Union Pacific Corporation (UNP) Earnings Call Transcript & Summary

Okay. Welcome, everybody, on the webcast. We're going to continue with Day 2 of Deutsche Bank's 11th Annual Global Industrials & Materials Summit. My name is Amit Mehrotra. I'm the transportation and shipping analyst here at Deutsche Bank. We just heard from the CFO of Canadian National, and I'm now pleased to have the CFO of another very high-quality company, and that, of course, is Jennifer Hamann from Union Pacific. Jennifer, I hope you're happy to be here. But like we were talking before, I think you're probably more happy that this is your last conference of the season. This is lucky #7 for you, and I think, Union Pacific since the start of May. Anyway, we very much appreciate the time that you're giving us. And we welcome you, and we welcome Brad and Holly as well. And I'll turn it over to you for some prepared remarks and then we'll get into Q&A.

Well, thank you, Amit, and good morning to you and to everyone who's joining us. Yes, this is lucky #7. It's a different world, though, doing this virtually versus being able to see everybody. So hopefully, that will be how we celebrate the 12th Annual Deutsche Bank Global Industrials Conference. But before we start, I would like to remind everyone that I'll be making some forward-looking statements today. And these statements are subject to risks and uncertainties. So please refer to the UP website and SEC filings for additional information about our risk factors. I'd also like to point out that the -- on our website, where you were able to access the link to come to this call, there's also a placer that you can see the slides that I'm going to be speaking to as well as an updated pitchbook. So if you open that up and turn to Slide 3, talking about our first quarter financials. I know that everyone is very familiar with our strong first quarter performance, particularly as we're sitting here today with less than a month left in the second quarter. But we very strongly believe that those results are indicative of not only what Union Pacific can do but what we plan to do post pandemic. In the first quarter, a volume decline of 7% was partially offset by strong mix and our positive pricing actions, resulting in revenue declining only 3%. We were more than volume variable in the quarter with operating expenses down 10%, which allowed us to improve operating income by 9% and earnings per share by 11% to $2.15. During the quarter, we also delivered an industry-best quarterly operating ratio of 59%, including an impressive core margin improvement of about 3.8 points. This improvement was driven by strong productivity of $220 million as evidenced by the improvement you saw across the board in all of our key performance metrics. If you turn to Slide 4, on our earnings call back in April, I walked through our liquidity position, and I want to reiterate that it remains very strong today. Our current cash balance is in excess of $2.5 billion, and we still have all of the additional levers available to us that we had back in April. The bond market is open to us, and we have not drawn upon our $2 billion credit revolver. And we also have up to an additional $400 million available under our receivable securitization facility, which is 50% drawn. We are in a very strong position to navigate this continued uncertainty. As we demonstrated in the first quarter, our cash generation is also strong with a free cash flow conversion rate of over 90%. And while we have suspended share repurchases as we prioritize liquidity, last month, we did make our second quarter dividend declaration, keeping the dividend flat. We very strongly recognize the importance of maintaining our industry-leading dividend payout. Moving now to Slide 5. In terms of how business is playing out here in the second quarter, volumes are currently down 22% as our 7-day weekly carloads have increased to around 135,000. As the chart on the right shows, we've come off the volume lows we experienced back in April and are starting to see a more positive trend. While I think it's probably a little too soon to make a definitive statement about hitting the bottom, business levels are looking a bit better. As I dive a little deeper into the business teams, our bulk business is down 16% as coal continues to be a significant headwind, down more than 25% quarter to date. Food and refrigerated, which includes beer, also continues to be impacted, down close to 25%. And fertilizer has improved a little -- has proven to be a little more resilient, only down 4%. Within our grain and grain products line, which is down 7%, if you dig a little bit deeper there, you can see some sharp contrast with results. Core refining or ethanol has been heavily impacted, down 30%. But on the positive side, grain is up 11% as we have seen improvements in export grain demand as China has been purchasing beans and milo. Our industrial business is down 17%. While there has been softening across the board, the largest driver is the impact of low crude oil prices on both our crude and sand shipments. Petroleum products are down more than 40% in the quarter, while sand is down almost 80%. Industrial chemicals and plastics as well as forest products are both down 10%. Construction in the south continues to be a positive driver for us, and we've seen increases in our rock shipments, up 3%. However, while major highway projects remain strong, we are seeing some cancellations or delays in the residential and nonresidential sectors. Finally, our premium business is currently down 29%. Of course, the biggest decline there has been the impact of the auto plant shutdowns as autos is down over 80%. However, as production is ramping up, we are seeing those volumes return. Most of the initial increases have been in auto parts, but finished vehicle shipments are increasing as well. The recovery in autos will ultimately be driven by how the consumer engages with the economy and their willingness to purchase cars to further drive production. Both domestic and international intermodal continue to be down around 15% for the quarter. The bright spot here is on the parcel side as consumers continue to use e-commerce to purchase goods. We'll continue to watch blank sailings on the international side, but we do feel a tad more optimistic there than we did a few weeks ago. Ultimately, the economic recovery is going to be based on how the consumer reengages. And while there are positive signs as the country reopens, there still remain many unknowns. Now back in April, we guided to second quarter volumes to be down around 25% or so, which is the range we've been in for most of the quarter. With only a couple of weeks left, however, that trend has improved. And assuming we maintain our current weekly volumes in that 135,000 range, we could see volumes finish down closer to 20% for the quarter. So a little bit better than we originally expected. If you turn to Slide 6. While it's difficult to see with the current level of volume declines what's happening kind of underneath the surface there, we are securing some very nice wins in the marketplace. We feel very positive about the dynamics that this is setting up for us as we leverage the enhanced service product facilitated by Unified Plan 2020 and the reduced cost structure that that's opening new markets to us. As I've mentioned before, we have seen wins across a number of our business lines. I'll give you the examples of tomato paste, sweeteners, pipe, steel and recycled glass, just to name a few. And despite the major economic headwinds as well as continued truck competition in the premium space, we have secured new business in auto parts and in both domestic and international intermodal. Our marketing and sales organization is excited about the product that they have to sell in the marketplace. And these recent wins only bolster the bullish optimism we have for the long-term future of our franchise. Turning now to Slide 7. As you can see from the updated May key performance metrics, we continue to operate a more efficient and reliable network. This enhanced service product is helping deliver the business wins I just mentioned. We made sequential improvement in train length again in May, setting a monthly record as we came in around 8,600 feet. These gains were driven by ongoing updates to our transportation plan, including yard and local schedules. This achievement by our operating team is not only impressive given the challenges associated with the current volume levels but in how they're striking the right balance of rightsizing assets with customer commitments. The improvements that you see in freight car velocity, freight car terminal dwell in both our intermodal and manifest/autos trip plan compliance demonstrates that we're not combining trains and cutting assets at the expense of our service product. We remain committed to ensuring that our customers continue to see tangible benefits from Unified Plan 2020. The need to provide an efficient, consistent service product is why we made the decision to implement Precision Scheduled Railroading. And it is providing the flexibility needed to adjust our network to rapidly changing volume environments while also boosting our ability to continue to provide a high level of service, both today and when volumes return. As you've heard us mention over the last couple of months, we have assets standing ready to return to service as we adjust to increasing volumes. We're excited to demonstrate to our customers our ability to deliver this same level of service and efficiency in a growing volume environment. To wrap things up on Slide 8. As I mentioned earlier, we are dialing in, I'll say, our guidance for second quarter volumes to down closer to 20%. Unfortunately, even with this slight volume improvement, a tailwind from fuel and the diligent expense-cutting measures we have taken, we will not improve our operating ratio for the second quarter on a year-over-year basis. For the full year, given the ongoing economic uncertainty created by the pandemic, we are also no longer providing guidance for full year 2020 volume, head count, operating ratio or share repurchases. Unchanged is our long-standing guidance around pricing. We still expect the total dollars generated from our pricing actions to exceed rail inflation costs. And while we have widened our full year range for productivity to $400 million to $500 million, we continue to see productivity gains in the second quarter despite the sharp volume decline. Longer term, our guidance of capital expenditures of less than 15% of revenue, a dividend payout ratio of 40% to 45% of earnings, and ultimately, a 55% operating ratio remain intact. As people begin to reengage with the economy, we remain unwavering in our commitment to improving safety, efficiency and service as we very firmly believe in the strong long-term prospects of Union Pacific. So with that, Amit, I'll turn it back to you for some Q&A.

Well, thanks, Jennifer. Thanks for that recap. I think that was really helpful in terms of the update. Not that surprising, but encouraging nonetheless to see the adjusted volume outlook for the second quarter. That makes obviously sense, given especially the outlook for finished vehicles on the automotive side. But also there's some risk, I guess, around the recent improvement that we've seen in grain volumes. I was just hoping -- you talked about a little bit, but maybe just for the first question, just give a little bit more color around where you are most optimistic on the volume side prospectively and maybe where you think there's a little bit more uncertainty or risk.

Well, it depends on if you're talking about relative to the economy or relative to the service product that we're providing. Relative to the service product, I'm bullish across the board. I think we really have dialed in and are doing a great job in continuing to improve the product that we're providing. And as you heard me mention earlier, I think that's opening doors really across all categories. If you're talking more economically sensitive, it's going to be those things that are really consumer-driven. So I mentioned autos. While the fact that the auto manufacturers are back and running, they certainly aren't going back to their, what I'll call their pre-COVID levels of production. And we're going to see what happens in terms of the consumer being able to engage. I think the same thing could be said of housing starts. Prior to the pandemic, with the interest rates staying low, we were really starting to see I won't call it a resurgence, that might be a little bit too strong of a term, but we were starting to see sustained growth in the orders for our centerbeam flat cars, those forest products. And you saw the numbers relative to housing starts where we're moving in a favorable direction. And so that was a pretty positive dynamic that, while interest rates have stayed low, certainly, there's a hesitancy on the part of the consumer relative to going forward with those big kinds of purchases. And those are purchases that can drive our business across a number of levels. Kind of the headlines, if you will, are the finished vehicle and parts shipments or the wood shipments. But if you peel that back, you think about the plastics, you think about steel, you think about soda ash that's used in the production of glass, I mean, there very much is a trickle-down effect that encompasses not just a lot of areas in terms of where we ship, but that also obviously has an employment impact and the impact in terms of that consumer confidence. So those are 2 areas that, I think, are going to be very interesting and that we need to keep an eye on. And then you think about, again, kind of those consumer goods that are going to be moving in intermodal and you think about the international intermodal, what kind of back-to-school shopping season are we going to have. Are we going to see the need to do some restocking there? So those are the areas that I would say we're most watchful of. I think there's opportunities across the board as businesses reengage, as consumers reengage, to kind of lift all of those tides. But those are the ones that, I think, we're the most cautious about because I think they're still the least visibility relative to how does that consumer ultimately reengage.

Yes. And I think just what's helpful about what you guys -- the disclosures that you guys are providing now with the RTMs. It's really helpful to basically assess the mix within the mix, as you call it. And at a high level, it looks like mix in the quarter, at least in the second quarter, overall, RTMs are kind of more or less in line with the carload unit declines. But the mix within the mix, so to speak, looks a little bit weaker. RTMs for bulk, industrial, quite a bit weaker than the overall units. Before even thinking about fuel and the impact that has on overall yields, maybe if you can just address how mix is shaping up, given all the moving parts in the quarter for you guys.

Sure. And I'm not going to give obviously any exact guidance there, Amit. But you're right. When you look at just kind of high-level numbers, RTMs versus volumes, they're both down about the same amount. But where you see some of the biggest declines, think of under the industrial sector, the energy and specialized markets, that's our crude oil shipments. Those are long-haul crude trains. And it's also where I believe some of the frac sand comes through as well. So those are goods that have high ARC and has a very positive mix for us. The other part there is automotive. When you think about the premium sector, finished vehicles and auto parts shipments that are moving intermodally, those tend to be some of our high-ARC business. So those 2 things I would just highlight as being places that there are some headwinds. Now conversely, you do have the intermodal business down significantly, and that obviously plays the other way. So lots of moving pieces, but I think you're thinking of it right, Amit, in terms of trying to peel that back a little bit further as to what's driving some of those categories within the 3 product lines.

And there's obviously this pretty big headwind from fuel prices in the quarter. But that's obviously the most variable piece of the cost structure. In fact, it could even be probably more than volume variable given some of the efficiencies you're seeing on the fuel side. So just how should we think about the headwind to yield from fuel? And does that optically or mathematically actually help you from a decremental margin perspective, given the effectively 0 decrementals on that revenue decline associated with the fuel surcharges?

Yes. So you're right. There's 2 pieces to that. I mean you've got the impact of the revenue line as fuel surcharge revenue comes down. And so that's a depressant on that revenue number. And then you also have the impact on the expense side, which is a tailwind in terms of lower expenses. And to your other point, we're constantly trying to become more efficient in terms of how we're using the fuel. And so those 2 things do have some offset. But as I mentioned in my comments, we don't expect our operating ratio to improve in the second quarter even with what is viewed to be a tailwind from fuel. And that's really that expense piece. Overall, that is a tailwind for us.

Right. And I guess the year-on-year deterioration in OR makes complete sense. There is some scope for the year-on-year deterioration in OR, the OR to deteriorate on a year-over-year basis but still actually have a 5-handle on it. Is that just an unrealistic expectation? Would you expect the OR to have a 6-handle on it in the second quarter because you can actually show year-on-year deterioration still stay within kind of a 5-handle of an OR, which will obviously be pretty impressive performance?

Yes. I'm not going to give that specific of guidance, Amit. But for us to say pretty definitively that we're not going to improve, if I thought there was a chance to improve it, I would certainly be kind of holding my powder dry on that. So with volumes having fallen off as much as they have, even with the fuel tailwind, we don't see a path, especially when you think about it, we've got 2 months booked, so to speak. And we are not going to improve that operating ratio.

Okay. I thought I'd try to ask that question. I appreciate the fact that you can tackle. Maybe let me try attacking that from one more perspective, if I could. You've taken what seems to be pretty incredibly proactive cost actions, whether it's the locomotive shop in Arkansas, the car shop in Missouri and even the reductions in manager paid leaves -- or unpaid leaves. Would it be reasonable to assume, just based on everything, including the fuel headwind, that the decremental margins in the second quarter can be kind of on the right side of 50%, on the wrong side of 50%? Because if they get a high level, we look at -- we think of structural versus variable costs or direct versus fixed costs as kind of that 50% threshold. And obviously, in the first quarter, you were even more than volume variable on your costs. So just trying to understand how the second quarter is shaping up relative to that -- the characteristics of the cost structure there.

Yes. I mean again, I'm not going to get into specifics. We are doing, to your point, and you enumerated a number of them, we're doing a number of things to manage our costs, and I feel like we have done a good job of getting out in front of it, of managing it. Some of those things are more permanent changes. When you think about all the work that we did leading into pre-COVID, you mentioned some of the shop closures that we've done. Those we view to be temporary. Although I will say when we bring those back online, it's not going to be -- I'll use our Jenks shop, for instance. If we employed 300 or so people there and they were engaged in heavy-haul locomotive repair, both OEM capital, I will say. When we open that back up, it's not going to be with 300 people. Maybe we open it back up with 150. So we'll be able to scale those things as the demand environment dictates that. The other things, like the salary cuts and some of those, are a little bit more block hedge. And after the period expires, assuming we're looking at a more positive economic environment, those things will expire as well. The thing that I think people need to keep in mind, though, is how quickly the volumes sell off, how sharp the drop was. And I also think when you -- we also get the question, I know you didn't necessarily go there, but some people have been asking, well, how do I think about it versus the great financial crisis and how does that compare to what we're facing today. And we did a pretty good job as we move through that period to become more than volume variable to try to minimize those decremental margins. To me, the one thing that I think people may be missing a little bit as they make those comparisons is the pricing environment. Back in the 2009-2010 period was still very much in the heart of what I'll call legacy pricing. And we were probably yielding pricing gains then of 4% and 5%. And while we're obviously not giving price guidance now or reporting what we get, you all know as you do your back calculations, we're not in that kind of a range today. We're still getting price in excessive inflation, and we're still very diligent about that. But as you also know, price fall straight to the bottom line. And so losing that does have an impact.

Yes. But at the same time, too, I mean, we have -- I mean, obviously, the first 3 quarters of 2018, I think your volumes were down -- your revenues were down over 20% in each of those quarters, and your decrementals were only 17% over those period -- over that period. And that makes sense from a pricing tailwind perspective. But then if you fast-forward to 2016, where maybe you didn't have obviously those legacy pricing tailwinds, you were still able to achieve a sub-40% decremental at the height of any given quarter from a revenue decline perspective. So -- and of course, you have seen similar dynamics from a fuel perspective now than you did back then. So how would you kind of compare and contrast early 2016 versus your -- I mean it's obviously a better business, a better-managed business at this point from an operational perspective. How would you compare and contrast that period where you were able to still post some very, very impressive decremental margins?

Sure. No, I mean, I think the biggest difference then, Amit -- because you're right, we have certainly improved our operations over that time period, and we've taken a lot of cost out of the network. The biggest difference is just absolute volume levels. What you've seen us run here in the second quarter is -- like I said, right now we're at 135,000 7-day carloads. But earlier in the quarter, we were 120,000, 125,000. I think if you go back to that 2016 time period, I don't have those exact numbers in my head, but I'm guessing they were closer to 160,000, 165,000. So you've taken 40,000 carloads a week or so out of the network. And that's -- there's a lot of leverage that goes with that.

Yes. And if I look at kind of the 7-day average kind of total carloads in terms of assessing what the capacity of the network is, obviously, one interesting thing about PSR is that you're creating capacity by running the trains faster and making the network more fluid. Relative to where you are today, I mean, where is kind of the -- at the point of total kind of carloads that you may have to reinvest in the business from a growth CapEx perspective?

Wow. I can't wait until we get to a point where we're talking about those kind of business levels, Amit. We have, as you know -- because it's not like over this period when volumes have been declining over the last several years that we haven't continued to invest in our infrastructure to make sure that it's well maintained and safe and efficient. But we've also continued to make targeted growth investments, and we're doing that again this year despite the environment. They're mainly geared towards productivity this year, when you think about our side and extension projects. But ultimately, that's going to enable us to grow and grow profitably. And so I look forward to the day when I have to talk to you all about the fact that we're having to increase our growth capital, and gosh, maybe even buy new locomotive, which isn't anywhere on the waterfront now as I look ahead. But that, to me, would all be very positive signals in terms of where our business has evolved to because we have a couple of thousand locomotives stored. We've got freight cars stored. We've got a lot of track and terminal capacity, and we've idled some of that terminal capacity as we have made changes with Unified Plan 2020. So that's all latent capacity that, yes, there will be a little bit of capital that we need to spend to bring those assets back into service, but that's a much more efficient capital spend than if I'm going out and buying or building new.

Right. And so I guess the implication is that an incremental dollar revenue, you maybe have a little bit more fuel expense, a little bit of car hire expense, but really kind of the vast majority of that drops to the bottom line from a profitability standpoint.

Yes. I mean -- and you've heard us talk about this. As the business comes back, I think you'll see us -- forget the decremental margins for a minute. But I think you'll see us be able to show very favorable incremental margins. And I think that also goes to our free cash flow conversion, to the extent that we're driving greater volumes across our network, driving our efficiency and returns, that's going to enable us to grow that free cash. And we'll continue to be very diligent in terms of how we're managing our capital.

Okay. And I just wanted to pivot a little bit on the cost side for 1 minute. Obviously, the Jenks locomotive shop is a big one, I think the biggest one on your network, maybe the biggest one in the world. I think there was over 1,000 people in that, if I'm not mistaken. How does that work? So when you basically close that for a short period of time, do those 1,100 people or more than 1,000 people just -- essentially, are they furloughed? Does that show up in your head count sequentially, kind of right away? Or how does that work from that perspective?

Yes. So that does show up in our head count right away as they go into the furlough status. What you do see though is because we do continue to pay benefits for a period of 4 months, now there -- this is only June. It's only the second month that the shop has been closed. So there's a period of 4 months in which we continue to pay benefits. So on a comp-per-employer or comp-per-FTE basis, that actually puts a little pressure to the upside. But you do see that head count come out in terms of what we report.

And what else -- so you talked about the car shop, the locomotive shop. I mean back in January, you had -- Union Pacific has closed the Davidson hump yard in Fort Worth, Texas, consolidated Kansas City. That gave you just -- appeared to give you a nice kind of cost tailwind. I mean can you talk about other things that you're doing in the second quarter that maybe will allow you to offset as best you can, obviously, the unprecedented revenue -- the volume decline that you're seeing?

Yes. So I mean, one of the things that we're continuing to work on, and it's not fully executed yet, you've heard us talk about it last year, is our intermodal terminal consolidation within Chicago going from 6 to 3. That work is continuing and will -- I think we'll be able to get some of that finalized here in the latter part of this year. We also are looking at similar opportunities in the Houston and L.A. complexes. Those are opportunities that have not yet really gotten underway. Houston a little bit, really still, I would say, in the evaluation stage around the L.A. Basin. So those are opportunities to not only, we believe, drive a better, more efficient service product for our customers but also to do so in a more cost-efficient way. The other thing, I think, you heard us mention on the first quarter earnings call is our yard and local network. So we have spent the preponderance of our time in the Unified Plan 2020 implementation just looking at more what I'll call the big over-the-road trains and bypassing terminals and reducing car touches to become more efficient with that. And certainly, that's reflected in our freight car velocity and reduction in terminal dwell. But we then have what I'll call more the nodes, which is our yard and local services, that are actually serving the customers. And so really look -- taking a hard look at those operations on a kind of a node-by-node, terminal-by-terminal basis and looking at all the deliveries needed, the locomotives deployed, at the use of the crews and finding more ways to be efficient with that. And so that's work that we've really just picked up here in 2020, and that work is ongoing. And we think there's certainly some fruit that can be borne from those efforts. And then just continuing to look at our transportation plan. I mean if you think about the train length that I referenced in my remarks, close to 8,600 feet, we certainly didn't achieve that by having more volume come on our network and just build longer trains. That took a lot of hard work and effort by the team to think about how they could combine trains, how they could rationalize services to achieve that while continuing to provide that better service product. So that's an area where, I think, there's just a lot of opportunity as volumes come back that we're going to have more optionality within that space. And that's the nice thing about Unified Plan 2020 and PSR, whatever you want to call it. There's just continuing iterations that you can put to it. And with each change that you make, that almost leads you to the next change, to the next change. And if we can start to get some volume on top of that, I think that's going to open up even further doors for us.

Yes. And in the last few minutes that we have here, I wanted to ask about the pricing environment because, obviously, historically, that's been an important lever for you guys to limit the decremental margins about 10 years ago or so. But now I mean, you've obviously stopped giving core pricing a couple of quarters ago. But just given that your direct competitor is not engaging in PSR or has not yet, the volume decline being incredibly unprecedented. Is it right to assume that the improvements in the network, the service, you're not necessarily obviously able to realize the pricing of all that because of the volume decline. And so when we think about core pricing just conceptually, I know you're going to price above your inflation dollar costs, but is it reasonable to think core pricing growth decelerates in the current environment? And then hopefully, when volumes come back, maybe next year, then the service can garner a better price? But from where we are today, is it safe to say that core pricing is actually decelerating in the context of the volume declines?

Yes. I mean I'm not going to give specific guidance relative to the direction of pricing. But you're spot on when you say it's a challenging market for a variety of factors. The loose truck market and supply is one of those factors. Certainly, the fact that a lot of our customers have had to shut down their businesses and restart them, and their revenue streams have gone away. Everybody is in a very tight spot today when it comes to managing their expenses, managing their transportation dollars. And so there's a lot of competition out there, and there's a lot of pressure on the price front. What's helpful for us is that about 45% of our traffic does move under contracts that are more than a year in duration. And when you think about those contracts, they do have annual escalators. Some are just fixed amount, and some are pegged to some sort of an indices. And then about 30% of our business moves on contracts up to a year, and then that remaining 25% is what moves on tariffs. And that's really more of our, I'll call it, spot business. And that's a business that tends to be, I'll say, ag-related, also some rock and maybe a little bit of lumber as well. So we're not in a mode where we have to reprice our whole book of business every year. So that's helpful to us. But in those businesses that we're going out and competing for today, it is a tight market. And that's really kind of going back to maybe your segue into this referencing our competitor, that's where our vastly improved cost structure puts us at a great advantage. In the business that a couple of years ago maybe didn't meet some of those return thresholds for us, it looks a little bit more attractive today. And I would say our ability to be much more cost-efficient and the ability to just think about how we run our service product differently and the fact that we maybe don't have to run a dedicated train to serve our customer, that we can combine services, that we can do things a little bit more creatively, it's really opened the aperture in terms of what are the markets that are available to the team to go after and win business.

Right. Okay. I think we're a minute over. So I'm going to stop there. I know you have a busy day of meetings. Jennifer, Brad, Holly, thanks so much for taking the time. We really appreciate it. Have a great day.

No. Thank you, Amit, for having us, and good luck to you for the rest of your conference.

Thanks.