Good morning and welcome to the Verizon First Quarter 2016 Earnings Conference Call. At this time all participants have been placed in a listen-only mode, and the floor will be opened for questions following the presentation. Today's conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to your host, Mr. Mike Stefanski, Senior Vice President, Investor Relations.

Thanks, Tori. Good morning, and welcome to our First Quarter Earnings Conference Call. This is Mike Stefanski, and I'm here with our Chief Financial Officer, Fran Shammo. Thank you for joining us this morning. As a reminder our earnings release, financial and operating information, the investor quarterly, and the presentation slides are available on the Investor Relations website. A replay and a transcript of this call will also be made available on our website. Before we get started I would like to draw your attention to our Safe Harbor statement on slide 2. Today's presentation includes forward-looking statements about expected future events and financial results that are subject to risks and uncertainties. Factors that may affect future results are discussed in the filings with the SEC. This presentation includes non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found on our website. The quarterly growth rates disclosed in our presentation slides and during our formal remarks are on a year-over-year basis, unless otherwise noted as sequential. Before Fran goes through these results, I would like to highlight a few items. For the first quarter of 2016 we reported earnings of $1.06 per share on a GAAP basis. These reported results include a few non-operational items that I would like to highlight. Our reported earnings include a noncash pre-tax loss of $165 million for a pension mark-to-market adjustment due to settlement accounting. We expect settlement accounting to impact earnings in each of the remaining quarters in 2016. Additionally, we recognized a pre-tax gain of $142 million on a spectrum license transaction. On an after-tax basis the loss on settlement accounting amounted to $102 million or $0.02 per share. And the gain on the spectrum transaction amounted to $88 million or $0.02 per share,…

Fran, thank you. Tori, we're ready to open it up for questions. If we can take the first question, please?

Thank you, sir. We will now begin our question-and-answer session. Our first question comes from Brett Feldman of Goldman Sachs. Please go ahead with your question. Brett Feldman - Goldman Sachs & Co.: Thanks. And appreciate the color. I didn't catch it in the release. Are you guys still reporting postpaid ARPA? And if so could you break it out for us? Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. We are going to continue to report postpaid IARPA. But, Brett, we'll get that out to everybody so that you can see that. Brett Feldman - Goldman Sachs & Co.: Okay. And then just a separate question. You noted that you're going to be making this investment in Boston. I was hoping you could give us some thoughts around the timing of that, so we could think about how that might flow through into CapEx? And then are you thinking that there could be an opportunity to continue to expand your fiber presence, particularly as you think about densifying your wireless network? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah. Sure, Brett. Thanks. Well, I mean Boston is a unique situation. So we announced the intent to expand Fios in Boston. Understand that the LFA has to be negotiated with city council. And that is a public process that will take approximately 6 months. We have been in discussions with some broad framework, but we need to go through that process. It's also important to note that the LFA is only for video linear TV services. It is not required for broadband or 5G. So obviously when we looked at Boston, it was a city that we needed to densify for the LTE network. So as we looked at all of…

Tori – thank you. Next question, please?

Thank you. Our next question comes from Simon Flannery with Morgan Stanley. Please go ahead with your question. Simon Flannery - Morgan Stanley & Co. LLC: Thanks a lot. Morning, Fran. Can you just give a – provide a little bit more clarity about your comments on Q2 and the rest of the year? Is it reasonable to take the Q1 margins, that sort of recast margins in Wireline that you've provided, as a good sort of guidepost here until you get more cost savings coming through? And maybe you can just reflect on any particular puts and takes from the strike in terms of extra costs from additional labor you might need to hire? Or conversely some cost savings? And what are you seeing so far in terms of impact on the business in terms of broadband adds, trouble reports, et cetera? And then if you have any update on your data center evaluation sale process. Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. Thanks, Simon. All right. So on guidance first and foremost, we are absolutely confident at this point in time, based on everything that we have planned and the timing of the union contract, that we can deliver on the $3.99 compared to last year. And just to set the record here, I mean again we did not give revenue guidance. We gave EBITDA margin percent guidance, and we gave EPS guidance that would be relatively comparable to 2015. So if you step back a second and look at earnings per share at 2015 coming in at $3.99, we have to keep in mind that $0.13 of that was from our assets held for sale. So really the comparable number is $3.86. And as we said we felt good about growing…

Tori, next question, please?

Thank you. The next question comes from David Barden of Bank of America Merrill Lynch. Please go ahead with your question.

Thanks, guys, for taking the questions. I guess two if I could. The first one, Fran, just following up on that guidance question. You highlight that, if you hadn't had the Frontier benefit last year, the earnings would have been more like $3.86. But if I do the math on the impact that Frontier is having on 2016, if you hadn't sold the Frontier asset, the earnings would be reasonably materially higher. And my math is that the year over year earnings power of Verizon, had the Frontier assets not been part of the mix here, would have been about 10%. And Street estimates are really only looking for about 3% earnings growth next year. I was wondering if you could comment on what you see as the underlying earnings power of the Verizon business as we kind of think about next year's growth, ignoring the strike issues for a second? And then just the second question, if I could, would be on upgrade rate. I didn't see it in the notes yet for this quarter. But obviously, reports are that it's been lower than normal. And I was wondering if you could kind of talk about how you see the cadence or the shape of the year with the iPhone 7 likely coming out in the back part of the year and the amount of upgrades you'd see by that point in time? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah. Thanks, David. So on earnings, look. I mean we've been pretty open about 2016. And of course we've got a lot of things going in a lot of different directions. I mean obviously, if you look at it, even with Verizon Wireless and the headwind of the revenue here and the transformation of…

Great. Thanks, Fran.

Tori, next question, please?

Thank you. Next question is from Phil Cusick of JPMorgan. Please go ahead with your question.

Hey, guys. Thanks. Two quick ones, if I can. One, can you comment on the FCC special access reforms? How are you thinking about that? And then, two, the potential to borrow against handset receivables. What do you think is the cost in that market, Fran, versus the normal bond market? Francis J. Shammo - Chief Financial Officer & Executive Vice President: All right. Thanks, Phil. So on FCC special access, look. The FCC will take action this month sometime on special access rulemaking, and if tariff investigation at a certain discount that we and other large legacy providers offer for DS1s and 3s. I mean we've reached out – we reached a deal with a lot of the CLECs in order to resolve a longstanding and contentious regulatory issue here. Our top priority though is to ensure that our business services are on a level playing field with all the other competitors, including cable companies. We intend to work with the industry and the FCC to develop a framework for that, that applies to all competitors equally and relies on the sound public policy to determine where and when regulation is appropriate. So we'll wait to see what the FCC does here, Phil. And then we'll respond accordingly. On the bond market and the recent press reports coming out of Bloomberg, look. We've been pretty open and public that we have been looking at an alternative financing arrangement for our installment sale receivables. The public asset backed market is an alternative that we've explored. We've had a number of discussions. We are having discussions continuing with alternative providers and various parties. But at this point in time these are just discussions. It's something we're looking at. We're still doing a lot of analysis around it. And at this point it's just something that we continue to look at. And nothing to announce here today that we're going to change anything at this point in time.

All right. Thanks, Fran. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure.

Tori, next question, please?

Thank you. Next question comes from Mike Rollins of Citigroup. Please go ahead with your question.

Thanks. Two if I could. First, as you look at the range of possible investment that you can make over the next 12 months or 24 months, is there a balance sheet debt level that investors should be keeping in mind in dollars or ratio terms that – the upper threshold for what the company is comfortable with? And then secondly, as you look specifically at the performance of AOL since you purchased the asset, are there some examples that you could provide on ways in which Verizon has made the performance of that asset better in terms of revenue or cash flow? And how some of the recent content investment might further the performance of that asset? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah. Thanks, Mike. So on investment side, look. I mean we've been pretty open that our main priority is to get our debt level back to an A-minus rated company. And we are on track to do that. And everything we do, that continues to be the top priority. So even with all of the M&A activity you've seen, I mean if you look back, we started this at a pre-Vodafone debt of – post-Vodafone debt of $113 billion. We've reduced that to $109 billion. But keep in mind that was with a $10.4 billion spectrum purchase during that period of time. That was with $4 billion of a purchase of AOL and some miscellaneous tuck-ins, capital investment, share repurchase. And now we've just sold the Frontier properties. That helps brings that debt down even to a lower level. So we are right on course. But that is top of mind at everything that we do. And will continue to be a commitment that Lowell and I made that is…

And, Fran, is there a ratio or set of numbers you could put around how you perceive getting to that A-minus debt level? Are there indications that you've received for that? Francis J. Shammo - Chief Financial Officer & Executive Vice President: Well sure. I mean if you look at each of the rating agencies, each of the rating agencies have a different approach, because some of them include the pension plan unfunded liability. Others include the OPEB unfunded liability. Others don't include any of that. Securitization, some include, some don't. So each of them is a different metric. But if you look at our overall GAAP ratio, it kind of follows in task with where we would need to be. And based on the GAAP ratio, you should look at a 2.0 to 2.1 (47:42) type area in order to achieve that A-minus rating.

Thank you very much.

Tori, next question, please?

Thank you. Next question comes from Craig Moffett of MoffettNathanson. Please go ahead with your question.

Hi. Good morning. Let me see if I can tie together maybe a question about the FCC and the ongoing discussions about Yahoo!. Given that in the FCC right now you've got the privacy NPRM, and you've got some uncertainty around whether Wireless is or isn't going to be upheld under Title II. How does that inform the way you think about what you might be able to do with AOL directly I guess? And also trying to expand the platform of advertising, as you might do with Yahoo! if you're the acquirer? Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah. Thanks, Craig. Well, look. I mean I'm not going to speak anything to deal with Yahoo!, so let's just talk about what we have on the table today. And under the sponsored data zero rating type issue, I mean the net neutrality already advocates some of this. And we've structured our sponsored data program to comply with all the FCC net neutrality rules. So for example if any party – third party – is interested in that, we will offer that on a non-discriminatory basis. And we've priced it accordingly at a commercially favorable rate that we believe is in direct, really, compliance with the FCC net neutrality rule. We think that sponsored data and other FreeBee Data programs are good for the consumer. And that regulators will recognize that after concluding their review on our product. So based on the zero data, we'll have to wait to see where they come out on that. As far as Title II goes, look. I mean we agree with all the principles with net neutrality rule. The thing that we disagreed with and opposed was applying Title II to broadband services and particularly wireless broadband. So we'll have to see where this comes out. But in re-classing broadband under Title II was not necessary to ensure an open Internet. I mean there has been nothing ever that shows that it not has been an open Internet. So this will obviously have some negative consequences on innovation as a whole. But look. I mean we're a company that has operated under regulation for 100 years. And it has been very successful. So we'll wait to see what the FCC concludes. And then we'll operate accordingly. But it's too early to say what exactly is going to happen here.

And, Fran, does the specific limitations that might or might not be imposed on the use of customer data under the privacy NPRM that stems from reclassification, does that impact your ability to monetize an asset like Yahoo! or AOL in general to – as you think about how you would use that for advertising purposes? Francis J. Shammo - Chief Financial Officer & Executive Vice President: Well, look. I mean we at Verizon – I mean privacy and security has always been top of mind. And normally we always use an opt-in with our customers or some type of an opt-out feature. The issue though that we have right now is under the FCC proposed aggressive rules on privacy and data security, that would apply to broadband providers but not companies like Google and Facebook. So if we're going to have rules, we need to make sure we don't single out certain industry to either benefit or not benefit from those rules. And that's something that our legal department continues to work with the FCC on. And so we'll see where this ultimately comes out. But that's really the crux of the issue for us.

All right. Thanks, Fran.

Tori, next question.

Thank you. Next question comes from John Hodulik of UBS. Please go ahead with your question.

Okay. Thanks. Fran, maybe you could comment on the competitive environment you're seeing in Wireless? You guys were able to cut your postpaid handset losses on a year-over-year basis pretty meaningfully. Do you expect that to continue through the year? And then secondly, prepaid has always been an area where you guys haven't really focused. You continue to lose subs in that space. Meanwhile I think AT&T and T-Mobile are – see a lot of growth in that area. Maybe you could compare your views on that market? And why you guys don't see that as a source for growth? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah. Sure. Thanks, John. So on the competitive environment of Verizon. I mean, look, coming into 2015 and again in 2016 we said that the top priority would be to maintain the high quality of our base. And you see us doing that. I mean we now have 48% of our base over on the new pricing. And we continue to push for that. So you saw this 7 basis point increase in churn for the last couple of quarters. What I would say though is, is if you look ahead, last year second quarter, the churn was like a 0.90%. I would not anticipate nor should you anticipate that we will achieve that churn rate again, because things have kind of flattened out now. So I would look at the first quarter as a guide to where we will be for the rest of the year from a churn perspective. And part of that is, is because we are seeing some increased churn on tablets, which we have talked about before, where we gave a free tablet away. And we saw that the customer base just didn't…

Okay. Thanks, Fran.

Tori, next question, please.

Thank you. Next question comes from Mike McCormack of Jefferies. Please go ahead with your question.

Hey, Fran. Thanks. Maybe just a quick comment on what your view is maybe more holistically on the video landscape? What other assets do you think Verizon requires? And I'm thinking about Fios Video long term. Where does that go? And then I guess on the service revenue stabilization, that 50% benchmark. What kind of factors have you built into that to get to that expectation? Francis J. Shammo - Chief Financial Officer & Executive Vice President: Okay. Thanks, Mike. So on the video landscape, look. I mean I think we've set the bar on where we're going on video, both in the home and outside the home. So in the home we were the first to come out with our Custom TV package, which rebundled certain content. And it's been very successful. I mean this quarter, even with the rebundle of Custom TV, we had a 38% take rate on that bundle. And what I will tell you is, yes, it does give us some top line pressure, because it's a lower bundle from a revenue perspective. But the content cost is considerably lower. Therefore, it generates actually more margin for us. So it's the right thing to do. This is what customers want. They don't want to pay for 300 channels anymore and only watch 17 on average. So we're trying to give customers what they want. And that's a fight, obviously, with all the content providers. But we're doing it within the legality of our contracts. And of course, we won't breach any of our contracts. But it's the way that the environment is moving. So I don't think we're going to change any approach to our in-home delivery. The other thing is, is there's confusion out there on the video side, which is, everybody wants to…

Great, Fran. Thanks for the color. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure.

Tori, we have time for one more question, please. Can you please just queue that up?

Thank you, sir. Our final question comes from Amir Rozwadowski of Barclays. Your line is now open. Please go ahead with your question.

Thank you very much and good morning, folks.

Morning, Amir.

I was wondering if we could discuss your network plans, Fran. In the near term, as you mentioned, your CapEx was down high single digits during the quarter. But you remain fully committed towards your guidance levels. What initiatives are top of mind for what seems to be an implied improving spending trajectory through the year? And I guess longer term, I was wondering if you could briefly discuss some of your initiatives on 5G? You folks clearly seem to be pushing a timeline that is well ahead of your domestic peers and most of the global players as well. What is the impetus for this focus? And in order to meet the timeline you expect, what type of assets do you think you need to ensure to be able to get to meet those expectations? Should we expect additional deals like XO? Or some organic investments in fiber? Or anything along those lines? Thank you. Francis J. Shammo - Chief Financial Officer & Executive Vice President: All right, thanks, Amir. So first on just the CapEx, look. There's some timing here. And the reason that is, is because, if you look at it, in the fourth quarter of last year, we really accelerated our spend, really in Wireless, to prepare for the Super Bowl. And that was a whole densification project on the West Coast, around San Francisco and Santa Clara. So really what you're seeing here is a timing issue. We are right on track with our plans on densification. We are still deploying a lot of small cells. So there is nothing that I'm going to say here that should concern you about our plans. And you'll see us catch up on that spend in the second and through the third and the fourth quarter. So, coming…

Thank you. We'll now turn the call back to Fran for some closing comments. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Thanks, Mike. Look, the first quarter provided strong results to the start of this year. And again I want to reiterate we are very confident in our ability to execute on the fundamentals and grow this business profitably amidst the competitive environment and manage through the transition of our business models. We are also positioning our business for future profitable growth through cost and capital efficiency initiatives and all the new revenue streams that we always talk about. We look forward to a positive 2016 with confidence in our ability to execute our strategy, create value for our customers, our employees, and our shareholders. Thank you again for joining Verizon this morning. Have a great day.

Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using Verizon Conference Services. You may now disconnect.