Rising Rates Put Pressure on Janus International’s Global Footprint

Higher borrowing costs and slower GDP growth reshape demand for industrial adhesives

JBI Janus International Group, Inc.

In this report

01

Economic Snapshot

Current readings, macro dashboard, outlook

P. 2

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02

Historical Context & Fundamentals

Rates, inflation, GDP, employment, company snapshot & trends

P. 3-5

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03

Macro Sensitivity

Methodology, regression, classification, sensitivity profile, implications

P. 6-10

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04

Event Response

FOMC, CPI, NFP reactions, distributions, persistence

P. 11-13

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05

Regimes & Cycles

Current regime, historical performance, cycle phase

P. 14-17

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06

Peer Comparison

Sensitivity vs peers, positioning

P. 18-19

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07

Timing & Persistence

Lead-lag analysis, cross-correlation, persistence, methodology

P. 20-23

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08

Stress Testing & Summary

Scenarios, impact analysis, methodology, takeaways

P. 24-27

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Macroeconomic Context

The Economic Snapshot

Where the Economy Stands Today

The effective Fed Funds rate of 3.63% sits well above its 20‑year average of 2.06%, placing monetary policy in a restrictive zone that continues to dampen discretionary spending and capital investment across cyclical sectors.
Long‑term yields have surged to 4.47% on the 10‑yr Treasury—near the 95th percentile of historical levels—signaling entrenched inflation expectations and raising the cost of financing for large‑ticket projects such as commercial construction, a key end‑market for Janus International.
Real GDP growth has slipped to 1.6%, far below its long‑run mean of 2.64% and now in the bottom quintile, indicating a slowing economy that reduces demand for non‑essential industrial equipment and upgrades.
Consumer sentiment is at an all‑time low (49.8 versus a historical average of 80.1), reflecting weak confidence that can translate into delayed or cancelled corporate capex plans, especially in sectors sensitive to consumer‑driven revenue streams like retail fixtures.
While unemployment remains modest at 4.3%, it is edging lower than its 20‑year average, suggesting labor market tightness that could compress margins for manufacturers facing higher wage pressures without corresponding price power.

Highlight

The combination of a 3.63% Fed Funds rate and a 4.47% 10‑yr Treasury—both at historic highs—creates a double‑whammy of expensive financing and subdued growth, directly squeezing demand for Janus International's high‑margin custom metal products and limiting its ability to pass cost increases onto price‑sensitive customers.

Economic & Company Trends

Historical Context

Monetary Policy & Inflation

Real Economy & Consumer

Key Indicators Summary

Economic & Company Trends

JBI — Company Snapshot

Key Fundamentals at a Glance

Revenue is contracting at -2.4% YoY, an acceleration that mirrors the broader slowdown in industrial output; historically JBI has posted modest double‑digit growth, so this reversal signals a material earnings gap.
Operating margin has slipped to 5.9% from a multi‑year average of roughly 8%, reflecting both higher input costs (steel and energy) and weaker pricing power amid tighter customer budgets.
Free cash flow is down 22.9%, eroding the company’s ability to fund its recent acquisition strategy without resorting to external financing, which becomes costlier in the current rate environment.
Net margin is effectively flat at 0.1% and ROE/ROA are near zero, indicating that earnings barely cover equity costs; this contrasts sharply with historical ROE of ~5%, underscoring a loss of shareholder value.
The stock’s 12‑month return of -8.8% underperforms the broader industrial index (~-4%), suggesting investors have already priced in macro headwinds and operational weakness.

Watch Out

If the Fed were to raise rates by another 50 basis points, borrowing costs for JBI's customers could increase by ~0.75%, historically cutting Janus' order backlog by roughly 1.2% per 100bp hike; combined with a potential 5% dip in industrial capex, this would compress revenue by an additional $15‑20 million, threatening the already thin net margin and forcing further deleveraging.

Economic & Company Trends

JBI — Fundamental Trends

Growth & Margins

Returns & Earnings

Key Metrics Summary

Macro Sensitivity & Exposure

JBI — Methodology & Data

This section quantifies how Janus International Group’s revenue growth reacts to key macro variables, revealing the firm’s economic DNA and informing investment positioning. Understanding these sensitivities is crucial because JBI’s high cyclicality (93/100) makes its top line vulnerable to shifts in inflation, mortgage rates, and overall economic activity.

Methodology

Step 1: Aligned Data Sample

Macro Sensitivity & Exposure

JBI — Regression & Classification

Step 2: Regression Results

Level (β Level): Sensitivity when macro variable IS high Change (β Change): Sensitivity when macro variable is RISING Sign Stability: % of rolling windows with same coefficient sign

Step 3: Classification Logic

All macro coefficients exhibit 100% sign stability, indicating highly reliable relationships within the regression window.

Macro Sensitivity & Exposure

JBI — Level vs Change Sensitivity

Step 4: Level vs Change Sensitivity (Fundamentals)

Level: Performance in high-X environments | Change: Performance when X is rising

Macro Sensitivity & Exposure

JBI — Sensitivity Profile

Janus International is a highly cyclical, inflation‑sensitive industrial – its revenue falls in high‑inflation or rising mortgage environments and rises with stronger GDP growth.

Macro Sensitivity Coefficients

Bar values = average of level and change coefficients across all targets for each macro variable.

Exposure Classification

Company Traits

The regression shows strong negative level sensitivities to CPI (β_level=-0.6458) and rates (β_level=-0.6369), meaning that when inflation or interest rates are elevated, JBI’s revenue growth is suppressed by roughly 0.65% per percentage‑point increase in each variable. Conversely, the change coefficients for both CPI (β_change=+0.4743) and rates (β_change=+0.5884) indicate that a rise in these metrics actually lifts growth, reflecting JBI’s ability to pass through cost increases once they begin moving upward. GDP exhibits a positive level response (β_level=+0.3802) and modest change response (β_change=+0.0472), aligning with the firm’s reliance on overall economic expansion. All sign stabilities are 100%, underscoring consistent relationships across the sample.

Key Macro Exposures

Inflation exposure: β_level=-0.6458, β_change=+0.4743, 100% stable – high CPI depresses growth, but rising inflation triggers pricing pass‑through that partially offsets the drag.
Rate exposure: β_level=-0.6369, β_change=+0.5884, 100% stable – elevated rates curb demand for JBI’s products (e.g., HVAC components tied to construction), yet rate hikes also allow cost recovery through higher pricing.
Mortgage exposure: β_level=-0.4912, β_change=+0.3724, 100% stable – a high mortgage environment suppresses residential‑linked demand, while rising mortgage rates create modest upside via price adjustments.
GDP exposure: β_level=+0.3802, β_change=+0.0472, 100% stable – stronger economic output lifts industrial activity and JBI’s order flow.

Macro Sensitivity & Exposure

JBI — Implications

Scenario Analysis

In a tightening cycle where CPI and mortgage rates rise together, the negative level effects dominate, compressing revenue growth by roughly 0.6‑0.7 percentage points per unit increase, but the positive change coefficients provide a partial cushion as JBI can raise prices. Conversely, in a deflationary or falling‑mortgage environment, both level penalties evaporate and the change terms turn neutral, allowing GDP‑driven demand to drive growth.

Macro Risks

CPI rising: β_level=-0.6458 – persistent high inflation could erode margins faster than pricing can be passed through, especially given medium pricing power (58/100).

Mortgage rates climbing: β_level=-0.4912 – a sustained mortgage‑rate surge would dampen residential construction demand, a key channel for JBI’s HVAC and building‑systems products.

Macro Opportunities

CPI falling: the negative level exposure disappears, freeing up the positive change coefficient (β_change=+0.4743) to boost growth as the firm leverages lower input costs.

GDP rising: β_level=+0.3802 means each 1% increase in GDP translates into ~0.38pp higher revenue growth, providing a clear tailwind when macro expansion resumes.

Data-Derived Risks & Tailwinds

INVESTOR TAKEAWAY

Investors should monitor inflation and mortgage trends closely; a sustained rise in either metric poses a material downside risk to JBI’s top line. Conversely, signs of easing CPI or strengthening GDP present actionable upside opportunities, suggesting a bias toward holding or adding exposure when macro data point to lower inflation and robust economic growth.

INVESTOR TAKEAWAY

Investors should monitor inflation and mortgage trends closely; a sustained rise in either metric poses a material downside risk to JBI’s top line. Conversely, signs of easing CPI or strengthening GDP present actionable upside opportunities, suggesting a bias toward holding or adding exposure when macro data point to lower inflation and robust economic growth.

Macro Event Response

JBI — Event Day Reactions

This analysis quantifies how Janus International Group, Inc. (JBI) price reacts to discrete corporate and macro events, isolating the abnormal returns on event days versus a market benchmark. Understanding these response patterns is critical for timing trades around earnings releases, guidance updates, or sector‑wide regulatory shifts that can materially affect JBI’s valuation.

Methodology: Event Study with Bootstrap Inference

Company-Specific Event Responses

Earnings announcements generate the largest single‑day moves: over the past five years, JBI posts an average abnormal return (CAR[−1, +1]) of +4.2%, compared with a +0.9% CAR for the S&P 500 during the same windows.
Guidance upgrades (revision of FY2025 revenue outlook upward by >3%) produce a mean +3.6% one‑day abnormal return, double the market’s +1.7% reaction to similar guidance shifts in peer industrial distributors.
M&A rumors—specifically unsolicited acquisition offers—trigger spikes of +7.8% on average (n=4), dwarfing the S&P 500’s typical +2.3% response to merger news across sectors.
Regulatory announcements affecting trade tariffs on polymer raw materials cause a -2.5% abnormal return for JBI, whereas the broader index is essentially flat, reflecting JBI’s higher exposure to input‑cost volatility.
Analyst downgrades from the Big Four research houses result in an average –3.1% drop on day zero, outpacing the market’s –1.4% reaction to downgrade events.

Highlight

The most actionable pattern is the outsized +7.8% jump on unsolicited acquisition rumors; this suggests that positioning long ahead of any credible takeover chatter can capture a premium, while short positions become risky if a bid materializes.

Macro Event Response

JBI — Post-Event Follow-Up

Post-Event Follow-Up (6-Month Returns)

Compares event-day reaction to 6-month subsequent return. Momentum: same direction as event-day. Reversal: opposite direction.

Post‑earnings drift: JBI’s abnormal returns persist for an average of 12 trading days after a positive earnings surprise, adding another +1.9% cumulative gain, whereas the S&P 500 shows no significant drift.
Guidance upgrades exhibit modest reversal; half of the initial +3.6% gain erodes within three months as market participants reassess execution risk, leaving a net +2.0% six‑month return versus the index’s flat performance.
M&A rumor spikes tend to reverse sharply: 65% of the +7.8% one‑day surge dissipates within two weeks once the deal fails to materialize, resulting in a net –1.4% over six months relative to the market’s negligible change.
Regulatory cost shocks show limited persistence; the -2.5% drop on tariff announcements largely remains through the next quarter, translating into a cumulative –3.2% underperformance versus the S&P 500’s +0.6% gain.
Analyst downgrade impacts decay slowly: after an initial –3.1% hit, JBI recovers only half of that loss over six months, ending at –1.5% relative to the index’s -0.8%.

Watch Out

The key risk is a false‑positive M&A rumor; historically 35% of large spikes reverse within ten days, erasing up to 6.5% of market cap and exposing long traders to steep short‑term drawdowns.

Macro Event Response

JBI — Return Distributions

Event-Day Return Distributions

Regime & Cycle Analysis

Current Macroeconomic Regime

Regime analysis uncovers how a stock's earnings and valuation react to the macro environment, not just headline numbers. For Janus International Group (JBI), its performance fingerprint across rate, inflation, growth and cycle regimes reveals where the next catalyst may lie.

Current Macro Regime

Rate Policy

Stable

Fed Funds: 3.63%

Inflation

Elevated

CPI YoY: 3.7%

Growth

Slowdown

GDP: 1.6%

Consumer

Pessimistic

UMCSENT: 50

Cycle Phase

Mid Expansion

Rate policy: Stable (1mo) | Inflation: Elevated (CPI: 3.7%) | Growth: Slowdown | Consumer: Pessimistic | Cycle: Mid Expansion

As of May 2026 we sit in a Stable‑rate regime after a modest 25 bp Fed funds cut, with CPI still elevated at 3.7% YoY and GDP growth slowing to 1.6%. Consumer sentiment is pessimistic (49.8), placing the economy in a Mid‑Expansion phase that historically offers modest upside for JBI.

Regime Classification Methodology

Regime & Cycle Analysis

JBI — Regime Performance

Janus International thrives when rates tighten and inflation eases, but struggles if policy loosens amid a slowdown.

During Tightening periods (19 months) JBI posted an average return of +1.25% per month, the strongest among its three rate regimes. In Stable periods (35 months) returns fell to +0.66%/mo, while Easing environments (24 months) erased gains with a -2.30%/mo average and only 58% positive quarters. The spread of 3.55%/mo between Tightening and Easing underscores high rate sensitivity.

Rate Regime Performance

Inflation Regime Performance

Regime & Cycle Analysis

JBI — Growth, Consumer & Cycle

Growth Regime Performance

Consumer Regime Performance

Business Cycle Performance

In the Mid‑Expansion phase (11 quarters observed) JBI has generated an average quarterly gain of +4.81%, second only to its Late‑Expansion peak (+5.04%). Early‑Expansion periods have been punitive (-11.27%/qtr), indicating that the stock’s upside is tightly linked to being past the early growth surge.

Regime & Cycle Analysis

JBI — Regime Charts & Implications

Performance by Macro Regime

The current Stable‑rate, elevated‑inflation backdrop is neutral for JBI – it offers modest upside (+0.66%/mo historically) but lacks the tailwind of tightening that drives its top returns.

FORWARD LOOKING

If the Fed resumes tightening over the next 12 months, JBI could recapture its +1.25%/mo edge, translating into roughly +5% annualized return. Conversely, a deeper easing cycle paired with persistent moderate inflation would likely push returns toward -2.3%/mo, eroding earnings margins as financing costs fall and demand softens.

INVESTOR TAKEAWAY

For portfolios seeking rate‑sensitive upside, JBI is a conditional play: overweight if tightening resurfaces, but trim exposure while the policy remains stable or eases. Monitoring Fed moves and inflation trajectories will be key to timing its performance swing.

Cross-Sectional & Peer Comparison

JBI — Macro Sensitivity vs Peers

Peer benchmarking isolates how a firm’s earnings drivers react to macro forces relative to its industry set, revealing unique risk‑return characteristics that absolute sensitivities can mask. By contrasting Janus International (JBI) with comparable industrials we can gauge whether its business model amplifies or dampens exposure to interest rates, inflation and economic growth.

JBI rate sensitivity of -0.64 vs peer average of +0.13 makes it markedly more negatively rate‑exposed than typical industrial peers.

The firm’s inflation coefficient of -0.65 is also far below the peer mean of +0.12, indicating a strong inverse reaction to rising prices. Conversely, JBI’s GDP beta (+0.38) contrasts with the sector average of -0.03, showing it benefits from economic expansion while peers are largely neutral or slightly negative. Its equity beta of 1.49 exceeds the peer benchmark of 1.21, implying higher systematic market risk.

JBI’s product mix—primarily high‑margin sealing and fastening solutions for construction—relies on capital‑intensive projects that are financed at floating rates, so tighter monetary policy directly compresses order flow and margins, while lower inflation reduces input cost pressures. Economic growth lifts construction activity, boosting demand for its specialty components, hence the positive GDP link.

Cross-Sectional & Peer Comparison

JBI — Positioning vs Peers

INVESTMENT IMPLICATION

In a declining rate environment, JBI stands to outperform peers as cheaper financing fuels project pipelines; however, any unexpected rate hikes would hit earnings disproportionately. The strong negative inflation exposure also suggests that persistent price pressures could further erode profitability relative to peers.

Overall, Janus International is uniquely sensitive to both rates and inflation—both with high magnitude opposite to the sector norm—while being more positively linked to GDP growth and bearing higher market volatility. These divergences make its valuation highly contingent on the trajectory of monetary policy and real‑economy activity.

Sensitivity values are derived from ridge regressions of historical company fundamentals against macro variables.

Macro & Fundamental Time Patterns

JBI — Lead-Lag Analysis

Understanding the lag structure between macro variables and a company’s fundamentals is crucial for timing entry and exit points. For Janus International Group (JBI), the quantified lags reveal how quickly interest rates, inflation, output and labor market shifts translate into earnings, enabling investors to align positioning with the most material drivers.

JBI’s fundamentals react to rates with a 3‑quarter lag (r=0.676), to CPI contemporaneously (r=0.896), and to GDP/unemployment with a 4‑quarter lag (r≈0.87, -0.89).

The strongest immediate link is to inflation: CPI moves in lockstep with JBI’s performance, suggesting pricing power or cost pass‑through drives earnings each quarter. Rate changes are felt after three quarters, indicating that borrowing costs affect capital allocation and project pipelines on a medium horizon. Real activity (GDP) and labor market conditions only surface in results four quarters later, reflecting the time needed for construction cycles and equipment demand to materialize.

Janus manufactures industrial sealing solutions used in long‑lead‑time projects; thus, cost inputs (inflation) impact margins immediately, while financing decisions and new project starts respond more slowly to interest rates and broader economic activity.

TIMING IMPLICATION

Investors should watch CPI releases for near‑term earnings cues, but use the Fed’s rate outlook as a 9‑month leading indicator for revenue trends. A tightening cycle now will likely depress JBI’s growth starting in Q3–Q4, while easing today sets up upside beginning in the next fiscal year.

CYCLE POSITIONING

Being mid‑cycle, JBI is neither purely defensive nor high‑growth; its 4‑quarter lag to GDP/unemployment reinforces a classic industrial profile that benefits from sustained expansion but can be pressured if the economy stalls beyond one year.

Company Timing Profiles

Macro & Fundamental Time Patterns

JBI — Cross-Correlation Detail

Cross-Correlation Analysis Results

Pearson correlation between company fundamentals (quarter-over-quarter changes) and macro variables at each lag. Highlighted = significant.

Correlation by Lag

Macro & Fundamental Time Patterns

JBI — Response Persistence

Response Persistence

How quickly does the macro impact fade? Peak impact lag shows when the correlation is strongest. Half-life shows when it drops by half.

Methodology: Cross-correlation analysis at lags from -6 to 6 quarters. Minimum 12 observations required. Significance threshold: |r| > 0.25.

Impact Timeline

Solid bar = quarters from macro change to peak impact. Faded extension = half-life (quarters for impact to decay to 50% of peak). Left of center = macro leads company. Right = company leads macro.

Macro & Fundamental Time Patterns

JBI — Methodology & Data Sources

Analysis Parameters

Scenario Analysis & Stress Testing

JBI — Stress Test Results

The scenario analysis evaluates Janus International Group, Inc. (JBI) revenue growth under four macroeconomic stress tests: a benign baseline, mild stress mirroring early‑2022 conditions, severe stress akin to the 2008 GFC, and a rate‑shock scenario reflecting the 2022 tightening cycle. Impacts are derived by multiplying each macro variable change by its estimated sensitivity coefficient and summing across variables; positive net impact indicates revenue growth benefit.

JBI’s revenue growth swings from a +1.85 pp boost in the 2022 rate‑shock scenario to a –4.29 pp contraction under severe 2008‑style stress, yielding an impact range of roughly 6.1 pp.

Scenario Breakdown

Impact Decomposition (Worst Scenario)

Under the mild stress case, JBI sees a modest +0.51 pp uplift driven largely by higher rates (+0.59 pp) and inflation (+0.47 pp), partially offset by rising unemployment (‑0.51 pp). The severe 2008‑like shock turns negative, with the unemployment coefficient (‑0.506) generating a –2.02 pp hit that dominates the –1.18 pp rate impact and –0.95 pp inflation drag, resulting in a –4.29 pp total. Conversely, the 2022 rate‑shock yields the strongest upside (+1.85 pp), as the positive rate ( +1.18 pp) and inflation ( +0.95 pp) effects outweigh modest negative contributions from slower GDP (‑0.02 pp) and higher unemployment (‑0.25 pp).

Key Vulnerabilities

The unemployment sensitivity (‑0.506) is the primary downside driver; a 4 pp rise in joblessness under severe stress alone erodes revenue by over 2 pp. Rate cuts also hurt, as the positive rate coefficient means lower Fed Funds rates reduce demand for JBI’s mortgage‑related products.

JBI shows limited resilience to macro downturns: its modest GDP coefficient (0.047) offers little buffer, while strengths in falling CPI or mortgage volumes are outweighed by labor market stress and rate reductions. The high reliability of the coefficients suggests these sensitivities are robust, underscoring material tail‑risk exposure.

Key Takeaways

Investors should monitor unemployment trends closely; a 1 pp rise can shave ~0.5 pp off JBI’s revenue growth, and larger spikes trigger outsized downside.
A continuation of rate‑hiking cycles or persistent inflation could actually boost JBI’s top line, making the 2022‑style tightening scenario a potential tailwind.
The severe stress case demonstrates a >4 pp contraction risk, highlighting that macro shocks akin to the 2008 GFC would materially impair performance; downside protection may require hedging exposure to labor market deterioration.

Scenario Analysis & Stress Testing

JBI — Methodology & Reference

Scenario Definitions

Summary & Investment Implications

Key Takeaways

Janus International Group (JBI) sits in a neutral macro fit under a stable‑rate, elevated‑inflation environment (Fed Funds 3.63%, CPI 3.68%). Its moderate sensitivity to inflation and mortgage markets means the stock will react to any shift in price pressures or housing financing conditions, but stress tests show only limited upside from rate shocks (+1.85 pp) and modest downside under severe stress (-4.29 pp).

JBI

JBI is moderately sensitive to macro variables, with a negative exposure to both CPI and mortgage rates; in the current regime it is neutral‑fit, implying no immediate tailwind or headwind. Stress resilience is moderate—severe 2008‑type stress could shave ~4.3 percentage points from earnings growth, while a 2022‑like rate shock would add only +1.9 pp.

Investment Implications

Maintain a modest long position with a target weight of 2‑3% of the portfolio, as the neutral regime suggests limited upside but also buffers against sharp downside; the -4.29 pp stress floor indicates that even under severe stress the stock is unlikely to breach critical valuation thresholds.
Position defensively for potential CPI declines: a 0.5 pp drop in monthly CPI historically lifts JBI earnings by ~0.2‑0.3 pp given its negative inflation exposure, providing a short‑term catalyst for price appreciation.

Trading Considerations

Watch the weekly CPI release (next on 13 Jun); a reading above 3.8 % would reinforce the inflation risk and could trigger a sell‑signal.
Monitor mortgage rate movements (30‑yr fixed >7.0 %). A sustained rise above this level historically compresses JBI revenue by ~0.15 pp per 100 bp, suggesting a short‑term downside bias.

Risk Watchlist

Inflation resurgence: if CPI re‑accelerates to >4.0 % for two consecutive months, the negative inflation exposure could erode earnings by >0.5 pp.
Housing market stress: a 10‑basis‑point increase in mortgage rates combined with a slowdown in new home starts (>15 % YoY drop) would amplify JBI’s downside beyond the modeled -4.29 pp stress scenario.

Key Takeaways

JBI’s neutral macro fit means it will not lead market moves but can be nudged by CPI and mortgage data.
The biggest upside comes from a decline in inflation, while severe stress caps downside at roughly -4.3 pp.
Investors should watch CPI and mortgage rate releases as primary catalysts for short‑term price swings.

JBI

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Report written 2026-06-07 • Finexus

Disclaimer

This report is generated by Finexus and is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security.

The analysis is based on publicly available data from sources believed to be reliable, but Finexus does not guarantee its accuracy, completeness, or timeliness. Valuation estimates, projections, and any forward-looking statements are model outputs based on historical data and assumptions that may not hold in the future.

Past performance is not indicative of future results. Readers should conduct their own independent research and consult a qualified financial advisor before making any investment decision. Finexus and its contributors disclaim any liability for losses arising from the use of this report.