Charter Communications, Inc. (CHTR) Earnings Call Transcript & Summary

Thanks for joining us. My name is Phil Cusick. I cover the comm services and infrastructure space here at JPMorgan. I'm happy to welcome Chris Winfrey, CFO of Charter. Chris, thanks for joining us.

Pleasure to be back.

Excellent. The U.S. seems to be more open every week. Can you start with an update of what you see recently from customers, both consumer and business?

No. It's true. The market is coming back. It's starting to return to some sense of normalcy in terms of activity. It still varies by geographic location. Obviously, we have New York City, we have L.A., and those have been coming back slower. But they're on the same trend line, and they're moving. And then if you think about residential versus SMB and enterprise, residential, as we said in our first quarter call, is coming back. Activity's picking up, which are selling opportunities for us. But it's been a little bit slower than what we might have thought at the beginning of the year. Past few weeks, in particular, felt pretty good in terms of just level of activity in the marketplace for all the reasons that you know. The enterprise space never really went away, but people weren't looking to disrupt their connectivity or serve managed services that we provide. And so there were -- there have been less selling opportunities in that space. And people haven't been in the office. And so probably 30% or so of our sales meetings are actually in person. And when you're selling complex fiber products, having that in-person interaction and ability to describe the services and products and sell in that environment is pretty important. That being said, we're almost back to the selling level that we were at pre-pandemic. Some months, we actually are at or even higher than that selling level, which gives me confidence that when the market is pulling back and people are back in the office, including their IT departments, I think there's going to be a real opportunity for people to want to modernize their services, and we stand to benefit from that. And then finally, SMB. SMB never was as hurt by the pandemic as we expected. Not that there wasn't business shutdowns, closures. There was a lot of it. It's unfortunate. And we saw that in Q2 of last year in particular. But because we're a share taker, as businesses either started to come back online or new businesses were formed, we've actually had very good growth, really starting back in Q3 of last year, and that's continued. And we're seeing as businesses get reformed, newly formed or come back online, our ability to grow in that space is enhanced now, and I think it will be for some time. So it varies by geography and it varies by area. But what we expect is taken place, even though if it's a little bit slower on the residential side than what we thought at the beginning of the year.

Okay. John Stankey from AT&T just talked about accelerated business formation on the SMB side. Have you seen anything like that?

We have. And so we've seen that take place, and that's kind of thankfully consistent with what I just said. So...

Okay. Okay. I want to follow up on something you just mentioned. So consumer has been a little slower than you expected at the beginning of the year. Maybe let's dig into that. And is that a function of just turnover and churn isn't happening? Is it a function of customers who are not moving? What's going on there?

It's a function of all of that. So much lower move turn, people have been less willing to change out their service in the pandemic. And then there's lower nonpay churn for not only us but across all the different operators, which means that there's less gross additions in the flow for us to be able to target and to go acquire. And so if you're a business without growth or if you're actually ex growth, that benefits you. If you're a share taker, as we are at Charter, then your ability to have higher net additions -- we're still growing and we're growing well, but we'd be growing faster in a more fluid marketplace. We are seeing that return to normal, which is what we expected. The only thing I was mentioning on the first quarter call and reiterating here is that the year got off a little bit slower than what we would have hoped for, but it's getting to where we expected. And our outlook for where we expect to be relative to 2019, Internet net additions is unchanged.

A little more backloaded than you'd expected back in January?

We expected it to be backloaded to begin with. I just -- I think we thought that Q1 would -- we were optimistic that Q1 would be even faster. We had a great Q1, so I'm not knocking it. But you could see in our financial results, when you have 12.5% EBITDA growth, it's because there's less selling activity taking place. And so slightly lower on the gross additions, significantly better on the financials. Similar to what you've heard me say before, I'd like to have that pressure on the short-term financials because we're growing faster, and I think we'll see that as the year progresses.

Okay. Yes, I want to follow up on that in a minute. Let's talk first about competition. There's been a ton of focus on this in the threats of residential fiber overlays. Again, John Stankey, a few minutes ago talking about long term not just the 30 million homes but more -- as well as getting wireless up and running. What is -- how do you see the outlook over the next few years in terms of competition and the incremental competition versus what we've seen in the last 5?

Yes. Look, we compete against large operators in all of our footprint. We always have. And so we have 3 mobile broadband Internet competitors, and we have fixed wireline competition everywhere we operate. The amount of overbuild and upgrade activity that we see today is not different than what we've seen in the past, and we've been able to compete in that environment. And so our strategy is pretty simple, which is have low prices, greater value, better products, better onshore/in-house service, package that all together in a way that your competitors can't replicate and be able to grow market share despite that level of competitive activity. So I don't see a big change from where we've been in the past. I think the addition of mobile plus all of the product benefits that I talked about before with our broadband product, the addition of mobile actually gives us something to really compete with in addition -- as a further way to save customers' money, which is really how we'd like to go to market.

Well, let's dig into that convergence. We've been seeing more converged offers from not just you and Comcast, but also from AT&T and Verizon lately. How do you see this evolving over time?

The broadband product -- the mobile product relative to the broadband product is really just an extension of our existing Internet product. If you think back to whether it was 15 years ago, you would measure the Internet connection that you had going into the back of the PC. And then several years later, it was the quality of the WiFi signal in the family room. Now it's a question of, why isn't it working as well out on the terrace; and when I leave the house, how is it performing? It is really just an integrated product, and we've viewed it that way. It's why we got into the business. We thought we could make money with it along the way, and we've proven that. But it really was an extension of the Internet business that we had, an extension of WiFi through the macro cell towers that we lease through the MVNO relationship that we have, the ability to offload additional traffic and have an improved service through CBRS, licensed and unlicensed. The unique thing for us is that we're not an incumbent in the mobile space, and we don't view it as a separate product, which means that we have the ability to go into the marketplace with very attractive prices and save customers a lot of money. And we can use that as a way to grow, similar to what we've done with voice in the past. And so I think we have a long runway in front of us for our total connectivity products to be able to increase the dollars per household that we receive. At the same time, we're saving customers significant money relative to what they pay today. And unlike many of our competitors, we're able to provide that type of converged connectivity product with superior speeds across every single one of the passings where we operate. And I think that makes us unique.

How much -- we've looked at wireless in the past, and we've not given it a lot of value. Greg Maffei at the Liberty meeting not long ago put a pretty big dollar value on what that could look like long term. Do you think that that's even within the range of possibility? Or how do you think about that?

Well, it depends on what you consider as profitability for a single-line product. I think if that's how we looked at the business, which it isn't, I think it could be much, much higher than that over really a long period of time. Because I think there's no reason that customers shouldn't want to take what is the nation's fastest mobile product today and the fastest Internet connectivity, which is through Charter, at a price point that's cheaper than what you can get elsewhere. So I think the runway for our growth and the profitability that we can achieve through that is really large. The reality is we don't take a look at it as a single product. And then we show that to the investment community as a way to create transparency so that people understand the investments upfront that we're making to be able to drive that type of growth. But as I mentioned before, it's really just an extension of broadband. And broadband has been a profitable product for us. Mobile is going to help it continue to be more profitable by having more customer relationships and by saving customers more money along the way.

I make an analogy here to the rollout of voice almost 20 years ago on the fixed side. Is there a reason you couldn't have a similar market share in wireless over time as you have in voice today?

You're right. I don't think people took us seriously when we came into the voice market. That was both here in the U.S. as well as when I was in Europe doing the same. And lo and behold, if you take a look today, it's still a valuable product for a good portion of the U.S. population. Between Comcast and Charter, either individually or collectively, we're now the largest phone operator in the entire country. Nobody would have thought that was the case. And the way we did it is by -- because we weren't an incumbent, we had the ability to save customers' money and we have the ability to go bundle it. And as a result, we took down phone pricing dramatically across the entire industry, across the entire U.S. over the 20 years and became the largest operators. At its peak, you could almost count as clockwork that the voice subscribers would be about half of broadband. If it hadn't been for mobile substitution, that percentage and those numbers were continuing to increase. And so I think our opportunity is at least that. And if you think about what I said before around Internet connectivity and the converged product, you would argue that it's one and the same. And shouldn't all of your broadband customers want to have Internet connectivity in a ubiquitous converged way? And that's the product set that we offer. We can save them money to get there. So it's a pretty attractive way to grow.

How should I think about the sale process of wireless today through your CSRs and other channels versus voice back in its heyday? You said it used to be like clockwork, a certain amount every quarter, which just keep coming in. Is that how more it is today, the machine just runs?

We want mobile, and we ask that mobile is part of every single selling opportunity that we have, whether that's in inbound sales, whether that's in the stores, whether that's direct sales. So every single one of our sales channels, including online, is required to have that conversation because it's a way to save customers' money. We use it in retention because it's a way to save customers' money. By adding a PSU with us, we can save them hundreds and even thousands of dollars a year, which is a lot better than giving them a credit for the cable bill, we can just save them a whole lot more money through providing the mobile service. So we're aggressively making that a part of every single sales conversation that we have, and we're getting better with those conversations as every day goes by. And you'll see us putting into the different packages over time and improving the way that we sell into the marketplace, selling mobile into broadband sales, selling additional lines, upgrading additional customers, all of that will be our focus for many years to come.

Right. And you've been selling mobile to small business customers for a long time. Has that been a significant driver of growth?

It's nice growth, and it's proportional to what we have for SMB overall. Our SMB relationships are about 2 million customer relationships out of a total 32-or-so million customer relationships. Our mobile net adds last quarter, I think, was 15,000 SMB out of 300,000 total. So it's pretty much pro rata, and it's what you would expect. But the proposition there is really similar, which is we can go into these businesses that have high bills with inferior products, and we can put together an offer that not only increases their capability of the products they have but causes them to save a bunch of money relative to an incumbent. And that makes for an easy sale. Now it takes time to pry customers loose and to get them willing to make a change, but over time, we expect that to happen. And it's happening in the SMB space in a really similar rate of what we're seeing in residential.

Okay. You've talked about a CBRS-based wireless network over time sort of on a where-it-makes-sense basis. Where are you in the development of that? And what should we expect over the next couple of years?

So I think by the end of this year -- again, going into next year, we will have constructed a radio access network and fully deployed that across one of our larger markets. It will be designed as a full-scale employee trial before we go fully active to paying customers. We've been successful in the lab. We've been successful in field trials. Everything works the way we expected. But we're going to scale it in a particular market and make sure that the handovers, as Tom has called it, work the way that we expect and that it's fully ready for showtime. Once that takes place, we'll be able to go market by market. And we'll pick the areas that have 2 factors. One is the most traffic that's taking place in particular areas so that we can get the best ROI for the deployment as well as penetration, which kind of ties to one in the sample. So in a weird way, the more penetrated we are on mobile, the more attractive the CBRS deployment becomes because it gives us more offload opportunity. So we're -- it can create -- it has the ability to create a superior product experience because of higher speeds similar to what we do with WiFi today. But the principal driver of the pace that we pick is really going to be tied to a fairly disciplined financial ROI for the offload strategy. And in the meantime, we continue to use extensively our WiFi and continue to use the MVNO relationship we have. And I expect both of those will be significant carriers of traffic for the long future.

If I -- you've been doing trials -- publicized trials in North Carolina for quite a long time. Is that a good guess as to where you'll do that first market?

No. Look, we've been doing trials in Orlando, New York City, L.A., North Carolina. We've picked virtually -- with Denver. We've been doing trials all over the country because we wanted to understand the topography and the impacts that would have as well. So I wouldn't read too much into one particular market and guess where -- I know it was a good try, but we're not prepared to announce today, or at least I'm not, of what market we're going to roll out first with the radio access network.

Okay. And should we think of that as sort of like an urban hotspot strategy? Or is it more like a strand mount peanut butter across the region?

We will take a look at offloading everywhere. And so you can think about -- I mean when I say everywhere, I mean where the traffic is high, and that can come through a combination of right of entry where we have the ability to place in some of our commercial agreements outside radio access networks. Certainly, it will be on strand. You can think about inside businesses where we have those rights and opportunities to offload traffic. And over time, while that's not something we're deploying at routers today, you can think about residential routers also having 2.4- or 5-gigahertz WiFi, having the new 6-gigahertz WiFi and having CBRS in those as well and targeting certain residences that have traffic characteristics around them to be able to deploy CBRS as well. So we're going to be opportunistic around how we deploy these radios, and it will just be tied to a financial return.

Okay. Okay. Comcast recently began offering multiline unlimited discounts. Does that make sense as a strategy for you?

I think it does. We're -- they're smart. We're watching what they do, and we're hopefully hoping that it works as well as I think it could. They mentioned on their call, we've not disclosed the number of lines per customer, but it's a pretty similar business with similar economics and not too dissimilar pricing that we've had in the past couple of years. And I think they announced 1.5 lines per customer relative to the U.S. average of 3 lines per household. Some of that's just time as customer individual handset contracts come up for renewal and allows you to sell in and take that line in addition and grow your 1.5 up to the 3. But I think it's a smart strategy to incentivize an acceleration of those lines, both at the point of sale as well as for upgrades over time and to take away, frankly, more of the competition's business out of the household and permanently switch those over to, in their case, Xfinity; in our case, Spectrum. To make it a whole house relationship, I think, is a smart thing to do. So we're watching and rooting for them.

I'm curious, how important has that multiline discount been in -- or not having it been in your conversations with customers? Because you do have the mix and match, unlimited and by the gig, that I think is really attractive for a lot of families. Is it...

We have the mix and match, which is unique and it's attractive. It allows for a 4-line household to have 2 unlimited, 2 by the gig. It allows you to periodically adjust that based on what your needs are, how much WiFi you're using or not using. So that's attractive, and that's been a good strategy to get additional lines. I think a fair amount of this is tied to just when those lines are coming up for renewal based on the EIP or the device financing that takes place with a competitor. And so I could argue that we were going to get it over time anyway because of the -- what you mentioned in the way we go to market with by the gig and unlimited packaging and low prices. But I think this is an opportunity to accelerate that migration and to win out that business upfront. We do occasionally do some limited form of contract buyouts, and so we can combine all that together as a way to grow more aggressively in the marketplace. So we're thinking through all those things, and again, watching it with a lot of interest and rooting on what Comcast is doing.

Okay. Okay. Let's switch gears. There's been a lot of consolidation in media now. I'm curious what you think about that and sort of the relationship over time of distributors and programmers.

Well, the most recent announcement, obviously, is the deconsolidation of vertical integration. And I think that what that shows -- we've looked at most content assets have been available over the past few years at different points of time. And we've resisted that temptation because we struggled to understand how -- as large as Charter is, we're still a regional distributor, and the content business is a global content business. So in order to create a benefit, you'd have to really handicap your capabilities for the content business outside of the region. And we just didn't -- we didn't see where that created really the beneficial synergies. So to me, it feels a bit of a validation of the pure-play strategy that we've chosen. And it will be interesting to watch. That's, I think, the biggest thing that's a takeaway for me.

Okay. Do you think it drives more -- does programming consolidation drive distribution consolidation over time as well?

I'd like to hope so. I think there's a real opportunity for us to do additional cable consolidation at the right time. Most everything that's left is now family-controlled. And so when they're interested in selling, I'm sure we'll get a phone call. I'd like that and to have the opportunity, but it's not really in our control. I think there's an opportunity to create additional scale. Most of our systems service infrastructure is now software-based. And so whether you think about platforms from a customer-facing or even from an internal service organization being software-based, I think there are big and different synergies than what we've had in the past. And our operating strategy is one that's designed to drive volume growth through saving customers' money, providing great service, in-sourcing all of the service infrastructure onshore, in-house. So I think we have a positive message that we could take to the marketplace if and when we get the opportunity for cable consolidation. But that hasn't been in the cards the past few years, and I haven't seen any indications that it's changing anytime soon.

Yes. Cable consolidation used to be about programming synergies. It seems like that's less the driver today and more about just operational go-to-market and knowledge.

The programming synergies would still be there, but it would not be in and of itself to -- enough to drive cable consolidation. And that's not new. We've said that all along is that getting bigger just to get bigger, that's a onetime synergy that has a benefit that's created. But the ability to actually cause assets to grow faster for a longer period of time and to have more free cash flow, recurring and accelerating free cash flow than they would otherwise, those are the operating synergies that come out of these consolidations. And that's, I think, what gets us more excited than a onetime reduction in cost or transaction synergies. That's always been the case for us.

I'm curious as well with mobile, and you have had this conversation for -- it's got to be 10 years. Has anything changed in the way you look at the need for fixed and mobile to come together as some of your peers sort of bundle more aggressively?

It -- we haven't felt the need so far, and we see a path to deploying the product set that we envision, this converged Internet connectivity service, without needing to rely on M&A to go do it. I mean it could happen. But in some sense, you'd be acquiring a business that you're intent on reducing significantly from a rate perspective. And so we have an organic path that allows us to grow by saving customers lots of money and reducing the ARPU that's paid to all mobile operators because of the service and product and packaging structure that we have. So I find it difficult to get an ROI when you think about acquiring a third-party mobile operator versus the organic path that we have in front of us. Never say never. But that's the path we're on, and it's consistent with what you and I have been talking about really for the past 10 years.

And that's the issue is you've always talked about lowering the margin value of wireless before you would want to own anything there. It doesn't sound like anything's different.

I don't think anything has fundamentally changed.

Okay. On the infrastructure side, we've talked a lot about broadband expansion. You signed up for 1 million homes of RDOF over the next few years. What do you hear from the DC side about anything, update on President Biden's infrastructure proposal? What do you think we're headed now?

Look, I don't want to get into predicting timing, amount or structure. It's fluid, and I'm not sure there's any benefit to us for doing that anyway. But I think what's becoming clear is that there's pretty broad support for 2 key aspects: one is affordability and the other is availability. And luckily, Charter has been a leader on both of those for many years. On the affordability front, we've had our Spectrum Internet Assist program, which is under $20 for a 30-meg product, including the modem. We've aggressively deployed that across our entire footprint. It was a merger condition and we've sustained it, and we expect to continue to sustain it. To the extent you added the emergency benefit -- Broadband Benefit program, which we're a participant in, and that could become permanent as a subsidy for low-income households. I think that would be beneficial for the country, and we could be also a significant contributor to that program. The other piece I mentioned was availability. And as you mentioned, we've been aggressive prior to this administration of rolling out rural broadband because we think it's good business economically, but we also think it's the right thing to do. And it opens up future opportunities for us, and it's good for the communities that we serve. And it's important to have that broadband connectivity everywhere. Some of that we've been doing with subsidies already through the program that we do Rural Digital Opportunity Fund through state grants, other ways and if there's additional money, and it would be required to do that to go provide additional broadband. I think as it relates to affordability and availability, Charter has been doing it. We've been doing it at scale. And because of the fact that we have the experience and we have the scale, we have the ability to do it generally better and faster than most other people, and we'd like to continue to be part of the solution. And because of our size and because of what we've been doing, I think we have the ability to keep prices low when we go do that. It's a fundamental part of our operating strategy anyway.

Okay. I'm curious, Tom said, I think, last week that you would have the same pricing structure in these new markets that you've had in the old ones. I think that's certainly good politics and probably good business as well. Where do you think penetration can go in these markets?

I think penetration across all our markets, new and existing, can be very high. But a lot of that has to do with the way that we go to market. We continue -- we invest significantly inside of our network infrastructure, inside of our product. We've invested that way in all kinds of different market climates, and we've not taken our foot off the gas. We continue to offer products at fair and good prices with value and packaging in a way that most people can't replicate. And so what that means is that you'll get high penetration. So our outlook for the new territories that we're building and for the ones that we serve -- it doesn't mean overnight, but I think we have really good upside in terms of penetration across all of our footprints as long as we continue to maintain our operating strategy the way that we do today, which is invest a lot, keep your pricing fair, bundle in a way services that people can't replicate and provide excellent service with in-house employees, which is a competitive advantage, I think, that we have, all of it.

Okay. Switching a little bit to the financial side. There were some questions recently about margin growth. And I think, certainly, the mix shift among a lot of cable companies has driven a lot of margin expansion. You haven't had nearly as much shift away from video as some others, but margins have been growing. What are the drivers aside from mix shift of margin expansion over the next couple of years? Can you just give us a quick outline?

I'm hesitant to even answer the question because it's not how -- you know we've had this debate. It's not how we manage the business. We're putting together our long-range plan or 1-year operating plan or a budget. It's really a complete afterthought in terms of looking at what's the percentage margin. Now I'm not trying to sound at all negligent as a CFO and saying that we focus on long-term free cash flow generation. And so you can have very high percentage margins with a lot less revenue, and you could be worse from an EBITDA and free cash flow standpoint. And that's obvious. Our goal is to become more efficient along the way to sell more product. And if the output of that is that the margin ends up being higher, so be it. But I do think the trends you mentioned are real. So I will answer the question. There's a mix shift that's taking place, and there's a complete digitization of the service infrastructure that's taking place, particularly for operators at scale, that allows you to take significant amounts of physical transactions and call center transactions out of the business, building transactions out of the business. And that trend of reducing your cost to serve per customer relationship, in addition to the mix shift you mentioned, that's going to be going on for many, many years to come. And so we're going to continue to get more efficient, which -- what that translates into us isn't just about margin expansion. When we get more efficient, that allows us to be more aggressive on pricing as it relates to mobile and across all of our other products in the marketplace so that you get this virtuous cycle of unit growth. And when you get that virtuous cycle of unit growth, what's happening is you're selling more products into a fixed number of passings, which means that you're getting more revenue for the same amount of fixed investment and operating costs that you have in the network and you sell more products per household, which means you get more revenue per household, all of which drives up your efficiency, increases your margin and allows you to be more aggressive about your investments and about the pricing that you have in the marketplace.

Okay. Not to be obtuse and ask about churn again, but one thing you talked about earlier is that the sort of turnover in the business has come down a lot and bad debt is down for everybody. I'm just concerned that as we come out of this, people will have forgotten that we've created a really tough comp for ourselves. How much extra benefit do you think the business is generating right now because of these low bad debt numbers and low churn numbers that we need to be ready for as the business normalizes?

I mean you're right to focus on it. There's going to be a wake-up call at some point, where when we start to grow significantly again -- we are growing healthily right now. But as transaction volume picks up and our selling opportunities pick up, there's going to be more sales and marketing costs. New customers generate phone calls. They generate the operating cost-related portion of installs. And new customers call more often and have more service calls upfront early in their tenure, all of which drives up your operating cost, and to a lesser extent, capital. And that's a good thing. It's temporary in nature, that financial pressure. Your underlying EBITDA is better off for it. So I see that day coming, and I'm excited about it. But it's going to depress our EBITDA growth rate relative to what we've seen for the past several quarters. I mean the first quarter was 12.5% EBITDA growth. It's fantastic. But if we had to pick between the short-term EBITDA growth and growing in the marketplace -- we've been growing in the marketplace every time because your underlying EBITDA and cash flow is higher as a result of that. So to give you a specific example, I just listed about a bunch of areas across the P&L that would be impacted by a higher growth rate, and that includes call centers. That includes field operations of installs. It includes, obviously, sales and marketing, but to your point, also includes bad debt. Just picking on bad debt, which is the most sizable right now in this climate of all those. In the first quarter, we mentioned that we thought we were $100 million better than we would have been otherwise based on the impact that stimulus and the pandemic was having on nonpay disconnect rates and bad debt. And so that's meaningful in terms of a contribution to your overall growth rate. You take that out as well as one other item that I'd mentioned on the first quarter call and our -- I don't know if it's normalized, but our growth rate still have been close to 10%. So the business is growing well either way. But some of that is coming about as a temporary benefit for the reasons that you mentioned. And we all need to be prepared for moving back into a more normalized environment where we're focused on growth, and we're willing to put short-term financial pressure on what we could have grown at otherwise as we elect for growth over short-term financial management.

Okay. In the meantime, buybacks in the first quarter were very strong, and recent filings from your owners suggest that 2Q continues at that pace. As taxes come on and RDOF consumes more cash, are there headwinds to that buyback?

Look, we've always wanted to retain flexibility to do what's right for our shareholders long term. And capital allocation is a key part of that. So clearly, RDOF will consume some capital over the next 6 years. You can think about rural build as kind of an equivalent to cable M&A. And so when we think about those type of opportunities, we're considering does it make sense to buy somebody else's stock versus buyback more of our own. In this case, it's kind of like cable M&A. But we've also said, clearly, if we see opportunities inside the business to invest organically, we'd take that every time. Because the more you do that, the better growth you're going to have, the more accretive your buybacks that you do, do are going to be. And so that's a way to create a model that's virtuous and continues to generate shareholder value over time. But I think we can do all those things. I think we can invest heavily in the business. I can think we can do cable M&A, and I think we can do buybacks. It's just a question of allocating amongst those as opportunities present themselves. And I think we've shown ourselves to be good stewards of that capital allocation process in the past. We pride ourselves on being good allocators of capital. And I think people should expect that from us in the future.

Good. That's a good place to wrap it up. Chris, thanks very much for your time today. Nice to see you.

Thank you very much. It's good to see.

Thanks, everyone, for joining us.

Take care.