Lumen Technologies, Inc. (LUMN) Earnings Call Transcript & Summary

We're live. Hi, thanks for joining us. My name is Phil Cusick. I follow the comm services and infrastructure space here at JPMorgan. Please help me welcome Ed Morche, President of CenturyLink's Enterprise business unit. Ed, thanks for joining us today. How are you?

I'm great, Phil. How are you? Good to see you.

Excellent. And everything works. So thanks for joining us. First, you've been with CenturyLink a long time via Level 3. Can you talk about your role at the company today and what your top priorities are?

Sure. Thanks, Phil, and thanks again for having me. So again, my name is Ed Morche. I've been with the company -- it's my 19th year via the Level 3 acquisition. I've got responsibility for our enterprise business and our government business, which means inside of enterprise, we refer to it as regional enterprise. Think state and multistate companies, typically 500 employees and above. Our large enterprise customers, national and global footprint. And then inside government, it's our state, local, education, federal, it's intel, civilian and defense.

Okay. And just given the time that we're in with this pandemic, can you talk about what CenturyLink is doing to address this with customers as well as employees?

Sure. So I've been in telecom, Phil, since 1992. There's been various times when we've gone through tornadoes and hurricanes and other natural disasters, and we've seen everyone flock to a geography and do heroic things. But I've never seen any company or any group of companies get together and focus on a national crisis like this for a sustained period of time. So beginning in early March, we decided to send home all of our nonessential workers. So it's about 75% of our company, people who could work from home. And then we refer to the 25% of our essential workers as those who work from work. We got people who are doing installs, people who are out there grooming the network, people who are out there making sure that the network is repaired in case of outage. CenturyLink is one of the largest Internet backbone in the world. We know they have a large responsibility to make sure that keeps up and running. So we are very focused on the 25%, making sure that they were safe, making sure that they had the right to say no if they felt that they were in an unsafe situation given the kind of ever-evolving circumstances around COVID-19, not knowing what was real and what was not real yet, very focused on their personal safety, very focused on making sure that they could do their jobs as effectively as possible. And right around when this happened, we saw our own customers start to go work from home. And we really went into a firefighting mode. We developed this concept called emergency bandwidth upgrades. And so in the first -- or sorry, in second, third and fourth week of March, we went through hundreds of these bandwidth upgrades every single week. They could be anything from a logical upgrade, going from 200 meg to 500 meg, providing more Internet access to the complete local upgrades of network. So to give you an example, we had a CIO of one of the largest school districts in the country called up and said, tomorrow, I'm sending 1.2 million K-12 students home. And I've got 2 days to figure out how to service them. And that required us to do a massive upgrade, essentially doubling the size of their network. And we did it. And it's a combination of logical upgrades, which we can do in-house, and actual fieldwork. And it was this sustained ongoing activity really for those 3 weeks, where our sales folks, our operations personnel, our folks in the field, our customers were putting in 12, 14 hours or more a day, working every weekend. And what was really great was there were no complaints. There were no concerns around following process. It was this massive put-the-customer-first opportunity, and everyone did the right thing, and it felt great. And then as we kind of weaned into April, the inevitable happened. We got all the bandwidth in place we needed to get in place for our customers, helping them reverse how they were operating in terms of network architecture. And then they hit a lull. They had to figure out what they were going to go and do next. So we saw things go on hold, RFPs, normal course of work start to pause. But what really became important was our ability to communicate. Yes, we had -- I was just flooded on 2 sides. Coming out of March we had accolades from our customers on how quickly we could respond and how we help keep their critical infrastructure going. And then after that, it was, well, what do you think life is going to be like? Where do we go next? And how do we react? Is this permanent? Is it temporary? And as those conversations continued to evolve, I think people became more and more comfortable that they could anticipate what part of their network was going to continue as is and what might be more variable in the future.

Okay. So I've got 3 of those kids. And now I know who to call when I've got Zoom problems. That's perfect.

Yes. So I'm like you, I've got 3 college students who moved home full time. So it's a bit of a challenge.

So maybe you've talked about customers who need more bandwidth. Help us think about what portion of customers are maybe shut down and need either less bandwidth or no bandwidth at all? What do you see there?

Yes. So certainly, I'm sure, as you've seen, Phil, our customers in hospitality and retail really got hit hard. And we had a combination of some came to us asking for relief. We worked with them as best as we could, along with the federal government, providing them PPP and other support. But then we had the other half of our customers who needed way more bandwidth than they were typically used to. So think insurance companies. We talked about on our earnings call State Farm was just flooded with calls. Some of them legitimate calls needed to be responded to for COVID. A lot of them just curiosity and inquiries. But that requires a ton of capacity to come into the network. So we did that. We did the same thing for other large customers like Blue Cross Blue Shield. And so I'd say, health care, on one end, inclusive of our desire to help support those temporary field hospitals, everywhere that they were popping up that we could provide something on that, and then we can do something quickly. We volunteered to provide those at no charge and continue to provide those at no charge. So it's health care, big pharma, insurance companies really driving massive demand. And then on the other end, it's really the hospitality and retail, the more voluntary things that our day-to-day citizenry can hold off on.

Help us think about it. You mentioned half. Is that a pretty good estimate of the split between people who need more and people who need less?

I think in my part of the business, we're thinking that regional enterprise and above, there haven't been that many who needed less. For the most part, it's been inquisitive around what might come next to [ in static ] need for more right now.

I see. I see. Okay. And help us think about how this changes the network long term, those conversations you are having with customers about not just on a temporary basis of getting more bandwidth. But what does this look like in terms of changing the network over time?

So we've talked a lot -- you've talked a lot specifically about the move from dedicated to public networking, SD-WAN becoming a big part of that. We refer to that sometimes as hybrid WAN or hybrid networking. What we're really looking at now is this hybrid networking become more of a tri-brid. And the view is 25% to maybe 35% of all workers who have been sent home may stay at home permanently. I think there is a concern in corporate America around lack of trust. In the past, without some kind of pandemic staring at you in the face, can I allow workers to go home and be as productive at home? Or for the most part, people didn't believe that. In the face of the pandemic, where they had no option, what CEOs have seen and CIOs have seen is people are just as productive or, frankly, in our case, even more productive. People are getting kind of exhausted. You can't figure out when your day starts and stops. But if you can be that productive working from home, you don't need to have the same real estate footprint you once had. So if you can trim that down, allow, say, 25% of your workers to stay at home, what does that network architecture look like? And so we started talking about this concept of the enterprise home office. So that rise of the home office as a permanent fixture. Then for folks like you and I who are using it for video conferencing and occasional chunks of work, it's probably fine. But if you think about examples of people like a director of finance, I like to pick on this guy because he tends to have to crunch large amounts of data. That person likes to work in the office where they have access to a lot of bandwidth and local processing power. But if we can allow them to work from home and process big data just as effectively or even more effectively at home, then that's a win for the company and a win for the employee, especially if that employee was in a large CBD, say, San Francisco or New York, where they're commuting 2 hours in and 2 hours back. We can give that employee 4 hours back of his or her life. And maybe 2 hours goes back to their personal life and 2 hours goes back to the company. Productivity goes up, but we've got to make sure that they are truly productive. And we started looking at some of the things that we can do to contribute to that, and our edge compute concept and product is a part of that. If we can get that ability to crunch large amounts of data very close to that director of finance, as an example, and they've got access to good broadband, and we can provide that in a low-latency environment as well as the ability to shut them off to centralized cloud providers, they're actually going to get better performance at home than they can get in the office.

That's interesting. And I know it's not your side of the business, but do you work with the consumer side to say, okay, this is now the opportunity that we could do on the consumer side and how can we work together here?

Yes. And we have seen a spike in broadband orders on the consumer side inside of our footprint. And so it's great for the consumer business. And sometimes, the network that they connect to will be ours, and sometimes it will be a competitor's. But in general, you can stand alone. That's great for consumer. I don't expect that as part of a national network, that our customers are going to say, please provide Phil or Ed that consumer broadband as part of this. But I expect the trend to be as much like our employers treat wireless, they're going to treat broadband the same way. So at my company, I bought my own wireless. I bring my own phone, and I get a $30 subsidy a month. And I think the same will happen in the new work-from-home environment that I'll be asked to provide a gig of broadband that's available, and I'll get the $30 subsidy. And my kids can use it to play Xbox, and I can use it for work and not have to prioritize that with some local device on my end. But I think that it removes that last-mile local access from a lot of our discussions and in many ways, allows us to deliver service even faster because, as you know, that last-mile access, if it's not on that, it's really kind of a long interval in terms of service delivery.

Let's go back to what you talked about a minute ago in terms of edge compute. What is CenturyLink doing? And what's your view overall on the rise of edge computing? We hear this phrase a lot, but it seems to have different definitions for a lot of different people.

You're spot on. And that always happens in the beginning of something new. Everyone shares the same phrase and they'll all have different definitions. So our view is centralized compute, right, or centralized cloud has been a fantastic advent at AWS, Office 365. They work very well for certain applications, but they're run centrally or regionally. They're not in every locality. And as enterprise CIOs look to pull more and more applications out of the business because they don't own a data center and they don't really want to be in a third-party data center, they don't have everything out in the cloud if they could do it. There are certain applications that are very latency sensitive that they tend to keep in-house. And we looked at our footprint, and one of the advents of who we are now, what we've grown into at CenturyLink is we have a couple of things that we've backed into. One, we've got an enormous amount of local peering. Think about the number of dark fiber networks out there. Most of them were built by us. The big cloud providers, other content providers, cable companies, wireless companies, a lot of them use us in part or in full, the backbone. So we had that local peering that we established as a part of that network design. Then we looked at our real estate footprint and looked at all the long-haul networks that we own or the metro networks that we own and the local telephone companies that we own. We've got a lot of real estate. And so our product team, our engineering team did an analysis and said, if we were to pick about 108 or so of those locations that we own across the country, pull out some of the equipment that we don't necessarily need any more, think like old TDM switches, right? You've got a fully conditioned space. You've got fiber coming in diversely or triversely. You've got backup power, pull that out, clean up the space and put in VMs. You essentially can do that in all the sites across the country and hit about 95% to 96% of enterprises within 5 milliseconds. That starts to answer that really low-latency requirement CIOs have, that we can provide that local compute and that local storage capability very near to them without them having to own a facility.

So that's interesting because those facilities 5 to 10 years ago were being discussed as sort of colo facilities, old carrier TDMs, [ load POTS ]. And that kind of went out of favor as hyperscale evolved and big colo facilities. Do you think the value of those are coming back as the need to move to the edge develops?

I mean I think if you look at how data centers have evolved, the first step was the CIO had to build his or her own and manage it. That became super expensive from a real estate and OpEx perspective. And then you saw this huge rise of third-party shared data centers that have done quite well. And now the move is, well, do I really need to own 2, 4, 8 racks in a third-party data center and do I have to pay all those cross-connect fees? Isn't there a simpler way to go? And as you pull more and more of the applications out of that shared environment into a cloud environment, really, what you're looking to purchase is access, capability and compute. And you want somebody else like CenturyLink, the same way that Amazon does this. Amazon owns the capital in AWS, and they stripe you across that capital, so your shared environment. They're responsible for all that tech refresh and upgrade. We do the same thing on the edge side. So you no longer have to buy that dedicated capital. You can share that. I think can be dedicated if you choose to, however you want to design that. But I think it's the next way to get CIOs out of the cost of data center real estate, even if it's third party.

Okay. That's interesting. So let's lead that into sort of discussion with CIOs in general. Are we -- now that we're a couple of months into this, have people moved away from the emergency "I need more bandwidth and I need it now" into "let's think about new technologies that might re-architect my network as well as my cost?" So you mentioned SD-WAN earlier. Get into some of those where there are hot discussions now.

Yes. And I think it really just comes down to the architecture discussion. What part of the current world is going to be permanent? And so we keep here coming back to that enterprise home office. If that's permanent, how do we manage that? How do we downsize an SD-WAN device so that it can go to Phil's house or Ed's house and we can prioritize traffic? In a somewhat primitive way, it doesn't have to be as robust as we have at a large enterprise branch location. But the concept of branch-to-branch communication is rapidly starting to deteriorate. And it's really endpoint to endpoint. And the endpoint could be my home. The endpoint could be mobility, could continue to be some branches. But the way we've been thinking about it is there's a core series of sites that are nonnegotiable. And we connect those with dark fiber, managed fiber or wavelengths. And then there are those key branch sites, which are going to be permanent, and they'll still use dedicated connectivity, all out VPN. It won't die overnight. And VPN's got great uses for that dedicated secure connection. Then you move into the best-effort branches, think sales offices, right? And I'd like to poke at the sales guys because I'm one of them. Those are best effort. If they go down, it doesn't matter that much in terms of architecture because I've got a cell phone as another way to handle that. And then there's the work-from-home environment, which I think we can actually make even more robust than the best-effort sales offices, right? That will force people to move even more folks out of these sales offices or motel spaces and completely go back to the work from home.

Okay. You mentioned VPN not dying overnight. What is the prospects of replacing VPN?

So I mean if you look at our business today, we're seeing VPN drop at a single-digit CAGR. And we're seeing SD-WAN grow at double-digit CAGR, which kind of keeps us flat as you're thinking about WAN as a service. There will be a point in time -- I think you made this point earlier. It's great that SD-WAN is growing double digits, but still a small base. At some point, the base gets big enough where it really starts to matter. And whether it's SD-WAN, hybrid WAN or this new tri-brid WAN we're talking about, the CIOs are really being forced to evaluate. In the past, you would see -- when it was just VPN stand-alone, it was a very difficult pricing shoot-out to go and take share because everybody had essentially the same network, and it was really about cost take-out. So the easiest thing to do was to go and run an RFP, get bids 20% or 30% below where I was at, go to my incumbent and say, meet this price and you can keep it. So you saw a lot of that happening, and you didn't see a lot of transforming of their environment. You didn't see a lot of migrating from one provider to another. Now the impetus to move is much greater. And people are looking -- of course, at price, price will always be important. But they're also looking at capability. And so if I go with you, CenturyLink, what am I going to get that's different from somebody else? And part of at the core is support. Our key is we provide better local support. We believe that our competitors and local support is our people, right? So we got 22 general managers across the country who sit in market with our customers, listen to what they need with their teams around them. But also, we look at support in terms of capital investment and that capital that we drive into their business that we just don't see people -- our competitors doing on a national basis. And that ability to go and continue to invest in those facilities -- and they might decide that they want Ethernet and then connect into the private side of our IP network. Or they might want DIA, Dedicated Internet Access and they connect into the public side of our network. Either way, we're going to continue to invest in them. And that investment, whether it's people locally and providing that consultative relationship behavior or it's the capital providing them a better experience and differentiated experience, is really what becomes the most important thing over time.

So there's a lot to dig into there. First, one of the things you said was SD-WAN is sort of replacing VPN. We went through a few waves over the last few years, I would say, of SD-WAN fear and excitement cycles. But as you talk to customers, are they maybe a little more knowledgeable and educated about the opportunity here as well as the downsides of that product?

Yes. And you're right. Remember years ago, when Voice over IP became a big deal, and everybody ran to it because they thought that voice calling would become free. And when you realize that, well, it wasn't really a freebie and people started to sit and reevaluate, well, am I getting the right quality that I need on calls. Am I getting the right experience for my people? And I think the same thing happened with SD-WAN. People looked at SD-WAN as a really low-cost alternative to VPN. I can use the public Internet. It's good enough. And sometimes it is and sometimes it's not. And you're also facing SD-WAN providers who don't have the architectural maturity that the VPN providers do because it's been around so much longer. And so you've kind of got 2 different groups of people. So I look at this and say, if I'm not getting the cost benefit, then it's not really worth it, right? I'll just try and stick with VPN, where I know I can get what I want but try and get it at a lower price. And others have said, no, I want to continue to drive into a new technology and use more best-effort capabilities and see if that will work for my end users.

So to some extent, this is -- maybe to take it up to a higher level. You mentioned a few years ago, you go to a new player, you get a better price and you bring it back to your legacy provider. And Level 3 was a beneficiary of that. Is that opportunity still there today to go to a high-quality alternative and get a good price and bringing it back or are -- as a competitive market, much more stable than a few years ago.

I mean it's more stable in the sense that there are fewer national players. We can talk about the cable companies and some of the niche players. And that's fine if you're looking at down market. But if you're looking at large enterprise, it really just is the 3 of us for the most part. And then it comes down to who's paying attention to the customer, who's investing in the customer and who's going to provide them that long-term commitment. And that becomes a really big deal because when you're moving from one network to another, you're essentially making at least a 3-year commitment to the business because of the OpEx implication. And if you don't think that 1 or 2 of the other providers is really going to be taking wireline networking very seriously in 2 to 3 years, 4 years, you might decide to opt out.

Yes. We heard from one of your peers today who talked a lot about other parts of the business, but this side was more on the rationalizing category. Do you think there's room to consolidate this space further? Would that make sense? Or is it pretty stable where it is today?

You mean consolidate like M&A or consolidate in terms of rolling up the business under us?

Well, in any way, does it make sense to have 3 providers out there? Is this a stable market? Or are one of these guys just under-investing to a level where it's probably going to consolidate one way or another over time?

Yes. So I think it will consolidate. It has to. I think that M&A, for the most part, we're down to 3 providers, so you're kind of there. So it really comes down to what's their interest and what's their focus. So for some of our competitors, their interest might be in wireless. Their interest might be in creation of content, the right media and distribution. For us, we've been very focused on the wireline business. I started out in outside plant in 1992, working on fiber, and I'm still working on fiber. I'm just on the commercial side now. And this is a business that we love. We love being in it. And I recognize that maybe it doesn't get all the glitz and glamour that wireless does and content creation does, but without us, nothing else works. And so when we talk to CIOs, we talk to decision-makers, the well-informed folks like yourself, they understand the value of the asset. They understand the need to continue to invest. They understand that if we just sat on our laurels and didn't upgrade our fiber over and over and over again, we're going to see deterioration. And that experience for our customers is critical for us, and we know it's a differentiator. And I can't tell you how many times I've walked in and I've met with customers in the last, call it, 2.5 years since the close of our deal. And it's the mid-level customers. It's statewide, nationwide, law firms, professional services firms, engineering firms, people of that caliber. And say, "When was the last time someone like me came in from one of those 2 companies?" And the answer is, "I can't recall." And the other question I ask is, how are you serviced? So if you're headquartered in L.A. and that's where your CIO and your CTO are, what local support team are you getting access to? It's typically somebody in New Jersey or in New York or in Texas. It's not anybody local anymore. So we've seen that kind of great retrenching of resources to go focus on other things. And I get it. That's their decision. Our decision is continue to invest in that wireline infrastructure. And I think that there's a huge opportunity for us to roll it out as we pay more and more attention to our customers and what they want, and we see our competitors pull away from what we're currently doing.

Have you seen your win rate in RFPs come up commensurately with that higher attention or their lack of attention?

Yes. I mean RFPs are a part of what we do. And you've got to be careful with RFPs. I mean there are still some out there where it is the tease, that come in here and spend a lot of OpEx. It could be at my incumbent. We've gotten really good at saying no. I think in the past, it was very hard for us to say no to customers because the opportunity might look like a $400,000, $500,000 a month deal. The reality was you're never going to get it. So we've become very good at saying no. I think that has scared some folks out there. Well, if you don't waste your time with me, and I don't get some kind of reduction on paper, I can't beat up my incumbent. So that's really your decision, not mine. And so our win rate's gone up, I think, because we've really improved our focus. I don't know that RFPs so much make the difference. It's really what you choose to spend your time doing. A little bit different on the government side. I'm sure I'll talk about that at some point. But I'm really just referring to the enterprise side right now. But if you're talking about funnel, I'd say that the funnel that we operate is healthier than it's ever been. And so I've always been very focused on pulling bad data out of funnels, making sure it's the cleanest funnel we can operate. That's the cleanest I've ever operated right now. And it takes a while when you bring 2 big companies together. And then I'd say that our forward-looking funnel is as big as it's ever been. So very happy with the health of the funnel, very happy with the size of the funnel. The opportunities are there. We'll probably see some pausing and hiatus here. We saw a lot of pausing in April, but we've seen opportunities pick up again in May and June. So that all feels very good. It feels like in many other parts of our lives, Americans are very resilient. Will we get scared? Will we have to stop and reevaluate? Yes. And we did so very quickly, and it feels like people are pushing back to get to normal as fast as they can.

Have you seen a similar pulling back from people maybe wasting time trying to go after your own customers as well? That, again, that competitive level and pricing, that's a better environment.

So I don't -- if you look at the other -- the other 2 guys of scale, I don't typically see them on the enterprise side attacking our base. They will fiercely hold on to what they have if it's large enough. Towards the bottom and the middle, they may not provide as much attention. But certainly on the big customers, they do. And then you've got the cable companies who are forever trying to move upmarket and get out of being regional providers into being larger enterprise providers but haven't seen them be successful yet, at least not coming after the business that I operate in.

Okay. Well, yes, I want to go back to that. But before we do, let's talk about the government side. You announced some pretty big government contracts in January. Can you discuss what kind of work went through the process with those? And are those sort of licenses to hunt? Or are they real signed contracts that you're going to build into over time?

So if you think of Department of the Interior and Social Security Administration, 2 really big cabinet-level agencies and contracts. We won those under what's called EIS, which is Enterprise Infrastructure Services contract. It's a $50 billion GWAC, or government-wide acquisition contract. Every 10 years or so, the GSA will put out a new 10-year GWAC. So we're leaving the former one called Networx with an X and moving onto the new one called EIS. Last year, CenturyLink was the first one to get an authorization to operate on that contract. And that contract is a hunting [ message ]. And so it basically provides a stable of 9 carriers that agencies can go and talk to, ask for proposals from, et cetera, as the obvious big 3 on there and then a small list. What I was surprised about that is that I spent a lot of time on Capitol Hill testifying over the last decade, trying to get the GSA to open these contracts up, get away from mandatory services, get away from universal service, which basically just meant that 2 or 3 providers in the country could work. And so this contract does allow for regional services. It does allow for nonmandatory services but never saw the cable companies step up to it, which was kind of surprising. But in terms of our wins, to get on that EIS contract and get that authorization to operate last year, that was about a 5-year investment. So it took me 5 years basically, money out of my pocket, out of our company's pocket, through our capture process, our business development process, through a government affairs team to work through a very lengthy QA process, a lengthy ATO process. But we are very proud to be able to do it. And you do this because you believe in the long run. And typically, the long run, these contracts, is 10 years. This contract has an effective 13-year cycle left to it. And so you look at the DOI and SSA awards, it takes anywhere from 1 to 2 years to migrate that traffic off of the incumbent onto us. That's always kind of our warning sign as, look, we get these huge awards and wins, but they don't bill overnight. They take a long time to move. They're very large. And dealing with government is different than dealing with enterprises. They have different motivations. But you move it over the course of a year or 2, and then you're enjoying that revenue not just as is but revenue growth on top of that, probably for the next 13 years. Functionally, all those contracts that have had a 1- to 2-year extensions. You're probably looking at 15 years.

And to be specific, you got the EIS permission a year ago, but the DOI and SSN, those were real contracts that were announced in the spring -- or in the winter, and it will take a couple of years to come on, but those are long-term real wins.

They are long-term real wins, and they're much -- the award value is kind of a challenge in the RFP process. You're given a statement of work to bid on. And you do that so that the procurement officer can evaluate everybody equally. And then once you win, you find out what the real award value is. And so you might be bidding DOI as an example. $450 million is a statement of work you're asked to bid on, and you find out when you win, it's $1.6 billion. And so it requires a lot of intuition, a lot of long-term operating knowledge to understand how government operates. It's unique. It's not like enterprise, certain services that we deliver exactly like enterprise. But how we do it, the FAR, the Federal Acquisition Regulations we have to follow are completely different. It's not for the timid. It's not for the meek. And it's -- but it's a long-term partnership. I can tell you, I've done this for a long time on the federal side, and it pays huge dividends. And it's not just a financial thing. It's also something that we can do to give back to the government. If we can run a network more effectively at lower cost and provide them better service, that's a great thing for us to be able to do. And that's on the -- what we're talking about right now is on the civilian side. If you think about what we do on the DOD side that I can't talk as much about, and I can't talk at all about we do on the intelligence side, those are the things that make you very proud.

I'd dare to ask a little bit of a follow-up on the cost side. We have just a couple of minutes left. But can you give us the 2-minute version of what's going on, on the cost side? Is a whole transformation effort going on within CenturyLink? Can you give us a little bit on your part of it?

Right. So when you look at synergies, I mean largely, you're looking at bringing 2 different operations teams together. You don't want to have double the cost. You want to have less cost. You bring in IT teams together, you want to find synergies there. When you look at the sales side, you tend not to want to cut sales budgets too much. Really, what my emphasis is, is how do I maintain the same OpEx envelope I've got right now with double the size of the business that I run so that it'd become twice as efficient. That's really what my driver is.

Okay. That's a good place to stop. Thanks very much, Ed. This was great.

Thanks, Phil. I really enjoyed it. Take care.

Bye.