Good morning, and welcome to Verizon’s Fourth 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. [Operator Instructions] 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. Michael Stefanski, Senior Vice President, Investor Relations.

Thanks Tory. Good morning, and welcome to our fourth quarter earnings conference call. This is Mike Stefanski, and I am here with our Executive Vice President and Chief Financial Officer, Matt Ellis. As a reminder, our earnings release, financial and operating information and the presentation slides, including a supplemental information slide, 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. Information in this presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Discussion of factors that may affect future results is contained in Verizon’s filings with the SEC, which are available on our website. This presentation contains certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the financial materials we have posted 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 Matt goes through our results, I’d like to highlight a few items. For the fourth quarter of 2016 we reported earnings of $1.10 per share and full year earnings of $3.21 per share on a GAAP basis. These reported results include a few non-operational items that I would like to highlight. Our reported fourth quarter earnings include a non-cash pre-tax gain of about $1.6 billion. The largest adjustment was the mark-to-market adjustment of our pension and OPEB liabilities, which was a pretax gain of roughly $1.8 billion. This adjustment which was primarily non-cash was caused by an increase in the discount rate as well as other planned factors. We also incurred pretax expenses of nearly $200 million primarily related to severance costs under our existing separation plan. The net impact of these items after tax approximated $1 billion or $0.24 per share. Excluding the effect of these non-operational items, adjusted earnings per share was $0.86 in the fourth quarter compared to $0.80 a year ago, a decline of 3.4%. For the full year adjusted earnings per share were $3.87 compared with $3.99 in 2015, a decrease of 3%. Recall that our 2015 adjusted EPS included $0.13 of depreciation benefit related to the three wireline properties that we sold to Frontier. With that, I will now turn the call over to Matt.

Thanks Mike. Good morning to everyone on the call, and thank you for joining us today. I look forward to working with our investors and all of you who follow our stock and sharing progress in our strategy to deliver the promise of a digital world. We are in a vibrant and exciting industry. Our leadership position in wireless and fiber networks, as well as our loyal and high-quality customer base, is a reflection of our commitment to continuous improvement by our outstanding employees, which places us in a great position for long-term profitable growth. The continuous changes from technology advances and the competitive environment will provide us new opportunities to evolve and develop innovative solutions to continue to be the key player in this dynamic market. I’m energized by those challenges and the great team we have and I am excited about the coming years. My primary objective is to build on the strong foundation of this business and ensure we are always being responsible stewards of the company by running the businesses we have today as efficiently and effectively as possible, while investing responsibly to deliver long-term growth and shareholder value. Let us now move into an overview of 2016. As expected, 2016 was a transformative year for Verizon. We demonstrated strong financial performance and returned value to our shareholders, while repositioning the business. Our core businesses are executing well in highly competitive markets, and we are on track with our strategic priorities. During 2016, we completed wireline divestitures of three markets, negotiated new contracts with our labor unions, executed successful 5G technical trials, and gained traction in new growth businesses. Operationally in wireless with our network leadership strategy, we added 1.3 million smartphone net adds and maintained industry leading retail phone churn performance of less than 0.9%…

Thank you, Matt. Tory will now ready to take questions.

Thank you. [Operator Instructions] One moment please, we have the first question. Your first question comes from Simon Flannery of Morgan Stanley. Your line is now open, you may ask your question.

Great, thanks very much. Good morning. Matt, maybe we could start with the last point on the guidance. Can you just give us a reconciliation up in new guidance versus the previous GDP type growth and the normal type EPS. What are the changes they are causing that? And on EPS, specifically, can you just help us reconcile what the base number that you’ll be using for as sort of a flat kind of organic number would be for all the adjustments with frontier and the labor dispute, etcetera. Thank you.

Thank you, Simon for the question. Good morning. So yes, let’s start with the outlook we gave this morning. And I’ll start with the revenue. So, as you saw for now, we said we expect to see a consistent with 2016 on an organic basis. And we continue to see the revenue trajectory of the business improve. So, as you saw in the release, we expect that to be fairly consistent on an organic basis. So, this is an improvement over 2016, when revenues decline 2.4% on a comparable basis. So, let’s unpack that for a sec and see how we get to that improvement from the negative 2.4 up to something is more comparable. And obviously, the major driver is wireless, where total revenue is down 2.7% last year and service revenue was down 5.4%. So, if we look into the service revenue component there, that trajectory improve throughout the year. We started in the first quarter of ‘16 down 6.2%, we ended the year in the fourth quarter down 4.9% and the year as a whole average down 5.4 as I said. So, as we expect that trend to continue to get better, we should see a better number year-over-year in wireless service revenue. Equipment revenue should also be higher given the higher device payment take rate which we expect to be similar to what we saw in the fourth quarter which was a 77%. And so, obviously improve pending wireless, it will be the biggest factor year-over-year. And as you look at the other parts of the business, we expect wireline revenue trends to be similar, the 2016. And then Media Cover, we expect that will continue to build off the progress made last year. And then within the IoT businesses obviously included Telematics acquire a 21%…

Okay. So, just to be clear on the EPS. It’s we should take the EPS that you reported for 2016 as the base for ‘17?

That’s a reasonable starting point, yes.

Okay, great. And just one last thing on the optimization. Has that sort of faded at this point or is that still continue at quite a pace. Was that kind of a three or four month effect, are you still seeing a lot of that going on?

Let’s say and that still continue but we saw at a certainly an aggressive pace. Initially, after we launch those plans, so that just means the base moved quicker to those plans that we’d seen in other changes. So, we’re excited we launch product features where of high level of interest to our customers.

Great, thanks, Matt.

Simon, thank you. Tory, next question please.

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

Thanks. Just a follow-up first on Simon’s question. Can you give us explicitly what the revenue number you’re looking at in ‘16 sort of a normal number as well as the earnings number?

Yes, the normal number for 2016 would be the comparable against the down 2.4% when you adjust out for the acquisitions over the course of the couple of years.

So, all right. So, exactly the dollar number that we should be starting with as the baseline to build from.

Yes, I’ll come back to you on that one. As to say, we refer of the down 2.4% year-over-year. It adjust out for the transactions in both 2016 and also the AOL introduction in 2015. So, when you adjust both of those numbers.

Right. And I’m just -- I’m sorry, go ahead Mike?

No, I just going to say we’ll get to you that exact number because it is both taking out Frontier for the first quarter.

Exactly.

As well as we do make an adjustment because we didn’t have a full-year of AOL. So, that’s how we get to the negative 2.4%. But effectively what we’re saying is that organically that plus not including any of the growth for new businesses, that would be the consistent number, but we’ll get you that exact number.

Okay. And then just to make sure, when you talk about better trends and it sounds like you’re looking for stability. That revenue number you’re looking for dollars of stability year-over-year not stable down tick in percentages. Correct? Now down 2%.

Correct. Consistent on a dollar basis year-over-year and we get that through seeing improvements in the trend on the service revenue trajectory, the equipment revenue trajectory. So, in total across wireless and then also the newer businesses whether it be Media Curve or across the Internet of Things businesses, we continue it to expect to see those the revenue from those businesses improve in 2017.

Okay, that makes sense. And then on earnings is it 386 that we’re using as the baseline from 2016 to jump off into ‘17 or is that a different number?

That’s I’d go off with 387 that we had on an adjusted basis, adjusting off for the mouth to market another items.

387 got it okay. And then if I just add one more new one, you talked about the gap tax 34-36 how should we think about cash taxes in 2017 under the current legislation?

Yes, we would expect cash taxes to converge to all the effective tax rate during 2017.

So higher cash tax rate in 2017 than 2016?

Yes, the cash tax is just purely on income obviously, our cash taxes for 2016 did include $3.2 billion of taxes related to the frontier transaction, we would expect to have cash taxes in ‘17 related to the disposal of the data centers, when that occurs at a lower level, but on the organic tax on earnings we would expect that the cash taxes to be closer to the ETR during the course of ‘17.

Okay, and do you have any initial thought on what the different plans of tax changes could be, anything you can help us as we model out the different impacts from border adjustments and things like that?

Yes, so as we look at tax, we certainly, we’ll be certainly, look it’s a little too soon to tell, we certainly are supportive to changes in the tax legislation, we believe that we need to get to a more competitive tax environment and we look forward to working with congress and the new administration as Trump put new tax rate forward. Certainly a reduction rate would be beneficial, 100% expansion of CapEx would be beneficial initially, but the plans being discussed also include items such as removal of the interest expense deduction, and then as you mentioned, we’re trying to understand exactly how border adjustable as it may or may not work, so certainly believe that tax reform would be a benefit to us, whichever year first it applies to whether applies to ‘17 or whether it initially apply to ‘18. We definitely seeing it being a benefit to the cash taxes we pay, but given the uncertainty on the specifics of the plan, it’s a little too soon to say exactly how much that could be.

Can you give us an idea of within your CapEx and OpEx what other dollar number or percent comes from overseas and then I will stop?

Yes, I don’t think we’ve disclosed that number previously, so we’d have to go back and look that back, we’re not going to be disclosing that at this time.

Thanks very much.

Phil, there is a reconciliation of the number of revenue that we’re using in our financials that we released this morning on our website, but the number is $121.8 billion. So 121.8 would be the base for the revenue as we discussed.

Thanks Mike.

Tory, if you could, next question.

Your next question is from John Hodulik of UBS. Please go ahead with your question.

Great, thanks. Another follow up on the guidance, Matt obviously there is a lot of moving parts, but with the revenue trends and EPS trends sort of mirroring each other seems to suggest a route to roughly sort of flourish margin, but you’re leading the year with real strength in wire line profitability. So first of all if you can talk about what’s driving that and next is that to continue that should we, that the margins on the wireless side, but on the ‘17, should be sort of flat to maybe even down and maybe talk a little bit about that trend specially given the help that you should see from the removal of subsidies in the year? Thanks.

Yes, thanks John for your question, so starting off with wire line, certainly wire line had a good result in the fourth quarter, I would tell you as you say it in our prepared remarks that we would expect wire line margins for 2017 in the year as a hold to be higher than they were in 2016 and you’ll see some seasonal fluctuations in it, as we typically do, so I would tell you be reasonable to expect wire line margins with the year as a whole to be in the low 20’s compared to the 19% that we saw for 2016. So we see a lot of improvements going through the business, there obviously we’re going to have the full year benefit of the new labor contract through there and we continue to manage costs in that business very closely in-line with the revenue trajectories, we continue to see kind of similar revenue to direct these for the enterprise and wholesale businesses and are excited about the files business which was up last year 4.6% on the full year basis, for files revenues and we continue to have more open for sale properties there, the great opportunities as we head into ‘17. On overall margins, when you talk about the wireless margins, this always comes back to where the service revenue trajectory is going to be. And so we certainly see improvements in the service revenue year-over-year, but we do go into the year off that 4.9% jump off point from the fourth quarter and we expect to see that continue to improve as we head into ‘17, but as I said we now see the point that which we get back to year-over-year positive number pushing out into ‘18. And so, I would expect us to have continued to a very strong margins in the wireless business but is going to be half of that service revenue trajectory continuing to be slightly negative though in an improving direction.

Did you think on a net basis you can keep those wires margins flattish?

We will continue to aim to produce strong margin in that business and certainly believe that we have the ability to maintain a premium pricing in the market and we will, that will certainly be our aim as we go through the year.

Great. Thank Mike.

All right, thanks John. 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.

Hey guys thanks for taking the questions. I guess two if I could, first Matt, lot of focus on the guidance taking maybe $2 billion to $3 billion of revenue out of that number. It feels like something has changed on the ground competitively that’s making you have to really get more aggressive on the EIP side and then the promotional side. Do you feel like Verizon needs to go to market more aggressively with an unlimited product like each of your competitors have and as kind of leading with these days and if you could kind of talk about kind of your view we all knew Fran’s view on the economics of that but I look to kind of hear what your perspective is on the necessity that you do that and your ability to do that if you chose to? And then the second thing just now with G price elevation to the chair I think we have greater clarity on the likelihood that we are going to be getting rid of the privacy rules specifically in the telecom also the opportunity to maybe more aggressively monetize broadband. Could you talk a little bit about some of the opportunities and actions that you might be taking right now to prefer kind of the next regulatory wave? Thanks.

Yes. Thank you, David. So I will start with your first question. So as we look at our market position it's based off the product offering and we have the best network performance out there which is a major criteria in the user experience. Despite the claims of others third parties studies continues to demonstrate the superiority of our network and as network leadership position, I will say allows us to maintain a premium price round service in the marketplace. So as I look at our service revenues plus installment billing so the total amount we are actually billing a customer each month I think increased 2% in 2016. So that demonstrates how often it continue to be competitive and resonate in the marketplace. We continue to constantly monitor the competitive market. We look for opportunities to compete more effectively. And as an example of that we have recently launched new single line pricing which we believe was an under-penetrated market for us. So our pricing is disciplined to provide a return for our premium service. This number of different offers out there, we saw some folks go to unlimited. We saw some bundling of content and so on in the marketplace. We continue to assess where we are in there and so I will say I think our result we had 167,000 net phone nets in the quarter so I believe our positioning continues to be competitive. We constantly look as well out there. There is unlimited is one of the things some of our competition has at this point in time. There is not something we feel the need to do but I will say we continually monitor the market and we will see where we are heading in the future. In terms of your second question, so look there is a lot of changes going on in DC right now. Obviously yesterday we saw the announcement that as you mentioned G pie and so that may have a number of impacts across the regulatory space but I think it's just too soon to tell exactly where we are going to be. We look forward to working with the regulators for the CFCC or others. The other thing I would mention though you think about that we make investments for many years given the nature of the business that we are in. and our investment are focused on just who happens to be in office today. We make an investments so that for 10 plus years and I think our records stands for itself irrespective whoever the administration is run by and the regulatory regime they were effective and that will be continued to be how we focus on our investment. So I will say we look forward to working with the new administration and the new leadership and the FCC and we expect to continue to be competitive in whatever we environment we are operating.

David, thank you. Tory, if we can move to next question.

Next question comes from Craig Moffett of MoffettNathanson, please go ahead with your question.

Thank you. Hi. Good morning guys. So I wanted to sort of step back to a bigger picture question if I could. Matt given the comments that you made in the press release about getting the balance sheet back to the pre-Vodafone deal levels, how much room does that leave you before 2018 and 2019 for strategic transaction. There has been a lot of speculation about the types of things that you might do in this new environment whether it's content, or wire-line or spectrum or none of the above. I wonder if you can just sort of give us some thoughts on how much flexibility you have and how you think about the various factors of opportunity for you?

Yes. Thanks Craig. So as you mentioned that we have been on this path to getting back to the pre-Vodafone credit metrics by 2018-19 and that's part of our overall camp allocation, we have been able to be consistent with investing in our networks on a continuous basis, making that improvement in the balance sheet and also returning value to shareholders and since the Vodafone transaction we had a number of activities that we have done whether that be AOL some of the other acquisitions in IOT such as Fleetmatics, we have also divested of business whether it would be the tower transaction as an example. And so we have been able to continually make strategic transactions while staying consistent to each part of that cap allocation policy. So that would be our intent to continue to do so. And as we head into 2017 we believe that we will out of the two, while continue to maintain that cap allocation policy that allows us to deliver on all three of those key areas.

And Matt can you comment on how you think about the various options out there whether it's content or wire-line or spectrum or something else?

Yes. So obviously look I am not going to comment on any specific combinations that have been rumored over the years and certainly I am - we are not able to talk specifically about spectrum right now given that we are in the incentive auctions. So we will continue to look for to opportunities to expand and grow the business. Although we’re not completely aligned that we will be disciplined in any investment activity. We evaluate all options whether that's build by our partner for our strategic positioning and the key criteria is creating long term value for the business and shareholders. So we will continue to look for the right things to do to position the business to be successful in the future and that's we do that on an everyday basis and we will continue to do so. And I think we have successfully done that over the past few years.

Thanks Matt.

Our next question please Tory.

Thank you. Our next question comes from Mike Rollins of Citigroup, please go ahead with your question.

Hi, thanks and good morning. Two if I could. First if you could talk about how the 5G business case is progressing from the financial perspective and Matt what are the key metrics that you are looking for from the key that's working on business case to facilitate a green light of commercial deployment? Is there certain cost metrics like per home path or certain other metrics that you are focused on and then just if you could follow up on a clarification? So I think you mentioned that in terms of thinking about flat organic revenue for 2017 you took the revenue for 2016’s tracked divestiture of market to frontier and you subtracted AOL. Can you help us think through what the backs have been on for the 2017 with the number of pending and completed acquisitions that you announced and are still in progress? Thanks.

Yes. Thanks Mike so let me start up with 5G, so look we had a good progress in 2016 as we discussed throughout the year. We had a number of technical trials and labs go trials which we completed and so we have now moved on to the next phase of that which is some of these commercial scale pilots that are getting on the way right now in about ten different locations around the country. So we are very excited about the opportunities of 5G brings. And we will see how those trials go and we look forward to sharing progress with you on those as we move forward throughout the year. You asked around key metrics and I think it's going to be the same as any major investment we could be looking at is the combination of what's the cost of rollout 5G, we get into questions about how the distance from the node, how many homes can you cover many particular node, what speeds can we get, what’s the cost of putting that there etcetera. Etcetera. XO obviously brings something to that but having additional five to the basis we think about rolling out the infrastructure needed for the 5G and but it's the same as any investment Mike we are going to look at the revenue opportunity. We think we can get based off the results of the tests around the way right now. And compare that with the cost. And if it provides a great return for shareholders we will certainly move ahead with launching commercially and if it will be the same as any other investment. We will look at the same way. In terms of your second question on 2016 you are right. The base line is reducing the frontier divestiture and also AOL because Sony had partially part of the year in 2015. So then if you think about total revenue for 2017 it would include obviously the full year of AOL this year. We expect XO to kick in later this quarter. We expect the IOT business as you are going to have the full year of Fleetmatics in Telogis and the other IOT acquisitions and then assuming the Yahoo transaction closes we will have the revenue from there too. So when you think about building on the number that Mike mentioned the 121 billion you got all those things to layer on top of that to get to the expectation for the full year. Obviously it relates to pending transactions. It will be contingent on the timing of those as well. But hopefully that answers your questions on that.

Thanks very much.

Okay. Tory next question please.

Thank you. Next question comes from Brett Feldman of Goldman Sachs. Please go ahead with your question.

Thanks for taking the question. If I look at your CapEx guidance for the full year, essentially seems you are guiding to flat to plus or minus a reasonable range. So maybe you can maybe unpack that a little bit and just thinking about your network strategy and your product strategy what areas are you accelerating capital investment inside the business and maybe where do you feel like you have done a good job building our your network where it needs to be? Thanks.

Yes. Thanks Brett, so as you think about the CapEx as you say the number is reasonable consistent year after year and that's something you have seen for a number of years but as you say within that it changes overtime. And so within LTE our spending has continued to transition from coverage to indentifying the network and that continues to evolve as we leverage new technologies around radio and hardware and software and then reforming our spectrum within 4G and identifying with small cells. So you will continue to see that densification of the 4G network and that includes how we put fiber out there which obviously is needed for the 4G network but also it's something we think about for pre-positioning for 5G so you will continue to see that - you will continue to see us launch additional pods of LTE advances as we go through that. We had the initial launch that last year. We expect additional features to come through in the close of this year. And we will continue to expand our architecture. So within wireless you should expect to see the spending continue to move to make the network more efficient on a cost per gig basis going forward. And as we have mentioned fiber is a consistent part of our business. So that's something you should expect to see us continuing. We have talked about what we are doing in Boston. You should continue to see us do that. Some of the other businesses aren't as we said previously they are not as capital intensive as our network business. So you should expect to see the CapEx will continue to be focused on the network side of the business as we go into 2017.

And just a quick question as a follow up around where you are investing you talked about the pre-commercial 5G commercial trials you’re running. Are these predominately within your wire-line footprint or do you actually think that when you are ready to go commercial you have a business case to go in whatever market so quick they have the best demographics regardless of whether you are an incumbent wire-line provider or not.

Yes. It's not just in the wire-line footprint it's across the country and we certainly see the opportunity to deploy 5G solutions across the country as well once we get comfortable that they are ready to be launched out on a commercial basis.

So you could do one fiber as in market across the country not just in Boston?

Yes that's certainly we are looking at how we would support the 5G network across the country both in and outside the ILX footprint.

All right. Thank you.

Tory next question please.

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

Hey guys, thanks. Matt, maybe just a clarification on your comments regarding service revenue turning positive. Just give us a sense obviously optimization continues but is that predicated stable pricing environment in your view. Secondly, on the retention side it looks like you have got about 21% Delta between those that are on sub-side plans versus those making device payments. Is that fair and as I think about that how much of that is bring your own devices versus off-contract versus your own retention efforts? And then if you don't mind a final one based on our math it looks like you still have about 13.1ish million feature phones out there so non-smart phones what’s the strategy to try to move those over to smart phones or try to retain them to prevent headwinds on handset as we look in the 2017?

Yes. Thanks Mike, I will start with the last one, look we certainly like it when customers migrate from feature phones to an LTE smart phone but we are also very happy for those customers that just want a feature phone. They are not looking for the additional functionality but they want to be connected to a great network. We are very happy to continue to have those as customers and we look forward to continue to have offerings that meet their needs as well. In terms of service revenue and I think you talked about the gap between the 46% of our customers who have a device payment plan in the 67% of our base who are now on subsidize pricing. That's a factor of those customers come out they are two year service contracts and they move over to that pricing without necessarily upgrading a handset and we expect that will continue. That delta between those two numbers will be those customers who have either come out of two year subsidy and moved over to the un-subsidized pricing. They could be we now have customers who took out a device payment plan over two years ago who have completed those payments and are now no longer making a device payment every month and as you say BYOD continues to be part of that base too. So you should expect they will continue to be delta between those two numbers because not everyone on unsubsidized pricing is going to have a current device plan. So we see that continuing as we go into the year and part of that is certainly migrating over to device payment.

Just a clarification, I guess I am trying to get to how much of that I am sorry to interrupt but the actual percentage that is it you going into actively retain customers that are still on contract to reduce their price point without losing a customer. Is there some component to that as well?

Yes, the vast majority of our two year customers who have gone on to the unsubsidized prices but they've come to the end of that. I mean, we typically its customer has to get through their two year price plan if they're on that two year service contract before they were then being able to come to the unsubsidized pricing. When you look at our churn, I think what you're trying to get to is that phone shown it was below 0.9%. And that is not because we're bringing customers on to that pricing before they've moved their thing. Their continued strong churn represents the value out basis and the service they get and the high quality of the network what they have when they're authorizing customer. So, it's only when they come out of their two year contract do they move over to -- have the opportunity to move over to unsubsidized pricing.

Okay. Thanks for the clarification. And just on the service revenue expectations, is that stable pricing is the expectation there or expecting this sort of promotions if we look at 2017?

Yes. We expect to continue to compete in the marketplace as throughout 2016, we had various promotions throughout the year. I'd expect us to continue to different times of the year, have different promotions out there. But I expect base of that, we will compete effectively in the marketplace.

Great. Thank you, Matt.

Thanks, Mike. Tory, we have time for one more question. So, last question please.

Thank you. Your last question comes from Amir Rozwadowski of Barclays. Please go ahead with your question.

Thanks very much and good morning. Just a quick follow-up on Brett's questions on fiber. Specifically, how should we think about your future fiber needs? It seems like in some contacts you're willing to shed certain assets but have also acquired others and are also working with third party providers. In some cases over building in areas such as Boston. I'm trying to understand is that based in your actions, I'd seen as not all fiber assets are created equal. And so, how do you get to the point we have the right fixed assets in the right locations to support your network vision. And a just kind of brief follow-up.

Yes. So, good morning Amir. Thank you, for that. Yes, fiber is going to be a critical asset for us. It's a critical asset today and it will certainly continue to be selling as we go into the future. So, one thing it allows us to do and is certainly is within our footprint is it replaces the core copper networks that have served us well over the year. But from a capability standpoint, or now it's just a maintenance standpoint, it certainly makes a lot of sense for us to continue to replace copper with fiber. And then as you say fiber is going to be critical for us as we densify 40 and think about 5G, that it explains why the XO transaction was interesting to us getting those metro rings in 45 of the top 50 markets. The other thing you seen us doing in Boston was really look at this one fiber approach which was built in a network in a way that it provides a common fiber infrastructure to serve a number of different needs, whether that be consumers in home or in out of home and then obviously our small medium and enterprise customers too. So, you should continue to see us deploy fiber. How we deploy that fiber? Can differ from location to location. We certainly look where it makes sense for us to own the fiber, but if there's way for us to partner with other people, they can build the fiber on our half, we certainly do that as well. So, it a location-by-location, case-by-case basis, we look at the economics and we decide the best way to get to the fiber assets. And we need, and we think about that if not justify brands, so we need for what we were doing today, but as we think about the network going out in to the future. So, you should continue to see us make investments in fiber as we go forward and position the network to service the business well into the future.

Great. And just a quick follow-up on your 2017 outlook. What type of factors do you take into account on any potential changes for the comparative landscape? In particular, Comcast has highlighted that they expect to launch their WiFi and VNO strategy in the back half of the year, giving you focus who're partnered there, was wondering what you're factoring in with respect to that partnership in terms of size and impact of both your financials and potentially the competitive landscape.

Yes, so as I think about, look we know they said they're going to they expect to launch that later in the year. We'll have to wait to see what is. As we said previously, look, we've been in the wholesale business for many years. We're happy to be in that business and we'd sign that agreement again if the opportunity came up. But look we don’t expect that to necessarily have a major impact during the course of 2017. They got a lot of work to do there and I'll let them talk about this strategy on that. But as I thi8nk about the competitive environment as a whole, I would expect to continue to evolve in ways that some of which we may guess, others which we'll have to wait and see how they play out, but what I would remind you is that we've seen many different competitive environments over the past 15 20 years in wireless and I think the one constant is being is the way that we've always competed effectively, whatever the environments and I highly expect us to do the same thing in 2017.

Great. Thank you for your questions. Tory, before we end the call, I'd like to turn the call back to Matt.

Thanks, Mike. I'd like to close this session with a few key points. In 2016, we delivered solid results in the competitive environment. We had a quality customers will lead in the industry and network performance and customer retention. We had solid financial results generating cash flow and shareholder return. We are confident in our strategy and priorities led by investing in our networks, creating platforms to further monetize daily usage, maintaining a discipline capital allocation model and returning value to our shareholders. We are positioning the company for longtime growth. A key foundational element for our vision of the future is be the trusted network provider. Our strong network assets will enable us to be a centerpiece of this new connected world of people and things and give us the opportunity to participate globally and at advancing digital ecosystems. We look forward to the opportunities ahead of us to create value for our customers and shareholders. Thank you for your - time today.

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.