Good day, everyone, and welcome to the VF Corporation's Second Quarter 2016 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lance Allega, VP of IR. Please go ahead, sir.

Thank you. Good morning and welcome to VF's second quarter 2016 results. I'd like to remind everyone that participates on today's call we'll make forward-looking statements. These statements are based on current expectations and are subject to certain uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC. Unless otherwise noted, amounts that our participants refer to on today's call will be predominantly in currency-neutral terms which we've defined in the press release that was issued at 6:55 a.m. Eastern Time this morning. We use currency-neutral amounts as lead numbers in our discussion because we feel it more accurately represents the true operational performance and underlying results of our businesses and brands. You may also hear us refer to reported amounts which are in accordance with U.S. GAAP. These amounts include the impact from foreign currency exchange rates. Reconciliations of GAAP measures to currency-neutral amounts can be found in the supplemental financial information included with the press release which identify and quantify all excluded items. On June 30, we announced an agreement to sell our Contemporary Brands business which includes the 7 for All Mankind, Splendid and Ella Moss brands. Appropriately, we have classified the assets and liabilities of these businesses as held for sale and therefore have moved their results into discontinued operations. Therefore, unless otherwise noted, results presented on today's call are based on continuing operations. Removing this business from the mix impacts the P&L for both 2015 and 2016 and we have furnished a full year 2015 P&L which designates the impacts. There is more detail in the press release we issued this morning. Joining us on today's call will be VF Chairman and CEO, Eric Wiseman; President and COO, Steve Rendle; President of our International Business,…

Thank you, sir. Our first question comes from Michael Binetti with UBS.

Hey. Good morning, guys. Thanks for all the detail today. Very helpful. I just want to ask one quick Vans question, then I had a bigger picture question. On Vans, that was better than we thought in the second quarter given some of the trends. You guys had talked about pretty consistently that it was going to be back half story. But the guidance for the year was always partly based on things that were not in your direct control, there's some inventory from competitors out there in the U.S. with some of the data sources we see, we see other brands making big pushes on market share. Can you just talk to us about the second half and how you guys think about the competitive landscape for Vans and how much you bake that into the thinking for the improvement there? Steven E. Rendle - President, Chief Operating Officer & Director: Yeah, Michael, this is Steve. I'll start with the Americas and K.H. maybe will want to add some things from an Asia standpoint. So we've called the year at high single digits and we're pretty much tracking right on plan, seeing great strength in our D2C, most notably e-commerce and then just good solid performance in wholesale. Second half, really don't see the changing dramatically. The strength of the brand continues. We talked about the power of our Classics collection with side stripes really performing extremely well and we've got new innovations with Classic Lights, our ISO program and then our Pro Classics where we brought some real performance attributes into the skate platform, we think will just continue to drive us towards the guidance that we put forward at the beginning of the year of up high-single digits. Karl Heinz Salzburger - Vice President & Group President, International: And, Michael, adding some color on the international side, starting with Asia. Asia is really doing well, as you heard me saying. It's doing well in DTC and wholesale, which gives us great confidence, no really big change. It's doing well in most Asian markets actually. Europe is a different picture. We reported that widely last time, Q1 was our worst quarter. Q2 is negative but better and we gradually plan to improve this going back to positive numbers in Q4. What gives us strong confidence also in Europe is our DTC numbers which are positive. That shows that the brand has resonated as well with consumers. Steven E. Rendle - President, Chief Operating Officer & Director: And, Michael, I'd add real quick. We aren't seeing any changes in our wholesale orders due to competitors. And clearly, there's some competitors out there doing much better than they have historically, but from a Vans standpoint and our connection to our consumer, we stay right on track.

Okay. That's helpful. Thanks a lot. You guys, I guess stepping back, you guys have always done a great job summarizing the big corporate goals for us and for the investors and for all the employees at the firm to focus on. It's been a while since we got the big goal of the long-term algorithm of 8% organic revenue growth and 13% EPS growth. But we've seen two headlines from you guys on dispositions this year. The end markets are in a different place than where they were when we first got the algorithm in 2013. So would you mind just helping us comment on how you think about those goals today and whether absent an acquisition how much more aggressive you could be with transforming the portfolio towards the highest performing businesses? Eric C. Wiseman - Chairman & Chief Executive Officer: Sure, Michael. Eric. I'll take that question. Our organic growth rate goals remain intact. Clearly this year, we're off to a slower start given all the implications of last winter and the inventory hangover that we faced in the first half of this year. But when you step back and look at our organic growth rate, internationally we were up 7%. That tells us that against that 8% organic growth rate goal outside of the U.S., we're pretty much on track. The most confidence inspiring part of this for me is that in our direct-to-consumer business globally, we were up 7%. So being up 7% in our stores tells us that consumers are buying from us at the kind of growth rate that we have built into our long-term vision. Unfortunately, that's only about 27% of our business. Our wholesale business is not experiencing that, but that's not to say that our wholesale business, the consumer take-out from our wholesalers isn't strong. What it says is that they have a lot of inventory and they're buying very cautiously. Our wholesale business is a reflection of what we're shipping to them this quarter for sale next quarter and not a reflection of consumer engagement. So we still think we have the brand portfolio and we're doing the right things with our brands to engage consumers at a near 8% growth rate, even this year which is clearly a pretty challenging year around the world. Obviously, the shape of VF is going to change. It's much easier and easier to manage the timing of selling something than it is buying the right thing.

Right. Eric C. Wiseman - Chairman & Chief Executive Officer: We're actively managing our portfolio, working equally hard on both divestitures and on acquisitions. The timing of one is more predictable than the other, but we're committed to both.

Thanks a lot, guys. Eric C. Wiseman - Chairman & Chief Executive Officer: Thanks.

Our next question comes from Matthew Boss with JPMorgan. Please go ahead, sir.

Thanks. So switching gears over to Timberland, by classification, where exactly are you seeing the inventory imbalance, whether it's footwear or apparel? And what gives you the confidence that this is a near-term issue and not something larger? Steven E. Rendle - President, Chief Operating Officer & Director: Yeah. So this is Steve. I'll start this question. So the inventory imbalance we talked about is primarily Americas issue and we see it primarily in our boots category. It really started to see this at the beginning of early Q2, both in our wholesale and pro business and it's truly a short-term inventory balance because what we see is just a little bit of inventory sitting in our channels coming out of last fourth quarter. And similar to our Vans Europe business, it's not a product or brand issue. We feel really good about our brand metrics, as I mentioned in my comments, and we see just over the next quarter or two getting that inventory to normalize. And why we're so confident about that is we've seen really good rates of sale through the first half that continue into the second half and that e-commerce growth rate of plus 25% continues to give us confidence around our ability to connect with the consumer and represent our brand in a really positive way. So we see returning to growth in the second half low-single digit, mid-single digit despite we're coming up against a Q3 in 2015 where we grew over 40%. So that's, I would tell you, kind of frame up why we're positive is the brand continues strong. The sell-through rates are good. We just carried a little bit more inventory in the channels out of second half 2015 into first half that is normalizing now and will be clear as we come into Q3/Q4. Karl Heinz Salzburger - Vice President & Group President, International: Yeah, Matthew, I may be giving some international color starting with Europe. You heard me saying Europe is really strong. We're doing well in all channels. In wholesale, in DTC we have a new digital platform. We do well in most European countries, but we also do well in many categories of products. So it's a really good story there. Asia is a little bit different picture. We had planned a softer first semester and planned a stronger second semester. Remember, Q2 is our weakest quarter as well. So numbers are a little bit misleading. But specifically related to Hong Kong and Japan, but we expect Timberland going back to growth in Q3 and Q4.

Great. And then just a follow-up on the larger picture model. As we think about the margin profile on the multi-year basis, has there been any change, it sounds like not through this year, but any change to the 50 basis points a year annual gross margin? It sounds like driven primarily by mix that's unchanged from the past. And then as we think about SG&A as a percentage of sales beyond this year, any reason to not think about that as more flattish going forward? Scott A. Roe - Chief Financial Officer & Vice President: Yeah. So, Matthew, the first question is, really no change at all in our outlook for continued margin expansion. And that's really driven by mix. Even this year 50 basis points is what we've talked about for the full year and that's really driven by that mix. So we see no reason why that won't continue. As it relates to SG&A, we really haven't talked longer-term beyond this year. As you can see, we are investing in SG&A this year and, again, that's really, we think, a strength of our model to be able to deliver EPS growth and, at the same time, invest in D2C, innovation, product, those key strategic drivers that are going to set us up for growth in the future.

Great. Best of luck. Scott A. Roe - Chief Financial Officer & Vice President: Thank you.

Our next question comes from Laurent Vasilescu with Macquarie. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Good morning and thank you very much for taking my questions. I was hoping to follow up on your top line guidance for the year. Does it incorporate expectations for normal winter or colder than normal winter? Also, I think there were some comments in the prepared remarks that retailers are cautious regarding this winter. Is that a function of too much inventory or just weakness in the consumer? Scott A. Roe - Chief Financial Officer & Vice President: Yeah. So I'll start that and maybe the guys will jump in. In general, while we're considering this a normal winter from our standpoint, it's worth noting that our wholesale partners have taken a very conservative view of the year, right? And maybe some of these imbalances that historically would have just been tolerated, we now see much more aggressive action from a retail standpoint. Thus, some of the issues that we've seen from our wholesale shipment side. Eric C. Wiseman - Chairman & Chief Executive Officer: And I think just to follow that, the caution in our wholesale, retail community, we called that at the beginning of the year. We spoke a lot about how that's baked into our guidance. And what gives us real confidence about the power of our brands is the performance of our D2C growing high single digits this quarter and the strength of our e-commerce platform growing significantly. And as we expand our e-commerce platform to all of our largest brands, it's now moving internationally. Just again, it's a continued strength of how our brands are coming to life for our brands. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Okay, great. And then I wanted to follow up on the Outdoor & Action Sports double-digit increase and direct-to-consumer versus Sportswear mid-teen decline. Can you provide a bit – more color on how store comps performed in these two coalitions for the quarter and your expectations for comps for the balance of the year? Eric C. Wiseman - Chairman & Chief Executive Officer: Yeah. So our Outdoor & Action Sports D2C performance, I mentioned, is e-commerce. We're seeing just great strength there. And our store comps, which we don't talk directly about our brands specifically. We saw those in the flat to up just slightly, which is pretty consistent with what you hear across the board. Contrast that with Sportswear, over three quarters – well, the majority of our Sportswear retail footprint is outlet. And the outlet channel, as a broad comment, has seen a pretty significant impact in traffic due to the high promotional activity going on across the majority of retail here in the United States. So our Sportswear team has been specifically impacted just due to the heavy weighting of that outlet mix. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Thank you. Best of luck.

Our next question comes from Lindsay Drucker Mann with Goldman Sachs. Lindsay Drucker Mann - Goldman Sachs & Co.: Thanks. Thanks for taking my question. I wanted to ask about the excess inventory – the inventory growth year-over-year, you've called out about half of that is cold weather carryover product. Is that product that you're going to be redirecting to your outlet stores or your website? Or how are you going to work through that excess that's still on your balance sheet? Scott A. Roe - Chief Financial Officer & Vice President: No, Lindsay. That is good inventory that'll go – we have orders against it. That's first-quality good inventory. As we've said, we've been watching this now or talking about this for a couple quarters. We had two options. We could've disposed of it and re-bought it. We saw the demand coming in the back half of the year. We chose to hold that inventory and we see demand against it. So it's good quality inventory. Lindsay Drucker Mann - Goldman Sachs & Co.: Okay, great. And maybe you guys could give some perspective on whether you saw any shift in consumer behavior in the UK or Europe post some of the negative events in those markets, whether it's Brexit or some of the attacks. Karl Heinz Salzburger - Vice President & Group President, International: I guess you heard me saying, Lindsay, we grew Europe 3%. Most of the brands are doing okay. It's not an easy environment, you're right. There's a lot going on. Specifically to Brexit, we have to see what is going to happen. Negotiation have started, so it's a long-term view. But all in all, actually, we are doing pretty well. Our DTC numbers are strong in Europe, so that shows that our brands resonate well with consumers. Lindsay Drucker Mann - Goldman Sachs & Co.: Great. And just last one. Could you talk about how your business to off-price has trended? Steven E. Rendle - President, Chief Operating Officer & Director: From a U.S. standpoint, we're pretty much normal percent to totals as we look at this year, nothing dramatically different whatsoever. Lindsay Drucker Mann - Goldman Sachs & Co.: Okay. Thanks very much.

Our next question comes from Omar Saad with Evercore ISI.

Hi, yes. Thanks. Good morning. Eric C. Wiseman - Chairman & Chief Executive Officer: Hi, Omar.

Wanted to see if you guys could maybe dive in a little bit deeper on the e-commerce business digital initiatives. And I know it's been growing nicely and I think you guys are maybe a little bit lower penetration than the broader kind of soft goods marketplace. You know what you're doing there and if you also have any thoughts around working with any new partners on the digital side, perhaps getting access to Amazon and the Prime customer base, if that's something that's – you're thinking about? Steven E. Rendle - President, Chief Operating Officer & Director: Right. So here within the U.S. business, I'll walk you through that. Our e-commerce businesses, obviously, has been and continues to be a big emphasis of ours. We put a lot of energy into building our VF platform that now all of our big brands, as well as additional brands are coming on to and we're expanding that into our European marketplace where our large global brands are able to really maximize the power of that content and then transact regionally in a very specific way. We have a digital lab that sits out in our San Francisco campus that is very connected to a lot of the fast-moving digital trends that we're constantly mining and bringing into that VF platform. And as we look at wholesale partners that we can work with, there's a whole host of really strong, pure plays in each of our businesses. There's the larger multinational partners that we have great business with, and then clearly Amazon is a good partner for many of our brands and one that we would continue to work with strategically as it fits into each one of our brands' strategies. Scott A. Roe - Chief Financial Officer & Vice President: Yeah,…

Excellent. That's helpful. And then if I could just ask if there's anything new on the M&A front, Eric, that you want to add? Eric C. Wiseman - Chairman & Chief Executive Officer: Thank you for asking, but no. Sorry. Not trying to be cute, but I – we would never discuss any processes that we're part of, or not during a call. Thank you.

Thanks.

Our next question comes from Camilo Lyon with Canaccord Genuity.

Morning, guys. Thanks for taking the question. Eric C. Wiseman - Chairman & Chief Executive Officer: Good morning.

So I guess the other side of the e-commerce question is the wholesale question. Obviously, there's been some challenges in the department stores and I guess the debate now is are these structural challenges or are they cyclical ones. The traffic trends that we've seen in the channel and the growth in your e-commerce partners in your own businesses, does that – does it fundamentally alter how you view your growth prospects in the wholesale channel for the longer-term? And how do you think about that? Eric C. Wiseman - Chairman & Chief Executive Officer: No, it – look, we've been around long enough. The world is constantly shifting between different channels and structures. To put some context on it, because that VF has changed now, our composition with the exit from the, I guess, potential exit from the Contemporary Brands business, and department stores now represent about 3% of our revenue. Mid-tier represents about 4% of our revenue. We're much more weighted towards specialty and sporting goods and – but having said that, in all channels in our department – with our department store partners, we're working very hard to make sure we get more than our fair share of their big revenue numbers. There's still a lot of apparel and footwear sold and we're trying to be a great partner and get more than our fair share, and we do that across – with of course with all of our customers and it does go from year-to-year. There's different centers of concentration, but I know there's concern about our exposure and that's why I tried to get some context to the size of the business.

That's great. Can you – Eric, would you care to share a little bit more detail on the coalitions in those exposures? Eric C. Wiseman - Chairman & Chief Executive Officer: I can't do that. Even if I wanted to off the top of my head, I just don't have that information. I'm sorry. They're all – each has a different model and we're a global company with lots of brands. Scott wants to weigh-in. Scott A. Roe - Chief Financial Officer & Vice President: I'm just going to say we really haven't disclosed that level of detail. We just – we give you the overall percentages.

Okay. Fair enough. And then just another question is on The North Face. Of late during the past year or so, you were to – there have been some other entrants into the category at some higher price points. I'm curious to get your take on where do you see the opportunities to grow The North Face brand whether it's on the price point perspective if you have an ability to raise part of your premium offering within The North Face or if you see other opportunities to expand where you're currently – the base of consumers that you're currently speaking to. Steven E. Rendle - President, Chief Operating Officer & Director: Sure. The North Face continues to be the number one outdoor brand on a global basis by a long shot. You heard us talk at the beginning of the year that the team has recently gone through resetting the business around four specific consumer usage occasions or four new business units. Mountain sports which is that most technical expression of the brand, the mountain culture which is more the lifestyle aspect that would come out of that core mountain and into the city, we've got our Mountain Athletics or training category which is a fast-growing, very significant opportunity for both apparel and footwear. And then we have a new category that's coming out of our Asia business called Urban Exploration, marrying up with what's already a good city expression of the brand here and in Europe but bringing a really interesting Asian flair coming out of Japan and China. There, our team in Asia has been leading that will allow the brand to come at that city market in a slightly different perspective. We have the ability to sell higher price points and you absolutely will see us do that through these four new business units, but what you'll also see is real thoughtful line segmentation covering those key price points in those key categories for those channel partners that we do business with across the globe.

Great. Is that something that we can expect to see this season or is that more of a fall 2017 expression? Steven E. Rendle - President, Chief Operating Officer & Director: You'll start to see it come to life in fall 2016 but it will really come to life in 2017. If you happen to be in San Francisco anytime soon, our Palo Alto store which I mentioned in my comments as well as our Post Street store has just been re-merchandised around these four brand territories, and really it's a beautiful experiential expression of the brand.

Great. Good luck, guys. All the best in the back half. Steven E. Rendle - President, Chief Operating Officer & Director: Thanks.

Our next question comes from Kate McShane with Citi. Eric C. Wiseman - Chairman & Chief Executive Officer: Hi, Kate.

Hi. Thanks. Good morning. I had a question about cotton. This we've noticed over the last week or so that cotton costs have gone up and I know it's only a week move or a couple of week move, but can you just remind us the timing of when you lock in your commodity costs? Is this something that you're watching and do you think it's sustainable and how we should think about it on gross margins going forward? Scott A. Roe - Chief Financial Officer & Vice President: Yeah, Kate, Scott here. So well first of all, as it relates to 2016, at this point we're committed, right? So any movements that you see now are going to be in the future. We're generally two to three quarters out by the time it rolls into our results. What you see now would be a 2017 impact.

Right. Okay. Okay. Do you have any view on cotton for the next six months? Is this something that is potentially sustainable, this increased cost? Or is it, are you watching it? Eric C. Wiseman - Chairman & Chief Executive Officer: Yeah. Well of course, we're watching it all the time but we're not in the prognostication business as it relates to cotton. What we do is we lock in within the time of our lead times, and that allows us then to price and react accordingly. But in terms of trying to predict which way it's going, we haven't been very good at that. I don't know anybody that is.

Okay. And then my second question was just about the reallocation of resources now that the Contemporary business has been sold and is going to close. Just how should we think about any kind of acceleration of potential investments or reallocation of resources as we get maybe into Q4 from this asset disposal? Eric C. Wiseman - Chairman & Chief Executive Officer: Are you talking about capital or expense was your question?

Both, if possible. Eric C. Wiseman - Chairman & Chief Executive Officer: I'm glad I opened it up to both. Thank you. That's probably a good question to ask, a better question to ask after we have gotten closure on the strategic review we're doing at LSG because that's a big business and they affect our economic model. Scott mentioned that Contemporary has a little bit. Our gross margin will be a little bit weaker without it, but our operating margin will be a little bit higher. LSG would have another effect on it. We are obviously looking at the shape of the P&L, what it might be after this review is complete, and we might be able to answer that better later. Having said that, the economic, the P&L model will look different and we're trying to put ourselves in a position to accelerate the organic growth rate in our core brands and the two businesses that we're talking about selling will do that by math because they have not grown at the kind of rate that the rest of the business grows at consistently. From a capital standpoint, we're going to keep that powder dry until we see how much capital we have, but our priorities remain the same. First is acquisitions, and down the road, we'll be looking at dividends and share buyback. But our priority is acquisitions.

Okay. Thank you. Eric C. Wiseman - Chairman & Chief Executive Officer: Thanks, Kate. Scott A. Roe - Chief Financial Officer & Vice President: See you, Kate.

Our next question comes from Dana Telsey with Telsey Advisory Group.

Good morning, everyone. As you think about pricing in back half of the year with the new product categories and given the fact that it is more fourth quarter heavy, what should we be looking to for each of the brands? Is there some new product, is there some new marketing initiative that we should be looking to for fourth quarter and potentially into next year as top-line drivers? Thank you. Scott A. Roe - Chief Financial Officer & Vice President: Yeah, Dana, as it relates to price, we do have price. It will be a little back-half loaded. And we've talked about the FX impacts over the last couple years. We do have price, which more than offsets that FX in the back half.

Got it. And then anything new on the product offering, whether it's in Timberland or Vans or North Face that we should be watching for with marketing to drive that business? Steven E. Rendle - President, Chief Operating Officer & Director: Well, our Vans business, as it celebrates its 50th anniversary, has been doing some really creative things certainly with the Nintendo collaboration. You will see some new ideas coming into the marketplace end of this month and early next month that I will leave for you to discover. It's not something we really want to talk about here on the call. But in the case of The North Face, we'll be really anchoring ourselves in these new brand territories that I've talked about, driving our Summit Series Collection which continues to evolve after its relaunch last year on a global basis and also driving Mountain Athletics and footwear. And in the case of Timberland, we will continue to drive our boots. The boot trend is still alive and well, and we've got some just great offerings along with our SensorFlex platform and, you know, that has been in place now for three years and continues to gain momentum and grab share not only here, but mostly we see it in our international markets.

Thank you.

Our next question comes from Jim Duffy with Stifel. Jim Duffy - Stifel, Nicolaus & Co., Inc.: Thanks. Good morning, everyone. Steven E. Rendle - President, Chief Operating Officer & Director: Hi, Jim Scott A. Roe - Chief Financial Officer & Vice President: Good morning. Jim Duffy - Stifel, Nicolaus & Co., Inc.: I'm particularly interested in commentary around channel inventories. You mentioned imbalances with Timberland and Vans Europe. Are there other notable pockets of imbalance? And then in contrast, what are the categories where you have healthier channel inventory positions and the stage seems better set to perform in the second half? Steven E. Rendle - President, Chief Operating Officer & Director: Yeah, Jim, this is Steve. The imbalance that – from a Timberland standpoint is, as I mentioned, boots, and it's across the dealer distribution that the brands work with. And it really is inventory that's been carried out of fourth quarter last year, and as they work through it with the strong sell-throughs we see in the first half, we'll return to growth in the second half. Otherwise, we don't see inventory issues other than what we've called out at the beginning of the year. Caution in especially outdoor, reflecting The North Face order book, but the rest of our business is sitting at a really strong place. Our new innovative products will have great opportunities to be placed in and be put in front of consumers. Jim Duffy - Stifel, Nicolaus & Co., Inc.: Very good. And then, Eric, I'm sorry to do this, but with respect to acquisitions, I recognize it's a situation of preparedness meaning opportunity. We know you're prepared. So has it been just a matter of pricing that's holding things back? Or are you not seeing properties available that fit the strategy? Eric C. Wiseman - Chairman & Chief Executive Officer: I would say that there's two – it's a complicated answer because we're very, very active. Jim Duffy - Stifel, Nicolaus & Co., Inc.: I'm sure. Yeah. Eric C. Wiseman - Chairman & Chief Executive Officer: But the two biggest categories would be some of the properties that we're most interested in aren't available now, and some that we're interested in are not available at a price that we think is prudent to pay. Jim Duffy - Stifel, Nicolaus & Co., Inc.: Fair enough and that does seem prudent. Thank you.

And that concludes today's question-and-answer session. I would like to turn the conference back over to Eric Wiseman for any additional or closing remarks. Eric C. Wiseman - Chairman & Chief Executive Officer: Sure. Thank you all for your interest in our company. It's been an interesting year for us. In the first half, as I said earlier, consumer engagement and purchasing of our brands in our stores and online is right in line with our long-term organic growth goals, and that gives us great confidence that our brands are strong and our teams are executing well. Unfortunately, our wholesale business growth is off, and that's following a very weak winter last year and all the implications of that on inventory in the channel. But that will get solved with time. With that, I'll just say that we're very confident about our outlook for the second half. We have good visibility and strong execution skills, and we look forward to giving you guys another update in 90 days. Thanks so much.

And that concludes today's presentation. Thank you for your participation and you may now disconnect.