Participants

Jeff Siemon; Vice President - Investor Relations; General Mills Inc

Jeffrey Harmening; Chairman of the Board, Chief Executive Officer; General Mills Inc

Kofi Bruce; Chief Financial Officer; General Mills Inc

Matt Smith; Analyst; Stifel, Nicolaus & Company, Incorporated

Andrew Lazar; Analyst; Barclays Bank PLC

Michael Lavery; Analyst; Piper Sandler Companies

Max Gumport; Analyst; BNP Paribas Exane

Rob Dickerson; Analyst; Jefferies LLC

Bryan Spillane; Analyst; BofA Global Research

Leah Jordan; Analyst; Goldman Sachs & Company, Inc.

Robert Moskow; Analyst; TD Cowen

John Baumgartner; Analyst; Mizuho Securities USA Inc.

Presentation

Operator

Good morning and welcome to General Mills' first quarter fiscal 2025 earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the call over to Jeff Siemon, Vice President of Investor Relations and Treasurer. Thank you. Please go ahead.

Jeff Siemon

Hi, thank you, Julianne, and good morning to everyone. We appreciate you joining us today for our Q&A session on our first quarter, fiscal '25 results. I hope you had time to review our press release, listen to our prepared remarks, and view the presentation materials which we made available this morning on our investor relations website.
Please do note that in our Q&A session, we may make forward-looking statements that are based on our current views and assumptions. Please refer to this morning's press release for factors that could impact forward looking statements and for reconciliations of non-GAAP information, which may be discussed on today's call. I'm here this morning with Jeff Harmening our Chairman and CEO; and Kofi Bruce, our CFO. So Julianne, we can go ahead and get to the first question. Will you please open it up?

Question and Answer Session

Operator

(Operator Instructions) Matt Smith, Stifel.

Matt Smith

Hey, good morning. I believe when you initially provided fiscal '25 guidance, you weren't assuming much improvement in your categories with more emphasis on your competitiveness. Does the shift in more at-home food consumption give you more confidence in the organic sales outlook or are you seeing that benefit muted by continued value seeking behavior?

Jeffrey Harmening

Hey, good morning. And thanks for the question. You know, first, I would say that, the quarter played out from a macro environment, you know, kind of as we had anticipated. And, you know, we thought we'd see gradual improvement in our categories, you know, throughout the year and we saw an improvement in our categories.
In fact, if you look at our North America retail categories, you know, they're up [2%], you know, a mix of a little bit of volume and a little bit of pricing in the categories. And so it's played out kind of as we expected and, and for us that, you know, as we said in the fourth quarter, the key for us is to keep improving our competitiveness.
And we made a step in the right direction in that in the first quarter. And we have some more work to do, you know, across our portfolio. And so the job for us to do for the rest of the year really is to keep improving. We did see a slight uptick in food consumption at home, in the quarter. We did anticipate that might be the case as we see consumers seeking value.
And you know, the fact is that now food at home is 4 times less expensive than food eating out on average. And so eating at home is a great value for consumers and, you know, consumers are still economically stressed. So that played out the way we thought.
And as we look at the rest of the year, I wouldn't say that our guidance is predicated on our categories, continued improvement. What it's predicated on is our continued improvement in competitiveness, which we're confident we can do, even get a continuing momentum into the second quarter here because we've got really great news on all of our [billion-dollar brands].

Matt Smith

Thanks Jeff, and as a follow up, I appreciate that your investment span both innovation and some couponing and promotional activity. But on the couponing and promotional investments, can you talk about the re receptivity from consumers to your investment spending? Are you seeing incremental purchasing behavior from those consumers? And is the return on those investments in line with what you had expected?

Jeffrey Harmening

Yeah. You know, I think it just kind of gets back to this question of value. And I would first tell you that, you know, consumers see value in a lot of different ways. And we did couponing, we increased our couponing, we saw good returns on those in line with what we would expect.
But, you know, consumers also look for brands and products, they trust, I mean, Life Protection Formula continues to grow. It's up mid-single digits for Blue Buffalo because, you know, we talked about ingredient superiority and what that brings.
We launched advertising on Wilderness and that business has, you know, we kind of have the losses on that business in a quarter and, you know, see some continued momentum. And in cereal, we launched Fruity Cheerios as the top turning new cereal in the category because consumers trust Cheerios and they want something a little bit different.
And so, you know, whether it's couponing, or whether it's new products, or whether it's advertising messaging, or pack sizes and getting those in the right place, so there are a lot of ways to create value for consumers, I would say, especially I think probably underappreciated when consumers feel a little bit economically stressed.
But the one thing they can't afford to do is throw away food. And so they have to bring something home that their family is going to love. And that's where our brands come in and making sure that we have relevant messages in the right package in the right place.
But to your point, I feel good so far, what I feel even better about is the majority of the news that we have on our brands actually takes place in the second quarter because it kind of starts in the second quarter. Because if you think about our portfolio, we have a lot of baking items, a lot of seasonal items even treating for pets is a little bit seasonal in the second quarter.
And so you combine that with some improvements we're seeing on Blue Buffalo and some receptivity from our pet specialty channel, Wilderness, we feel like we'll see a step up in the second quarter because we've got more good news coming.

Operator

Andrew Lazar, Barclays.

Andrew Lazar

Jeff, you talked a bit about obviously the expectation of continued sort of progress around market share and competitiveness as you go through the year, I guess, would you anticipate, you know, being in a position to sort of hold share across your NAR segment for the year or maybe just the more gradual start make this sort of outcome perhaps still a bit overly optimistic.
And then Kofi, I think last quarter you mentioned an expectation for an equal contribution from volume and price mix for the year. Is that still how you sort of see things playing out at this stage? Thanks so much.

Jeffrey Harmening

Yeah, thanks Andrew. I think the theme of the day is probably progress and continued work to do which we intend to do to improve our competitiveness throughout the year. That is certainly true for NAR. It's also true for Blue Buffalo, I would say the first quarter kind of played out as we anticipated for both of those segments.
We improved our competitiveness in NAR, but there's still market share gains to get. And we fully expected that especially as our first quarter sales comp was probably the toughest of the year and Q2 gets quite a bit easier from a sales standpoint.
And we talked a lot about our great news on our biggest brands, but most of that starts to hit in the second quarter. So Andrew I would say I'm not going to predict where we end up at the end of the year, it's a long year. My belief is that we'll keep getting better as the year progresses, starting in Q2 with our competitiveness. And that's what I would expect, given the first quarter play that as we thought and the news that we have introduced seems to be landing the way we wanted to.

Kofi Bruce

And to your second question, we continue to be focused on and expect gradual improvement as we move through the year in total sales. And to the point of our expectations for the full year, there's nothing that, that, you know, tells us we're broadly off mark and expecting equal contributions from volume and price mix as we work our way through the year towards our guidance.

Operator

Michael Lavery, Piper Sandler.

Michael Lavery

Thank you. Good morning. When you talked about some of the continued market share improvement, you cited one of the drivers has improved customer service levels. Can you call out maybe where that still has been an issue and what the kind of road map is or timing for improvement there?

Jeffrey Harmening

So we have seen improved customer service gradually across most of the portfolio acutely. So in our food service business, our pet business, in particular, those have been aided by I would say bigger changes in the service levels, but in aggregate, our service levels are moving close to where they were pre-pandemic.

Andrew Lazar

So it's not any one particular category. It's just broad improvement for that.

Jeffrey Harmening

Say, specifically with our food service portfolio and our refrigerated, and you know, obviously across our pet portfolio, both our internal and external supply chain reliability has improved service levels across all the formats.

Andrew Lazar

Okay. That's helpful. And on pet you said that the quarter kind of, you know, you're seeing progression. It's as you had expected. Can you give a sense of a little bit more what's ahead? And I maybe specifically on Wilderness even if the declines are moderating. Do you have an idea of when actual growth is expected and what we should be looking for there?

Jeffrey Harmening

Yeah, I think good, very fair question. Yeah, I was pleased by our improvement in Q1 on pet, particularly on the on the sales. I mean, we were down 1%. I think we lost 0.1% market share. And our dry pet food business was Wilderness and Life Protection Formula, and actually Tastefuls in cat actually gained share.
So we kind of gained share on 60%. So it's a good improvement. But down one is clearly not the goal and, and even if Wilderness improved, it did not improve all the way that we want. So I'm really pleased that there's direction and the momentum and there's, I think there's more to come on Wilderness specifically.
You know, we just turned on the advertising, you know, at the end of the first quarter, this new advertising, which, you know, shows the protein relative to our nearest competitor. We've seen in the games (technical difficulty), but those take a little while in the feeding cycle of pets.
I would also say, you know, starting in the second quarter. So we're going to hack up on advertising in the second quarter. But in addition, you know, we're doing a couple other things on Wilderness that will help us. The first is that we're reintroducing some grain-free products. So we have some grain-free products that we're adding back to the Wellness portfolio, as we had a few years ago.
The other is that we're adjusting sizes and making some smaller sizes again in this current economic environment, smaller bags of dog food tend to do better. So we're reintroducing those and we have commitments from a couple of our pet specialty customers to improve the way that they feature Wilderness in store.
And so we're working with our retail customers, all those things hit in the second quarter. So, you know, my expectation is that we continue to see improvement on Wilderness and pet into the second quarter and we'll see what that yields. So I'm not going to give a number for how much is going to improve, but looking for improvement on our pet business in the second quarter and on wilderness.

Operator

Max Gumport, BNP Paribas.

Max Gumport

Hey, thanks for the question. Jeff last quarter, you discussed your intent to return excess cash to shareholders in the form of share repurchases if you couldn't find attractive acquisition candidates. So I think the initial read of the intent to use all the proceeds from the yogurt divestiture suggested there might not be attractive M&A out there.
It seems like in today's prepared remarks, you had a bit more pointed commentary about focusing on deals that are more bolt on the nature specifically in that $1 billion to $2 billion transaction size range. So I think that helps to provide more clarity on the reason for why you're returning the proceeds to shareholders. But I'm curious what you're seeing in the current environment that has made you focus on finding the next Andes or Tyson pet treats business rather than the next Blue Buffalo. Thanks.

Jeffrey Harmening

Yeah. So thanks for the question. I appreciate that. And you know first I was, you know, kind of back up and say in the last fiscal year, you know, we did exactly what I said, which is we didn't find any acquisition candidates that we really liked. And so we returned the money to the shareholders in the form of share purchases.
So we actually did what we said we're going to do in the last fiscal year. When it comes to this year, our balance sheet is in a great place. And so with this divestiture of our American yogurt businesses, we felt it important to make sure that all of our investors know what we intend to do with those proceeds.
And as we look at the environment, you're right, I got a little bit more specific in this release and it really is kind of what we see in the near term as the kinds of things that might be available to us in terms of bolt-ons and, you know, similar to what we had done in Andes or similar to what we had done for Tyson.
I mean, certainly if something bigger came along that we don't see now, we could entertain the notion, but for us, it seems like our, our focus right now and what we see in the marketplace really is probably more availability of smaller size assets that we could bolt on that would enhance our growth, so still enhancing our growth, but bolted on to businesses we already own.
And importantly, I mean, I know that, you know, this because you've been following this for a while, but for those who haven't been, maybe, you know, we're able to do these bolt-on acquisitions and repurchase shares at the same time. We did it with Tyson, we did it with Andes, we've done it for a long period of time.
And so we got a little bit more specific on the near term only because that's the way it looks to us and looks to be our focus over the coming time. And you know, we have the balance sheet to be able to do both of those things at the same time, add on bolt-on acquisitions and do this yogurt divestiture and as well as repurchase shares.

Max Gumport

Thanks. And then with regard to improving your competitiveness, which is clearly a focus for this year, it was nice to see the progress in the first quarter. And I recognize you're far from declaring victory on that front just yet. But I'm wondering if you think investors would be making too much of a big deal out of the last month or so data, which would suggest you took a step backwards.
I realized it's just a quad week and there can be volatility, but it was like in cereal, refrigerated dough, snack bar, sweet snacks, there was a bit of a step backwards. It does sound like you have more product news coming later on in 2Q. So just curious how you think we should all be reading that latest quad week of data. Thanks.

Jeffrey Harmening

Yeah. So your question says commentary on Q1. It's right, I mean, we didn't make progress. There's no victory being declared, but I would say that we're confident in that, you know, the first quarter played out the way we thought both in terms of the macro environment and our improved competitiveness. And we understand that there's a job left undone, which is to kind of get back all the way to share growth and absolute growth.
I mean, down one is not the goal, but we're confident we can get there given what we see coming up on the horizon in terms of our initiatives. Over the last four week period, I'm not sure the angst of investors feel over the last four week period. But I can tell you it's entirely due to a timing of merchandizing shift from one period to another. So it's really a couple of big merchandizing programs, that shift in timing. So I am not worried about what you see in scanner data for the last month.

Operator

Rob Dickerson, Jeffries.

Rob Dickerson

Great. Thank you so much. I guess you touched on kind of pricing couponing a little bit earlier, but I'm just curious, you know, as we think through, I guess Q2 and then I also I guess back half of the year, like, you know, is there a scenario that kind of plays out such that in North America price mix could actually be positive this year?
I mean, clearly, you know, there's a lot of discussion around promotional needs and what we're doing on pricing and the value based consumer, et cetera. But at the same time, there's a comment in the prepared remarks that spoke to like selling the right, you know, pack size, the right channel at the right price. But then also maybe there is some price mix benefit on some of those shifts, so just trying to get a sense of kind of the price mix outlook for the year.

Jeffrey Harmening

Yeah, let's look at what's happened this year in our categories where you see kind of an equal contribution from rate and from mix or from rate and volume in our categories. And that's kind of what we see playing out for the year, kind of an equal contribution and it's more or less what we saw in the first quarter.
Then if you look at our business, you look at our price mix was down 1%. It was entirely mixed. In fact, more than entirely and more than entirely mixed and mix is a hard thing to really predict. As we look ahead, I mean, we don't comment on pricing or promotion plans as we look ahead.
But I mean, I think it's important to note that our categories remained very irrational. And what we see is input cost, inflation is certainly moderated, but still our for our forecast for us for the year is 3% to 4%. And so as we look ahead, we see rational categories and we see a little bit of inflation and you know what I'm pleased with is that we have the (technical difficulty) productivity savings that can really offset that.
And so now our job is to drive growth. And so as we look at the coming quarters, we'll see what happens with price mix, but it's played out exactly so far this year, kind of as we thought it would.

Kofi Bruce

And, you know, we could see some modest improvement mix as we work our way forward. But to Jeff's point, it is hard to predict

Rob Dickerson

Fair enough. And then just on the M&A side, you know, again, prepared remarks, you know, spoke to kind of bolt on attraction $1 billion or $2 billion transaction size on average. Simple question, kind of where you would like to go, right? Is this kind of build up a little bit more international scale, maybe leaning into pet? So just any color you could provide would be fabulous. Thank you.

Jeffrey Harmening

I'll provide a little bit of color, but maybe not as colorful as you're -- it's going to be things that, you know, that kind of bolt on to our existing categories. I would say specifically, you know, are the category where you have a right to win, which, you know, in a large degree are our global businesses.
And so you look at pet or you look at what we've done in acquisition in pet or snacking or what we've done in food service. I would expect more of those both on the priority business where we have a right to win and where we see growth and it could be international it could be domestic.
So I'm not going to get that level of detail, but really where we have a competitive advantage where we see growth, maybe get little synergies along the way, those are the places where we will continue to look.

Operator

Bryan Spillane, Bank of America.

Bryan Spillane

So two for me, one just I think we've talked a little bit about, you know, kind of progress and trends. So maybe Kofi could you just tie together, I think at the start of the year, we were kind of looking at more of a back half loaded plan to begin with. So just as we're looking at the second quarter, you know, will it look somewhat similar to 1Q? I know we've got the comps are kind of wonky in pet but any color you can give us in terms of phasing, I think will be helpful and then I got a follow up.

Kofi Bruce

Sure. So we would expect to see continued improvement off of this trend as we step in the Q2. You know, I think it would be fair to characterize the years, expecting gradual improvement in the top line as we work our way Q2 into the back half of the year, and then obviously, profit a little bit more phased in the back half.

Bryan Spillane

Okay, thank you. And then the follow up Kofi just on the divestiture and the dilution, is there stranded overhead incorporated in that, I guess underneath my question is just, you know, is it dilutive initially? But then you work through the overheads and over time it actually isn't as dilutive.

Kofi Bruce

Yeah, our expectation, you're exactly right. Our expectation is that there's stranded overhead that it will take us a period of time. We would expect that period to be about two years or less for us to get that stranded overhead addressed and out of the cost structure. So that is a part of the drag in the dilution math.

Bryan Spillane

Okay. Are there any TSAs also we should be aware of?

Kofi Bruce

Yeah, there will be TSAs as part of the terms of both of the sale agreements with Sodiaal and Lactalis.

Bryan Spillane

Okay, but not very material.

Kofi Bruce

Yeah, I would not consider the material to the dilution and accretion.

Operator

Leah Jordan, Goldman Sachs.

Leah Jordan

Good morning. Thank you for taking my question. I just wanted to follow up to the discussion on the more food at home trends supporting the volume lift. You know, is that a widespread list versus your expected baseline across categories or any notable surprises to call out there and has that demand shift impacted your view on how you're promoting or messaging in this current environment, including any update on how you're thinking about the timing of the spin throughout the year?

Jeffrey Harmening

Yeah, as we look at a little bit of a shift from away from home to at home, first, it's a little bit of a shift. I mean, it's from like 86% of food at home to 87%. So just to make sure we highlight it and don't overplay it. You know, the second I would say, you know, within the trend, it is broad based and what we see is that the traffic at restaurants is down a little bit and the traffic at what we call non-commercial outlets.
So places like K through 12 schools or colleges and universities or healthcare places like that, we actually see growth and which is where we over-indexed, and importantly, we see growth versus the prior year, but neither are actually at pre-pandemic level.
So it's growth off a base that was much lower than it was before. But growth in this non-commercial space, which we over-indexed, which is why we have confidence in the growth of our food service business. In terms of the impact on our retail business, it's actually been quite broad based across food and beverage. So it hasn't really impacted one category or the other significantly because again, it's a one point change versus what we saw a year ago.

Kofi Bruce

And Leah, about time to spend, I mean, we have had I think pretty consistent plans to increase our investment behind media and brands this year. We saw that in Q1, that'll actually be up even more in Q2. Jeff talked about some of the big seasonal initiatives that we have, whether it's on Pillsbury or Soup or others. And so making sure we're supporting our brands through that period of time is important. So you'll see even a bit more of an increase in brand support here in the second quarter and that will continue in the back half.

Leah Jordan

Okay, great. Thank you. And then for my follow up, I don't think we've touched on international yet. Just seeing if you could provide more color on trends in that segment. I mean, it sounds like Brazil has improved from last quarter, you know, what were the key drivers in that region and then if you could comment on China as well. I mean, that seems to still be challenged, you know, how are things trending sequentially and any updated views on that region as we go throughout the year?

Jeffrey Harmening

Sure. On our international business, I was really pleased; first of all, I was really pleased with our European results. You didn't mention that, but I'll tee up the question and answer it myself. We did see some growth in our European and Australian business, which is good because it's a business that is a strong profit contribution. And so I like the way we're competing in Europe.
And Brazil, you're right, we grew in the first quarter in Brazil on the top line and a much improved from the year before. It's one place when we've talked about this before, it was one place where we saw quite a bit of inflation over the last few years and probably didn't fully utilize our strategic revenue management tools in the right way.
And so we've adjusted pricing and in Brazil, it's one of the places where we needed to adjust. We've made the adjustments, we're seeing the benefits of that, so pleased with how we performed in Brazil. The challenge for us really is China. And within China, we have two businesses, Wanchai Ferry dumplings and Häagen-Dazs, kind of equally split.
Wanchai Ferry dumplings is doing fine and even Häagen-Dazs at retail stores and through e-commerce also doing pretty well. It's the Häagen-Dazs shops, the shop traffic is down, and much like you've seen and probably heard others in the market talk about the consumers pulling back and when they do, you know, the shop traffic is down.
And so as we look at the rest of the year, while we would like that trend to improve, we're not banking on that trend improving for us to hit our guidance for the year. And so as we look at international, I'm actually pretty pleased with most of it. And the one area that's challenging is China and it's not really an execution challenge on our part, it really is a more of a macroeconomic challenge with the shops, the margins on shops are low, but the fixed costs are high. So it has an impact on profitability.
So that's what we're seeing a little bit in China. We're not counting on the economics to get better in the near term. So it's something we'll continue to have to work with throughout the year.

Operator

Robert Moskow, TD Cowen.

Robert Moskow

To what extent does morning foods currently operate with an integrated cross category strategy across cereal and yogurt and does the divestiture of yogurt require you to alter your approach to the retailer or your consumer insights? And are there any implications regarding scale in that regard or is it just like there's different buyers? There's a cereal buyer, there's a refrigerated buyer, and it's very separate,

Jeffrey Harmening

The answer Rob is much more the latter. There's not a category of strategy when it comes to yogurt and cereal. I mean, they both participated in a lot in the morning occasion. So those are the things they have in common as well as, you know, kind of a combination of taste good and good for you. So they have that in common as well.
But there's not broader implication with our retailers, there's not a broader implication on insights. We have insights embedded in that particular operating unit, but also we have insights in North America retail, that kind of span. So it's a business from that standpoint and frankly, from a manufacturing standpoint, that's relatively easily separable and I wouldn't see an impact on serial from that divestiture,

Robert Moskow

And a follow up. You said 6 of your 10 categories are flat or getting better. Can you comment on the other four, like if it is snacks and dough and what's the plan for accelerating the growth in those other four?

Jeffrey Harmening

Yeah, I would say that, you know, rather than taking a tour around the world of all four, I would say that the biggest one, you know, the biggest one is dough and a little bit of snacks. So those are kind of the two biggest by far and with refrigerated dough, think we have some phenomenal advertising coming up in the second quarter using the Doughboy.
We have lots of product news in that category, launching some new products. And so I would anticipate our dough business to get better in the second quarter. We'll see about share. Our market share in dough is already about 75% or so. So the key to dough is really just to get, you know, to kind of grow it.
And so I have a high degree of confidence in our plans as we look forward. We'll see what they yield, but our dough business I feel good about. And then fruit snacks, reminder -- you may not remember this, but we're bringing additional capacity starting in the second quarter particularly for our Gushers business, which has been capacity constrained.
We have some really good new products, especially and Gushers is also coming in the second quarter. So that's a business where I would expect to see some improvement as we move throughout the year, you know, it will all happen in the second quarter.
But as we move through the year, I would expect us to see improvement in our fruit snacks business. So those are the two biggest ones, Rob, the one where we feel like, okay, we made a good progress on a lot of them, but those are two we need to continue to make progress.

Operator

John Baumgartner, Mizuho Securities.

John Baumgartner

I wanted to come back to North America and the comments on competitiveness and the larger eating at home environment. You're looking at recent innovation, it seems to appeal maybe a bit differently to the frequency of consumption, the Totino's Breakfast, the taco dessert shells, the low sugar Betty Crocker. How do you assess your portfolio at this point and the frequency of consumption relative to its potential?
Are there certain brands or categories where that gap is still significant? And in closing those gaps, what's the relative importance between, you know, even more innovation relative to making pack size changes or marketing differently against the business in its current state?

Jeffrey Harmening

Yeah. When we think about innovation, we kind of think about it broadly and it can happen in all the ways you identify which is new product innovation. It can happen through our marketing messaging, it can happen through pack sizes, it can happen through all those things. A lot of times people focus on just the new product innovation.
And by the way, I think our new product innovation is good, but it'll be 5% of our business this year and the rest of the 95% is really what drives profitability and growth and household penetration. And so the key for us is to make sure we have innovation that's relevant category by category and sometimes that's messaging, sometimes that's news, sometimes that's having the right pack sizes in place, and other times is new product innovation.
Fortunately, I've said it before, so I'm maybe at the risk of just repeating myself. But as we look broadly, landing in the second quarter, I feel good that we have good new product innovation on our [billion-dollar brands]. We also have stepped up levels of advertising. You'll see some, some I think some exciting advertising on Totino's coming here starting in the second quarter as well as new products from Old El Paso and new Old El Paso soups that we've launched in the marketplace as well as news on our core, like flakier biscuits.
So it really is -- and I go category by category, but everything I just mentioned is innovation on [a billion dollar brand]. And I think that's the key when you have good ideas on big brands, you tend to do better. And I think we have differentially good ideas on big brands, which by the way includes Blue Buffalo, not just North American retail.

Jeff Siemon

Okay, I think that's all the time we have this morning. Appreciate everyone's engagement and we look forward to catching up over the course of the coming months. Please reach out with any questions through today and I look forward to speaking with you again next month. Take care. Thanks, Julianne over to you.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.