace them with longer data and much more efficient funding. And so that puts us in a good position going forward. As we look to next year, we obviously still have the remaining portion of the Series A preferred that we will clean up at the end of next year when that becomes actionable from a return to the security point-of-view. We still have shareholders working their way out of our ownership structure, that’s something that we’re keeping a close eye on. And obviously our priority over time is to return cash to shareholders and that’s something that we continue to evaluate. Rod Lache – Deutsche Bank: Okay. Thank you.

Our next question comes from the line of John Murphy of Bank of America-Merrill Lynch. Please proceed with your question. John Murphy – Bank of America-Merrill Lynch: Good morning, guys. Maybe just a follow-up on the North American margin question that Rajesh posed. I mean, we’re staring down the barrel of the K2XX launch which is going on right now. You have the HD launch which comes up after that. And then as we look over the next couple of years you got your small SUVs and large SUVs and the market is doing pretty well and you’re doing – tap with [ph] 96.4% right now, looks like that will improve over time and you’re posting 9.3% margins now. I mean, is 10% a ceiling, Chuck, or is that something you think you can do over the cycle? I mean, is there a period of time where you could potentially be higher than that?

Our objective is to drive this business to +10% EBIT margins by mid-decade and really to generate those kinds of margins at mid-cycle volumes as we’ve talked about before which would be an industry level of 15.5 million, 16 million units. We’re at the early stages of executing to that plan, the product portfolio and launch cadence is the first part of it, we need to continue to drive complexity and cost out of the business to get the cost savings that we need to take the next tranche. So, is there a point where we could be above 10% EBIT margins during the cycle? Possibly. But our commitment is to get to 10% by mid-decade. Once we get there we’ll worry about the next step. John Murphy – Bank of America-Merrill Lynch: Okay. Seems like you’re almost there. Maybe –

As I said, John, we shouldn’t extrapolate Q3 over the calendar year, you know there’s ebbs-and-flows within the quarter, so. John Murphy – Bank of America-Merrill Lynch: Absolutely. But it’s impressive so far. And maybe just one second question for Dan Akerson. I noticed that your hiring trends on the hourly side were not that aggressive but on the salary side it looks like you hired about 5,000 workers and it looks like it’s a focus on ramping up your IT. Is that an effort, really, just to clean up some of the in-house stuff or is there an opportunity to start mining data and marketing consumers more intelligently or some big data push here that could really push the business forward? I’m just trying to understand what that big step up in IT professionals is for?

Well, we were – I won’t recite all of the tens of IT path but we had 23 un-mirrored, not connected independent data centers we are trying to get to two. We now have a data center here in Michigan that ranks in with Google and Facebook in terms of the capability, one of the few in the industrial sector with that capability.

Over the last month, just this month we have taken all of the mainframes that were not resident in our sphere of influence and consolidated them without a hitch to the operation. Having been in the high tech environment for a good part of my career, I was very pleased with the transition to our data centers. Along with that we have transitioned away from some of our outsource costs and brought it in and that is the majority of Alliance, more of 90% of our head count has been in IT this year. So that is a positive from my perspective because we aren’t paying the overhead for those people that we were once paying to our third party. And yes we are a very big data driven company and you can see it just in our marketing. I don’t think it should go without passing to note that we want people to start buying cars over the Internet, it is a potential half step away from our traditional channels. It doesn’t mean we are going to try and bypass our dealers, but why not in this tech savvy culture we have, this economy we have, for the millennial to come in and say I can shop and I just go down and sign and go. So we are trying to evolve not only from an internal perspective but an external perspective to a more 21st century information based marketing company. Your observations are directionally correct, we are also trying to clean up some fundamental basics in how we run the information systems of our company. John Murphy – Bank of America-Merrill Lynch: Great, thank you very much.

Our next question comes from the line of Adam Jonas with Morgan Stanley. Please proceed with your question. Adam Jonas – Morgan Stanley: Hey thanks everybody. First question is on the initial reaction to the enhanced employee discounts in the U.S. Care if you can comment on how that’s going so far, early days and perhaps to kind of dynamic, how big were these discounts as a percentage of your total retail sales pre-crisis, because we have heard figures as high as 30%, that might have meant crazy high levels but I just wanted to confirm that and see how it is going so far?

To your latter point Adam, 30% of our total sales were employee based, was that the data point? Adam Jonas – Morgan Stanley: Yes.

That is way too high. So to dispel some of the apparent myths around this employee pricing. We ended up doing two things, one, simplifying the program, we had a very complicated car line specific EVA or rebate program that was very difficult for our employees and family members to manage. So we went to a simple percent of MSRP kind of discount. Secondly, the incremental costs associated with that is relatively minor in the scheme of our overall incentive spending, you’re talking $200 to $250 a car on average. Third, that really put us in the middle of the pack, as far as employee discounts go between Ford and Chrysler and I think you’re aware especially if you get around the Great Lakes region that there is a lot of interrelationships with family members and employees that have relatives that are Ford or Chrysler employees, or retirees. So we needed to be competitive in order to make sure we were capturing our fair share of employee and related sales. So far it has been relatively successful, that is never going to move a market share point. It is just again, simplify, enhance to be competitive and make sure that we are getting our fair share of employee and related sales.

Let me just add something to that because I know you are trying to read tea leaves and get some sort of perspective that gives you a better idea of what is going on. When we look at our -- when I mentioned my remarks, incentives are down and average transaction prices are up. When we look at our competition we are 200 to 300 basis points lower than some of our competition in this area on incentives. So we have been very disciplined on our incentives and as a result our ATPs are up. That includes employees and non-employees. Adam Jonas – Morgan Stanley: Thanks for clarifying that. It’s very helpful. If I can just ask one follow-up. We understand that the CFPB has sent letters to the automotive captive finance companies, curious if you can confirm whether GM Financial received any communication from the CFPB and if so perhaps share the nature of that communication as.

We don’t have any comment on that at this point. Adam Jonas – Morgan Stanley: Does that mean that you’ve not received communication or you’re just not commenting on that question, Dan?

It means that I’m not commenting on the question. Adam Jonas – Morgan Stanley: Thank you for clarifying.

Our next question comes from the line of Patrick Archambault from Goldman Sachs. Please proceed with your question. Patrick Archambault – Goldman Sachs: Yeah. Thank you very much and good morning. Just a couple of questions on some of the international ops. Beginning with GMIO, you did see a sequential uptick from the second quarter but I think in your comments you sort of – it sounded like that you’re hinting that obviously some of the core challenges there remain. Should we interpret this as at least you’ve – even though you’re down year-on-year and running at lower level than six months ago, things have at least stabilized and you’re working to get them better or is there some risk that there is actually further downside to the profit levels you’re seeing in this segment, that would say, excluding restructuring charges, of course, which nobody can predict.

Yeah, I would say that we’re certainly not out of the woods yet that there are ongoing challenges but at the same time we’re taking actions and we’re taking actions quickly. You saw that we have – we’ve made a leadership change in the region bringing in Stefan Jacoby to head up that part of the business for us. We should expect to see changes through the business as we look to get the business back on track. You need to remember that this reporting segment is really a collection of very different markets across the big span of the globe and there are different dynamics going on in each market. We’ve talked about, for example, in Southeast Asia where the yen and the competitive dynamic there has created some challenges. We’ve had issues in India that we do talk about publicly in terms of some product related challenges there. So, it is a little bit of a different story by market. We are taking very affirmative action to get the business back on the kind of track that it should be on but this is something that we’re going to be working through over the coming quarters and you know it’s not full year results obviously at this point. Patrick Archambault – Goldman Sachs: Okay. That’s helpful. And just a similar question actually for Brazil or I should say South America. You know, you had a very good quarter there relative to expectations but you seem cautioned that there are some remaining issues there. Was there any kind of one-off that supported results either, you know, kind of an FX this year or anything like that that kind of reverses in the fourth quarter or are we just talking about sort of ongoing challenges that can hopefully sustain this level of performance?

Well, there are a lot of just external challenges in the region. From an operating environment point-of-view there has been, as is well-known, a lot of FX volatility. I think I described in some detail how we have worked to offset FX volatility with pricing in the various markets where we’ve had the biggest impacts there at the same time we do operate in some volatile economies down there, including in places like Venezuela where overall political situation remain unstable and so on. So, when you’re operating in some of those kinds of environments the business is in some ways – that we have a week-to-week activity as to exactly what the surprise of the day is going to be in terms of the external environment that you’re operating in. So, we made good progress in the quarter but we want everyone to understand that it’s a volatile environment and we’ll be dealing with those fluctuations in the coming quarters.

Just to add a little bit of more color, when we do our operating reviews in South America, just to buttress what Dan said, many times the first half hour, 40 minutes they spend trying to understand the politics and it isn’t just Venezuela, although Venezuela is one of them, but many of these economies have inflation, hyperinflation. Argentina, you have a President that became ill in the middle of an election and a turn of government could make a big impact on foreign exchange. So it is an area that isn’t a block like Europe, although you get some volatility, but not so much economic policies, variability in Europe. So it is a more challenging political plant economic area than most areas of the world, most regions of the world and we do spend more time trying to understand that. That’s the message you’re trying to deliver. Patrick Archambault – Goldman Sachs: Okay, great. Thanks a lot.

Our next question comes from the line of Ryan Brinkman of JP Morgan. Please proceed with your question. Ryan Brinkman – JP Morgan: Hi, thanks for taking my questions. Maybe just another one on North America margin; how should we think about the year-over-year contribution from pricing going forward after 3Q’s strong $600 million swing? Presumably this was still impacted by, I would guess relatively higher incentives on older model year pickups which should less of a factor going forward, and then also with the heavy duties launch in 4Q SUVs next year, is it possible that this year-over-year swing number could continue to get larger for another couple of quarters now?

I think that from a general proposition perspective, Q4 year-over-year pricing in general will feel kind of like Q3. In other words, we should have a pretty good year-over-year impact; I would say quarter-to-quarter, a bit different story because the seasonality as we move into model year ’14 as you move through that cycle, incentives historically increase. In summary, kind of Q4 year-over-year growth, quarter-to-quarter probably is a bit of a headwind. Looking into 2014, I would say there is probably going to be continued price opportunity first half of the year as we go through the launch of the HDs and the full size SUVs. And then I think it’s going to normalize a little bit second half of the year and going forward. So I don’t think we’re going to see in ’14, the same magnitude of the year-over-year price improvement as we saw ’13 versus ’12. But I still think there is an opportunity and probably in the first half of the year. Ryan Brinkman – JP Morgan: Okay, very helpful, thanks Chuck. Then just last question; can you comment on the 9.4% margin that you earned – net income margin that you earned on your China JVs. It was a bit lower versus a year ago, but obviously still very strong. How should we think about that trending over time? Should it naturally evolve lower as the China market matures and we see a higher mix of more affordable cars, more Chevys and [indiscernible] Buicks or could it even go in the other direction if you’re successful with Cadillac over there? Maybe just as a follow on to that can you sort of remind us of your aggressive plans for the Cadillac brand in China and maybe update on how the effort is going?

Sure. So overall, we’re being roughly flat from a China margin point of view for the last few quarters and it’s what you describe which is the business continues to grow. We’ve got some operating leverage. We’ve had some mix -- starting to see early mix favorability as a result of Cadillac introduction on a localized basis although it’s early days for that. And all of that is offsetting competitive price pressure on the market place. So that sort of a baseline equation that we would expect to see continue, generally hold going forward assuming that the market remains reasonably stable from a growth point of view as it has been for the last little while now. So I think that overall trend will continue. We have talked in length about the plans with Cadillac in China. We believe their market there is very much ready for Cadillac in a much bigger way than it’s been there on an import basis. We’ve started manufacturing locally. We’ve had a significant expansion on the deal and it worked over the last 12 or 18 months, but we’re still at the early stages of really getting the volume equation ramped up and something will continue to work on, not just coming quarters, but coming years. Ryan Brinkman – JP Morgan: Thanks. Congrats on the quarter.

Our next question comes from the line of Itay Michaeli from Citi. Please proceed with your question. Itay Michaeli – Citi: Great, thanks good morning. Just a two part question on Europe. One Dan, you mentioned you had started to incur restructuring charges for the Valcom [ph] closure. Do you plan on excluding those from an EBIT adjusted or those will show up in the numbers, but called out in the appendix of the future slides? And then two, can you remind us what the savings now going forward that are tied to Valcom [ph] arm? You may have already realized some with the write down and maybe some labor. But what the incremental opportunity for cost savings from Valcom [ph] is going forward?

Sure, on the restructuring, we’ve been very consistent. We view restructuring as part of the cost to doing business. And so that will be in our EBIT number and as has been our practice. We will identify it and call it out, so people can do what they want with it. Restructuring is something that carries on in this business and in this industry and we reported accordingly. In terms of the overall savings, we have not provided specific numbers in relation to Valcom [ph] we have provided our overall cost objective for getting to the break even plan, we’re talked about the $0.5 billion of incremental fixed cost reduction. Obviously capacity rationalization is a meaningful element of that along with other SG&A savings and things that we’re working on would demonstrate good cost progress so far this year and we expect to continue to build on that as we get some of these other steps behind us. Itay Michaeli – Citi: Perfect, thank you so much.

And our last question comes from the line of Jose Spak of RBC Capital Markets. Jose Spak – RBC Capital Markets: Hi, thanks and good morning everyone and thanks for taking the question. One last quick one GMNA, I didn’t hear specifically called out in the cost side anything related to the marketing for the blitz of the new launches, was that any bit of a headwind or not a real issue in the quarter?

Yeah, I would say quarter-to-quarter it was relatively immaterial, I think sequentially looking at Q4, there is going to be a fairly significant uptick in marketing part of seasonal relative to major league baseball world series, NFL and part of it supporting the ongoing Take 2 as well as the CTS launch. Jose Spak – RBC Capital Markets: Okay, great and then I realize – just on capital allocation, going back to an earlier point, realize that these are in a board decisions but can you help us think about order of operations or timing at least because it would seem that you know there has been some technical overhangs on the stock and dividend or a buy back may be a way to stimulate some demand, I know you called out some of the cars on the cash next year with the Series A et cetera but the cash flow is strong and obviously there is – it looks like it's going to get stronger so just how do we think about timing or order of operations, can any of those occur before there is further balance sheet simplification.

Yeah, like I said earlier, we’re obviously – I think we’ve made a lot of good progress on the balance sheet, we’ve been reinvesting significantly in the business so we feel like we’re getting into increasingly good shape on that with the refinancing transaction in September and so on. we are watching you know actions of some of the shareholders as they work the way out and you know whether there is any developments there and you know obviously remain fully aware of the desire on the part of our investor base to see incremental returns of capital, we obviously took a big step a year-ago or less than a year-ago, it would be $5.5 billion repurchase of that time and we’ll continue to monitor our opportunities here in the near to medium term.

I sit on the board so I’ll comment on it. This board understands our shareholders during here to you know this will turn on their money and we have a few tactical issues over the next couple of months in terms of certain shareholders that are exiting the business and that I think we demonstrated our philosophy if you were last December and we spend $5.5 billion to buy a block of our stock and return to capital to shareholder and we understand what we’re here for and wanting to return money to our shareholders and that will be a continuing thing not only this quarter but the next year and the year after.

Great. Thanks a lot for the color.

I will now turn the call back to Randy. Please continue with your presentation or closing remarks.

Thank you, operator. Thank you every one for your time and attention today.