ALLE
#Yes, so going back strategically, right decision to divest the business.
You may recall long earnings cycle, with government municipalities, bad return on invested capital, and so divesting the business, given that we had nothing really to leverage within our portfolio.
Good move there.
The write-down last year was just based on the anticipated consideration that we were going to receive.
And what's happened since the sale, basically, is the business has deteriorated relative to its future ongoing cash requirements, the receivables, coming in lower than anticipated, again, from the government municipalities and so you look at what the expectation is going forward and we determined that the consideration isn't collectible at this moment.
We'll continue to endeavor to do what we can to work with the business, to collect on those monies.
But right now, don't anticipate any collections.
It has no impact relative to our available cash flow projections.
As indicated, we upped our ACF guidance, has no impact, really, going forward.
It was not included in our guidance to begin with and so it's just ---+ it's unfortunate, but one of those things that's happened given the deterioration in the business in the broader China economies.
Electronic development of our entire portfolio, and this would include exit devices, locks, the smart closers, will continue to be a high priority in our investment, capital deployment decisions.
I think any time when you introduce new technologies, when we have the success, the market tends to normalize.
And low double-digit growth is significantly above the 8% ---+ 6% to 8% growth that is forecasted for growth for this globally.
So feel good about the opportunity.
There's a billion locks in the world and the penetration rates globally are low.
We think it's one of the bright opportunities for Allegion going forward.
So not going to give specific numbers on our research but total institutional, as we move into 2017, positive.
Education, positive, I think, builds on our comments.
The state budgets, municipalities' budgets are in line.
We've been pretty active in K through 12 security.
<UNK> Eckersley, our Head of the Americas, was just given a national award on this.
We participated in a forum with government officials.
There's tightness of funds, but K through 12 security, infrastructure, we see as a positive as we move into 2017, including higher ed.
Hospitals, our total healthcare, a bit of a mixed bag.
We see 2017 as a positive in hospital construction, but I would say modest.
What's happening there, more medical office and clinics but that typically comes at a lower price point and lines up nicely with our initiative to go after some of this light commercial.
So total institutional, as I look from 2016 to 2017, positive.
The commercial, we'd say slightly flat to slightly up, but the Allegion perspective, as we move into 2017 in our core markets in the US is positive, <UNK>.
The retrofit market chugs along.
Even when in the bottoms of the recession and budgets are tight, it's the gift that keeps on giving.
If you've got a lock, exit device, or closer, I think, my view on the retrofit replacement market is, again, net positive.
Yes, exactly.
So at the time of disposition, again in Q3 last year, the expectation was there would be some consideration to be received from the collection of receivables on that divested business that would then funnel to us, and now the outlook we're saying it's unlikely that we will have any monies coming our way associated with that.
Correct.
Yes.
Yes, so on the taxes, so the 18% full-year guidance includes the $0.03 one-time benefit from the accounting change on the stock-based comp.
So you'd really have to back that out and you get to a range that's really closer to our original guidance, the top end of 19%, so that would be kind of the going-forward position, if you will.
And then, as we put together our budget and plans for 2017, we will give you more guidance on that going forward.
Exactly.
No, I think long term, 40% is probably a good expectation, is what we would anticipate.
You're right.
We got really good leverage at our operating facilities on the incremental volume.
But long term, 40% is probably a good barometer to use.
As we mentioned previously, as the business continues to grow, and we can manage the inputs, inflation, productivity, pricing, investment, et cetera, we should continue to get some incremental margin improvement going forward.
We'd like to thank everyone for participating in today's call.
Please contact me with any questions and have a great day.
