Earnings Call Transcript - BG Q2 2024

Operator, Operator

Good morning everyone and welcome to the Bunge Global SA Second Quarter 2024 Earnings Release Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Ruth Ann Wisener. Ma'am please go ahead.

Ruth Ann Wisener, Investor Relations

Thank you, operator and thank you for joining us this morning for our second quarter earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found in the Investor Center on our website at bunge.com, under Events & Presentations. Reconciliations of non-GAAP measures to the most directly comparable GAAP financial measures are posted on our website as well. I'd like to direct you to Slide 2 and remind you that today's presentation includes forward-looking statements that reflect Bunge's current view with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review these factors. On the call this morning are Greg Heckman, Bunge's Chief Executive Officer; and John Neppl, Chief Financial Officer. I'll now turn the call over to Greg.

Greg Heckman, CEO

Thank you, Ruth Ann, and good morning, everyone. I want to start by thanking the team for their dedication and focus. We continue to effectively deliver on our commercial and operational priorities, making excellent progress on integration planning. I'm so impressed by this team's passion and drive, excited by the opportunities to grow our existing business, and look forward to the future combination with Viterra. Two teams are working very well together in the planning process and are identifying ways to create a more complete company post-close. The regulatory approval process is continuing to progress. While we have the bulk of the approvals required, we are continuing to constructively engage with relevant authorities in the remaining jurisdictions. Based on ongoing discussions, we see no issues that would materially affect the economics of the deal, and we expect to receive the remaining approvals and close the transaction in the next several months. Turning to our results, we delivered solid adjusted EBIT, reflecting an improved margin environment in some regions during the second half of the quarter, partially offset by more muted conditions in others. Our balanced market requires a different approach. We're very proud of the team for their ability to adapt and deliver. For the rest of 2024, I think the dynamics we have discussed are still in place. Demand is good; customers at both ends of the supply chain, and largely in the spot market, limit visibility later in the year. We're controlling what we can amid the evolving supply/demand environment in markets around the world. We're tapping into the tremendous work we've done over the past several years to strengthen our business. Based on what we see in the markets and the forward curves today, we now expect full year adjusted EPS of approximately $9.25. I'll now hand the call over to John to walk through our financial results and outlook in more detail, and then we'll close with some additional thoughts.

John Neppl, CFO

Thanks Greg and good morning, everyone. Let's turn to the earnings highlights on Slide 5. Reported second quarter earnings per share was $0.48 compared to $4.09 in the second quarter of 2023. Reported results included an unfavorable mark-to-market timing difference of $0.82 per share and a negative impact of $0.43 per share related to transaction and integration costs associated with our announced business combination with Viterra. Adjusted EPS was $1.73 in the quarter versus $3.72 in the prior year. Adjusted core segment earnings before interest and taxes, or EBIT, were $519 million in the quarter, which is down from $893 million last year. Agribusiness processing results were $265 million in the quarter, down from last year as higher results in Europe soy and soft seed crush were more than offset by lower results in North and South America and Asia. Merchandising lower results were primarily driven by global grains. Our volumes were more than offset by lower margins. Refined and specialty oils performed well, but were down from a strong prior year. Higher results in Asia were more than offset by lower results in North and South America and Europe. Milling higher results were primarily driven by South America, reflecting higher volumes and margins, while results in the U.S. were in line with the prior year. Corporate and other improved from last year. The decrease in corporate expenses is largely due to lower performance-based compensation. Our results in other were primarily related to our captive insurance program. In our non-core sugar and bioenergy joint venture, core results were impacted by lower Brazilian ethanol prices, which more than offset higher sugar prices. Results were negatively impacted by approximately $15 million in foreign exchange translation losses linked to U.S. dollar-denominated debt. Results in the prior year included a $39 million benefit from the reversal of a tax valuation allowance. Over the first six months of the year, reported income tax expense was $147 million compared to $381 million in the prior year, primarily due to lower pre-tax income. Net interest expense of $86 million for the quarter was in line with last year. Let's turn to Slide 6, where you can see the adjusted EPS and EBIT trend over the past four years, along with the trailing 12 months. Strong performance over the period reflects a combination of a favorable market environment and full execution by our team. The more recent trend reflects more balanced and less volatile markets, translating into lower earnings. Slide 7 details our capital allocation. In the first half of the year, we generated $895 million of adjusted funds from operations. After allocating $191 million to sustaining CapEx, which includes maintenance, environmental, health, and safety, we had $704 million of discretionary cash flow available. Of this amount, we paid $191 million in dividends, invested $342 million in growth-related CapEx, half of which relates to our large multiyear greenfield investments, and repurchased $400 million of Bunge shares. This resulted in a use of $229 million of previously retained cash flow. We are in progress on our greenfield products. We could end the year toward the higher end of our CapEx range of $1.2 billion to $1.4 billion, or perhaps slightly above. However, this would reduce our 2025 expectations. Moving to Slide 8. Quarter-end readily marketable inventories, or RMI, exceeded our net debt by approximately $3 billion. Our adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA, was 0.5 times at the end of the quarter. Slide 9 highlights our liquidity position. At quarter end, we have committed credit facilities of approximately $8.7 billion, which includes $3 billion that will become available to draw upon at the close of the Viterra transaction. With the $5.7 billion available to us currently, all was unused at the end of the quarter, providing ample liquidity to manage our ongoing capital needs. These amounts are in addition to the $8 billion of term loan commitments that we have secured to fund the Viterra transaction. Please turn to Slide 10. Trailing 12 months adjusted ROIC was 15.2%, well above our RMI adjusted weighted average cost of capital of 7.7%. ROIC was 12.2%, well above our weighted average cost of capital of 7%. Moving to Slide 11. For the trailing 12 months, we produced discretionary cash flow of approximately $1.5 billion, a cash flow yield of 13.7% compared to our cost of equity at 8.2%. Please turn to Slide 12 and our 2024 outlook. As Greg mentioned in his remarks, taking into account first half results and the current margin environment forward curves, we now expect full-year 2024 adjusted EPS of approximately $9.25. Note that this forecast excludes any pending transactions that are expected to close during the year. In Agribusiness, full-year results are forecasted to be in line with our previous outlook, reflecting higher results in processing, largely offset by lower results in merchandising. Milling results are expected to be down compared to last year. The refined and specialty oils full-year results are expected to be up from our previous outlook due to better-than-expected second-quarter performances, but down compared to last year's record performance. The milling full-year results are expected to be similar to our previous outlook and up from last year. In corporate and other, full-year results are expected to be similar to our previous outlook. In non-core, full-year results in our sugar and bioenergy joint venture are expected to be down slightly from our previous outlook and significantly down from last year. Additionally, the company expects the following for 2024: adjusted annual effective tax rate of 22% to 25%; net interest expense in the range of $280 million to $310 million; capital expenditures in the range of $1.2 billion to $1.4 billion, as I mentioned earlier; and depreciation and amortization of approximately $450 million. With that, I'll turn things back over to Greg for some closing comments.

Greg Heckman, CEO

Thanks, John. So, before we go to Q&A, I just want to offer a few closing thoughts. As we look ahead, the fundamental drivers of our business remain strong. Long-term demand for our food, feed, and fuel product services continues to increase. With our global platform, we're very well positioned to find solutions to meet the needs of our customers at both ends of the value chain, regardless of the market environment. Our strategic combination with Viterra will help us accelerate our diversification of assets, geographies, and crops, providing us with even more capabilities and optionality to address the world's most pressing food security needs. As I mentioned earlier, both teams have been hard at work planning our integration and we look forward to unlocking this additional organizational capacity post-close. We're also progressing on a range of other strategic initiatives that will strengthen our company for the future, including the sale of our interest in the sugar and bioenergy joint venture in Brazil to partner BP. I'm very pleased with the great work the team has done to become a leader in the industry. However, this business is not core to Bunge's long-term strategy, and divesting it will allow us to focus those resources on our core businesses. We also recently completed a commercial pilot season in our effort to provide lower-carbon solutions for farmers and consumers. Working with our partners, Corteva and Chevron, farmers planted over 5,000 acres of winter canola in the Southern U.S. After a successful harvest, the plan is to significantly increase acreage to 35,000 for the next crop year. We hope to build on these promising results to meet consumers' growing demand for energy, creating a more environmentally sustainable future and driving additional revenue sources for farmers. In addition, we jointly tested a traceability platform using blockchain technology for sustainable soy with CP Foods, a global leader in food and feed committed to nutritious, safe, and traceable products. We successfully shipped several vessels of deforestation-free soybean meal from Brazil to Asia, allowing CP Foods to trace the product from farm to processing and transportation, all the way to the destination. This is another example of the work Bunge is doing to increase transparency and reliability, enabling customers to fulfill their sustainability commitments. Our focus remains on delivering great value to all stakeholders while investing to strengthen our business so that we can provide customers with solutions, not only today, but over the longer term. And while we always look for opportunities to improve, we're well positioned to deliver on our critical mission of connecting farmers to consumers to deliver essential food, feed, and fuel to the world. And with that, we'll turn to Q&A.

Operator, Operator

Ladies and gentlemen, at this time, we'll begin the question-and-answer session. Our first question today comes from Ben Theurer from Barclays. Please go ahead with your question.

Ben Theurer, Analyst

Good morning, Greg and John. Thank you for the presentation. My first question is about understanding the factors behind the guidance. Three months ago, you were estimating around $9, with a roughly even split. If we take $4.50 for the second half and add it to the current $4.70-something, that totals $9.25. However, we’ve clearly observed a very different environment in crush nearby, and the conditions have changed significantly. I would like to know what you are currently seeing in the market that leads you to establish what seems to be a conservative guidance, considering the current state of crush. What have you been able to secure and what are the volumes looking like? Additionally, how should we view the typical fourth-quarter skew, which appears less pronounced this year compared to previous years? If you could explain that conceptually, I would appreciate it.

Greg Heckman, CEO

Sure. Let me start and good morning. Yes, as you laid out, we overperformed in the first half from what we had talked about since we were together last time. Gross margin did improve late in Q2, and that also gave us visibility into Q3, where we have been able to lock in some margins, and that gave us the confidence to project it. Now, that being said, Q4 margin curves are very inverted. We've got very little visibility. While the demand for oil and meal remains strong, the end customers, as everyone knows, are very spot, as well as the consumer. So, we just don't have much visibility in that Q4. As you said, it's historically an important quarter for us. So, I think we had the confidence to roll it through with the team given that, but that's what we see now, and that's why we projected approximately $9.25.

John Neppl, CFO

Ben, maybe just to add one more point. When you look at the second half, while the overall forecast for the second half didn't change significantly, we've shifted a little bit more towards Q3, where we were looking at a 40/60 split before. It's now more like a 45/55 at this point, so a slight shift to Q3 from Q4.

Ben Theurer, Analyst

I appreciate the information. I understand you may not be able to discuss it in detail, but you've mentioned the pending regulatory approvals with Viterra, and it seems that there are no significant financial issues despite the potential need for divestitures. Could you provide us with more insights about how the negotiations are progressing and what you might need to do to finalize this deal?

Greg Heckman, CEO

Sure. The team has been doing great work, and we have the majority of the jurisdictions that have all issued clearances. We are currently engaging with the EU, Canada, China, and a handful of others as we're getting to the end of the process. The team has done a great job on the integration plans, on preparing for the financing, the capital structure, and the plans of our leadership team. Those plans are in place. As you know, we have to continue to operate as separate companies until we're able to close the transaction. But as I said, we're making good progress, and we expect to include that in the next several months. Many of the current conversations are going on but are confidential. However, as timelines roll up on us, we will be able to share those publicly.

Ben Theurer, Analyst

Okay. Thank you very much.

Operator, Operator

Our next question comes from Adam Samuelson from Goldman Sachs. Please go ahead with your question.

Adam Samuelson, Analyst

Yes, thank you and good morning everyone. My first question is on the merchandising side of Agribusiness. You alluded that the crush margin environment has improved in the nearby, but the comments on the merchandising piece were a little bit more tempered. I'd love some additional color on what you're seeing in terms of farmer selling in Brazil, and Argentina, and how those are influencing your outlook for merchandising over the balance of the year. I then have a follow-up question on the Refined Oil side.

Greg Heckman, CEO

Certainly. If you look at Argentina, the crop has definitely recovered, right? The 2023 crop was about half of what we're going to get this year. However, the selling has been very slow. Part of that is of course due to the shift to lower prices; the producers don't like that. With the government policy that has been an economic catalyst, it’s driven a slower selling pace. The second half will be very much about the FX and the government policy to see how that develops in Argentina. In Brazil, the combined bean and corn crop was about 30 million metric tons lower than what the industry expected. The industry had logistics ready for a larger crop, like last year's, which saw tightness and strains in distribution. The smaller crop created a lot of pressure on logistics, which has hurt margins, particularly in merchandising. Global demand for meal and oil is good, but consumers have been incentivized to pivot to the spot market; there aren’t the same supply chain challenges. They have pulled down inventories and reduced the length of their supply chains, getting rewarded for that as prices have gone lower. We have seen slower farmer selling in North America as well. The farmers don't like the lower prices, even as markets become more balanced on the supply/demand front. The livestock margins have been improving, but a lot will depend on weather in the Northern Hemisphere, as soybeans enter a critical window for agricultural producers and their marketing decisions.

Adam Samuelson, Analyst

That's really helpful color. On the refined oil side, you talked about raising your outlook largely to reflect second quarter performance. Was that what surprised you relative to your expectations three months ago? And just help us think about the forward, why you don't think that strength would persist in the second half at quite the same level?

Greg Heckman, CEO

We received a bit of help on the tight cocoa butter supply and our cocoa butter equivalents on the tropical oil side, which was somewhat beneficial. In addition, we saw stronger energy demand come in late that we weren't expecting in the U.S. That was constructive. When we look at the balance of the year, we don’t have visibility, but we're calling that out in the puts and takes. I think the lower prices consistently drive demand, which holds true not only for soybean meal inclusion but also for soybean oil for both food and especially on the energy side.

Adam Samuelson, Analyst

I appreciate that color. I'll pass it on. Thank you.

Operator, Operator

Our next question comes from Heather Jones from Heather Jones Research. Please go ahead with your question.

Heather Jones, Analyst

Morning. Thanks for taking the question.

Greg Heckman, CEO

Good morning.

Heather Jones, Analyst

I just wanted to ask about your coverage going into Q3 and Q4. Greg, you mentioned that customers and farmers have been very slow to buy or sell. However, the soy crush in the U.S. has been markedly lower than people expected, leading to rallies. As we think about your Q3 and Q4, particularly Q3, how much of that is actually covered? Do you have any exposure to the robust margins that we're seeing at present?

Greg Heckman, CEO

I think if you look at Q2 and the global setup, we were pretty well hedged, and a lot of that strength came very late in the quarter. The team did a great job of executing while closing out the balance of our open capacity. As we saw the late Q2 run-up, we were able to hedge some of Q3 and lock that in. That gave us confidence to roll overperformance in the first half into our full-year guidance of $9.25. That said, in Q3 and Q4, there's really no liquidity yet and very low visibility, which are crucial watch points as we proceed into Q3 and Q4.

John Neppl, CFO

Yes. Maybe just to add there, Heather, that we're largely covered for Q3 at this point, especially on the canola side. Sunflower is affected a little bit by the crop, so maybe not as much cover there. But we’re really covered on soy as well here as of the end of July.

Heather Jones, Analyst

Okay. And another question on the Argentina side. I was wondering if you could help us understand not only more about the outlook but also what happened in Q2. I've heard from industry insiders and have read that there were periods during the quarter when cash margins were among the highest the industry has ever experienced. However, your commentary seems to tell a different story. Can you help me understand the difference and how you're thinking about that business for the second half?

Greg Heckman, CEO

Yes. You're right that farmer selling improved at certain points, and it came in surges. That did provide some ability to crush above fixed costs, but I would not characterize them as robust margins in the overall scenario. What will be critical in the second half is how the farmer reacts. The earlier selling observed may not have been enough to compensate for lower soybean meal exports moving into Europe, therefore we see strong margins in Europe while demand for meal remains robust and fewer meal imports. It's a complex interplay of various factors.

Heather Jones, Analyst

Okay, all right. Thank you so much.

Operator, Operator

Our next question comes from Salvator Tiano from Bank of America. Please go ahead with your question.

Salvator Tiano, Analyst

Thank you very much. Firstly, regarding merchandising, I'm curious about the normalized merchandising earnings you mentioned two years ago, which were expected to be around $75 million to $100 million per quarter. We've been falling short of the lower end of that range for several quarters now, and even more so in Q2. Has this affected your outlook on normalized earnings? Or is it primarily due to the poor agricultural situation causing significant underperformance? When do you anticipate returning to the $75 million to $100 million range?

Greg Heckman, CEO

Yes. Remember, those were our assumptions in the model for our baseline, and we are operating below the baseline today. However, this has been a difficult predict because the market has been in transition. Thus, opportunities may arise which the team can capitalize on. We've been in a time of transition where markets move from higher prices to a more balanced S&D, putting pressure on margins. Farmers have good balance sheets, significant store capacity, and resist selling at lower prices. This builds inventory as they consider weather effects on crops, while at the same time, consumers are reducing inventory levels. This has created spot market pressures that have hurt margins until the balance is restored. That said, we’re getting closer to that balance. The weather and demand variables are crucial to ensuring favorable outcomes.

Salvator Tiano, Analyst

Okay, perfect. Thank you. Additionally, I want to inquire about refined products. It remains the segment where you consistently exceed your expectations. Could you elaborate on why this is happening? Is it mainly on the fuel side? Or is it primarily on the edible oil side?

Greg Heckman, CEO

It's been both. Our food customers have been shifting slightly towards lower-cost options, and people are eating at home more versus dining out, which has favored our oil demand. Similarly, the demand for oil does not track one-for-one with food demand. It has been impressive, especially with the lower prices driving energy demand. Additionally, as I mentioned regarding tropical oils, the tight cocoa butter supply has benefited us, helping customers solve their supply issues or mitigate costs through reformulation. Our execution has been commendable, even amid a challenging environment.

Salvator Tiano, Analyst

Thank you very much.

Operator, Operator

Our next question comes from Tom Palmer from Citi. Please go ahead with your question.

Tom Palmer, Analyst

Good morning. Thanks for the question. I wanted to ask on capital allocation. Are you done with share repurchases until the Viterra transaction closes? Or might we see something sooner, given the slightly extended timeline? If not repurchases, what's the strategy for excess free cash flow? Would it just be allocated for debt?

John Neppl, CFO

Thanks Tom, this is John. Yes, I think we're not likely to commit to share repurchases prior to the Viterra close. We want to achieve certain leverage commitments and targets heading into the close process in anticipation of a ratings upgrade related to the transaction. However, we still plan to execute that share repurchase program post-close. We included a post-close 18-month window for this, and we’ll decide based on what makes sense at the time. The proceeds from the sugar sale could significantly contribute to increasing the repurchase program.

Tom Palmer, Analyst

Great. Thanks for the color there. I wanted to ask about the capital plan for the next couple of years. You have this multiyear CapEx cycle. As we approach this next year, what are your early thoughts on 2025 CapEx compared to this year? I realize this is pending the Viterra deal.

John Neppl, CFO

Yes. We expect to be at the high end of our range this year, possibly exceeding $1.4 billion, depending on end-of-year big CapEx expenditures. We anticipate next year to reach closer to the $2 billion range, ranging from $1.9 billion to $2 billion, as key projects enter full development. However, major commissioning will likely occur in 2026 for the four large projects we’re engaged in. Subsequently, we may see a significant drop in CapEx, potentially up to 50% reduction in 2026 compared to 2025.

Operator, Operator

Our next question comes from Manav Gupta from UBS. Please go ahead with your question.

Manav Gupta, Analyst

Good morning. My first question is about Viterra. Since the time you announced the transaction, there have been financial reports from Viterra. Did those numbers meet or exceed your expectations?

Greg Heckman, CEO

Yes. As you know, we must run our companies separately until the close. The Viterra team continues to execute well. They are facing additional pressures with integration planning and regulatory obligations amidst a challenging environment. However, the platform is strong, and we remain impressed with the quality of their people and the skills they bring to address the integration challenges. We're optimistic about the transaction and look forward to our future together.

Manav Gupta, Analyst

Perfect. My quick follow-up is regarding the divestment of the Non-core business. It has been marked as non-core for some time. How did this particular deal arise? And were you satisfied with the transaction price?

Greg Heckman, CEO

Yes, I'll start and John can elaborate. We've been focused on incidentally exiting our sugar and bioenergy joint venture with BP since we established it. It was an outstanding collaboration initially and made the team a recognized industry leader. We're proud of that. However, our long-term strategy has not shifted. When the timing was appropriate and evaluations matched, we proceeded. As announced, we aim to close the transaction later this year and would be excited to reallocate resources, including capital and personnel, to core businesses.

John Neppl, CFO

And Manav, I'd add that we are quite pleased with the valuation we secured from this deal.

Operator, Operator

Our next question comes from Steven Haynes from Morgan Stanley. Please go ahead with your question.

Steven Haynes, Analyst

Hey, good morning. Thanks for taking my question. I wanted to ask about farmer selling. You mentioned previously that it might be a source of upside in the future. I was hoping you could provide some broader context about where you think we are in the evolution of farmer selling slowing down as the year progresses. What gives you confidence that it won't turn into a more prolonged slow farmer selling cycle like we might have seen in past downturns? Thank you.

Greg Heckman, CEO

Sure. Looking at the overall setup, we've made that transition to a lower price environment. Farmers are adapting. Simultaneously, as mentioned earlier, they've built some inventory. With the upcoming larger crop anticipated in Argentina and North America, provided favorable weather conditions continue, we expect to see farmer marketing increase accordingly. South American farmers typically monitor U.S. price movements and futures as they decide on selling, with government policies weighing heavily on Argentina. Everything is unfolding as anticipated. We're pleased that our team remains dedicated to executing with calculated risk management as appropriate for the existing environment.

Ben Theurer, Analyst

Thank you.

Operator, Operator

Our next question comes from Andrew Strelzik from BMO. Please go ahead with your question.

Andrew Strelzik, Analyst

Hey good morning. Thanks for taking the questions. You talked about the inverted curves. I was curious if there are internal levers you can pull in an environment where U.S. crush margins become more challenging across operations, or if the growth CapEx would be delayed? What other levers can you potentially pull as market changes?

Greg Heckman, CEO

I would just say, the last five years have demonstrated that running a global platform allows for flexibility. It minimizes exposure to being overly concentrated in any single region, which is extremely advantageous. The optionality and flexibility within our system enables us to operate effectively where margins are favorable, letting us respond quickly to demand shifts. The structural changes we've made in the company and our operating model have enhanced our execution discipline. That's critical when facing demanding market conditions. We remain confident that, as we conclude the year, we will seize upcoming opportunities.

John Neppl, CFO

I would state, Andrew, we retain an 850 baseline from a couple of years ago that we still surpass, even through this more challenging environment. We're executing well compared to the baseline we established.

Andrew Strelzik, Analyst

Great. Thank you very much.

Operator, Operator

And our next question comes from Carla Casella from JPMorgan. Please go ahead with your question.

Carla Casella, Analyst

Hi. My question relates to financing. You got the question around dividends and buybacks ahead of the Viterra transaction, but what are your thoughts surrounding pre-financing that transaction? How much might you seek in the market, or will you wait until after?

John Neppl, CFO

We've already syndicated out the debt for that transaction, so we have secured the necessary commitments to finance it. There are some nuances related to Viterra bonds and execution ahead of close, but overall, we're well-prepared regarding financing and already have commitments in place. We'll adjust later as needed.

Carla Casella, Analyst

Okay, great. Thank you.

Operator, Operator

And ladies and gentlemen, with that, we'll be ending today's question-and-answer session. I'd like to turn the floor back over to CEO Greg Heckman for any closing comments.

Greg Heckman, CEO

Thank you very much. Thanks everybody for joining us today. We're really excited about the longer-term prospects and about the upcoming merger of Bunge and Viterra. Together, we're going to create a more complete company with enhanced capabilities to serve our customers in an increasingly complex environment. With a growing population and increasing per capita consumption, climate volatility presenting unique challenges, and a policy environment that remains unpredictable, we are positioned favorably to meet our stakeholders' needs. We appreciate all of your time and participation today. Wishing you a great week ahead.

Operator, Operator

Ladies and gentlemen, that concludes today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.