Comcast's (CMCSA) Management Presents at UBS Global Media and Communications Conference (Transcript)

| About: Comcast Corporation (CMCSA)

Comcast Corporation (NASDAQ:CMCSA)

UBS Global Media & Communications Conference

December 7, 2015 10:45 ET

Executives

Mike Cavanagh - Chief Financial Officer

Analysts

John Hodulik - UBS

John Hodulik

Okay. If everyone could please take their seats, we will get going here shortly. Okay, thank you all for joining. I am very pleased to announce our next speaker is Mike Cavanagh, the President and CFO of Comcast.

Mike Cavanagh

Just CFO.

John Hodulik

I thought it said President, must have been a typo. Just CFO of Comcast. We have got it looks like about 35 minutes for questions. So Mike, why don’t I start off?

Mike Cavanagh

Thanks for having us here. Pleased to be here, John. Thanks.

Question-and-Answer Session

Q - John Hodulik

We are approaching the end of ‘15. As we look on to 2016, can you give us a sense for what you see as the strategic priorities for Comcast next year?

Mike Cavanagh

Sure. I would say, right off the bat, I mean, the most important thing for us looking into 2016 is just to continue executing well. So, get to some of the big things we are working on strategically, but one of the things being with the team 7 months that I am most impressed with is the execution tempo of the place. So Neil Smit on the cable side, unbelievable what that team has done, when you think about the disappointments and all the time that went into preparing to do Time Warner and then to pivot well, shift gears to some other priorities, which I will get into. And then deliver the kind of results you have seen with subscriber, the improvement on subscriber side and the continued growth in broadband, best third quarter in the years in both cases. So, execution is great on the cable side, it needs to continue, and NBC with Steve Burke and the team there, knocking on the door of doubling the cash flow of the business from 5 years ago when the team acquired the business.

But to get specific and we will go through these in greater detail, but the things we are excited about cable first, so one is just to continue delivering on the customer experience. We have talked about it a lot. As I just said it’s a big area of pivotal focus for Neil and team to really work on sort of root causes of a lot of the things that make the experience better. So, it’s from billing to on-time arrival of getting it right the first time, things that – everything that’s being tracked under that initiative, lots of improving trends on that score. Ultimately, shifting to focus on net promoter side with the big results that you have seen the numbers already that I think there is more room is just improvement in churn. Second thing in cable is to just drive market share. So you saw again we are on track for another year of double-digit growth in broadband revenues and nearly 20% growth in business services on the cable side. We will talk about it more, but the video side, it continues to be our goal to grow video subs on a year-over-year basis and we are really encouraged by what we are seeing there.

And then other areas where we are focused on share growth is just enterprise on the business side continuing to drive things in the wireless base with WiFi. And so lots that we are working on in the cable side and finally product there, so continuing to drive the X1 platform out into the marketplace, continuing to experiment with segmenting the marketplace and driving again more in the high-speed data side. And then on the NBC side it’s television, driving more retrans and affiliate fees, which we still think we are under-monetized there and we will get into it more deeply, but continue to drive the revenue stream coming off of retrans and affiliate side. You have got a big year in TV next year with the Olympics. So, we look forward in Rio to doing the same that we have done in Sochi and London last time, driving great results in the Olympics and that’s also a political year. So, that’s the TV side.

On parks, we have got Harry Potter opening in Hollywood in the early part of next year. And when you look at what that franchise has meant everywhere we have opened, it’s the first and second rounds in Orlando. And in Japan, it’s typically driven 2 million to 3 million uplift in annual visitors to those parks and we expect it to be the same in California and really be a game-changer for the way that park is thought of. And then finally and I will wrap it up on, what we are focused on is film. So film, we are about to finish the best year in the history of Universal Studios with three movies for the first time breaking the $1 billion annual – $1 billion box office globally, and that’s despite the fact that we will have – as you can tell no hits in the fourth quarter so a weaker fourth quarter than expected.

But as we think about the way into ‘16, it’s a continuous focus on what we call the strategic slate, driving the big franchise, properties that we have and animation. So, we have got some good things coming next year, but simply not as big a slate as this current year. But nonetheless, we think we have lifted the cruising altitude of the film business and we will continue to drive that. So all-in-all, we got a lot to be focused on and excited about. And like I said, at the very beginning, it comes back to really nothing more than 1 foot in front of the other, continue doing what we are doing on the execution side and I think we will have a great 2016.

John Hodulik

That’s great. Thanks Mike. Maybe let’s work down that list starting at the top with cable and with video, you said it’s a strategic priority to get video growing again. I mean, as you look out at the landscape, you have seen a lot of improvement in your video sub-trends despite a pretty – a fairly large change in the backdrop of the industry in 2015. In 2016, do you think you can grow subs for the first time?

Mike Cavanagh

Well, we have set it out as a goal to drive growth on an annualized – for a full year. We have been showing progress quarter by quarter by quarter. This quarter, fourth quarter, I think will be a solid one on subscriber metrics leading us into next year. So, can’t promise it, but I can say you there is a tremendous amount of focus on getting there. And the reason is we think we have a great product. So, when you think about the X1 technology as well as the breadth of video that’s in there at a great price, we think it’s a very compelling proposition and we are seeing it in the results. Also, we are trying on the video side to do a much better job segmenting, X1 is not for everybody, but for the strong user video X1 is the best thing that’s out there. We have also as you have seen done Internet Plus, which is more a skinny bundle type of approach that’s been out there for a couple of years. It’s stabilized now in the base, but it’s still there and relevant for someone that wants something skinnier.

But what we are encouraged by in that base is the migration up to other packages, so of those who stay with us after promotional periods, about 30% upgrade to some higher level of video service over time. And that’s kind of the point on the video side is trying to make sure that we are segmenting the market right, trying to give different types – different segments of our customer base something that’s relevant for them at that moment in time, showcase what we are capable off and hopefully through the life of the relationship steer them into different packages. And so we will get into it later, but I am sure, but our college campus product, Xfinity On Campus is doing well up to 26 universities and giving a younger base and experience with our product that we think is the right thing to do for the long-term. I already mentioned Internet Plus and Stream, which I think we will talk about a little more is yet another example of trying different experiments in the video side. Again, with the view that we don’t want to give our customers a reason to go on [indiscernible] and so that’s the spirit with which we approach it and do that all while we have been driving higher ARPU.

John Hodulik

So, you have made it clear that 2016 is a big year for X1 deployment. We are estimating you guys end the year at about 30%. I mean, where can we expect penetration to go to 2016 and then maybe longer term?

Mike Cavanagh

Sure. Yes. So, we ended third quarter at 25% penetration of our video base. We crossed 10 million deployed. We are running at 40,000 X1s a day. It’s more than one-to-one for households, but 40,000 a day and so your 30% forecast for the end of the year isn’t bad. So, at that kind of pace, we will be pushing – we will continue to push at that pace, if not, a little faster through the course of 2016, but around that level, and so we will be informed as we get deep into 2016 and then into 2017. We are looking at the metrics that come back to us. The steep decrease in churn versus the rest of the population, the much bigger penetration of DVR and multiple devices, the much higher use of video on demand, which really speaks to the engagements of the user, so all driving much higher ARPU for an X1 subscriber than a controlled group. And so as long as you are continuing to see those trends, you can expect us to keep going at a strong pace. And that’s our attitude broadly. We are seeing a lot of things across the whole business working well and we will continue to invest behind that.

John Hodulik

Great. And you recently struck a licensing deal with Cox on the X1 platform; I think you are trialing with Shaw on Canada. Can you talk about maybe the financial benefits it may have and then are there any operational benefits that come along with it?

Mike Cavanagh

Yes. I would say the business case for that is less the financials of what we get paid by any particular partner that comes along. But it is we think valuable to have something that spans the industry that demonstrates the power of cable broadly and what our technology can do as sort of affirmation and maybe a way forward for the industry broadly. But I wouldn’t point to licensing X1 as something people should be baking into their expectations as a big financial mover for us. But nonetheless, the ubiquity of our platform outside of our footprint, we think is a good thing.

John Hodulik

Earlier in terms of the growth of the video product, you talked about segmenting and the use of skinny bundles to help sort of drive some penetration at the low end. Do you expect to see increasing flexibility from the content providers to allow you to sell more skinny bundles?

Mike Cavanagh

Well, it’s we will continue to – all I can say is that we will continue to work with programmers to do what’s in all of our interest, which is really meet the needs of our customers. And so to the extent that some portions of the opportunity out there are looking for something different, I think we are prone to want to experiment and try things out. And I think things like the migration upwards over time of what we have seen with the Internet Plus product is actually helpful in conversations with programmers of the evidence that offering greater flexibility provides to their benefit and ours. So we will continue to be advocates for going that way and hopefully meet with good support on the programming side.

John Hodulik

And also as you mentioned, you recently launched the Stream TV product in Boston, can you talk about...

Mike Cavanagh

As well as are coming. Yes.

John Hodulik

Okay. Can you tell us about the strategy behind this service and are there early learnings and then maybe the better economics…?

Mike Cavanagh

Sure. Too early to have any real earnings, I would go back to the idea that what we are trying to do is make sure that we bring, we experiment and bring different products for different segments to the marketplace to our customer base and learn from it. And again, expose our capability set to a segment that’s not really experiencing it and hopefully, up-sell and migrate as time passes. What stream is and isn’t, is it is a cable service over IP for existing high speed data customers of ours. So the business – and it is a thinner video package of – for $15 is what the cost is. But it’s in my mind there is a lot of benefits that come from churn reductions, so whether that churn reduction is on a triple play customer or HSD only customer, the idea that we are going to give a video package to a valuable high speed data customer is a good business case and it is in footprint, right. So this is cable service in footprint, that’s where we have the rights for and that’s what we are playing with, with that product.

John Hodulik

And do you expect to roll this out nationally at least through the footprint and if so, is there any danger to cannibalizing your full service video package?

Mike Cavanagh

It would only be in our footprint to the extent we complete a broader rollout as we get through some of the early markets for the reasons described, it’s an in-footprint cable service offering that relies on the rights we have for content and as a cable service in footprint. And it will just be informed by how we see it working.

John Hodulik

Got you. And are you concerned about it potential cannibalizing the bigger, the full sort of expanded base basic – sub base?

Mike Cavanagh

It’s not what we are seeing given who we are going - given that we are going after a non-video customers of ours today, we are watching and learning, but more important, we try to give customers what they are looking for and make our business – try to make our business models work around what the customers want.

John Hodulik

Got it. Maybe talk a little bit about just competition in the traditional TV market. So it seems as if we saw a bit of a low-ebb with DIRECTV being acquired by AT&T, AT&T sort of pulling back on the reigns a little bit on the U-verse side, how would you characterize what you are seeing from your sort of traditional competitors in video?

Mike Cavanagh

Sure. I mean I would say it’s early days for me, but it’s competitive. I mean I think this business and other ones I have been in like - this is business, right. These are good healthy, attractive, very competitive businesses, it’s no different now than it was 5 years ago and it’s going to be no different 5 years from now. I mean, we got to run ourselves with a view that we face tough competition all the time. And I think we are prepared for that. That’s the reason for the investment in X1, that’s the reason for the investment in broad contents right, that’s the reason for experimenting with different offerings to different segments. It’s certainly the reason behind – we haven’t gotten the high speed data yet, but the years and years and years of heavy investment in our network and increase in the speeds and capability and capacity that we think gives us a very compelling offering. So despite the tough competition that’s out there, you have seen the results that we have been posting of late and we continue to think we have a compelling product to bring to market. And when – as I have said earlier, when you marry that with areas where we can continue to improve customer service being an example on where we are actually putting a lot of resources as a new initiative on top of many other things we have already – continue to be focused on in terms of speeds, capacity, WiFi networks and the like, I think we are in good shape for the competition we face, and we will face.

John Hodulik

You saw a meaningful deceleration in programming cost growth in the second half of ’15. Can we expect slower growth as we – or similar levels of growth in 2016?

Mike Cavanagh

Sadly, no, as we said in the third quarter earnings call, the second half of this year is a little lower than normal trends, so expect for us in 2016 with some timing of some contracts and deals that are kind of baked or coming that will revert to a higher programming cost increase trend. And part of that I mean, for the reasons that you know, it’s retrans cost across all networks higher, you got higher sports cost flowing through and then [odd bias] [ph] again to work with programmers to make sure we are delivering broad content rights. And at the margin, we would rather have more inside our offering than less. And so, those factors were the factors behind higher programming costs.

John Hodulik

Got it. Maybe trying the broadband, there are a lot of questions regarding cable’s ability to monetize broadband connection as you take share in the market. What role does usage-based pricing play in that equation? And how would you characterize how Comcast was priced broadband in the market?

Mike Cavanagh

Well look, we have been steadily growing high speed data revenues. It’s been an important contributor and that’s really been growth in market share, which we think continues to run for a while here. We think high speed data is still underpenetrated relative to what the opportunity can – in aggregate units. And then, historically our pricing schemes have been based upon speed, so whether it’s speed based or usage based, I mean, the idea is that we are giving – we are investing heavily in capacity, speed, in-home WiFi, out of home WiFi, hotspots and the like to make our broadband offerings highly valuable and increasing in customer value. And so I believe that over time, we will in a way that works for our customers and we are experimenting giving customers different ways to work with this different options for paying, which includes the experiments of usage-based billing in ways to make sure that over time, we get compensated for the investments that today’s marketplace requires us to make. So I continue to be confident that, that’s the big backdrop that the investments that we are making, we will figure out ways to derive value from that and demonstrate value and derive value from that pricing. Of the usage based billing, it’s been an experiment that we are using that the key data point behind that is kind of intuitive, that 10% of our client base uses 50% of capacity. So intuitively, experimenting with ways that over time have an element of recognizing that is something that we are trying to experiment with and working in some places where unlimited options are seeing good take-up rates, but still experimenting.

John Hodulik

So at this point, there is no plan to roll it out right, if not at this point okay. That brings us to the wireless, Comcast activated the MVNO with Verizon to test and learn about the wireless products, it sounds like that’s going to happen sometime in the second quarter next year. Have you decided that Comcast needs to be in wireless beyond WiFi?

Mike Cavanagh

No. So, we have no news on this topic today. What we have decided is that it’s certainly worth at this point triggering the MVNOs that we can work on exploring what kind of offering we could bring and go deeper to learn and experiment. That’s the state of play on the MVNO. And that sits in the context of having been big believers in WiFi. So, you have seen us invest in and continue to invest in the WiFi as an extension of the value of the broadband pipe, which is still the kind of best and cheapest way to transmit data we believe is to get it to the hardwire as soon as possible. So, with the progress we have made on our WiFi product and broadband, we think it makes complete sense to be exploring on – what possibilities the MVNO offering has to add value to our customer relationships. That’s as much as we know. There is no – it will take time to draw any conclusions from what we are now going through.

John Hodulik

Got it. There has been a lot of talk about mobile video, obviously, with Verizon this morning and early with the ad panel. I mean, as you look out that change the way people are consuming video, is mobile video more of a threat or more of an opportunity for Comcast?

Mike Cavanagh

I mean, it’s got to be an opportunity given our company’s footprint in both the efficiency by which our networking can transmit data of all sorts, bits and bytes as well as our capabilities in the video business as both a pay TV provider and content producer. I think it’s got to be opportunity. So, there is plenty of obviously twists and turns to convert that into the business models that everyone is trying to do and we will do our share of that and that’s the way you should look at us. It’s a great set of assets and that’s the way we feel going back to the first question. Opportunities abound, but the work isn’t going in and figuring it out. And then once you have figured out some ways you want to proceed being able to execute well. So, I don’t think it’s more complicated than that. Other than that, obviously, we are in a moment where consumer tastes are changing. So, no one really has the ultimate answer. I think trying and experimenting in a lot of different ways and keeping our minds open about the fact that it is a changing environment is important. And I feel good about the team that I have become part of that’s the attitude of how we are looking at the shifting landscape.

John Hodulik

Got it. One of the next big sort of events in the wireless market is going to be the incentive auctions, which really get going, it’s called early, early next year, a couple of milestones that are coming up. I think Comcast has already suggested on the call that it could be a seller of spectrum where we have overlapping stations in the market. Can you talk about how broad of an opportunity that could be for Comcast? And then as you look forward to the forward option, there is a number of reasons why it may or may not make sense for you to participate. Could you give us an update early just taking that?

Mike Cavanagh

Sure. Now, let’s start with again no new news on the topic of the auction. I mean, as you said, on the NBC side, we will participate in the auction. Whether we sell will depend upon how the auction progresses. But in many markets, we have two sticks, an NBC stick and a Telemundo stick that puts us in a position to evaluate whether being a seller of one of those sticks is good value from our perspective. So, that’s the lens through which NBC will be approaching that side. And on the cable side, we have not decided to participate yet, no final decision. And so that’s where we stand. I would harken back to the comment about the MVNO. There is things you can learn from engaging, but we just haven’t yet made a crystallized decision on that front.

John Hodulik

Got it. And then just quickly on the business services side, it’s been the number two growth engine for Comcast for a number of years. Can you continue to grow at the rate it has been and talk about your efforts to penetrate the medium and larger vision markets?

Mike Cavanagh

Sure. So, you hit it out there. I mean, I think so business services side, we think the natural capability of our network to help the business services segment has been a great business logic for it and where we started it was small business side and we have been doing small and medium – began 6 years ago. So, we are running with a $5 billion or so, we are just shy of $5 billion annualized revenue run-rate for what we are currently doing in small and medium size. We are about – we think there is room to penetrate deeper in both of those markets. We are about 10% market penetration in the medium size market. But with a great Ethernet product and dedicated sales force, we think we can drive that higher. We are obviously higher than that already in the small business side, but versus other options in the marketplace, we feel quite good again about the products we are bringing to market. And for that base, we think this is a great example of where small acquisitions picking up more capabilities to add more value to the connection side, network management, some on the top managed services that go along with that product set give us room in small and medium to both grab more market share and sell more services is good reason to think that they will be healthy continued growth. And we just announced since I have joined the formation of a team to go after the enterprise market. And so that might sound interesting when you first hear it, but think about the target really is to go after Fortune 1000 companies that are basically networks of small and medium sized businesses. So, think about any kind of company, whether it’s retail or its fast food, banks that are operating networks of branch systems. Very much the services of the local branches and those contexts are exactly the needs that we are already delivering to the standalone small and medium-sized businesses. And so that’s resonating when we have been pitching to headquarters at a lot of companies we have been going after and have a good number already signed up. So, we are very excited about what we can do there. And so to answer the question, I think we will have healthy growth in the business segment for quite a while, quite excited about it.

John Hodulik

Okay. Just lastly on cable on the third quarter call you announced that capital intensity was tweaking up a little bit, you went from 14.5% to about 15% on the guidance. How should we think about capital intensity of the cable business as we look out to ‘16, which I guess it sounds like it will be the big year for X1 deployment?

Mike Cavanagh

Yes, what I would put in the context of, I mean, we have been investing behind the things that we are seeing working, right? So, it’s X1, it’s broadband and WiFi gateways, it’s business services to name a few and network capacity broadly. That’s driving the results that we have been pleased with and talking about and we are sort of data driven on this stuff. So, it’s long as we are seeing the results we are seeing why wouldn’t we continue to invest at the pace that you have seen us invest that we have the resources to do it? And so I think looking into ‘16, the 15% that we are of cable capital intensity that we are now seeing for 2015 is a good place to expect us to be in that neighborhood in ‘16 as well.

John Hodulik

Got it. Alright. Now, let’s switch over to NBC with the time we have remaining again as you mentioned great year in 2015, you gave us a little bit of a summary. But what do you think will be the sort of core incremental drivers for ‘16 versus ‘15?

Mike Cavanagh

So, in TV, again, it’s going to be retrans. On the NBC side, we have got – that number was $4 million, 5 years ago, it will be $400 million or $500 million this year, probably $800 million next year. So, it will be a bigger driver of growth, a bigger amount of absolute growth in ‘16 than ‘15. So, that continues to be an opportunity for us on that side of things. And as I said at the beginning on the affiliate fee side, we think we continue to be under-monetized relative to the power of selling together the NBC channels together with a healthy and broad array of cable networks. So that soul of the package we think continues to leave us with great opportunity to drive higher affiliate fees, so that’s one. Parks is another, so you have seen on the parks side, as I said earlier, we are in the rhythm of driving I think continued growth not just 1 year but multi-year with an attraction a year at each of the major parks. So we have again, Harry Potter coming to Hollywood next year. We have got King Kong coming to Florida next year. We will also be opening a Sapphire Falls Hotel with another 1,000 rooms, bringing us to over 5,000 rooms against a study that says we can drive park visits and handle about 10,000 onsite hotel rooms, so continue to invest there. In ‘17, we will have water park coming to Florida. So that’s the sort of domestic story. You saw we bought the 51% of the Japan Park and so continued appetite to take the IP and the skill in the parks business and deploy it more broadly. And then finally, we have got the – we are working on definitive agreements to finalize plans to open a park in Beijing that will be 2020 or a little later. So still the way is out, but lots going on in the parks business between attractions, hotels and geographic expansion.

John Hodulik

Yes. On the film business, obviously you had the three big films in ’15 and you mentioned, obviously we won’t have the same slate going into '16, but longer term can you talk about how you think about this business and its growth drivers?

Mike Cavanagh

Sure. I mean I think Steve said it well earlier in this year where you take it apart it’s obviously, a business that fluctuates based upon good fortune, it’s a hard business to predict what exactly the results of anyone film are going to be. But also there is real business management behind this and so I think we had a higher cruising altitude as he said it on the back of a great work by him, Jeff Shell, Donna Langley and the team there that’s worked on what’s they would call a strategic slate, really thinking about managing the slate of films that are going to come in any 1 year and over a multi-year period with the view of trying to deliver known franchises. So think about look back on this year, Fast and Furious 7, one of the biggest hits in China of all time and a $1 billion plus global box office movie and it’s the seventh of its kind. That will come back around in a couple of years’ time. Jurassic World, another example, Pitch Perfect. So driving the known IP takes a lot of the uncertainty and risk out of the equation. It still is risky, but it takes – it contains it through a degree. So having a couple of franchise films in the slate every year together with big animation, so we have got something new coming from Chris Meledandri and Illumination next year, Secret Life of Pets on top of Minions that we have seen this year, so we are trying to have good animation in it. And then away from that, done a lot on the business management side, I guess I would call it where we have made the marketing side of the house a global business. We have put Duncan Clark and had as a sole – singular head of the international distribution side of things and we have taken in-house, our China distribution business, which used to be reps. All those things are going to have ongoing – are real contributors to the results this year and they are all ongoing into the future, so feel good that while we don’t have the size slate next year as we had this year, that the business is in good shape to be a major contributor in the future.

John Hodulik

We have a couple of minutes to take any questions from the audience. If there are any questions, please raise your hand and we will get to you. One last one for me might be you talked about the return of the capital here at Comcast in terms of how you prioritized dividends and buybacks?

Mike Cavanagh

Yes. Well, I mean I think – I guess one thing I would say we ended last quarter 1.9 times leverage of total net debt and preferred to operating cash flow. Just a reminder, we closed in the quarter the acquisition of Japan, which is a leverage business, we are going to consolidate that so pro forma for that if you read in third quarter, that 1.9 will be 2.1. So just for clarity on that one. But I think as I have said, we can operate around that level of two times, feels like a very comfortable level of leverage for us. And then in the context of the cash earnings power of the business, I think we can handle the capital intensity that’s described where we are investing for things that we think drive future growth, that’s we can do that. You also saw this year do what I would call some smaller bolt-on investments, but adds up a little bit when you think about Japan Park Vox, BuzzFeed and the like. So assuming that we have a placeholder in mind for continuing to do more of the same that’s helping the existing businesses evolve and contribute to future growth. And then we are also – and this is not in priority, but a balance plan. In balance, we are also going to be able what we think I think to be continue to be a good returner of capital to shareholders through a – I would like to see a steadily increasing dividend and then healthy return through buybacks as well.

Unidentified Analyst

Thank you. Question, to what extent you and your other partners have talked about Hulu and the way to meet kind of consumer and migrate that consumer over time definitely to a broader TV offering, can you talk a little bit about [indiscernible] how you would do that migration [indiscernible]. And then secondly when you rolled out Xfinity [indiscernible] on a mobile device, can you talk a little bit about how much [indiscernible] came down on the small screen versus the large screen?

Mike Cavanagh

I will take the second one first. So what we are working on is capturing better data. And so while I guess the quick comment on viewership as well, we are seeing obviously ratings pressure for traditional programming. What we are seeing is strong aggregate viewing across mobile and in home for those folks on the XFINITY platform. And so it’s allowing us to capture some of those observations. Obviously, with products like stream and mobility, there is more increasing viewing on mobile devices versus big screens and certainly, my kids and my household, are great evidence of seeing that trend and so we do see that. As far as Hulu both because we are not – I am not close on that one, I will take a pass on that one.

John Hodulik

One more questions here in the front.

Unidentified Analyst

Okay. Can you give more color on the [indiscernible]?

Mike Cavanagh

So the question is, comment on our M&A strategy so just people can hear, comment on our M&A strategy and would we be interested in wireless, so I will give you the expected answer, which is we are not going to talk about our M&A strategies. But suffice to say that if things – if we will look at a variety of different things and if it can make sense for our shareholders, we will at times be willing to engage in M&A. But it’s as I would take it back to the very beginning, which is we very much like the businesses and business strategies that we are involved with, executing well and there is nothing that we need to do in our minds to continue to drive great value for our shareholders.

John Hodulik

Mike, that’s all we have time for today. Thank you very much.

Mike Cavanagh

John, thank you very much.

John Hodulik

Thanks everybody.

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