Operator
Good morning. Thank you for standing by. Welcome to Sovama's fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, you will have an opportunity to ask questions. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. As a reminder, your conference is being recorded. I would now like to turn the call over to Hans Bjorkman, Vice President, Investor Relations. Sir, the floor is yours.
Thanks, Audra. Good morning, and thank you for joining our fourth quarter and full year 2024 earnings call. Our speakers this morning are Jean-Michel Rivieres, Chairman and Chief Executive Officer, and John Sims, Senior Vice President and Chief Financial Officer. Slides two and three contain important information, including certain legal disclaimers. For example, during this call, we will make forward-looking statements that are subject to risks and uncertainties. We will also present certain non-U.S. GAAP financial information. Reconciliations of those figures to U.S. GAAP financial measures are available in the appendix. Our website also contains copies of the earnings release as well as today's presentation. With that, I'd like to turn the call over to Jean-Michel.
Jean-Michel M. Thanks, Hans. Good morning and thank you for joining our call. I'll start on slide four. In 2024, we generated 23% return on invested capital as we executed our strategy and strengthened our competitive advantages in our core uncoated free-sheet market. We improved our financial position by repaying $154 million in debt, achieving a net debt to adjusted EBITDA of 0.9 times. We earned $632 million in adjusted EBITDA, generated $248 million in free cash flow, and returned $130 million in cash to shareholders. We reinvested $221 million across our manufacturing network and our Brazil forest land to strengthen our low-cost position. We are committed to being the investment of choice and believe we can generate significant shareholders' returns in the future by executing our strategy. Slide 5 highlights our 2024 full-year key financial metrics. Our adjusted EBITDA was $632 million with a 17% margin. Our $248 million of free cash flow was more than $6 per share. Our adjusted operating earnings were $7.42 per share, which is 14% higher than 2023. We now have three full years under our belt since becoming an independent company, and our financial results have established a solid track record and are indicative of our ability to navigate tough industry conditions, challenging geopolitical events, and other uncertainty that we may face. As we enter 2025, we are confident in our ability to continue to create value for our customers and share owners. Let's move to slide six. We had very strong cash generation to finish the year. This allows us to pay down additional debt, reinvest in our business, and return cash to share owners. Our teams collaborated well with customers to manage through a successful transition as a result of the job store mill closure. I want to thank our employees for their hard work and execution as we navigated through the transition. I also want to thank our customers for the trust they place in us each and every day. We are committed to remain the supplier of choice and will work hard to earn and retain the business. Lastly, regarding Project Horizon, our cost-reduction program to streamline manufacturing, supply chain and overhead costs, we exceeded our $110 million year-end run rate saving goals by $34 million. John will cover this in more detail in a few slides. Let's move to the next slide. Slide 7 shows our fourth quarter key financial metrics. We earned adjusted a bid of $157 million with a margin of 16%. Free cash flow generation was $100 million as we generated adjusted operating earnings of $1.96 per share. I'm proud of how our team delivered impressive results while taking care of our customers. More importantly, I'm proud of our team's commitment to putting people before paper to ensure everyone returns home safe at the end of each day. We are focused on building a resilient safety culture by involving every team member in our efforts to proactively eliminate risk and create a safer environment for everyone, every day. Now, John will review our performance in more detail.
Thank you, Jean-Marcel, and good morning, everyone. Slide 8 contains our fourth quarter earnings bridge versus the third quarter. The $157 million of adjusted EBITDA was in line with our outlook of $150 to $165 million. Price and mix was unfavorable by $18 million. Forty percent of this was driven by lower pulp and paper pricing in Europe, and about 30 percent was due to worse mix in North America. volume increased by $6 million driven by the seasonality in Latin America. Operations and other costs were stable due to favorable effects and less economic downtime in North America, which more than offsets the planned 10-year turbine generator maintenance event at our Eastover mill that we highlighted on our last earnings call. We also had some one-time events, Some planned, like an insurance settlement, and others like a LIFO adjustment. Planned maintenance outages cost increased by $17 million as we executed a major planned outage at the East River Mill in the quarter. Input and transportation costs increased by $9 million, driven by transportation and seemingly higher energy prices. Let's move to slide 9. A core pillar of our strategy is to be a low-cost producer. Project Horizon, our cost reduction program to streamline manufacturing, supply chain, and overhead costs is helping us to stay low cost. As Jean-Michel mentioned earlier, before inflation, we exceeded our $110 million year-end run rate savings goal by $34 million. We beat our manufacturing savings targets by delivering results on over 180 initiatives across all three regions. These projects targeted chemical, energy, and fixed cost reductions, as well as improving fiber efficiency and productivity. We surpassed our supply chain savings targets by reducing approximately 20% of our distribution centers in North America, optimizing sheeting, and rewinding outsourcing processes, as well as other initiatives across our network. We executed all these initiatives while maintaining our focus on the customer experience. As we mentioned several quarters ago, we eliminated about 150 salary positions, or 7% globally. These collective efforts are making us a leaner, stronger company. Let's move aside, Tim. Another important part of our strategy is to invest in high-return projects to strengthen our competitive advantages and increase future earnings and cash flow. Here are two examples at one of our flagship mills in Latin America, a Luis Antonio mill, where we are already seeing positive results. The first project increases the self-generation of power at the mill by upgrading the turbine and gearbox on one of our turbine generators. This was a $7 million investment that started up in the third quarter of 2024 and is showing approximately a 25 percent internal rate of return the second project reduces our production waste by installing a new real transition system on one of our paper machines this was a one million dollar investment that also started up in the third quarter of 2024 and is yielding approximately a 40 percent internal rate of return these are just a few of the many high return projects that we are assessing and implementing to make us more competitive in the future. Let's go to slide 11 and look at our first quarter outlook. We expect to deliver first quarter adjusted EBITDA of $85 to $105 million. We project price and mix to be unfavorable by $10 to $15 million. This is due to paper price decreases in Europe and in our Brazilian export region, plus seasonally unfavorable mix in Latin America. These decreases are projected to be partially offset by realization on paper price increases communicated to customers in North America and Brazil in the fourth quarter. We should see higher realization from these increases in the second quarter. We expect volume to be unfavorable by 20 to 25 million due to seasonally weakest demand quarter in Latin America, and lower North America volume from the Georgetown Mill exit. Operations and other costs are projected to be stable to slightly up as our Project Horizon initiatives offset the non-repeat favorable fourth quarter events. We expect input and transportation costs to increase by $5 to $10 million primarily due to seasonally higher energy prices and the longer-than-expected extreme cold weather across the United States so far this quarter. Planned maintenance allergies are projected to increase by $15 million. We expect quarterly earnings to improve throughout the year as we benefit from seemingly strong removal volume, less maintenance allergy expenses in the second half of the year, and realize the price increases we are currently implementing. You should note on Appendix Slides 44 and 45 that about 80 percent of our planned maintenance outages will be in the first half of this year. Let's go to slide 12. I'll shift now to talk about overall industry conditions across our region. In Europe, we're seeing improved order books and industry supply was reduced by seven percent after two uncoded free sheet machines closed last year. HULP and uncoated free sheet prices have also stabilized as we are entering the new year. In Latin America, we expect seasonally weaker industry demand in the first quarter and expect demand to be sequentially stronger in each calendar quarter, like every year. In Brazil, we are currently seeing strong demand for back-to-school orders and notebooks. We previously communicated uncoated free-sheet price increases to our customers in Brazil effective in January. We are seeing uncoated free-sheet pricing pressure for our Brazilian papers exports to other Latin America and offshore markets. In North America, we are seeing slightly lower industry demand in line with our expectations. Domestic industry supply was reduced by 10% after a few machines closed in the second half of last year. We previously communicated uncoated free sheet price increases to our North American customers effective in January. Globally pulp industry conditions appear to be stabilizing and are anticipated to improve over the course of the year.
I'll turn back over to Jean-Michel and pick up on slide 13. thanks john we have generated substantial cash since our inception and have allocated over 1.8 billion as you can see on this slide over 70 of this cash was used to repay debt and reinvest in our business after starting out with over 1.5 billion in growth debt we have reduced it by almost 50 percent and have achieved a net debt adjusted bid-day ratio of 0.9 by the end of 2024. Keeping a healthy financial position is a cornerstone of our capital allocation framework. This allows us to invest in our business to strengthen our competitive advantages to the cycle and to increase future earnings and cash flow. As most of you already know, Now, many people are investing to get out of Uncoded Fushi, while we have reinvested over $600 million in our business in the last three years in order to improve our competitive position. One of the main advantages we have as an independent company is that it allows us to invest in our future in a way that we could not do before. Improving our financial position allowed us to return almost $350 million to share owners, to dividend and share repurchases. We will continue to look for opportunities to purchase shares at attractive prices. We have generated substantial cash over the past three years and plan to continue to do so moving forward. For 2025, we are planning $220 million to $240 million in capital spending. Our outlooks include approximately $125 million in maintenance and regular spending. Our Brazil forestlands are a significant competitive advantage. These eucalyptus plantations provide a material cost advantage relative to most other global competitors. We plan to invest roughly 35 million dollars in our forestlands to increase our self-efficiency and reduce wood costs. Additionally, we will complete the 30 million three years wood supply agreement to ensure adequate wood supply from 24 to 20. As we have been saying for several quarters, we will continue to ramp up our high return projects to strengthen our low-cost assets to increase our earnings and cash flow. This year we expect to invest 50 to 70 million dollars for high return projects like 15. Speaking of reinvesting in our low-cost assets, we're excited to announce that we're investing in the future of one of our flagship mills east over south carolina we have three high return projects that will reduce cost while improving efficiency and mix of the most competitive uncoated free sheet mill in north america first we are investing to optimize one for two paper machines second we are replacing our next distinct cut-sized sheeter with a brand new sheeter these first two projects will require a total investment of approximately $145 million over the next three years. The spending will start this year, with the majority occurring in 2026. Once completed, this combined investment should have an internal rate of return of greater than 30%. It should create incremental adjusted EBITDA of more than $50 million per year, resulting in additional cash flow as well. Third, we're partnering with an industry leader in woodyard operations to modernize our woodyards and improve our efficiency, while avoiding about $75 million in capital over the next five years. This is a very exciting moment for all of us. I'll turn it to John to discuss this higher return project in more detail.
Yeah, thank you, Jean-Michel. This is exciting. I'm on slide 16. The first of these high return projects at our flagship Eastover mill will be to optimize one of our two paper machines, modernizing it to the same world-class level as our other paper machine at Eastover. We plan to make investments starting at the head box, continuing all the way down the paper machine through the forming, press, and dryer sections, including modifications to the winder at the end of the machine. needs. These enhancements will allow us to reduce costs while improving our product mix across both paper machines. This deep bottleneckling should result in up to an incremental 60,000 tons of uncoated free sheets. The project has an investment of approximately 100 million over the next three years with an expected startup in the fourth quarter of 2026. it. Let's turn to slide 17. The second high return project will be to replace an existing sheeter with a stay-the-art cut-size sheeter. This new and more efficient sheeter will lower our sheeting costs up to 15%, reduce waste by maximizing paper machine trim while providing incremental cut-size volume capability. This sheeter will allow us to reduce outsourced sheeting while providing better reliability and additional flexibility to better service our customers. This $45 million project is expected to start up in the fourth quarter of 2026. Let's turn to slide 18. And the third high return project at Eastover will be to improve our wood yard efficiency through innovative modernization. We are entering into a 20-year partnership with an external provider the price company who is an industry leader in wood yard operations they design finance and operate the most efficient wood yards in the world they will invest the capital to upgrade our wood yard and they will also operate and maintain the wood yard at the east over mill this will result in more efficient reliable and cost effective wood processing operations this project will greatly improve the overall reliability of our operations by replacing our aging wood yard equipment. As Jean-Michel mentioned earlier, this project will enable us to avoid spending about $75 million in capital over the next five years. The anticipated startup is in the first quarter of 2026. These high return projects reinforce our commitment to reinvest, to strengthen our low cost assets, to increase earnings and cash flow. I'll now turn it back over to Jean-Michel.
Thanks, John. I'm on slide 19. We strive to create long-term shareholder value by executing our strategy and delivering on our investment. Since becoming an independent company just over three years ago, we have achieved the total shareholder's return of almost 150%, earned over $2 billion in adjusted EBITDA, generated over $900 million in free cash flow, reduced debt by almost $725 million, reinvested over $600 million to strengthen our business, and returned almost $350 million in cash to shareholders. I'll conclude my comments on slide 20. I continue to be impressed with our team as we work to take care of our customer needs and remain the supplier of choice. We are reducing our cost structure and are reinvesting in our business through a great pipeline of high-return capital projects, which will enable us to grow on earnings and cash flow in the coming years. BAMO is creating shareholder value through strong cash generation and disciplined capital allocation. We believe in the promise of paper for education, communication, and entertainment, and we intend to increase our competitive advantages in the regions we serve. We're confident in our future and motivated by the opportunities that lie ahead. With that, I'll turn the call back to Hans.
Thanks, Jean-Michel, and thank you, John. Okay, Audra, we're ready to take questions.
Operator
Thank you. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.
If you would like all your questions simply press star one again we do ask that you limit yourself to one question and one follow-up question thank you and we'll take our first question from george stappos at bank of america thanks so much everyone good morning thanks for the details um my two questions and congratulations on the progress over the last few years um my two questions first of all Can you talk a little bit about what impact of pricing that might be in the process of being implemented is in your guidance for the first quarter, if anything at all, or is all of that pricing more or less locked and loaded from prior efforts? And then if I go to slide eight, I believe, and we look at volume, you touched a little bit on it, but volume was a little bit weaker than what you'd been looking for in the fourth quarter. Can you give us a bit more detail on what was going on there? Thank you, guys.
Yeah, George, and thank you. To your first question, actually, so we have two price increases that we've announced to our customers, as we mentioned. and one in Brazil, remember Brazil, so that's about 50% of our volume down in LATAM and one in North America. And we're in the process of implementing that in the first quarter, because if we are implementing, I can't give you a lot of details, but I can say that the realization because of the timing of those, it's gonna be more in the second quarter and very little in the first quarter than our outlook. The second question in terms of volume, Volume was lower than what we expected, really across all the regions, mostly in North America. And so that's really the difference between our outlook and the actual results.
I guess, John, why was it a little bit weaker in North America than the other regions? If you had a view. I'm sorry, keep going.
George, it was a little bit lower in the commercial printing and envelope market uh actually the cut size the copy paper business was actually stronger than what we expected but it was more so in the in the commercial commercial printing area okay that makes sense anyway we had in north america to be hi john michelle thanks for john michelle okay in north america we had a with javember i think we didn't anticipate it well enough all the holidays and the impact it had so we had a as planned october and december month but november was below okay thank you i'll go back to q we'll take our next question from matthew
mckeller at rbc capital markets hi good morning thanks for taking my questions um i'd like to start by asking about tariffs uh if the us were to apply sustained 25 percent tariffs on goods from Canada and Mexico, and they in turn applied retaliatory tariffs on the U.S., how do you think your business would be affected, and what would be your response in that scenario?
So, thanks for joining the call, first of all. This is still very difficult to assess, to be very honest. I think the 25% on aluminum and steel will have some impact that we've anticipated potentially on some of the equipment we buy because the steel or aluminum might get more expensive in the U.S. in general. But that's not material for us. I would not be too worried about that. The rest with Canada, Mexico, if it was to happen, it's more a question of what is the retaliation we're going to get. I don't think it's going to impact us really at all if there is no retaliation. But as of now, if those tariffs were to put in place, we don't know what Canada or Mexico will do. And that's a question, Marcia. I don't have the answer.
Okay. Thanks for that, Keller. Maybe shifting to Latin America, I think you mentioned seeing some positive trends in demand in Brazil. I'd also like to ask about your expectations for demand through the textbook order this year. And maybe putting it all together, what that implies for how your volumes and mix kind of evolved through 2025 and maybe put differently do you expect the seasonality we typically see in lat am to be exaggerated this year with a bigger ramp through the year than usual driven by a more significant shift in mix maybe especially given the prices in brazil are going up that you called out uh prices in the export channel as being under some pressure yeah matthew uh i think you one of the questions you asked is just around the textbooks in the school business So if I heard that correctly, yes, we're seeing improved order books, demand for that down in Brazil.
You've got to remember in Brazil last year, demand was down, so that does impact us from a negative mixed perspective as we shift less into Brazil. This year, we're seeing it up, the flat is slightly up, and we expect, as we said, that that Brazil and also LATAM markets will sequentially increase throughout the year. So, that's going to be positive from a volume perspective, but also very positive from a mixed perspective. And that'll start to really materialize itself, you know, more as the year goes on, second and third quarter.
Thanks. I'll turn it back.
Operator
And as a reminder, to ask a question, please press star one. We'll go next to Daniel Harriman at Sidoti.
Hey, guys. Thanks for taking my question. Just a quick one here today from me. Can you help us a little bit with the cadence of your capital spending in 2025 within that range of $220 to $240? Should we expect more or less that CapEx to kind of follow the cadence that it did in 2024?
Yeah, Daniel, are you talking about, and thanks for joining, Daniel. are you talking about in terms of the timing of the spend is that what you mean by yeah just how how should we think about it being spread out throughout the year on a quarterly basis yeah and i think the way to think about that is um more heavily weighted to the first half because you can see 80 of our outages are in that uh now with the uh the spending for the spending that we'll do on the East Dover project that we talked about, that will occur throughout the year, not really tied to the outages as we prepare for that implementation in 2026.
Okay. All right. Thank you, John.
Yeah, the outage this year particularly is probably one of the most extreme we've had in terms of timing of outages, first house versus second house of the year. which is part of our earnings growth where we have a hockey stick, you have 80% of our outage spending in the first half of the year versus 20% only in the second half. So that's a big component to take into consideration.
But Dan, we do look at the monthly spend, the projections that we have as we forecast. It's really not much different than what we had last year in terms of the monthly spend on capital.
Operator
We'll move next to Jerk Staffos with Bank of America.
Hi, guys. Thanks for taking the follow-ins. My next two, can you talk a little bit about how the cost curve is shifting in Europe? You know, certainly poll prices stabilized, or at least it looks like that in a few markets, but it was a declining situation, second half. you know what did that mean for the cost curve and you know ultimately pricing and your your market shares in the region the related question what do you think the industry operating rate is in europe uh right now thank you yeah george i think when we take a look at the cost curve it's it has certainly moved up um as really since uh the russian invasion into ukraine and that's really driven um with that has driven is increased energy costs um gas costs as well as wood the
wood costs we've seen go up across the region if you look at your day pricing that's what we looked at uh europe uncoded free sheet pricing is stabilizing because about um 20 or so maybe even more a quarter of the cost curve is right now the pricing is you know below the cash cost so right now you know we got about 20 25 percent of the capacity that even with the pulp prices where they are today which is bottoming we have you know cost that's above the current pricing in Europe. In terms of the operating rate, you know, it has improved because of the outages or because of the closures that occurred. Yes. And so it's in the mid-80s right now.
Including the 10%, I think you said, reduction from closures.
That's right. Including that.
And John, just a point of clarification, I'll turn it over.
So your view is the cost curve actually is up over the last quarter two quarters in europe or you know it's more or less stable and certainly up over the last several years because of ukraine and the like it's a ladder i mean we you know with the decreasing pulp prices you can say that maybe quarter sequentially quarters slightly down but overall um the cost curve is has increased if you will gotten higher cost.
Thank you, John. I'll turn it over.
Operator
And we'll take a follow-up from Matthew McKellar at RBC.
Thanks very much. Just following up on an earlier response, I think you mentioned you saw lower commercial printing and envelope volumes in North America in the quarter than maybe you were anticipating. Just wanted to, I guess, get a little bit more color on that. Are you seeing any kind of rebound in volumes, maybe start Q1, or whether maybe you're expecting to see some more permanent kind of demand destruction, maybe on the back of higher postal rates or any other factors?
No, I think we don't see that as a systemic issue. We see that coming back. And our projections are for North America that demand will be down about 3 percent, the historical trend that we have been seeing or, well, we haven't been seeing really because of the inventory corrections now, but that we've generally been seeing over the, for the industry. So nothing different than normal.
Okay. Okay. Thanks for that. And if I could just sneak one more in on the yeast over wood yard operations, of course, your partner will be laying out some capital and you're going to be avoiding spending your own capital. You also mentioned more efficient, reliable and cost-effective operations, I guess with this agreement, how should we think about the impact to operating costs at Eastover both in 26 versus 25 and then how things progress over the longer term, just specific to what you've announced with the wood yard here?
I think just the wood yard is not a huge impact in cost. It's avoidance of capital spending, the first thing, and then the yield and all of that. We continue to put our wood, which is very competitive, even more competitive once transformed at the mill. So it's a small impact, but we'll take every penny. You know, it counts everything in this industry. It's a small impact in the cost side, better reliability, flexibility, and avoidance of capital. That's the way I would look at it.
Okay. Thanks for the help. I'll turn it back.
Operator
And a final reminder, if you would like to ask a question, please press star one. And we'll go back to George Daffos at Bank of America.
Thanks, guys. I want to piggyback off of Matt's question. So what does your partner get from you in exchange for operating the wood yard, if you can talk about the terms there? Second question, penciling it out, free cash flow for the first quarter looks to be, you know, on our math, kind of neutral to maybe up $20 million.
I don't know if you called it out actually in the the deck or the release if you did i apologize for missing it but if you could sort of give us some thoughts there uh and then i'll turn it over come back into queue yeah i think the uh to your first question george we're not going to really disclose the terms of the agreement other than what we said you know the 20-year agreement we are paying them to service the wood yard and the way sean michelle talked about it you know we're going to get uh some efficiencies on yield but that's going to pay the service fees that we're charging them so the big benefit there is it's really the capital avoidance because they will be investing the installing the equipment and maintaining the equipment in the wood yard which will significantly modernize it so that's that's how that's going to work and on free cash flow all right and uh i'm sorry you're gonna have to repeat your question again john as i was penciling it out um and i don't know if you've actually mentioned the deck or the release i if you did i missed it i'm kind of coming out with sort of flat to up 20 million on free cash flow for the first quarter could you give us some thoughts on that yes i'm sorry i didn't uh remember that question but yeah we you know we don't do it we don't give any guidance on um on free cash flow just one thing
I would say is like 24, I would expect a 25 with a seasonal stronger cash flow in the second half and first half. And remember in the first half, especially first quarter, we've got these outages in Europe, which impact the cash. We've got the annual incentive compensation and customer rebates. So we've got quite a one-time seasonal cost in Q1 versus the rest of the quarters. So I won't get the exact number, but it might be more pressure than you have in your numbers.
Yeah, the first quarters always are more challenging in terms of cash flow.
Don't worry for the year. It's just the time here.
Hey, guys, maybe I'll throw my last two in here if it's okay. tax rate kicks up a little bit 28 to 29 percent what's in that and could you give us my last question what was the effect of the one-timers in the quarter that I know you'll be offsetting with horizon in the first quarter but what was kind of that benefit that you got in fourth quarter thanks and good luck in in the first quarter yeah and thanks George and the question on the taxes we had a benefit last year.
We bought some credits that we were able to use, and so that lowered our tax. We're not going to have that repeat right now. We're going to be continuing to look at that, but that's not in our outlook. And the other thing is lower earnings in Europe as, you know, and so that increases our tax, the overall tax rate, because we have less earnings in Europe.
Okay, and one-timers from 4Q?
Oh, one-timers, yeah, so specifically we had a $5 million insurance payment that we got in the fourth quarter. LIPA was about $7 million.
Operator
I'll now turn the call back over to Hans Bjorkman for closing comments.
Before we close up, I'm going to let Jean-Michel kind of wrap up the call today yes so thank you everybody for joining uh exciting times and uh we're writing our strategy about to investing in our high return projects one thing for 25 is i don't intend to give you numbers on the annual earnings guidance but with all the uncertainty of the macro and the geopolitical I'll be prudent, but on a high level color, if you look at 25 versus 24, both in North America and Latin America, we plan a slightly better 25 than 24, and I just did a bit that. For Europe, with this $35 million incremental maintenance outage, we plan to be worse than 24. So I'm putting that with some salt, of course, because as you mentioned, all So tariff and macro is very difficult to forecast, and it's not an exact number, but it gives you a trend, which I hope helps you. As we mentioned, we expect our quarterly earnings to improve throughout the year due to three main factors, seasonally strong volume, realization of the price increase in North America and Brazil, and less maintenance allergies in the second half of this year. So with that, I thank you for joining the call, and have a good day.
Operator
Once again, we would like to thank you for participating in Sylvama's fourth quarter 2024 earnings call. Thank you. You may now disconnect.
