Philip Cusick: Thanks, guys. Two follow-ups, if I can. Your tone around new footprint expansion and broadband efforts has — there’s no change. Does bead funding or state subsidies going forward, accelerate that further? Or do you think the $1 million annually is the right figure to think about going forward? For Jeff, any update on trends in advertising since your comments in early December? And then finally, I wonder if you guys can talk about the $500 million in severance this quarter. Is there more to come? And Mike, I heard you say that margins in Cable should continue higher. What impact do you expect on cost going forward? Thanks very much.
Dave Watson: Let me start, Phil, this is Dave, and talk about the footprint expansion expectations. So pretty steady progress. You look at ’21, did $813,000; ’22, last year did $840,000. So good progress and in line with our expectations. And we do expect to accelerate in ’23. So there’s an opportunity to do around 1 million passings. And so the opportunity clearly still within footprint and residential, also hyper builds we call the commercial growth. Those all still exist. We’re excited about that. And that’s the majority still of the footprint expansion. The newer ones will be the rural edge-outs that we’ve been talking about, and that will begin to pick up the pace. Having said that, we’re excited about it. We’re going to lean in.
We think we’re doing well early stage in terms of the grants and the wins around these communities. But we’re going to take a very disciplined approach, and we’re going to go after returns that are similar to historic levels as we do that. So — and we’re — I think all of the — whether it’s the network upgrades, the footprint expansions, we’re still right on target with what we said and going back to ’21 and being around 11% Cable CapEx intensity. So very excited about both of those areas, how we upgrade, the elegant path to upgrade and the footprint expansion. Jeff?
Jeff Shell: Thanks, Dave, and thanks, Phil. So on the ad market, I think in prior calls, the market — the ad market steadily worsened over the course of last year. It kind of feels like it bottomed out around late November, early December. And really since then, it hasn’t gotten worse and maybe even a little bit better. I describe it really as shallow. There’s parts of the market that are actually doing really well, Pharma, entertainment. Travel is on fire. There’s parts of the market that feels uncertain, tech, auto, financial services, all are weak. It feels like the weakness is due less to businesses not doing well and more to just macro uncertainty. I mean none of us really know where the economy is headed, and I think some advertisers in those segments are really holding back.
And when they do advertise, they’re coming in later than usual. So I think we have — we’re doing a little bit better than our peers for a couple of reasons. One is Peacock’s growth is really helping to offset the linear weakness, which is fortuitous for us. And I think, secondly, we’ve made big investments in data and measurement, and we have the best team, and that’s really helping. But I guess I would just summarize it by saying the ad market feels to me like it stabilized a bit. And we’re assuming it’s going to stay weak for the first half of this year and then recover. But who really knows based on the macro economy?
