Good day, ladies and gentlemen, and welcome to CenturyLink's Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Tony Davis, Vice President of Investor Relations. Mr. Davis, you may begin.

Thank you, Saeed. And good afternoon, everyone, and welcome to our call today to discuss CenturyLink's second quarter 2015 results released earlier this afternoon. The slide presentation we will be reviewing during the prepared remarks portion of today's call is available in the Investor Relations' section of our corporate website at ir.centurylink.com. At the conclusion of our prepared remarks today, we will open the call for Q&A. As you move to slide two, you'll find our Safe Harbor language. We'll be making certain forward-looking statements today, particularly as they pertain to guidance for full year and third quarter 2015 as well as other outlooks in our business. We ask that you review our disclosure found on this slide as well as in our press release and in our SEC filings, which describe factors that could cause our actual results to differ materially from those projected by us in our forward-looking statements. We ask that you also note that our earnings release issued earlier this afternoon and the slide presentation and remarks made during this call contain certain non-GAAP financial measures. Reconciliation between the non-GAAP financial measures and the GAAP financial measures are available in our earnings release and on our website at ir.centurylink.com. Now as you move to slide three, your host for today's call is Glen Post, Chief Executive Officer and President of CenturyLink. Joining Glen will be Stewart Ewing, CenturyLink's Chief Financial Officer. And also available during the question-and-answer period of today's call will be Ross Garrity, CenturyLink's Interim President of Global Markets. Our call today will be available for telephone replay through August 13, 2015, and a webcast replay of our call will be available through August 27, 2015. Anyone listening to a taped or webcast replay or reading a written transcript of this call should note…

Thank you, sir. Our first question comes from David Barden from Bank of America. Your line is open. Please go ahead.

Hey, guys. Thanks for taking the questions. I guess, we kind of gathered from the Analyst Day, it was going be a tough quarter. So thanks, Glen, for kind of giving us that frank rundown. I guess, Stewart, the way we're now set up with kind of in the middle of the third quarter, the revenue and EBITDA guidance you're giving us kind of in a worst case scenario says that we're going to see flat revenues and rising margins and at the midpoint of the guidance, it suggests we're going to see some pretty strong quarter-on-quarter acceleration in revenues and EBITDA growth heading into 2016. And I guess that that's going to be the big focus for kind of Glen's point about execution and such. So if we go to that page 12, which is really I think on the business services side and we look at that chart, can you kind of walk us through the pieces parts that are going to drive what you seem to think at this stage can still be strong revenue growth kind of heading into the back part of the year and into next? Thanks. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Yeah. So, David, part of what's going happen is, one, we have adjusted some of our wholesale pricing. We think that we'll start picking up some orders from one of the major carriers that we've not really been picking up over the last four months or so. Additionally, we had a one-time item in the second quarter of about $13 million that we think will improve over the next quarter or two. And if you look at our EBITDA from the standpoint of third quarter and fourth quarter, particularly in the fourth quarter, we expect to have implemented some of the steps that Glen mentioned. And our expenses actually from third quarter to fourth quarter come down about $100 million or so. So that provides the higher margins that you'll see on the back half of the year. Additionally, we expect the second half of the year to continue to have good growth from the standpoint of our high-speed Internet revenue as well as private line, too, which is on the wholesale side.

So thanks, Stewart. And then, I guess, the second question is just on the CAF 2 piece. So, I guess, if we take out $100 million from the kind of, I guess, $75 million from the midpoint of the EBITDA guidance, we're reiterating the free cash flow guide. So it sounds like with the CAF funding, actually EBITDA and free cash flow estimates will probably end up going up. But there's still this large gap that it seems you need to analyze over the next few weeks. I guess, the key issue for people is going be, is the threshold for accepting this CAF money to make sure that it's accretive to the cash flow profile of the company rather than dilutive, and so that's the number that you're trying to figure out? R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Yeah. That's what we're working through, David. And really trying to look at the effects on 2016 and 2017 of the CAF 2 monies and we really are studying very hard the cost associated with building the network. And we think if we're able to make some progress there, we can (34:05) CAF 2 monies. Basically the minimum that we outlined in the release today really applies to about 24 states or so, or a couple of dozen states. And there are 11 other states that we're having to study a little bit harder in terms of where we are with respect to the network and how much the build-out would cost associated with those. So we could be slightly cash flow dilutive, but I mean that is what we're trying to solve for.

Got it. Okay. Thanks.

Thank you. Our next question comes from Simon Flannery from Morgan Stanley. Your line is open. Please go ahead. Simon Flannery - Morgan Stanley & Co. LLC: Thank you very much. You have targeted 2015 as the year of revenue stability. You're not talking about getting to revenue stability long term. Is this something where we think we can see revenue stability in 2016? Or is it going to take longer than that? And then on the dividend, I appreciate the comments around how you're thinking about that and the color on the tax payments. But when you cut your dividend a couple of years ago, you did target or talk about bringing your payout ratio below 60%. So how are you thinking about payout ratios, I guess, on a normalized cash taxes now? And if the dividend payout rises above that level, how do you square those factors? Thanks. Glen F. Post, III - President, Chief Executive Officer & Director: Hey, Simon, it's Glen. I'll take the first question regarding revenue stability. First of all, as always, we'll provide guidance for 2016 during our fourth quarter earnings call. But based on the sales funnels we're seeing today, the growth we're seeing in our funnels, the expansion of our GPON and Prism footprint and capabilities, the expected improvement in our cloud and hosting and IT services products, I really believe we're going see revenue stability in 2016, what we're seeing right now. Simon Flannery - Morgan Stanley & Co. LLC: Okay. Thank you. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: And, Simon, in terms of the dividend payout ratio, of course, if we do get bonus depreciation, the dividend payout ratio will be approximately 60% or so in 2016 from what we're seeing…

Thank you. And our next question comes from Phil Cusick from JPMorgan. Your line is open. Please go ahead.

Thanks, guys. A couple of things. First on the CapEx reduction. Can you expand on what's changing this year? Or can you cut without really impacting the business at this point? And does the $3 billion guidance assume that that follows through in 2016 or are you sort of pushing things out? Thanks. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Yeah. Some of the projects that we're looking at that we've actually cut really relate to what we cut that falls in the revenue enablement bucket. Probably about a third of the cut is there. And these are projects that are really more network related, that give us extra capacity, and we can go a little bit longer for that and related to that. And so we don't – we may need to make some of those next year, but we think we can really pretty safely cut that. So about a third of the $200 million cut is network related. About a third is success based too, which really just reflects the – although we're making our sales for and bookings for the second quarter were 15% ahead of where they were in the first quarter, they're still really behind where we originally expected them to be when we set our capital budget for 2015. And then another third of the $200 million really comes from furniture, equipment, vehicles and things like that that we just think we can – not have to do. And some of that really relates to some of the other changes that we're making that Glen mentioned. Glen F. Post, III - President, Chief Executive Officer & Director: And, Phil, I just want to be clear on that. The $200 million we're cutting this year, we do not expect to have to add that to capital budget next year. We won't be doing that, so just to be clear on that.

All right. Thanks, guys. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: And again, the $3 billion next year really includes CAF 2. And that's why it would go from, like $2.8 billion to $3 billion. I mean, frankly we're hopeful that next year we could get our capital budget down potentially in the $2.5 billion to $2.6 billion range exclusive of CAF 2.

Got it. Thank you.

Thank you. Our next question comes from Frank Louthan with Raymond James. Your line is open. Please go ahead. Frank G. Louthan - Raymond James & Associates, Inc.: Great. Thank you. So, on the buyback can you remind us what the current authorization is and any thought that the board might accelerate that given your confidence to revenue stability and given where the shares are? And then, can you be just a little bit more specific on the cost items? What exactly are you focused on and is any of this head count related? And how that's going to come out as quickly as you've outlined it? R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Yes, so Frank so the board authorized in February 2014, $1 billion program. I think I mentioned we're about $540 million or so through that. And it expires in essentially May of 2016 and we would expect to complete the program – our current plans are to complete the program by the end. As I mentioned we expect to be back in the market next week and set up a 10b5-1 plan to start the process of repurchasing the remaining shares. With respect to the cuts, about two-thirds or so of the amounts are really related to contract labor and professional services as well as some employee cost and employee benefits. So that's where about two-thirds of it is. The other third is actually down in – we think network expense as well as property taxes. Frank G. Louthan - Raymond James & Associates, Inc.: Okay. Thank you.

Thank you. Our next question comes from Mike McCormack from Jefferies. Your line is open. Please go ahead.

Hey, guys. Thanks. Glen, can you just give a little more detail on, I think you mentioned credit policy changes. Just trying to get a sense for, if you're seeing a significant uptick in involuntary churn or is that inside the Prism footprint where you're getting people installed and then sort of abandoning equipment? And then, I guess secondly in giving some thought to your comments regarding over-the-top, Prism TV probably is not as profitable as offering obviously straight broadband although it might have churn reducing benefits and we're seeing AT&T de-emphasizing the U-verse platform. Does it make sense to sort of move away from Prism TV and focus more on developing the over-the-top product and then getting just higher speed data to the homes? Thanks. Glen F. Post, III - President, Chief Executive Officer & Director: Yeah, Mike. On the credit policy change, that's mostly around this broadband and HSI. We ought to be a little bit out on Prism but more to HSI. We're seeing a lot of churn there. No pay churn is hitting us really more than previously. So we are – that's really the – it's around high-speed data primarily. We're seeing that issue where we're trying to address it.

Okay. Glen F. Post, III - President, Chief Executive Officer & Director: And regarding the Prism TV and over-the-top, certainly the programming costs are high on Prism TV. However, if you look at the all-in opportunity there, we bring 52% of the new customers to CenturyLink, 57% are triple play customers and about 97% of those customers have a high-speed data connection. So overall, those are profitable customers for us and we're pleased to get them – we're working hard on the programming costs as our whole industry is, we think it's really an area that we have to change over time. But we think it is a good product for us and driving revenue and cash flows. The over-the-top is certainly an opportunity. We have some new products coming out over-the-top that we think will be very profitable and we'll include those with our Prism product as well as in areas we don't have Prism and we think there's opportunity there. You're right. There are higher margins with that over-the-top product. So we're looking forward to offering that.

Glen, just as a quick follow-up, I know in the past you've talked about the sort of time lag or timeframe between revenue stability and EBITDA stability, has that changed in your mind at all? Glen F. Post, III - President, Chief Executive Officer & Director: No, I think we still think – the 18 month is still that we still think that we'll be looking at that 18 month timeframe give or take a few months, but that's still our target. That has not changed.

Great. Thanks, guys. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Mike, one other comment on the over-the-top, it's going to be available to many more households than our Prism TV is available to because you don't need the bandwidth to be able to use the over-the-top product that you need to use the Prism product.

That's certainly – the cost to connect I assume is going to be quite a bit lower based upon at least the comments from DISH and Sling TV? R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Yes. Glen F. Post, III - President, Chief Executive Officer & Director: Yeah.

Great.

Thank you. Our next question comes from Batya Levi from UBS. Your line is open. Please go ahead.

Great. Thanks. Question on the margins. It looks like the guidance for the full year is about 38%, but you're going to exit the year at a higher level given the expense cuts that you talked about. How should we think about margins going into 2016? Where do you think that can get to before we see the EBITDA stability some time in 2018? And second question on the wholesale private line, which you mentioned that it's still a drag on revenue growth, can you quantify what percent of the revenues come from that? And do you see any impact from maybe wireless backhaul that offsets some of that pressure going forward? R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: So, Batya, on the margins, you're right, about 38%. And as we look out, I mean, if we can get to revenue stability in 2016, as Glen mentioned, and basically continue to control our expenses, we're hopeful that the margins next year wouldn't drop that much from where they are this year. And your second question was?

Wholesale private line mix. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Yeah. So basically we're seeing upgrades from the carriers in terms of wireless backhaul. It's been a little slower than we expected. And I'll tell you, Bill's here. Bill Cheek's here. I'm going to get him to answer the question for you, Batya.

Yeah. Batya, Bill Cheek. Wholesale revenues is about – and if you think about wireless backhaul, I think was your question, is about 4% roughly of our total company revenues, so it's really relatively small percentage.

Okay. Great. And then maybe just another question on CAF. If you decide to take about $300 million from the new fund, how much of the existing $350 million of frozen support will still be available for you? R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: So with the states where we – if all we take is basically are the two dozen states or so that results in about $300 million, there would be about $100 million of frozen support that we would continue to receive. At this point, it just depends on how long it takes the FCC to write the rules for the auction process and put that in place and actually have the auctions. We believe the earliest that would be would be towards the end of 2016, but it could very well go over into 2017, and then we would also have the ability to be able to participate in those auctions as well. So about $100 million of frozen support that we will continue to receive in addition to the $300 million of CAF 2 funds.

Okay. Great. Thank you.

Thank you. Your final question for today comes from Tim Horan from Oppenheimer. Your line is open. Please go ahead. Tim K. Horan - Oppenheimer & Co., Inc. (Broker): Thanks, guys. It seems like the revenue guidance is kind of calling for that this is the bottom quarterly and should increase the next two quarters. Just so I understand that or do you think it could kind of step down on a quarterly basis again next year. And then on just maybe you can walk through the puts and takes on the dividend payout ratio. I guess, if we get out to 2017 on more of a normalized cash tax rate or normalized tax rate and all the puts and changes that you are seeing in terms of the margins, what do you think the dividend payout ratio will be at that time and how confident are you in that dividend payout ratio? R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: 2017, the cash taxes would go up somewhat if bonus depreciation is enacted for 2015 and 2016 and not 2017, then basically cash taxes would go up then, but we still believe that we would be okay and we would be hopeful at that point if we stabilize revenue, we would be stabilizing EBITDA as well. So hopefully that wouldn't be an issue. And you are correct in terms of revenue increasing, basically we expect our strategic revenue to grow somewhat in the third quarter and the fourth quarter and in effect offset the declines that we might see from the legacy services. Tim K. Horan - Oppenheimer & Co., Inc. (Broker): Great. And last, should we think of CAF as more of a one time or temporary or do you think it could be kind of more – should we think of it as more ongoing and might be offset when the six year is up that it might continue longer term. Thanks. R. Stewart Ewing - Chief Financial Officer & Executive Vice President & Assistant Secretary: Well, we really – we do believe there will be another program after this program is complete. We are not really sure what the program – we don't know what the program will be, of course, but we think that there may be some opportunity to continue to get some funding to help serve and provide broadband service to rural America. Tim K. Horan - Oppenheimer & Co., Inc. (Broker): Thank you.

Thank you. Showing no further questions at this time, I would like to hand the conference back over to Mr. Glen Post for any closing remarks. Glen F. Post, III - President, Chief Executive Officer & Director: Thank you, Saeed. As we called out today, we are not satisfied with our results for the quarter and we have plans in place to correct that trajectory, but overall I really believe we have the best portfolio of assets we've ever had at CenturyLink. Now it's really about execution. We are taking these assets and leveraging them to drive revenue growth, EBITDA growth and shareholder value over time. And while though there certainly will be some quarterly ups and downs with some bumps in the road along the way, CenturyLink's long-term trajectory in my view is as positive and bright as it's ever been. So thank you for joining our call today and we look forward to speaking with you in the weeks ahead.

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program for today. You may all disconnect and have a wonderful day.