Safran S.A.

Philippe Petitcolin - Chief Executive Officer Bernard Delpit - Group Chief Financial Officer Peter Campbell - Head, Investor Relations

Olivier Brochet - Credit Suisse Tristan Sanson - Exane Rami Myerson - Investec Zafar Khan - Société Générale David Perry - JPMorgan Harry Breach - Raymond James

Good morning, everybody. I am here with Bernard Delpit, our new CFO and Peter Campbell, who is as you may know him already the Head of Investor Relations.

We are very pleased this morning with the strong set of results we are showing you for the first half of 2015. A few words before we start.

The financial growth and next financial six months of 2015, notably it was the propulsion activities. Commercial success for the LEAP continues and we are working intensively to prepare its entry into service as well as the production ramp up.

The testing campaign made also very good progress in H1 and I will comment that a bit later. The profitable growth we are experiencing allows us to raise our profitability guidance for this year, notably on the basis of the strong H1 activity in civil aftermarket.

Another thing I want to tell you before we start. Over the second half of this year, we will refresh our medium-term plan and elaborate our 2016 budget.

We currently intend to hold a Capital Markets Day in Q1 of 2016 after our 2015 results announcement to discuss with you in depth some longer term subjects. So, let’s go to Page 2, solid operating leverage.

Sales up at 16.6%, or 5% on an organic basis, operating profits up 22.5% or 17.8% on an organic basis, and we maintained a moderate net debt lever. Growing revenue, mostly driven by aerospace services and security.

Operating margin increased, mainly driven by propulsion and the net profit is up 89%, including the sale of Ingenico Group share. Group net profit, excluding the capital gain on Ingenico, is up 20.9% in line with our adjusted EBIT.

On Page 3, you see the excellent progress of the LEAP. The LEAP development took two major steps forward in H1 2015, reinforcing even further our confidence in our ability to deliver on our commitments.

We are also preparing intensively the LEAP supply chain and production ramp up. If you look at program-by-program, the LEAP-1A had its first flight on the A320neo in May.

And as of today, 125 hours of flight test. The flight tests are doing very well.

The LEAP-1B for Boeing began its extensive flight test program on April 29 with its first flight on the modified 747 flying testbed. Engine is behaving very well and is on track for engine certification in 2016.

You will also notice that for the LEAP-1C, for the COMAC C919, we have delivered our first engine last week. On production readiness, just stress points preparing its supply chain and industrial capabilities for an unprecedented production ramp up.

To meet this huge challenge, we will do two new assembly lines totally dedicated to the LEAP in our assembly line and assembly shop in south of Paris. Page 4, very quickly, as you all know already, we had a very successful Paris Air Show reflecting with the CFM leadership, strong backlog as of today of 9,580 LEAP engines.

And we keep studying also the CFM56 with a backlog today, which is very close to 4,000 engines. At the Air Show, we logged 835 orders, the two main ones coming from Aercap for 200 LEAP-1B and from GECAS for 120 LEAP-1A.

Page 5, some business highlights on the H1 2015, you see some business highlights from the first half of 2015. We have recorded several significant commercial successes across all our businesses.

We can mention the FADEC International selected by GE for GE9X, a new engine for the Boeing 777X. We are also doing extremely well in the carbon brakes.

Defense, we had a very good order intake as well as in security. In addition, we have reinforced our partnership with Rolls-Royce in accessory gearboxes.

And in space, we should take 74% of Arianespace through our JV ASL, Airbus Safran Launchers. Page 6 positive trends in the civil aftermarket.

Civil aftermarket grew, as I said, a bit earlier, 27.8% in H1, significantly above our guidance for 2015, thanks to continuing positive trends. Therefore, we have decided to raise our fiscal year 2015 assumptions.

What is the main item of this very good performance in H1? We have more higher value shop visits on the recent CFM56 engines.

We have continued momentum on the GE90 and there was a catch-up of deferred maintenance as the airlines’ financial health improves. Now, I will let Bernard present the financial figures before coming back to you for the full year outlook.

Thank you, Philippe. I am very happy and proud to share with you for the first time Safran results.

For the moment, it’s the occasion of very strong results. I will walk you through the usual slide package, but before that I would like to reiterate the main takeaways of this first half, almost 17% growth in revenues, the essential part of that coming from currency, but 5% organic, which is very strong; record profitability, almost 14%; EBIT margin, also very strong; and a healthy financial structure further enhanced by positive cash and proceeds of Ingenico share disposal.

Let’s start with Page 9. As you all know, we have experienced a lot of FX volatility since first half 2014.

Top line benefits from weaker euro average spot rates, operating income always isolated from ForEx volatility with a hedged rate slightly improved from $1.26 to $1.25 and mark-to-market of currency derivative is negative. But as you all know its non-cash and not affecting adjusted data.

And this mark-to-market impact is at the middle of Page 10, €2.123 billion negative from the currency derivatives portfolio. And the only other figure I wanted to pick here is the €1.1 billion net profit of this first half on adjusted terms.

Page 11 as one-offs are negligible these two quarters, it leaves the profit from operation at a record 13.9% margin, up 60 bps over the first half of 2014 or up 23%. As you can see on Page 12, the 23% increase in EBIT translates in a 21% increase in net profit.

On top of that, the gain from placement of Ingenico sales leads to a €2.8 per share net profit, €1.8 per share coming from operations, and €1 per share coming from Ingenico. Two additional comments here, the limited impact of financial environment rates and FX on financial expenses have increased factors as limiters with a blended apparent tax rate of 31.3% versus 32.5% last year.

Let’s now focus on operations, strong 16.6% increase in revenues; €55 million contribution of 2014 acquisitions, mainly Eaton and Hydrep; €782 million contribution from FX, 85% of that coming from the euro/dollar variation. So, it leaves €358 million of 5% organic growth.

It was 2.4% at the end of Q1. It benefited from favorable comps as H1 experienced a slow growth in after-markets last year and it was very strong this quarter and this first half.

That’s why it explains the strong organic growth. Moving on to Page 14, strong growing – strong growth in revenues translate in strong growth in recurring income.

No scope impacts. Positive currency coming from improved hedge rate and translation of U.S.

subsidiaries profit in Safran profit, strong €170 million improvement, excluding scope and currency, it comes mainly from propulsion. Main contributor is civil aftermarket.

We also experienced positive growth for civil OE and positive contribution from the landing gear, wheels and brakes. Page 15 gives me the opportunity to add back improvement of underlying profitability is even higher than the €117 million I just mentioned.

Our R&D charge to EBIT, have increased by €87 million. This is a consequence of an expected decrease of self-funded R&D due to LEAP and A350 and an even quicker decrease of capitalized R&D with the same programs then, plus Silvercrest, who has now been active since last year.

You have the details branch-by-branch in the additional information package. Our branch concerned by high R&D impact on EBIT, excluding equipments.

Page 16 provides a brief overview of revenues and the recurring income by division. All divisions are up in terms of year-on-year growth, even if propulsion and security were the provider of organic growth.

In terms of profits, propulsion now above 21% due to aftermarket, clearly, other divisions are not where we expect them to be and I will detail with them and plans to improve that. Let’s start with aerospace propulsion on Page 17.

I think that the situation of propulsion in H1 illustrates why we are very confident of next years. 21% EBIT margin is a record starting point.

Installed base is still growing. I will remind you that we have 4 Boeing CFM56 in backlog.

Timing of shop visit is positive. Only 50% of shop visits are second shop visits.

For another 50% a head will help civil aftermarket in the coming years. So, we have here, revenues up 19.2% and EBIT up 30%, moderate growth of civil OE, soft for military OE, but no recognition of ramp on export engines at that stage.

Very strong increase in services, up 30% in euro coming from 40% increase in euro from civil aftermarket, 15% increase for helicopter services and 9% increase from military engines. Now, for Aircraft Equipment, I am on Page 18.

We faced two headwinds for this division in the first half of 2015 and those two headwinds have somehow overshadowed strong improvements of our landing gear business. Those two headwinds are pricing pressure on wiring and lower deliveries in large nacelles and thrusting business.

So, it explains why our organic growth was 1.2% negative and why profitability was just maintained around €200 million for the first half. I would like to add two comments.

First, actions are taken to mitigate pricing pressure on the wiring and H2 should be better for volumes on nacelles, and second, very good growth of services in this division, up 17% and it represents less than 30% of total revenues, but it goes in the right direction, increasing. The trend is good.

For defense, we believe the situation is temporary and it was anticipated. Revenue is up 5.5%, including scope – positive scope impacts from Eaton acquisition last year.

Two reasons for negative organic growth of €10 million, expected end of FELIN contract in Optronics with French DoD and lower deliveries of inertial navigation systems. We have maintained R&D that explains the margin level.

That being said, we are confident to catch up in H2, thanks to a strong backlog in Optronics and comps will become more favorable as the FELIN contracts started to decline last year in H2. For security, EBIT didn’t run as fast as sales, strong revenue growth, almost 8% on organic basis driven by identity and security in Europe and in the U.S.; smartcards, very strong for banks and telco industry.

Detection experienced some seasonal impacts of deliveries to airports. Q2 is better than Q1 and we believe that H2 will be better than H1.

Operating is up 3%. Volumes on identity offset by pricing pressure.

Strong cost-cutting actions already taken as it is allowed to maintain margins, but currency was negative. Lower detection revenues had kind of negative mix impact on the division blended EBIT as margins are high, but volumes were lower in H1.

After the business review, some words on the financial situation of H1, starting with FX hedging. To make the long story short, no change since April.

2015 and ‘16 fully hedged at $1.25; 2017, 85% hedged at $1.25 as well; and 2018 will benefit from today’s weaker euro with a targeted hedged rate below $1.20 and that will be very positive in 2018 as shown on Page 22. Page 23 gives you some details about our positive cash generation in H1, strong generation of cash from operating activities since the beginning of the year, almost €1.5 billion.

It’s 34% more than last year. Working capital also increased €529 million since the beginning of the year.

That is €235 million more than last year, 100% explained by inventories in propulsion, including strong FX impact. Total CapEx, both tangible and intangible, increased due to entry tickets in major programs and to the preparation of the launch of new engines.

So, positive cash and Ingenico proceeds are fully financed dividends and the reevaluation of U.S. denominated debt and that leaves the net debt unchanged compared with the end of 2014 at €1.5 billion.

Page 25, no change in terms of debt redemption schedule and available liquidity, very comfortable and flexible situation. Some words about our balance sheet on Page 26.

The balance sheet structure reflects what I just said, increasing tangible and intangible assets due to CapEx, increasing working capital due to inventories, conservative policy of provisioning with provisions up €126 million. Just a technical comment on non-current assets that increased for two reasons: higher tax base of assets due to high negative mark-to-market of derivatives and we see the rules from the financial institution, which hasn’t taken the sale of the remaining shares of Ingenico, is posted in non-recurrent assets.

Now on Page 27, low level of net guarantees to customer and a good coverage level. That’s it for me.

And now, I leave the floor to Philippe for the outlook and the conclusion.

Thank you, Bernard. Just a word on our equity shareholding, the French state sold 4% of our share capital in March, bringing the free float to 68%.

Page 30, key assumptions we take for the full year of 2015. Healthy increase in Aerospace commercial OE deliveries.

Civil aftermarket to grow by a percentage in the high teens. Previously, we said approximately 10%, and this is mainly driven by the recent CFM56 and GE90 engines.

We assume that we will have a reduction of the self-funded R&D in the order of €100 million, less spending on LEAP, A350, helicopters’ programs as all these programs mature and enter into service. We maintained a system level of tangible net CapEx, around €700 million, profitable growth in the security business, and we will continue and push our Safran+ continuous improvement plan to further improve our direct costs and reduce our overhead.

With all of this in mind, this is the outlook we proposed for 2015. The adjusted revenue is still to increase by a percentage in the high single-digits at an estimated average rate of $1.20 for the euro.

If the average spot rate of $1.12 to the euro remain throughout the full year of 2015. The revenue would consequently grow by a percentage in the low double digits.

The adjusted recurring operating income now is expected to increase by a percentage in the mid-teens. Previously, we said low double-digits at the hedge rate of $1.25 for the euro.

As previously said, the free cash flow is expected to represent 35% to 45% of the adjusted recurring operating income, and all of these bring us to a very strong confidence over the long term of our company. Thank you very much for listening to us.

Now Bernard and myself will try to answer the questions you may ask.

Yes, good morning gentlemen. I would have two questions.

The first one on FX, if you could update us on the policy, a few things appear to have changed in 2018. First of all, the gain that you expect and also the level of hedging that have been achieved moving down.

So what has happened basically on FX there? And the second question I would have would be on the acquisition by GKN of Fokker.

Does it have any influence in your view on what’s happening in the sector and specifically in the wiring domain, which appeared to have been a bit difficult for you in the first half?

I may start with the second question regarding the acquisition of Fokker by GKN and I will let Bernard answer the FX question. Fokker is a competitor of our Labinal wiring activity for years.

It’s not something new, and the acquisition of Fokker by GKN will have no impact on our business. We have a lot of long-term contracts with both Boeing, Airbus, Dassault, Embraer, Bombardier and COMAC, for example.

And we are doing extremely well with them and I do not foresee any kind of change related to this acquisition. You mentioned our difficulties – small difficulties in the wiring.

This is not determinant problem. We know what to do, and we are doing it, and we will recover very, very quickly the level of margins that you all expect.

And the level of margin is good. I want the level of margin in the wiring to be very good, so this is what we are doing today.

No change related to this GKN acquisition.

Now on FX, the first thing to say that we have the same policy, no change here, the only thing that changed that we have some knockouts that have been touched, so we have lost some optional coverage in 2018. And that thing, I think, is positive because it allows us to reduce again our target of hedge rate.

Now you see it’s below $1.20, but I want to reiterate here that there was no change in the policy of hedging of Safran.

Can I follow up on this? What will happen for ‘19 and ‘20?

Are you continuing the accumulator policy?

Yes. Well, we have some accumulators, of course.

We don’t want to have a too lumpy period of hedging because we want to benefit from a weaker euro today to reduce the hedge rate. But technically speaking, yes, we have accumulators.

And those accumulators also reversed. I mean, it helped us to mitigate the impact of forward, of leverage forward, in able to reduce again the hedge rate in the future.

Thank you.

Good morning everyone, it’s Tristan from Exane BNP Paribas. Two quick questions, please.

The first one is on Turbomeca and the performance in Q2. Can you tell us actually what happened in – on the OE part of Turbomeca.

I think that turbine deliveries were a bit quick in Q1? Do you have a recovery in Q2?

And can you explain us what was the driver of the mature growth in services that you had in helicopters as well? And the second question is on the A330 headwind that you’re having on the equipment business, the thrust reversers.

Knowing that you’re still delivering material level of sort of nacelle equipment there and that the program is going to go to, basically, zero over the coming years, do you think you can continue growing the margin on the equipment business despite that headwind or what should we see the equipment margin going when factoring this adverse momentum? Thank you.

Thank you for the question. Regarding Turbomeca, we – in the OE business, we ship based on the requirement of our customers, and it is true that the helicopter industry today is not progressing as well as commercial aerospace industry.

Our engines delivery, OE – for OE during the first semester are 5% less than what we were last year. But again, it has almost no impact on our business because we are doing very well on the service business, also in the helicopter engine market.

So for us, Turbomeca is very well positioned. We are taking market share with new customers, and I do not foresee any kind of prediction whatsoever in the performance of Turbomeca.

We will see the piece of blue sky for the next future. Regarding the thrust reverser for the nacelle business, we dropped the production of the A330 very quickly.

And it takes us a bit longer to adapt. It’s just a question of timing to adapt our cost structure to the business.

We will do it. I will do it, I guarantee you, in the next coming weeks.

And I foresee the profitability of this business to come back to the level it should be. So I have absolutely no concern regarding the future, but again, the drop in the production rate of Airbus was something which was not totally anticipated by our construction.

Just to follow-up on the figures for Turbomeca, so OE is 5% down because of deliveries of volumes and services is 15% up, including MCO in France and a good pricing trend in the first half of 2015.

Thank you very much. It’s very clear.

Hi, good morning gentlemen. Two questions, I am just trying to understand, you have done very, very good margins in Propulsion in H1.

And do you think that those are sustainable as you start the transition of production to the LEAP in ‘17 and ’18. And the second question is can you talk about organic growth in equipment aftermarket and have you seen any provisioning as – or reduction in provisioning as some of your peers are seeing?

Thank you.

Regarding the margin for propulsion, I can only repeat what we say for many years. The impact on our service aftermarket business of the LEAP will have absolutely no impact before 2022, 2025, I bet.

So for the next coming years, we do not foresee any kind of change in the trends we are seeing today in this business and in this very healthy production of spare parts for the Propulsion division, so, no impact in the foreseeable future as the LEAP will not come for maintenance before 2025 at best. Regarding the equipment growth in the service, we are doing, as I said and as Bernard said, very, very well in the landing gear and braking systems.

We are not with a big increase in the nacelle business, but the rest is doing extremely well and we do not see any change in this trend.

Just to follow-up on that. The organic growth in equipment services is over 2% and we didn’t really have a breakdown between any sort of provisioning in the rest of the services.

But organic growth is positive.

Thank you.

Thank you very much. Good morning everybody.

I have got minor questions, if I may please. I noticed the $50 million or $55 million scope impact in the sales from the acquisitions, but zero impact on EBIT, so if you could explain that.

That’s the first one. The second one is just on the unit visits for the propulsion business, you said that, obviously, the pricing had been very good, just wanted to – or the mix had been good.

But just in terms of the number of visits, how is that half and half? The third one was just on the capitalized R&D.

The net capitalized R&D encouragingly is down €106 million in H1, can we expect a similar kind of decrease in H2, if you could give us some help on that? And then just a broad question, first I should congratulate you on very good numbers for the group that you have just reported.

But really, these are driven by the excellent performance of propulsion, but if I look at the other three businesses, I think if I were being completely honest with myself, I would be disappointed with those, and I know you have touched on what you are doing in those businesses, but Philippe can you please just tell us where you think the margins in those businesses can get to, because I would imagine that they’re all underperforming their peer groups. So I really need to know what you are going to do in those other three divisions which, to me, look as if they are underperforming and where you can get to what kind of aspirations you have for margins in each of those three divisions.

Okay. I will let Bernard answer your first questions and I will come back, of course, on the last one.

Right. I think it would be a shortcut to say that we have €55 million positive scope impact on revenues and euro in terms of EBIT, because some acquisitions created some positive EBIT and some are still in a negative mood.

But you are right, some of the acquisitions are not delivering all the EBIT that we expected and we are working on that. Regarding capitalized R&D, the answer is no, you shouldn’t take H1 as a run-rate for H2.

It has decreased by €112 million in H1 and this is in the guidance for the full year. It’s consistent with the guidance, so don’t expect the same level of decrease in R&D in H2.

You had also, Zafar, a question on shop visits?

Yes, just wanted to know the volumes or the number of shop visits a year – or half and half just in terms of what the volume increase has been. I know that the...

Overall, the quantity of shop visits has increased by a range of 6% to 7%, with of course a declining quantity in the old gen 1, the first generation of CFM engines and a good increase of the new – or the last or latest generation of CFM, so altogether 6% to 7%. But today, as a percentage, if you look at the quantity of first generation versus second generation, third generation represents only between 20% and 25% of the total and the new generation, 75% to 80%.

Overall, a 6% to 7% increase with an increase, of course, of the quantity of the new generation of CFM56. So, the question – no, no I have also – I have not answered the question of Zafar regarding the three other businesses, which are not at the same level of profitability as propulsion.

If you look at them one by one, the equipment is up 8.2%. We should be – and we should target I hope before the end of this year, but if not before the end of this year, at least at the minimum for next year, the minimum of 10%, which is part of the question.

We will improve the situation and the performance during the second quarter. And I cannot guarantee that for the full year, we will reach a 10%, but this is a minimum for next year.

If you look at defense, 2.4%, we know exactly what happened in terms of product mix compared to last year. We are totally confident to reach as a minimum the profitability we had last year for the full year of 2015.

We have the order in the shop. We are producing the products and we know what we are going to deliver before year end.

So, we are totally confident for the rest of the year. And regarding security, as you could see, there is a big increase in sales.

The profitability is not at the same level. The only point in all our businesses of security, which had a weak first half is detection and it’s in detection that we have the best margin.

And we are going to deliver a lot of systems, tomograph and related systems during the second half. The orders are in-house and the products are almost completely produced.

So, we will deliver them both in the U.S. and start delivery in the Europe of these new machines.

And we know how to make a better profitability of the security business by year end. So we are totally confident in the improvement of the three businesses you just mentioned.

We have different causes, but we are on the right trend. Don’t worry.

In the longer term, are they all capable of double-digit margin? Are these three businesses capable of....

On short-term, I just told you that equipment, yes; security, I believe so; defense will take a bit longer. I cannot guarantee you that next year, we will jump from 6% to 10%.

We will go to that level, but it will take more than six months to go at this level of performance that we are all looking for. Thank you, Zafar.

Thank you very much.

Good morning, gentlemen. I have got one very high level question for you, Philippe.

So, I hope you don’t mind and it’s simply this. We see so many other suppliers currently going through transitions of old products to newer products having to reduce their earnings guidance and take a pause in earnings growth, at least in the short-term.

Do you think there is any chance that Safran tells us in your Capital Markets Day or before then that you will need to take a pause in earnings growth through ‘16 and ‘17 as you transition to LEAP-X?

Thank you very much for your question. My predecessor used to say that during the transition, we expect the profit of the propulsion to remain in the high-teens.

So, I maintain this commitment. And we will remain, during this transition of LEAP, in the high-teens for the margin of the propulsion division.

And at the same time, as I just said to Zafar, I expect the other businesses of Safran to improve their performance and I will do what is necessary to do to achieve this kind of commitment. So, altogether, it will depend on the respective load or weight of the businesses.

We do not foresee a pause, a reduction, whatsoever in our performance.

So, you – so just to be clear, you do expect earnings growth for the group in ‘16 and ‘17?

Well, it’s too early to tell. We will discuss that as I just said at the beginning of our discussion.

We will handle a Capital Markets Day at the beginning of 2016 and all these things will be discussed with you and your colleagues at that time and it will make more sense for me to discuss that at that time.

Okay, thank you.

Good morning. Can you hear me?

We do.

Congratulations on the good numbers. Just had a couple of very simple questions and please forgive me if I am slow on the uptake as usual.

Firstly, just with the civil aerospace aftermarket growth in propulsion, can you give us any breakdown between the wide-body engine aftermarket growth and the narrow-body? And then second question is as we look towards the LEAP engine delivery next year, 2016 and 2017, can you give me any idea of the proportion of those that are covered by long-term service agreements compared with simple traditional engine sales?

Okay, let’s start with the first question. When you look at the 27.8% increase in civil aftermarket in dollar terms, the breakdown is the following and I think it will help to answer your question.

We have 37.5% increase for CFM, 10% increase for high-thrust engines and 22% increase for other services. So, I would say that a majority of the increase comes from a single layer.

Regarding your second question, I am sorry, but I don’t have the split today for the first delivery of LEAP between the one which have long-term contract service and the ones which do not have. The overall picture is that the majority, more than 50% of the LEAP orders have long-term service agreements.

I would say today even more than two-thirds as of today. I would assume by statistics that this two-third that we see for the overall picture of the bookings we have on the LEAP is respected during the beginning of the production.

Thank you very much, Philippe.

Thank you for taking the questions again. I hope I don’t take the place of anyone here.

Just wanted to have a quick follow-up on two points. First, on the cash guidance for this year, can you tell us what you assume in term of prepayment received on export orders?

Do you have one order, two orders, three orders? And the second one is on the GE90 it seems that every quarter we expect a normalization of a very strong trend in aftermarket activity.

And every time actually, we are surprised to see another very strong quarter for spare parts. It seems that you assume from now on more of this normalization to happen.

But can you explain a bit what explained that limited visibility and short-term trend of this high-thrust engine at the beginning of the services period?

Okay, Tristan, I will answer the cash guidance. We have taken some assumptions in terms of prepayments of export in our guidance.

That’s why it’s always subject to certain uncertainty. We have taken into account two contracts, Egypt and another contract in our guidance for undisclosed figures.

Okay. Regarding the GE90, we have as I said maybe a bit less visibility, because as you know these contracts are under the responsibility of General Electric and we are just a risk-sharing partner with 23.5% market on this engine, but we do not really manage and master all the long-term agreements.

There are a growing number of flight hours, growing revenue. And as we told you already many times, the time and material activity of the shop visits is extremely good and will continue for a long time, so no other comment on this point.

Yes, thank you very much.

Thank you. Thank you all.

I know you have a very busy day. Thank you for listening to us and for the ones who are going to take some vacation, have good vacations, have a good summer break.

If you have any additional question, you know Peter Campbell will be able to help you. And we remind you that our Q3 results will be in October and the 2015 full year result on February 16, 2016.

Thank you very much. Have a nice day.