MHK
#So I think the clarification on oil is that in our carpet business a large part of the materials are from oil but over time we've developed two large categories which are significant to our business.
One is recycled polyester which the majority of our polyester comes from recycled bottles which doesn't follow exactly the oil prices.
The second is that we have our SmartStrand category which comes from corn which also follows different ones.
Now they're related, in some ways they're not related but they are not directly related.
The second is that besides the improvement in the raw materials the investments we're making we're getting huge productivity improvements across the business.
And then we spend a huge amount of effort differentiating our products and bringing new products into the marketplace to improve our mix relative to the marketplace.
Now with that we had been selling more of the lower-priced pieces as something but we still have a much higher mix than the industry average because of all the merchandising and marketing we do.
We are confident that we're going to continue improving our profitability in the business going forward.
However, we're going to have to react to market pressures just as in every other category.
We think that we're investing significantly more than most of the industry and we think we're executing better.
So we're quite confident about the direction that we're going and where we're positioned.
And just to clarify, <UNK>, one more time, the soft surface margins have shown improvement year over year.
Expecting our margins in each of our three segments to continue in fourth quarter and through 2016.
We've done a lot of acquisitions in the last two or three years.
We've done significant ones this year.
Even with that we generate a huge amount of cash as well as our EBITDA is going up both paying down debt and increasing our capacity.
With those things we have the balance sheet to invest significantly more in the internal capital as well as acquisitions if we find the right businesses at the right values and we're aggressively looking for those things.
However, we're only going to do it if we like the returns on the investment and the risk levels.
On the free cash flow question, <UNK>, the third quarter was about $265 million.
For the year we'd estimated to be $530 million or $540 million in that range.
We have different salesforces going into different channels.
Each of the businesses is different, so in my carpet business I have multiple salesforces selling carpet into specialty retail.
I have specialized salesforces going into the builder and multifamily channel.
I have multiple specialized business salesforces going into the commercial business and in all those things I have similar variations of that in the other businesses.
We are increasing the salesforces in all of them, positioning ourselves to be more aggressive than we have in the past.
We're confident about our position and products we're bringing to market and we believe that we can help our growth and profits by putting these investments in today.
The pricing actions are related to competitive situations in the marketplace.
We will remain competitive and as the market changes we have to change with it or our customers will find other alternatives.
The market has been fairly disciplined up to now and given what's going on in the raw materials I think that the industry is doing reasonably well.
And I don't see anything that's going to change it in the near future.
And I would add, too, both on the raw material front and the pricing front for the quarter it was where we expected.
It was in line with our expectations.
Thank you.
We have a distinctive culture that drives product differentiation, operational efficiency and customer commitment.
We operate our business in a decentralized manner that creates competitive advantages while driving best practices across our total enterprise.
Our capability to execute acquisitions and broaden our products and geographies provides unique opportunities to Mohawk.
Our substantial cash flow and debt capacity will enable us to sustain both our internal and external expansions.
Thank you for joining us.
Have a good day.
