CNH Industrial NV (CNHI) 2010 Q4 法說會逐字稿

Good morning, ladies and gentlemen and welcome to today's CNH fourth-quarter results 2010 conference call.

For your information, today's conference is being recorded.

At this time, I would like to turn the call over to Mr.

Manfred Markevitch, Head of IR.

Please go ahead, sir.

Thank you, Jana.

Good morning and good afternoon, everyone.

We would like to welcome you to the CNH 2010 fourth-quarter and full-year earnings conference call.

Just a quick introduction.

I would like to remind everybody they can refer to page 3 of our presentation, which was distributed today and posted on the Internet regarding certain forward-looking statements.

Also all information that will be used in the conference call today is available on our website at www.CNH.com.

Today we will have the presentation by Rich Tobin, the CFO of CNH Global, followed by a short Q&A session.

We have with us today Rich Tobin; Harold Boyanovsky, CEO of CNH; and Marco Casalino, our Treasurer.

We would like to begin with a brief presentation.

With that, I will hand over to Rich.

Thank you, Manfred.

Good morning, good afternoon, whatever the case may be.

We will start on slide 4, which is the highlights for the quarter and the full year.

Net sales of equipment of $3.8 billion, up 17% in the fourth quarter and $14.5 billion for the year, up 13%.

Agricultural equipment was up 13.7% in the fourth quarter.

Construction equipment up 32% in the fourth quarter with 8% on ag for the full year and 39% for the full year in construction equipment.

Equipment operations operating profit increased $75 million compared to Q4 2009 and $0.5 billion as compared to the full year of 2009.

Q4 operating margin increased to 4.7% as compared to 3.1% in Q4 2009 and full-year operating margin of 6.1% as compared to 2.9% in 2009.

Equipment operations net cash position increased by $1.7 billion to $2.2 billion on the full year and we will get into some of the drivers which is principally a restructuring of the debt portfolio and very good cash flow from the group for the full year.

Net income before restructuring and exceptional items was $216 million in the fourth quarter and $0.5 billion for the full year.

You see the bottom of slide 4, both the Q4 and full year -- that is a typo -- full year 2010 on a basic diluted and pre- and post-restructuring and exceptional items.

Moving to slide 5.

This is just the numerical figures that I just talked to you a moment on a full-year basis, so I won't go through all of those figures.

But you can see changes in net sales, equipment, operations, operating profit, net income before restructuring, and exceptional items is $0.5 billion as compared to a loss of $115 million in 2009.

And equipment operating cash flow for the year of $1.8 billion as compared to $1.2 billion in the previous year.

Moving to slide 6, net sales by geographic region for the full year, I won't read all the percentages.

I think that we will deal with the rate of change when you see the arrows in between the final 2010 column and the far right column based on what we had spoken to you at then end of Q3 versus what actually happened.

As you can see, full-year rate of change is 17% on the full year.

You can see that Western Europe actually turned around a negative position in Q4.

So the rate of change between the first three Qs and Q4, Western Europe tractor sales were up actually 12% during the quarter.

And as we had spoke about at the end of Q3 and as expected that sales face and headwinds in Brazil.

So sales were down in Q4 as a rate of change versus the first three Qs.

We had curtailed production as expected during Q4 in Brazil to level load our inventory.

We can get into that on the cash flow statement itself.

So overall, good performance across a wide geographical spread, really no surprises in terms of what we had expected at the end of Q3 versus what has been delivered.

I think that the most hopeful sign was the rate of change in Western European demand for equipment and it's looking right now that that is going to continue into at least at minimum the first half of 2011.

Moving to slide 7, same type of analysis both on the net sales and an operating profit level.

Just using some absolute numbers, the increase between 2009 and 2010 was very similar between construction equipment and ag both at $826 million and $865 million for ag.

And in terms of operating profit change, up $231 million in absolute at agricultural and call it $400 million on construction equipment.

And as expected, incremental margins were both beneficial to our gross margin reported for the full year.

So on a full-year basis, ag incremental margins of 27%.

And as you would expect on the CE side that had curtailed production significantly in 2009, that incremental margin in CE were close to 50% year-over-year.

This was a function of increased capacity utilization and the benefits of restructuring charges taken in 2009 rolling forward into 2010.

Moving to slide 8, this is the equipment operations operating profit.

Evolution for the full year, you can see volume and mix of $266 million, net pricing positive at $109 million for the full year.

Production costs at $205 million.

SG&A was up year-over-year, principally driven for reserves for bonus payments.

R&D up as expected, principally driven by the transition to Tier 4 technology, though that is being launched as we speak.

So you see the walk between $373 million to let's call it rounding up $900 million for the full year.

Moving to slide 9, on the contribution or our equipment operations JVs, you see in the far hand right corner, as we've been seeing all year most if not all of our JVs have moved into a profit position versus the prior year.

The same drivers with JVs are the same drivers that you see in the consolidated group.

So on the ag side, improved performance on the back of better commodity prices in 2010 and demand versus 2009 and a recovery in the construction equipment margins.

You can see in the middle of the presentation, the global joint ventures continued to improve contributions, so Russia, the KAMAZ joint venture is beginning to start in a real way in Q4 in terms of assembly of tractors and construction equipment plan for 2011.

China, we have just approved an investment for the capacity expansion in China, which will be completed in 2011.

Turkey had a fantastic year, strongly recovering from a 2009 slump in (inaudible).

Tractor demand and the whole good imports for combines.

India, I think that we covered that quite significantly and in Q3 in terms of what our investment plans for 2011 were going to be, that's at pace and that is at capacity expansion both for tractor assembly and component parts that will be delivered for the balance of our global network.

And as Pakistan seeing a bounce back from a very, very weak 2009 for a positive contribution.

As you can see from the top right-hand corner from a full year '09 loss of $50 million to a full-year profit of $90 million of net income, which is a positive contributor to EPS expansion year-over-year.

Slide 10, equipment operations, change in net debt cash for the full year.

Concentrate on the bottom of the slide primarily you can see cash change in working capital year-over-year.

So close to $800 million driven by a relatively small increase in account receivable despite the fact that the topline grew significantly 2009 to 2010, so a good performance there.

A reduction in inventories of $323 million despite the fact that sales were up and we were building, for the most part building into those increased sales for the year.

The profile of our inventory has been improved quite significantly so the inventory liquidation of 2008 and 2009 residual production is largely completed.

So not only have we been able to reduce inventory, the quality of our inventory going into 2011 is significantly improved from the prior 24 months.

And accounts payable increased, which is just a reflection of the increased production performance year-over-year to 2009.

Some more color on the inventory.

You can see the full year and that is CNH produced retails versus CNH production and the walk on both company inventory and dealer inventory.

So you can see on the ag side, we underproduced in Q4 slightly to retail.

That's a function of really three items, some better-than-expected sales of residual Tier 3 equipment in the United States or the American market in Q4.

Good demand in Western Europe, I mentioned earlier that tractor sales were up 12% quarter-to-quarter in Western Europe, and some of the recovery which had a positive influence on standing inventories in Western Europe.

And a curtailment of production in Brazil that we mentioned in Q3, which was due to the market slowing down and thus level loading our inventory positions in South America.

So from that point of view, I think that we feel -- back to the comment before -- that right now in terms of FMS, we are at either par or better with the industry, the reports, dealer and company inventory based on forward month look in sales.

On the Construction Equipment side, again in Q4, and underproduction versus retail, sales were flat Q3 to Q4 in construction equipment.

Production was down Q3 to Q4 and that is largely as a result of the transition to new product launches during the quarter.

Slide 12, I'll move fast.

That's a placeholder moving to slide 13.

I will go over these relatively quickly.

I think it's no surprise that commodity prices on the ag side are proactive to demand, were proactive to demand in 2010 in terms of increases in farm income.

We don't see any sign of that abating in 2011 going into the year, which would be proactive to demand, which allows us to forecast an up to 10% increase in revenue year-over-year.

So you see both the charts in terms of the variety of the commodities, corn, soybeans, and wheat and you take a look at the chart which are both based on IHS Global Insight data on net farm income, so both of the major metrics absolute pricing in commodities and net farm income are positive moving into 2011, which should be positive in terms of farmers spending money on agricultural equipment.

In Construction Equipment, it's a little bit different.

While markets have improved year-over-year, we spent most of the year in Western Europe which was really showing very little sign of improvement overall.

Developed markets, demand still is largely related to replacement of aging fleets, so not an overall bullish demand in terms of the consumption of Construction Equipment.

But the fact of the matter is that after almost 24 months of low levels of activity in terms of demand that naturally that those fleets need to be replaced.

We are seeing good signs of that.

We have been seeing it for several quarters in the United States and beginning to see it in Western Europe.

The two markets that held up during the year were obviously the Asian market in China, where CNH has a relatively small participation of the Chinese market, and Brazil, where CNH has a substantial market share and strong position.

The Brazilian market, which is beginning to flatten or flattened into Q4 over a year, so the rate of change is beginning to slow, but the overall demand were quite constructive going into 2011.

Slide 15 is industry performance for 2010 and the relative CNH performance on a full year basis really not a substantial change that we have seen through the first three quarters.

So fourth-quarter performance didn't really change the full-year quarter much with the exception of on combine demand, where we outperformed in Western Europe during Q4, which was a good sign.

But the balance of industry performance to CNH performance has been reasonably flat for the full year, underperforming in the low horsepower ag sector as we prepare for new product launches in 2011.

Some underperformance in the Brazilian market in Construction Equipment, which is largely related to capacity constraints that we are rectifying in 2011 with plant capacity expansions at our two factories in Belo Horizonte and Sorocaba.

Slide 16, the New Holland ag side continues to expand its broader product offering.

I think that we've released a significant amount of information in terms of what our plans are on Tier 4.

And as we mentioned over the last couple of quarters, it's largely not solely a Tier 4 story going into 2011.

A lot of these products will be reengineered not only to meet emissions requirements going -- that are being enacted for 2011, but there's performance upgrades and restyling across the portfolio.

These are several or a few examples of the much wider rejuvenation of the portfolio on the New Holland side in both high horsepower tractor sprayers and the compact segments.

Same thing for the Case IH brand.

On the cotton picker segments of high horsepower tractor and some innovation in terms of precision farming, during 2011 we spent a considerable amount of time in 2010 developing or finalizing a strategy going forward for precision farming.

I think we will have some news flow on that if not at the end of Q1, slightly after of what our plans are for both brands on the ag side in terms of precision farming.

Moving to slide 18 and the Construction Equipment segment, I think that we've given a significant view on where the timing of the launches are in previous presentations.

All of those launches are on pace, so nothing has really changed.

We've got the new skid steer loader and backhoe which have been introduced in the marketplace.

Coming in 2011 is the new wheel loader product that you can see some of the information on in slide 18.

And then you see on slide 19, more of the innovation on the crawler, dozer, and new crawler excavator product lines, which are all being designed for improved performance and in certain cases for Tier 4 introduction during the year or during the latter half of the year.

Moving to slide 20 is a view, a full year outlook on both the Agricultural and Construction Equipment segment, which is done by product class and by region.

So you can see both that worldwide we expect flat to plus 5% on tractor volume between 2010, 2011.

What is influencing that is, as you can see, is a negative 5%.

On the Latin America side, we're taking a cautious stance on Latin America until the end of Q1 when we believe we will have some news flow in terms of what the policy of the Brazilian government is going to be in terms of demand and whether that negatively or positively influences it.

So I think that's going to be more of a Q1 answer.

I think that we are taking somewhat of a cautious stance on rest of the world markets that are showing signs of inflationary economies and some amount of tightening.

Whether that will offset the positive aspects of rate and commodity prices I think that we are just going to take a cautious view there, so you see the rest of world tractor demand zero -- flat to 5%.

Worldwide and combine segment, we're forecasting 5% to 10%.

That's back on the back of proactive commodity prices and you can see the splits between North America, Western Europe, Latin America, and rest of world markets.

On the Construction Equipment side, forecasting demands on the light of 8% to 12%, you can see the market performance.

We are taking a somewhat cautious view on the rest of world market for the same reasons that I mentioned in terms of inflationary environment and some amount of tightening.

I think that that's an area that we will take a look closely and have some more color at the end of Q1.

And then worldwide 5% to 10%, which seemed that -- and that is largely as results that we've seen some slowdown in the Chinese market in terms of demand in Q4.

Whether that rolls into 2011 it's a little bit hard to tell and I think that we need to get a quarter under our belt before we have a solid view of 2011 in terms of the Asian market and demand for heavy construction equipment.

The last slide of the base presentation is the 2011 outlook, which was in the press release that was released earlier today.

New agricultural tractors equipped with Tier 4A/Stage IIIB engines available for retail at the end of the first quarter.

Construction equipment portfolio renewal includes the launches of new wheeled and crawler excavators, wheel loaders in Tier 4/A Stage IIIB configurations.

And in terms of financial guidance, moving into 2011, revenues on a constant currency basis are expected to be as much as up to 10% as compared to the full year of 2010.

Operating margins expected to be between 7.1% and 7.9% consistent with our strategic business plan that was announced on April 21 of 2010.

And that's the final slide of the main presentation.

You will see that there is a significant amount of information in the backup portions, which gives a level of granularity in terms of expectations down to the regional level.

All of the quarterly slides are there.

And I think, Manfred, that's it for the base presentation.

We are ready to open it up for the Q&A.

Okay.

Thank you, Rich (inaudible).

Then we will go on with the Q&A session, please.

(Operator Instructions) Gregg Williams, JPMorgan.

A couple of questions.

Just on 10-Q first, if I look it your operating profit evolution on page 28, I'm a little bit surprised to see net pricing in negative.

Could you just talk about that and what your expectation is going into 2011?

The reason it's negative going into the Q4 was basically positive net pricing for whole goods was offset by increased input costs of pricing of raw materials in Q4, which is primarily on the steel side and the rubber side.

Our expectation with our guidance that we had given for 2011 takes into account what we can see now in Q4 and we've got the developing position whether those costs continue to escalate.

But the guidance that we give you in terms of revenue and operating margin takes into account what we can see right now in those two primary areas.

Can you quantify the pricing in dollars versus the input costs in dollars, give me the exact amount?

Give you the minus 31?

Well, it's in positive pricing, it's approximately $60 million to $70 million, so you can do the math there.

Okay, now are you saying that net in 2011 you expect there to be a headwind?

Well, we've taken into our guidance what we can see in Q4.

So on a full year basis, 2010 to 2011, and what we can see in Q4 is a headwind.

But we've taken that into account of what we can see into our guidance that we've given in terms of operating margins

Now, whether that position deteriorates or flat lines through 2011, I think until the end of Q1, we will have to see.

Okay, that's helpful and just from a forecasting standpoint.

And then you mentioned in the presentation that you're going to announce your strategy for both brands and precision farming.

Could you expand a little bit on that?

We did comment at Ag Connect that it was interesting that New Holland was not there, considering that I suppose in hindsight it doesn't really play in the precision farming sector.

Can you just expand on what we should expect out of that -- the strategy for both brands in precision?

Ann, this is Harold.

Let me comment about Ag Connect.

Sorry I missed you there, but the reason that Case IH was the predominant display, they were one of the early supporters of this new ag show and they still remain a strong sponsor because of the strength in the large cash grain grow crop sectors.

And the New Holland brand chooses to make their marketing commitments and focus in other areas.

So we have really let Case IH focus on that show as an initial sponsor of the event.

Any more color on what we should expect when you articulate your strategy for both brands in precision farming?

I think it's fair to say that both brands will be adequately represented in any growth new technology relative to precision farming.

Okay, Harold, I appreciate that.

Just one final one because I don't want to hog the Q&A.

Can you just talk a little bit about the fundamentals in Eastern Europe in places like Russia?

I mean, we look at the price of wheat, we look at the conditions that are going to require us to increase production in 2011.

Is there any listening in terms of import tariffs or financing in the region or what are your expectations specifically for that region for 2011?

For sure, if you look at the CIS holistically, the issues of tariffs, financial credits are still there today as they were in 2010.

We do not see that changing.

We would hope that with the particularly the wheat price being what it is, it would help them recover from the weakness in production in 2010 and that we would see some increased demand as we go through the year.

But we are not forecasting the market to return to the 2008 levels.

Okay, so at this point from what you can see where you're at, you hope things will get better.

Is that the right way to kind of frame it?

Yes, I mean in 2010 at least for CNH, our combine business was up significantly.

Round numbers I think we sold an extra 300 units over 2009 in the area.

Okay, Harold.

I will leave it at that and perhaps we can meet up at CEMA since we missed you at Ag Connect.

I look forward to that.

Okay.

Take care, guys.

Andrew Obin, Merrill Lynch.

Yes, hi.

Good morning.

Just a question on incremental margins and how we should be thinking about them going into 2011.

Looking at your press release, it seems to be a combination in Europe, a function of European utilization in ag.

And on CE, we are facing with a headwind from retooling costs.

So I guess those will go away as we will raise production, but then of course we have a drag from raw materials, which was somewhat unexpected.

Historically I think raw materials when they went up, inflation generally has been good for you guys.

So how should we be thinking about operating leverage working itself through 2011 both in construction and ag?

Okay, it's both an overall construction and an ag answer and then we have to I guess split its by geography to a certain extent.

So you may get a longer answer than you'd like, but --

I like long answers.

Fair enough, Andrew.

Look, let's deal with capacity utilization first and foremost.

Yes, there was a drag in Q4 on the construction equipment side in terms of capacity utilization and what the impact of that changeover for the retooling of the launches in both Italy and the US in terms of manufacturing plants, I think the best way to look at that is revenue was almost flat Q3 to Q4 in construction equipment but margins down.

The bulk of that margin dilution is because of the lost production performance of that changeover.

Just to put it in some kind of perspective.

Now there's a lot of moving parts but I think that's a good approximation of the difference between operating margin and what we incurred during that period.

Now, the good news is -- which I don't think anybody has picked up yet, is that while we had to take the negative of the changeover for the retooling for those factories, which is three of them predominantly, basically the factories that make this skid steer and backhoe product line.

It allowed us to continue to liquidate our inventory position predominantly in Europe.

So while we took it -- while we had the lost absorption in Q4 from a cash flow perspective, it was pretty good for us because of the net reduction in inventory.

Now, going into 2011, as we mentioned on the call I think that our guidance for 2011 takes into account what we can see in terms of our own input cost escalation, which is primarily steel and rubber for the most part.

So I think that that's why there's a little bit of a range in terms of our operating income.

That takes a variety of different scenarios in terms of input costs, but it also has to take into account as you know a wide distribution of mix, both product and geography, where margin performance is really all over the map.

But the fact of the matter is in terms of production performance going in 2011, ag ran at a pretty good rate, so in a 70% capacity utilization rate.

We don't expect that to change a lot in 2011, but the fact of the matter is where the increase is going to be we expect it to be almost all in Europe where we are running at -- 70% is a global average.

We were running significantly less than that in Europe.

So the benefit that we are going to get on the incremental units as far as we can see right now should be in Europe, so we should have a -- I don't want to call it disproportional but a very good effect in terms of leverage, which year-over-year should be pretty much within the same range of what we can see in terms of commodity headwinds.

So one should offset the other and then we just get the benefit of the gross margin on the increased sales.

Is that long enough?

Yes, that's pretty good.

I guess the follow-up question as I look at your balance sheet, you've done a fantastic job in terms of working capital in Q4.

And based on my calculation, you basically have over $2 billion of free -- well, cash sitting on the balance sheet.

How much of it is yours?

How should we be thinking of it particularly after the split from Fiat now that you are part of Fiat Industrial?

How should I be thinking about this cash?

And frankly, what are you guys going to do with this balance sheet if it's all your cash?

Okay, well, before we answer the question of whether it's ours or not, I will let Marco answer that as the Treasurer for the group.

But I think that what you are leaning towards is kind of more of a Fiat Industrial question in terms of what -- because at the end of the day, CNH is CNH.

Right.

Is it fair enough that we've got a cash credit cash balance which is great, which is very good performance in terms of increase of sales and working capital.

There is -- the CNH answer is all the cash is ours.

Right?

There is an issue of how much liquidity the group need standing liquidity to run the business from a working capital perspective.

I will let Marco deal with that and I hope we're not going into the discussion about Fiat cash pools and your cash or not, but I'll let Marco answer.

But at the end of the day, it is our cash.

We need -- (multiple speakers) billion to run the business.

But I guess the question I have, there is a big difference between this cash being part of big Fiat organization where you have auto -- I mean truck is not that big.

So if I'm thinking on January 1, basically should I be thinking that the cash balance that we've seen at CNH prior to the split, effectively the same cash balances that are going to be there first week of January?

Is that the right way of thinking about it?

Yes, absolutely.

I can add a few comments.

First of all, I will reiterate the cash is ours.

If you look at our balance sheet, part of that flows in from bank [datas].

Part of that was on Fiat affiliates.

(inaudible) and then start operating until January 1.

Fiat S.p.A.

returned that $1.6 billion of cash so you can see on their account as of end of December, clearly to invest cash on January on January 1.

So what I can tell you is that there are no currently cash or debt relationships with Fiat anymore.

I think to finish up on the subject hopefully, Andrew, is two things, is that if you remember from our strategic business plan that our R&D spending goes up sequentially through the plan.

So there is quite a bit of increased capital spending going into 2011 so we can expect from cash flow perspective comparison because of the very good performance in terms of networking capital, especially inventory, the so-called inventory liquidation period is over.

So that excess cash generation of drawing down that 2008 production is over.

So now it's going to be more or less how well do we match retail sales with production going into 2011?

So we have some needs for cash going -- you can't just take a look at 2010 and then roll forward that kind of cash generation.

No, no, no, but looking at the end of -- as I'm thinking about 2011 and about your cash flow generation, it's not that there will be a huge payback in terms of need to massively rebuild working capital.

Is it just normal working capital use as you ramp up production?

There is no one-time big payback, right?

No, no.

You can expect our working capital to be self-liquidating.

So it's going to look like an accordion if we do it right, rights along with our revenue line.

So there is no excess net working capital need going into 2011.

That's what we expect now.

Now over the year in the second half of the year, it becomes more of a question of what does 2012 look like?

And whether we have to -- you know -- hopefully we are building inventory into an expected good performance for 2012.

Okay, well, this sounds very good.

Thank you very much.

Henry Kirn, UBS.

Good morning, guys.

Is it possible to give a quantification to the Q4 product launch cost?

Yes, I will repeat myself.

But if you look -- the launch costs were primarily burdened the construction equipment segment, so if you look at Q3 to Q4 sales, it's basically flat Q to Q.

But you have dilution in the margin.

The substantially most of that is related to launch costs and/or curtailment of production for [utility].

And switching over to your work, could you talk about in North America the Tier opportunity, what you are seeing so far and the reception from the customers?

And what you could see for share in '11 versus '10?

Yes, order boards remain quite strong.

I will give you a couple of global numbers.

Our tractor retail order board is up 29% over the same period last year and our self-propelled combine order board is up 21%.

Construction equipment retail order board is up a third from a year ago.

And if we look specifically to your question about North America orders relative to Tier 3, Tier 4 tractors, the Tier 4 vehicles will start to hit dealer yards the end of the quarter.

And right now our order boards are covered through the spring tillage season.

So our order boards and looking strong through March and April.

One more, if I could.

One product launch question.

Do you see any more costs in the first and second quarter?

Yes, we will see the same on the ag side.

It's a little bit different on the ag side because of where we are launching products.

Predominantly in ag we have multiple production lines as opposed to some of the plants that we did on the construction equipment side where there is cycle production lines.

So the expectation is that we manage a little bit better but the fact of the matter is yes, we will incur launch costs in Q1 for these products.

Very helpful.

Thank you very much.

Jerry Revich, Goldman Sachs.

Harold, excellent performance out of your joint venture businesses.

I am wondering if you can give is the rough break out of profits by region for that business and color on ag versus CE?

And also talk about what your outlook for 2011 anticipates out of those businesses?

Thank you.

Yes, by practice we don't break out the profitability and by business in the JVs.

I could say this though that we expect a similar performance to this year.

For sure if we look at the KCM or the Kobelco, Japan, that's all construction equipment.

If you look at India, the consolidated -- so company-owned is all agricultural tractors.

China is predominantly agricultural tractors.

The JV with SAIC and also our company-owned operation in Harbin.

So the predominant revenues coming out of the JVs are agriculture would be the --

Harold, any Eastern Europe impact in there?

Well, as Rich indicated, KAMAZ is coming up to stream but very -- we have very little forecast for sales revenue in that JV in the base plant.

So a lot depends upon the recovery in Russia and we will just see.

Thank you.

Rich or Marco, what's the outstanding equipment operation's receivables balance that corresponds to that $62 million interest charge to financial services line item?

What page are you referring to, Jerry?

So in the breakout of your income statement for equipment ops versus financial services, so that's page 9, interest compensation for financial services $62 million expense.

What is the sold receivables balance that ties to that?

I don't have that in front of me.

You want the receivable balance at the capital group that ties back to the interests comp?

Yes, because (multiple speakers)

You know, we will send you something on that.

I don't have that handy right here, Jerry.

(Operator Instructions).

We have no further questions at this time.

Thank you, operator.

So at this stage, I would like to thank you, everybody, for joining today's call.

And as always, the information is available as well on our website, www.CNH.com.

We look forward to seeing you or to talking to you for your questions and again, back on Q1 release in April 2001.

Thank you very much.

Thanks for joining.

This will conclude today's conference call.

Thank you for your participation, ladies and gentlemen.

You may now disconnect.