General Mills, Inc.

Greetings and welcome to the General Mills fourth quarter fiscal 2022 earnings Q&A webcast. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded Wednesday, June 29th, 2022. I would now like to turn the conference over to Jeff Seaman, VP of Investor Relations. Please go ahead.

Thank you, Kelly, and good morning to everyone. We appreciate you joining us today for our Q&A session on our fourth quarter and full year fiscal 22 results. I hope everyone had the time to review our press release, listen to our prepared remarks, and view our presentation materials, which were made available this morning on our investor relations website. Please note that in our Q&A session, we will make forward-looking statements that are based on management's 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 with Jeff Harmoning, our Chairman and CEO, Kofi Bruce, our CFO, and John Newby, Group President of our North America Retail segment. Let's go ahead and get right to the first question. So Kelly, can you please get us started?

Certainly. Thank you. If you'd like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. Our first question comes from Andrew Lazar with Barclays. You may proceed with your question.

Great. Thanks. Good morning, everybody. Good morning. Good morning. Good morning. Great. I think you've talked about over the course of this year how the combination of HMM and pricing and other levers have actually been pretty effective at sort of protecting know a lot of the at least the dollar cost of actual sort of inflation but that supply chain costs and some other things of course have have um have weighed you know weighed on on margins and profitability as well like it has for for the group as a whole i guess as you look forward to 23 i think you mentioned that you you anticipate um you know another sort of call it low double digit benefit from pricing that's you've taken already or is already in place But, of course, you still see another very significant 14% jump in inflation. And slowly but surely, hopefully, we'll continue to improve on the supply chain side. So I guess the question is, do you think that the combination of the pricing and the HMM and the other levers that you've got would be enough in fiscal 23 to sort of better protect dollar profit, even including inflation? you know, some of the supply chain issues and other things as opposed to just cost inflation. And then I've just got a quick follow up. Thank you.

You want to take that one?

Absolutely. Thank you, Andrew. So as we think about our approach to the next fiscal year, we're thinking about it much, much the same way. We're expecting only a modest decline in the level of supply chain disruption. We expect, as you mentioned, our price realization in a combination of HMM to largely offset the dollar cost of the 14% inflation that we've called. And our expectation is that the remainder of costs from disruption, we would work out over time to the extent that we see the environment stabilized. So the only big question remains, when that happens,

was set this year okay and then um obviously it's still very dynamic and i know there have been plenty of discussions and a lot of debate of course around you know around pricing and cost and everything else but you know as you built your plans going into 23 and then discuss them with you know with your key retail customers and things i guess are there things that um have changed a little bit around going into your plans for fiscal 23 in terms of your retailer conversations versus let's say a year ago meaning you know things around innovation or marketing plans, merchandising plans? I mean, are you seeing customers start to think a little bit differently about those things as opposed to simply, you know, the pricing and inflation dynamic? Or am I being naive and we're just not there yet? Thank you. John, you want to take that question? Yeah, absolutely.

So it certainly is a dynamic environment. There's no doubt about that. And certainly inflation and supply are two of the big topics that we spend a lot of time with retailers on. But I would say, Andrew, that things are pivoting back a bit more to growth from a marketing standpoint, from an innovation standpoint. So we're having those conversations as well. And also, how do we provide value to consumers in a time that they need it as well? So we're talking about many things. Honestly, a year ago, it was really about supply that we were thinking about then. So I think things are getting back to some of the conversations we've had in the past, and it's all about how do we properly grow our businesses together. Okay.

Great. Thank you.

Our next question comes from Brian Spillane with Bank of America. You may proceed with your question.

Hi. Thank you, operator. Good morning, everyone. I guess my question, and maybe this is for you, Kofi, if we look at the guidance, the organic guidance, right, so the revenue range is 4% to 5%, and if you add back the net impact of the divestitures and acquisitions, the operating income range is 1% to 4%. So can you just kind of help us kind of think through what are the drivers that would cause you to be at the low end of that range, the OI range, or the higher end of that OI range? Again, assuming that 4% to 5% organic sales growth is the right number. Is it a reflection of commodity volatility? Or just like what are some of the pieces there that kind of describe or inform that wider range in OI?

Yeah, no, I appreciate the question. And I think, you know, back to my earlier comments about sort of the backdrop for the operating environment, it still remains volatile with a high degree of uncertainty. I think we're expecting as a backdrop that, you know, the supply chain disruptions to the extent they are foreseeable will in the near term not abate that much. So that is a factor that even as we work through this past year, um was a was a headwind to margins and and even as we moved from quarter to quarter uh provided some volatility to our expectations so the guidance range uh primarily reflects that and then you know obviously um you know inflation um is our best call based on the information we have in front of us is 14 but i would note that you know our our expectations moved up either expectations on the range.

Okay. Thank you for that.

And then go ahead. I just add one, one additional piece on the inflation is, you know, we, we are about 55% covered on our ingredients and packaging material requirements as we start the year, that's a bit higher than average, but you know, that still

Okay. And anything in terms of, I guess you must know more about the first half of the year than the second half of the year. Just anything we should think about that in terms of phasing, just in terms of the inflationary pressure, is it a little bit more front or back half loaded?

Yeah. So I think that's a great question. And one word, just a little bit of comment. So as you think about the year, I would say we'd expect that the first half profit growth to be slightly weighted and favorable to the second half. A lot of that obviously is in part of the weight of the comparison on this Q4 that we just closed. But as you think about inflation, which you also referenced, we would expect that to be and a full impact kind of in Q2. And then the other factor that I just call out that's worth mentioning is the impact of divestitures. The ones that we've announced and the ones that we've closed will be a bit higher in the first half before we begin to lap the yogurt and dough divestitures, which happened in the second half of this fiscal year. All right. Thanks, Kofi. You bet.

Our next question comes from Robert Moscow with Credit Suisse. You may proceed with your question. Hi.

I have just a couple of questions. You know, Kofi, I think in the middle of the year, you actually quantified the cost of supply chain disruptions. And then I don't know if you've quantified it since. Do you have a number for us? And when you talk about your pricing and HMM actions offsetting cost inflation, does it also offset that disruption estimate or is that a separate number? And then I have a quick follow up.

Yeah, so if we did provide a number, it's I think it has in the range of 200 previously 250 is about where where we we hash the mark here at the end of the year. And then I think back to my earlier comments as we look at the full year, you know, our adjusted gross margins are down in a If you kind of deconstruct that, the elements would drive you to inflation being about 500 basis point roughly drag offset almost completely by price mix and HMM. And that leaves the cost of the operating environment, the disruptions, the due leverage, other intermodal transfers, all the things that we're doing to accommodate supply in this environment as the driver of the margin decline.

Okay, and I might just not be competent in finding things, but I'm having trouble finding the price mix for North America retail in fourth quarter. I think I'm backing into something like 16% pricing.

Okay, so if your cost is 15 points is the number of organic price mix.

I guess here's the question. If your cost inflation for the year is only 14%, but you're running pricing at 16, isn't that a net positive?

Are you talking this fiscal year or next fiscal year?

Fiscal 23. So for fiscal 23, I think you're guiding to 14% inflation. Your pricing in your biggest segment of the market is up mid-teens. So I guess it seems like the pricing benefit is, from a dollar standpoint, is a net positive compared to your price inflation on a cost inflation on a dollar standpoint.

Yeah, Rob, I think you've got, I mean, you have to remember that we'll be starting to roll over some pricing as we come into this. 23. My apologies. And then the other piece that would be included in that would be the offset from volume and deleverage that comes through. We mentioned that we are expecting elasticities to be below historical levels, but to increase somewhat as we go through 23.

Okay. That makes sense. And should I think about like for first quarter pricing, is that you're lapping only a 4% price mix for North America. You're taking more action. So are those two things kind of offsetting each other, do you think? Like, you'd still be mid-teens in the first quarter?

Yeah, roughly. I think that's a fair assumption. Got it. Okay, thank you. You bet.

Our next question comes from Michael Laver with Piper Sandler. You may proceed with your question.

Thank you. Good morning. Just looking at the SNAP benefits, the federal COVID emergency authorization is now set to run at least into October. And that, of course, supports the state emergency elevated levels of SNAP benefits that have been pretty significant. As you contemplate your top line guidance, what assumptions do you make around how that might unfold?

You know, I would, you know, I would start and I'll have John Nudy follow up on this, but I, you know, Michael, I would start with, you know, the, what we, you know, our assumptions include people starting to eat from away from home more to, to a little bit at home eating. And so I think, you know, as consumers become more concerned about their economic reality, the first thing they tend to do is eat more at home and bus away from home. And we've seen restaurant traffic year over year, the last couple of months. has gone down a little bit, and eating at home has gone up. And so as we think about our assumptions for the year, and we saw this in the last recession, the Great Recession, we saw that consumption away from home eating was down and replaced by at-home eating. We're seeing the same kind of behavior start now, so that's actually the first place I start. And that's because consumers want to eat out more, but the cost of eating away from home is more than double the cost of eating at home. And then, of course, there's value-seeking behaviors. And once they get in the store, consumers try to change their habits as little as possible and still be able to get what they want. And so that's how we frame. I mean, it's a non-answer to the SNAP question. But before we go deep down that hole, I just wanted to start with kind of an overarching comment. And so, John or Kofi, do you want to take over a little bit on the SNAP question?

Yeah. So thanks, Jeff. And I think you hit it exactly right. So SNAP is obviously pre-pandemic periods. So we continue to monitor SNAP and plays into things, but as Jeff mentioned, some bigger factors in play as well, including the shift to more in-home eating, and then even what's playing out in our categories. We've obviously watched very is increased by a point or two in terms of volume performance. We've actually held our own from a share standpoint during those periods. We've seen the second and third tier brands lose share to private labels. So it's a dynamic time. We're very close to our business and watching all the different factors, but Snap is just one of those.

That's really helpful, Kohler. That's great. And just to follow up, I know you've called out the elasticities you expect to start at least getting closer to normal levels and factoring in some of that volume piece. On the pricing side, just especially with what the consumer is facing and some of the pushback maybe even from retailers, are you starting to feel like you're hitting a price ceiling in any categories, or is it really still more of the same like it's been in this recent environment?

I would say up until this point, we haven't really seen any change in elasticities. And I think the reason for that, there's a couple of reasons for that. One is that consumers have switched to more at-home eating because it's more expensive. So the reason I started talking about, I would say would be a big contributor to elasticities not having changed much, even over the last month from what they were two or three or four months ago. And the consumer is actually still in a, they're still in a decent place. They're getting nervous. But, you know, when it comes to savings rates or the employment rate, I mean, consumers are still spending quite a bit of money. Now, as they look ahead, they get nervous because they see inflation and so forth. But right now, the consumer is in a decent place, and we haven't really seen any elasticity change, and I think that's because of the shift from away from home to at home eating.

Okay, really helpful. Thanks so much. Yeah, thank you.

Next question comes from Cody Ross with UBS. You may proceed with your question.

Hey, good morning, folks. Thank you for taking my question. I just want to dig a little into PET here because the PET margin continues to slide further, driven by inflation and supply chain disruptions that you called out. Did this catch you by surprise during the quarter? And when do you anticipate the rate of margin declines to moderate? And then I have a follow-up. Sure.

Yeah, absolutely. Sorry. I just presumptively just in there. So thanks for the question. I just want to kind of set the frame by just acknowledging I think the pet business for us is still seeing really strong demand, right? And we've grown the pet business double digits on both the top and the bottom line in the four years post-acquisition. So this is more a function as we look at the margins specifically around two things, roughly in equal measure. The impact of the acquisition that we completed early this year, this past fiscal year, of the pet treats business, which has largely driven by some one-time costs and some modest margin dilution that comes with that business. And then second, the cost to serve, which we're acutely higher in the quarter on the pet business. We candidly were not able to produce to the demand we saw in the quarter and have had challenges and headwinds as we worked through the year. We're taking significant access to your question on kind of what we're doing about it to de-bottleneck and continue to add external supply capacity. In addition, we've put $150 million on service to get additional capacity online and starting at F24. So we would expect the margin pressure to modestly improve as we take the near-term actions and then the real unlock to come as we get additional capacity both external and internal online.

Gotcha. Thank you. And I just want to follow up a little bit about gross margin and some of the stranded costs you expect. So if you combine the low double digit price mix with the HMN savings, it looks like you should fully cover the inflation you're going to endure next year. You'll also be lapping the supply chain challenges in the second half next year. Is it fair to say right now that gross margin could actually increase next year? And if not, is that because of stranded costs? And if so, can you just kind of give us any color as to how much of stranded costs you expect? Thank you.

Cody, this is Jeff. I think you've got the right drivers. You're right that HMM plus our SRM pricing actions are intended to offset the inflation component. We did talk about a modest decline in disruptions. We will have an impact from

for the year got it thank you very much I'll pass it along our next question comes from Pamela Kaufman with Morgan Stanley you may proceed with your question hi good morning morning morning in the prepared remarks you highlighted that portfolio reshaping is going to be an ongoing aspect of the company's strategy and One of your key competitors is pursuing a more surgical approach to portfolio reshaping. What are your views on pursuing a similar strategy, and have you considered splitting up the company across higher and slower growth segments?

Yeah, thanks for that question. You know, what I love is that our strategy is working, and it has been working regardless of what competitors are doing. Our strategy has been working for the last four years. You know, as evidence by our continued, you know, growth above our long-term algorithm and the fact we're needing share in the majority of our categories. And so I think actually the worst thing that we could do is look at what somebody else is doing and try to emulate that when the strategy we have is working. And, and, you know, I say that because, you know, we're executing well on our core business as evidenced by the, you know, the share gains over the last four years, but we've also integrated M&A quite well. And whether that's, you know, seamlessly divesting the yogurt business or, for aggressively growing Blue Buffalo and the pet treat business. We feel great about that. The other thing I would say is it kind of goes, people get lost and we talk, there are a lot of dis-synergies from splitting things up and not only financial dis-synergies, but also capability dis-synergies. And let me give you a couple of examples. When we bought the Blue Buffalo business, one of the things we said was that know the capabilities we have at general mills are very similar to what is needed at blue buffalo and one of those is extrusion technology which is the technology we use in cereal and we're one of the world leaders if not the world's best at extrusion technology you know the same would be true for things like thermal processing where you know the same technology that's used for wet pet food is used in things like soup and yogurt and other things and so you know for a whole host of reasons but but ending with our strategy is working You know, whatever our competitors do, their strategy may be best for them. But we really like our strategy. We like the way it's working. And at the end of the day, it's creating quite a bit of value for shareholders.

Great. Thanks. And also you've discussed how you expect consumers to seek more value given the pressures that they're facing. In this environment, how are you thinking about managing price gaps versus private label and your branded competitors? it seems that your price gaps have widened pretty meaningfully versus private label in your categories. So what are your expectations around trade down and how are you thinking about price gaps going forward?

I'll let John Newdy answer the details. I would note that our pricing, it has been higher in the last few months, but at the same time, we're still growing share, which I think speaks to the strength of our brands. But John, you want to follow up?

Absolutely. And, you know, Jeff, you touched on this before, but it's not only looking at our categories, but looking at broader consumption. So it starts with our consumers eating away at restaurants or eating at home. And we're seeing that shift at home, which is important. We've built an S-round capability over the last five or six years that we're really proud of. And it's much more sophisticated today than it was. We're able to monitor what's happening in the environment and then take targeted actions. And it might be less pricing. It might be promotional optimization. So we're taking the actions we believe will enable us to win and the categories that we're competing in, and we are. If you look at the past year, we've grown share in the majority of our categories, not only in North America retail, but really across the enterprise, leveraging this S4M capability. We take private label very seriously. We call it retail of brands. We believe the best course is to make sure that we build our brands and we innovate. And over time, if you look at and our categories is a 10. And again, we believe that's because we build our brands and we innovate. We'll continue to do that as we move forward. So we compete in North American retail alone in over 25 categories. We're laser focused on looking at what's happening from an inflation standpoint, how we're going to offset that from a pricing standpoint, how we're going to build our brands and how we're going to innovate. Again, we feel good about our plans for the coming year. We do believe that we're going to be able to compete effectively and grow share in our majority of our major categories, again, in fiscal 2013.

Thank you. Our next question comes from Chris Groh with Stiefel. You may proceed with your question.

Hi, good morning. Good morning. Hi, just had a question for you to be clear on kind of the phasing of pricing through the year. Is it so you have pricing actions that have already either been announced or you have carryover pricing from this past year? So is it the second quarter when pricing plus your HMM cost savings would be sufficient to offset inflation. Is that the right way to think about that in the second quarter?

Yeah. Yeah, sorry, I jumped in again. Chris is roughly right. I think that's a fair expectation given the inflation assumption for the year and the expected . Okay.

And then I was curious, jumping over to the pet division, bringing on new co-packers you won't have new capacity available and sound like until fiscal 24. do you believe you can meet demand in fiscal 23 is that the addition of co-packers and perhaps some of the new capacity that's going to allow you to meet demand in fiscal 23 for that division i i think it's fair to say in the near term this will continue to be a headwind we expect modest

enrollment, continued enrollment of additional external supply chain capacity. But, you know, I wouldn't expect it to be, you know, fully enough to satisfy the demand we're seeing on the business in the near term.

Okay. That's all I had for you. Thank you.

Thanks, Chris.

Thank you.

Our next question comes from Ken Goldman with J.P. Morgan. You may proceed with your question.

Tom Palmer on for Ken. I wanted to ask on elasticity. Guidance assumes elasticity increases but remains below historic levels. I just want to make sure I understand this. Are you assuming elasticity returns to more normal levels at some point of the year or that some degree of below average elasticity persists throughout the year and, you know, why you have that view, and what do you consider to be normal elasticity? Thanks.

Well, so I'll just take that, Kofi.

Yeah, this is Kofi. So I think the fair assumption is for the full year, our guidance is predicated on elasticities being higher than this past year, where, as a reminder, they were significantly below, what our historical modeling would tell us. We are not expecting, for the balance of the area, a return to the full levels of elasticity that the historical models would indicate. Structurally, there are a number of reasons for this, and Jeff referenced a lot of them around the at-home dynamics, the consumption patterns that we expect to see from consumers being a primary driver as a backdrop. And then I think it's hard to drive by the continued challenge around supply chain disruption, just as you think about that as a backdrop for choice and selection for consumers. And then lastly, you think about the broader inflationary pressures and the value trade-offs for our assumption.

Okay. Thank you for that. And then just on shipment timing, I think a quarter ago you talked about how some of that undershipment in North America would likely be a fiscal 23 event. At least looking at Nielsen, seems to be a bit of timing benefit in the fourth quarter. Is there more to come as we think about 2023? Yeah, I'm going to take that.

Yeah, absolutely. We actually don't believe there's any benefit in the quarter. We think non-measured channels is really the difference versus what you see in Nielsen and movement versus R&S. So we don't believe that we either build inventory or replenish it at our customers. So as we move through the first half of fiscal 23, we expect some of the same service issues that we experienced through fiscal 22 to still be with us. So as a result, we're not digging in any you're a real benefit from rebuilding inventories. Great.

Thank you.

Our next question comes from Steve Powers with Deutsche Bank. You may proceed with your question.

Yes, thanks. Good morning, everybody. Just a relatively quick follow-up on PET, if I could. I think the discussion has been pretty full, but I guess you know, the growth rate as realized in the quarter was, was still quite substantial despite the supply constraints. So I guess, is there a, you know, can you give us some color on what, what that implies about what you're seeing in all channel consumption? Number one, so you said you're not, you're not, you're not delivering to that demand, you know, how you're thinking about channel inventory levels, any risks that we should be, that you're monitoring and we should be aware of around fulfillment rates or out of stocks. I guess I'm, I'm looking at the, the current situation as a potential opportunity as you catch up. But I'm also just trying to level set on the interim risk. Yeah.

Well, let me frame it primarily through the lens of what we saw for service. And as we looked at the fourth quarter on this business, our service levels came in at the high end of 60, low end of 70%. So I think the opportunity as we go forward is to be running probably closer to 80%, but we see strong demand across all the channels as we look forward. So this is not a demand issue. It is ultimately going to be even modest improvements in supply will allow us to unlock additional growth. And the other factors that you listed around, you know, retailer inventories are less a challenge.

I would say in terms of risk, I'm not sure there's risk beyond what we've already identified in our guidance. The demand is clearly there, and we've accounted for the fact that in the very near term, we're not going to catch up fully to demand, but this is not beyond the wit of what we know how to do. This is really about bottlenecking capacity and using external sources and then building more capacity. As you indicated, we also have to remember we did grow, I think, 20% in the fourth quarter. So we feel great about our pet business, and we just have to make sure that we get our capacity back, particularly on dry dog food, and we're in the process of doing that.

Okay, very good. Thank you very much.

And our final question comes from David Palmer with Evercore ISI. You may proceed with your question.

Thank you. Just following up on the gross margin question so far, gross margin in fiscal 22 is 33%, I think, and gross margin in pre-COVID fiscal 19, mid 34s. I wonder what the net impact to that gross margin has been from M&A over that time. Basically, I'm wondering how much lower gross margins were versus pre-COVID on a comparable basis and how that compares to that 200 basis points plus of supply chain friction you mentioned.

Yeah, I think I can give it to you in the perspective of the friction from other supply chain costs being the primary driver of the drag as you look from the beginning of that period to the most recent quarter. You know, and I think I would note that Some of the biggest divestitures we've made over that period also had probably some margin dilution already embedded in our P&L. So to the extent that we are, you know, the most recent divestiture obviously had attractive margins, but the net of all of those is probably a small plus to neutral from a margin mix perspective.

So basically the decline, to put a finer point on it, the decline versus pre-COVID is really all supply chain disruptions.

Yeah, that makes sense. Any thought on the ability to reclaim that margin? Is there anything, you know, aside from the timing of pricing actions versus inflation that makes you think you can't get back to a business-adjusted pre-COVID gross margin level?

Yeah, no, look, I think the main thing I would start with is a recognition that the supply chain environment stabilizing. And once that begins to stabilize, we will be able to apply our peer leading HMM capability to get at these costs. Some of these costs will fall wholly naturally with the environment and the stabilization of supply chains. Some of them will require just some focused HMM work and all within our capacity to deliver. If you look at our historical ability to drive HMM, pre-COVID levels have been in the 4% to 5% range. So I think this is comfortably in the zone of what we can manage. What's not knowable right now, obviously, is exactly when we'll see the supply chain environment stabilize. But that is the way we're managing the business.

And I just had one last one. Your media advertising, you said in the presentation, it's going to go up by more than the 5% CAGR that you've had over the COVID era. And so that would be I guess we'd get you 20% above pre-COVID levels in media spend. This is sort of a fundamental change that you started from before, just before pre-COVID where you're, I guess, getting bigger in digital. And I think it's worth sort of addressing how different this has been for you, how you're spending on this, but also why you feel confident that this is getting an ROI in a way that would make you different than you were in the three years before COVID. Thanks.

Maybe I'll be clear about one point. Yeah, let me clarify one point, and then maybe I can shift it back to John or Jeff. Dave, in the presentation, we talked about the fact that we expect media to be up in fiscal 23, but there wasn't a relation to the growth rate. That was just in terms of dollars. So we've grown at a 5% compound growth rate the last three years. We expect media to be up in fiscal 23, but that wasn't a rate guidance. So in terms of where we're spending or how we feel about it, maybe I'll pass it over to John or Jeff.

Yeah, I would just say we feel great about our media and the granularity we have and understanding the return or ability to optimize. So more than 50% of all our media spent is digital now, and amongst that digital space, we've invested to acquire, partnering with the retailers and their data, which is really powerful, and becoming really targeted, building one-to-one personalized relationships, and then testing and iterating at scale. We can take 200 different ads online and optimize and really have the focus on the one that has the best return, and that's seeing significant increases in return for us. So we believe we're getting more than, you know, more return from our advertising than We're literally optimizing ads on a daily basis, and that's really good for our brands because it helps build them and helps refine the messages, and it builds more loyalty for us as well. So we feel great about media, and we're continuing to invest heavily to make sure we have the digital capabilities we need for the future.

Great. Thank you.

Jeff, you can close up here.

Pardon me, it seems Mr. Harmoning's line did disconnect, unfortunately. So, Mr. Seeming, you're good to close the call if you'd like.

No worries. Thanks, Kelly. We just appreciate everyone's continued engagement and interest in General Mills. Certainly, the IR team will be available today for follow-ups, but we wish you all a good continued summer and look forward to catching up soon. Thanks so much.

That does conclude the conference call for today. We thank you for your participation and we ask that you please disconnect your lines.