Q4 2019 Earnings Call

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Just to confirm. It's a for Alpha. I for India e for Echo Romeo Alpha.

Thank you. I'm telling you now. Have a nice day, sir.

Most importantly, these are all critical Investments that drive sustained future growth and value creation starting this year that let me now hand wash. Thanks Bob and good morning everyone since our press release provides significant details on our performance. I will touch on our fourth quarter results very quickly and then turn into the larger drivers in our 2019 performance along with our 2020 guidance.

It's a high-level. The fourth quarter was another solid one for us, excluding the prior-year sales of body armor in October last year and 4 Life change impacts net sales increased 4.6% in the quarter with contributions from all four segments.

The sales growth along with strong productivity synergies and network optimization row operating income growth in the quarter of 30% and operating margin expansion of 210 basis points. We delivered adjusted diluted EPS growth of 17% in a corner fueled by the growth in operating income and the lowered effective tax rate partially offset by higher interest expense due to copy of last year's benefit of interest rate swaps in the fourth quarter last year.

The full-year results free cash. In 2019 was exceptionally strong and approximately two point four billion dollars this translated into an adjustment fee cash flow conversion rate of nearly 140% We also ended the year with seventy-five million dollars of unrestricted cash on Thursday.

In terms of Leverage, we reduced our outstanding bank that by approximately 1.3 billion dollars in 2019 as a result our intent to adjust it. He beat that issue which we refer to as our management leverage ratio improved by nearly a full turn to 4.5 times 5.4 times at the end of 2018 since the merger closed in July 2018. We have reduced our leverage ratio by 1.5 tons.

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We also paid down 541 million dollars of structured Pebbles during 2019 resulting in total payments between debt and structure payables of one point eight billion dollars in terms of synergies 2019 was the first year of our three-year program as you will recall when we announced the merger two years ago being committed to six hundred million dollars of synergies with two hundred million dollars per year between 2019 and 2021 wage. There are synergies of a slightly more than two hundred million dollars and we expect to deliver our commitments in each of the next two years.

And finally before turning to 2020 guidance, let me provide some details on our Synergy productivity and network optimization programs wage even continue to be important sources of growth and value Creation in the coming years as we share at our investor day in March 2018. I bought a key part of our strategy is to execute untapped opportunities to drive profitability and cash flow which enable us to reduce that and Thursday optionality for the business our value-creation program which includes synergies productivity and network optimization is an important aspect of examples of progress across these programs that we have already made include the following the consolidation of warehouses between our two legs wage.

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The integration into one sales organization the organizational alignment of the to Legacy companies including the consultation of certain corporate functions and Thursday off the roles simultaneously reducing the cost and improving the quality of our Growers through engineering redesign and the hormone National Brewer parts and platforms optimizing procurement practices utilizing.