Good morning, and welcome to the Verizon Second 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. It is now my pleasure to turn the call over to your host Mr. Michael Stefanski, Senior Vice President, Investor Relations. Thank you. You may begin.

Thanks, Tori. Good morning, and welcome to our Second Quarter Earnings Conference Call. This is Mike Stefanski, and I'm here with our Chairman and Chief Executive Officer, Lowell McAdam; and our Chief Financial Officer, Fran Shammo. Thank you for joining us this morning. Given yesterday's announcement of the Yahoo acquisition, we expect this call will exceed an hour. 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 our filings with the SEC, which are available on our website. This presentation includes non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available on our website. The quarterly growth rates disclosed in our presentation slides and during our formal remarks are an on a year-over-year basis, unless otherwise noted as sequential. Before Lowell and Fran go through our strategy and these results, I'd like to highlight a few items. For the second quarter of 2016 we reported earnings of $0.17 per share on a GAAP basis. These reported results included several significant non-operational items that I would like to highlight. Our reported earnings include a noncash pre-tax loss of $3.6 billion, generated by pension and other post-retirement benefits, primarily due to the re-measurements triggered by the new labor contracts, the transaction with Frontier, and settlement accounting. The overall impact after tax amounted $2.2 billion or $0.54 per…

Thank you, Fran. Tori, we're now ready to take questions.

Thank you. We will now begin the question and answer session. One moment, please, for the first question. Your first question comes from John Hodulik of UBS. Please go ahead with your question.

Thanks and good morning, guys. Maybe quick – couple quick questions for Lowell. Lowell, first of all, could you give us an early look at the synergies that you see coming with the Yahoo transaction? And with it behind you now, do you feel that you have the assets you need to execute on the new media strategy? Thanks. Lowell C. McAdam - Chairman, President & Chief Executive Officer: Hey, good morning, John, and good morning, everyone. I understand there were lots of rumors about me announcing a big reorganization of the company, so I'm sorry to disappoint you. But I think we have some pretty exciting things to talk about here. First, on Yahoo synergy. Look, certainly as we went into the auction process, we had a very good idea of what the synergies could be. I think probably we were the only significant bidder that had synergies. So we have a good idea, and we've heard numbers bantered around that are in the ballpark. But my view on this, John, is we now enter a phase where post the auction diligence, which is certainly limited, we can go in and talk to management and see a much greater depth of information. And we'll validate our plans and make our decisions. So I think as we get closer to closing, which we expect will be either at the end of the year or early in the first quarter, we'll announce those numbers. But they're meaningful, let me just put it that way. On the – do we have the assets we need? Certainly yesterday when Marni [Walden] and Tim [Armstrong] did their public interviews, we're extremely excited about the assets that Yahoo has in the area of sports and finance and email and news. And you match those up…

Great.

Great. Thanks, John. We appreciate the question. Next question, Tori?

Thank you. Your next question comes from Simon Flannery of Morgan Stanley. You may now ask your question. Simon Flannery - Morgan Stanley & Co. LLC: Great. Thanks very much. Good morning. Fran, I think you were one of the early ones to talk about elongating handset cycles. I think what we've seen so far with three companies reporting is very low upgrade rates, relatively low switching, but also low adds, low churn. To what extent do you think this is a typical sort of pre-iPhone lull? Or do you think we're in a new environment of more subdued activity going forward? And in particular as you think about your growth, you talked about the ARPU stabilizing and service revenues returning. But you also need stronger volume growth. What can you do to stimulate more of the phone adds as we go forward here? Thanks. And anything you can say on the data center sale as well would be appreciated. Francis J. Shammo - Chief Financial Officer & Executive Vice President: All right, great. Thanks, Simon. So on handset cycles, so two viewpoints here. One is obviously we saw a similar trend – maybe not this dramatic – in 2014 where we saw a slowdown in the first half of the year in anticipation of iconic phones that were coming up on a 2-year cycle. So I think some of it could be that. Unfortunately for us though, we have our first set of EIP customers coming up on their 2-year anniversary. And there's not enough volume yet of those customers to really get a behavior track, if you will, whether they're going to hold their phone and take a $20 to $25 discount on their bill or if they're just waiting for a new phone. So I think it's…

Tori, next question, please?

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

Oh, thanks. If I could follow up on Yahoo for a moment. In a letter that was picked up by the press from Yahoo's CEO yesterday, it referred to Verizon's goal to get to a global audience of 2 billion users and $20 billion of revenue within the mobile media business by 2020. I'm wondering if you could talk a little bit about that goal in a couple of respects? In terms of what are the key strategies to get that growth? Is it simply just leveraging the assets you have? Or can you give us a little more color on how you look to maybe manage them differently than they've been managed in the past? And then secondly, how should investors think about the profitability of that type of revenue in this category over time? Thanks. Lowell C. McAdam - Chairman, President & Chief Executive Officer: Okay. I'll – let me take the strategic question. And then Fran can talk a little bit more about the profit side. Mike, I think this is similar to my answer to John's question. We've got a perspective going into this, and we'll refine it as we go along. But if you take a look at the interest that we have received from AOL current partners as well as new partners, we think there's a huge opportunity in the following areas. First, in the sports area. As you know we've got relationships with a lot of the big leagues. Certainly NFL and NBA are the headliners for us. I've spoken with both Roger Goodell and Adam Silver in the last few weeks about this. And I think we're very excited. And I expect over the next few months you'll see more details about the plan of what we can do with their content,…

Mike, thank you. Tori, next question, please.

Thank you. Next question comes from David Barden of Bank of America. Please go ahead with your question.

Thanks so much, guys, for taking the questions. Maybe two if I could. First, Fran, you highlighted a GDP level of revenue growth next year. I think in the past you've talked about a kind of mid- to high-single digit normal earnings growth expectation for next year. Could you just kind of confirm that those two are the same thing? And then second, just I think in Lowell's commentary, he kind of referenced a view that spectrum is not necessarily the be-all, end-all for creating capacity at the margin. In the notes out this morning you noted that 93% of the data traffic is on LTE capacity. I was wondering if you could kind of refresh us as to where or how much of your spectrum portfolio is dedicated to LTE? And how much is still available to be tapped to kind of continue to support that 40% plus growth rate in consumption? Thanks. Lowell C. McAdam - Chairman, President & Chief Executive Officer: Okay, David. Thanks for your question. Let me go first on the spectrum side. And then Fran can cover the first part of your question about growth rates. Today, just to say it, about 50% of our spectrum is dedicated to 4G LTE. We still have some spectrum on 2G. We're refarming our CDMA spectrum as we go forward. And I expect that we've got plenty of headroom here. The point of my comments – and Boston is our good example there – is the farther we push fiber out into the network, the more small cell technology works for us. And the cost trade off that we expected prior to the last auction told us that we would be better off going with the small cells than we would paying the prices that were –…

Thanks, guys.

Tori, next question, please.

Thank you. Next question comes from Phil Cusick of JPMorgan.

Hey, it's Phil. So first of all, can you help us understand the progress on the 5G trials? What are you learning about the cost of deployment? Usable distances and speeds? And then, Fran, you mentioned tablets are slower, but you do expect a rebound once churn falls away. Do these add value? Is it mostly just sort of tacking on and pulling those customers in more tightly? Or do they actually add value economically on their own? Thanks. Lowell C. McAdam - Chairman, President & Chief Executive Officer: Okay. I'll take the first part again on 5G. What we've had so far, Phil, is we've got a big deployment down in Dallas working with Ericsson and Nokia. We've got several in New Jersey and some down in Virginia. We've typically seen speeds above 1 gigabit over, let's just say, 500 yards or less, because of the confined space that we've got available to us. With that sort of speed we've been able to put up six ultra high definition TVs, six virtually reality units, numerous tablets, et cetera. So and those services are only drawing in the 300 megs to 400 megs of throughput. So lots of head room. Now the process we're moving into now is actually going out into a field environment, where we can cover a 200 home development. And see with normal vegetation, with difference in weather patterns where we think these critical parameters are going to go. Theoretically, looks, 1,000 meters or so between cell sites seems to be reasonable. But again we've got to verify that. We're going to go into some rural environments to see whether that propagation changes based on demand. We'll know a lot more as we go along. From a pure cost perspective, again I think it's a little too early to tell. But what I'll tell you is about half of our cost to deploy Fios is in the home today. And the next biggest thing outside the home is the drop. And so our take is that with the router roughly costing the same – and remember we wouldn't have to have an ONT as we think about it today. So as the – when we deploy 4G and densify, that small cell can contain 5G for very little incremental cost. And with the router in the house being probably less than an ONT and router combination today, and losing the wiring in the house and losing the drop, we expect there to be a significant cost reduction. But we'll know a lot more as we finish these trials. And I fully expect that as we wrap these trials up, we'll actually be bringing some analysts and some of media to the field to take a look at these deployments, so that you can judge for yourself. Fran?

Thank you. Francis J. Shammo - Chief Financial Officer & Executive Vice President: And then, Phil, on second part on tablets. So absolutely we view as tablets as adding value. So traditionally you would say, well a tablet that's added to a Wireless account just gives you a minimal amount of access revenue. And that's far less than a smartphone. And all that is true. But if you look at the entire ecosystem that we're developing here, more people who have tablets, we know watch more video on a tablet. And if you think about what Lowell outlined on our whole video strategy, along with go90, AOL, Yahoo coming into the portfolio fold, we're trying to drive more usage into these devices. And we want those users to consume our content, which then ultimately drives advertising. So we're looking at the value of these instruments if you will more from a holistic standpoint. So yes. I mean today it's 11.4% of the base. I still believe that there is a huge growth opportunity here in the base with tablets and where technology is going. And that's going to generate not only access revenue on the Wireless side of the house, but it's also going to generate a lot of, if you will, media co type revenue for the future portfolio of digital advertising.

Great. I understand. Thanks, Fran.

Thank you. Tori, if you can tee up the next question, please.

Thank you. Our next question comes from Jennifer Fritzsche of Wells Fargo. Please go ahead with your question.

Great. Thank you for taking the questions. Two if I may. Just following up on Phil's point. Lowell, you mentioned doing in Boston into other cities. Can I just explore that a little bit? Are you talking in your franchise footprint, your Wireline footprint, or going outside of that? Because I guess the logical next question would be outside of that, how do you work with the incumbents there if you're kind of trying to cannibalize their main business? And then secondly, if you can offer any question – or commentary on FirstNet? If you guys are there? And any thoughts on that? Thanks a lot. Lowell C. McAdam - Chairman, President & Chief Executive Officer: Okay. First on the cities, Jennifer. Well absolutely there's no boundary here on our Wireline footprint. Obviously, we have a stronger position in the Washington to Boston corridor. We can move to market more quickly. But we don't view that as a barrier at all. And in fact we are talking to other cities. And I mentioned San Francisco, because we made a huge deployment with the Super Bowl. And we're going to leverage that in our work with them. But there's no boundary. Now as far as cannibalization, there's an awful lot of dark fiber providers out there. And we've had a lot of discussions with them. And they're very happy to sell. And they've got very good footprints that get deep into some of these networks. As I mentioned, we've obviously just purchased XO, 40 metro fiber rings, which get us into a very strong position. And there's companies out there like XO. So we don't view any issue there. As far as FirstNet, under federal contracting rules we really can't comment about that while there's an RFP in process. So I'm sorry. I can't make any comment there.

Jennifer, thank you. Next question, Tori?

Thank you. Our next question is from Brett Feldman of Goldman Sachs. Please go ahead with your question. Brett Feldman - Goldman Sachs & Co.: Thanks for taking the question. Lowell, early on you started off talking about the importance of network. It's interesting, investors have increasingly been asking whether networks really are sufficiently differentiated versus what we've been accustomed to. And of course some of your competitors are arguing that actually there is not a lot of differentiation anymore and people should be more focused on things like price. So I was hoping we could come back to that. And then just if we think about the evolution of how you've differentiated, it used to be you differentiated on the reliability of voice. More recently it's been the reliability of data and data speeds. Where is the battleground shifting? And how are you going to make sure you continue to be differentiated based on where that's going? Lowell C. McAdam - Chairman, President & Chief Executive Officer: Okay. Brett, thanks. I think since we started with the original network reliability message back in 2000, those that weren't number one have constantly said networks don't matter. And customers have voted that networks do matter. And all you have to do is look at the churn. And I'd argue that if you need to sell your product at half of what Verizon sells theirs, that's proof alone that networks matter, if you have to take that sort of a haircut. I know it's shocking, but occasionally advertisements are out there that aren't completely truthful. But that's the world that we live in. As far as differentiation, as we say around the business, I think we've said this in other – I don't think it's made it to an ad yet, but, "Can you hear me now?" has really moved to, "Can you see me now?" And that's because we've moved away from voice being a channel and an application by itself on these networks to, it just rides the data stream. And so the throughputs, the latency, that's where the battleground shifts. And how we stay ahead is by densifying the 4G LTE network, but then driving very hard to 5G. Because we've seen this time and time again throughout the history of Verizon – and I'd argue throughout the history of Wireless – is if you build it, they'll come. And the more we build, the more speeds that we deliver, the more ubiquitous the network is, the customers just soak up that broadband capacity. Verizon has always been the one that is pushing the envelope here. And we continue to do that. So I hope everyone on the call sees that by aggressively moving to densification and then using that same infrastructure to build out 5G, Verizon is going to stay on the leading edge for the next decade. Brett Feldman - Goldman Sachs & Co.: Thank you.

Tori, next question, please.

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

Hi. Thank you. Two quick questions if I could. Lowell, can you talk about the FCC's Privacy NPRM and what could be significantly stricter rules for ISPs, like Verizon, relative to edge providers like Google or Facebook? Did that impact your thinking about what you could pay for Yahoo and how you monetize Yahoo in any way? And then second, just a more tactical question. Can you talk about the Fios installation backlogs coming out of the work stoppage and what we can expect with some rebound there? Lowell C. McAdam - Chairman, President & Chief Executive Officer: Yeah, good morning, Craig. So on the FCC Privacy NPRM – and I'd also apply this to the set top box side. We're not a big fan of regulation in general. We'd rather let the markets work. But if there's going to be regulation, then we think it ought to be for all the players in the ecosystem. And I know – and I've talked with Tom Wheeler. And I have great respect for what he's doing. He's only got so many tools in his toolbox to help set some of the standards here. But we're encouraging a broader action here that might involve the FTC or others, so that everyone in the ecosystem is treated the same. And I think that's our philosophy on set top box. That's our philosophy on privacy. Did it impact us on Yahoo? No, not particularly. We look at that as a standalone business. Certainly the regulatory environment always enters into your thinking. But we would do Yahoo regardless of however that NPRM turns out. And we think it's going to be a dynamic business for us going forward. So I hope that helps.

Yeah, thank you. Francis J. Shammo - Chief Financial Officer & Executive Vice President: And then, Craig, on the Fios installation backlogs. Yes, obviously coming out of the – when we settled with the representative employees, there was a large backlog. I would tell you as we sit here right now today, that backlog is down to a normal. But I would say that in my prepared remarks I said we would get back to a normal growth in the third quarter. But I'll caveat that comment let's say that, look, during the strike we discontinued old advertising. And it takes about 60 days to 90 days to ramp that back up. So albeit the third quarter will be a more positive quarter for us, it probably won't be as much as a normal third quarter for us. So a little less than norm. And then we feel that we'll be back in stride by fourth quarter. So that kind of lays the land of how we think about Fios backlog and installation going forward.

Thanks, Fran.

Tori, we have time for one last question. If you can place that through.

Thank you. Your last question comes from Tim Horan of Oppenheimer. Please go ahead with your question Timothy Horan - Oppenheimer & Co., Inc. (Broker): Thanks, guys. Fran, between 5G and if you look at platform and solutions, how much could this drive your overall revenue growth in 2018, 2019? Is this enough to drive almost all the GDP-like growth that you're looking for? And just maybe on the platform side, can you talk about what partners really like most about the platform and what else you're looking to do to it to kind of make it unique to attract more content partners? Thanks. Lowell C. McAdam - Chairman, President & Chief Executive Officer: So I'll let Fran take the first part there, Tim. So the second part, I assume you're assuming Yahoo. Right? Timothy Horan - Oppenheimer & Co., Inc. (Broker): Correct, sorry. And AOL, yeah. Lowell C. McAdam - Chairman, President & Chief Executive Officer: So look, I think the items that I mentioned around the sports, finance, and news are really the big items there. If you look at Tim's numbers, he's in the hundreds of millions of users. Yahoo is well over a billion users. So you start putting those numbers together, and there's some significant reach here. I think every content provider – and I think it's fair to say whether you're an advocate for the 300 channel bundle or over-the-top, you realize that this is moving more and more toward digital distribution. And the partnership of AOL and Yahoo gives them the ability to reach those specific customers. If you look at our purchase of Complex, Complex has more visitors per month now than ESPN does in that male millennial. And AwesomenessTV has those same sort of numbers for female millennials. So it gives,…

Okay. That's all the time for questions. But before we end the call, I'd like to turn it back to Lowell. Lowell C. McAdam - Chairman, President & Chief Executive Officer: Okay. Thank you, Mike, and I'd also like to thank Fran for taking us through the results. And all of the analysts, I appreciate your questions. I wish we could have gotten to more, but Mike will be available throughout the day. I know we also have a lot of reporters on the phone, and Jim Gerace and our Public Relations team will be available to answer your questions. Both Fran and I will be out visiting with our large investors over the next several weeks. So we expect to be able to tell our story and answer more questions on a number of fronts here. I realize that it's been a long call today, and we've covered a lot of topics, both operationally and strategically. But given what we said last year about 2016 being a plateau for us on earnings and given the acquisitions that we've completed – obviously Yahoo the most significant now front of us – we thought it was good to give you this sort of an overview and update. Before we end I just want to make sure we have a few points that don't get lost. The team is very focused on delivering on our fundamental operational execution. We continue to be a leader in network quality and customer loyalty and in financial performance. On the strategic front obviously we're aggressively building new businesses with revenue and ecosystems that are expanding the industry and enhancing the revenue profile of the company. Certainly we don't kid ourselves about execution. We've been executing, bringing new businesses into the portfolio since we started this back in 1999. But just as we have in the past, we're determined to lead the next growth surge and create value for our shareholders. And hopefully after today you see that path as clearly as we do. So thank you all for covering Verizon and have a great day.

Thank you, ladies and gentlemen. This does conclude the conference call for today. Thank you for your participation and for using Verizon conference services. You may now disconnect.