Ladies and gentlemen, thank you for standing by. Welcome to the AT&T fourth quarter 2016 Earnings Results Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will be given at that time. [Operator Instructions] I would now like to turn the conference over to our host, Michael Viola, Senior Vice President, Investor Relations. Please go ahead, sir.

Okay. Well, thank you, Cathy, and good afternoon, everyone. Welcome to the fourth quarter conference call. Good to have everybody with us. Joining me on the call today is Randall Stephenson, AT&T's Chairman and CEO; and John Stephens, AT&T's Chief Financial Officer. John's going to cover our operational results along with a 2017 outlook and Randall will follow that with an overall business update and then will follow that with Q&A. As always, our earnings material is available on the Investor Relations page of AT&T website, and that includes our newly redesigned investor briefing which you’ll want to take a look at. You can find them at att.com/investor.relations. I need to call your attention to the Safe Harbor statement on page three, which says that some of our comments today may be forward-looking, subject to risks and uncertainties. Results may differ materially, and additional information is available in AT&T and Time Warner's SEC filings and on the Investor Relations page of each Company's respective websites. We are also in the quiet period for the FCC Spectrum Auction, so we can't address any questions about spectrum today. And I will also turn your attention to page four, which is information regarding the SEC filings specifically the recently filed form S-4. Again that's on slide on four. And now, I'll turn the call over to AT&T's CFO, John Stephens.

Thanks, Mike, and hello everyone, and thanks for being on the call today. Before, I turn over to Randall for a strategic view of our Company, I'd like to provide a brief overview of our fourth quarter and full year operational results that are on slide five. Our teams executed very well in 2016. We grew revenues and on adjusted basis, we expanded operating margins and increased earnings as we had projected. And free cash flow came in at the high end of expectations, even with strong capital investment. On top of that, we made significant progress with our integration of DIRECTV, meeting our cost synergy targets and launching our first over-the-top video service nationwide. For the fourth quarter, consolidated revenues were down slightly due to fewer upgrade sales and some pressure on our legacy services. But customer gains and growth in video and IT-based services mostly offset these declines. At the same time, we continued to see adjusted consolidated margin expansion, even as we invested in customer growth opportunities in mobility, video and Mexico. For the fourth quarter, our adjusted EPS was $0.66 or up nearly 5%. This includes adjustments for amortization, our annual mark-to-market pension plan adjustment, merger, integration related items and a one-time tax gain that was excluded. During the quarter we aligned our depreciation schedules with our updated business cases and engineering studies for certain of our network assets; this lowered depreciation expense on a sequential and year-over-year basis. This impact was offset by investments in strong wireless customer growth, in both U.S. and Mexico, and the development, launch and promotion of DIRECTV NOW. And while we expect those depreciation benefits to continue in 2017, they are expected to be offset by other non-cash items such as reductions in capitalized interest, benefit plan expense and taxes.…

Okay. Thanks, John, appreciated. We have a new President and FCC Chairman, Bill. So, I know everybody is talking about tax and the regulatory reform, and you're going to have a lot of questions for us about that. But before we get to your questions, I do just want to take a brief moment and offer some perspective on how AT&T is now positioned in converging telecom media and technology space. We’ve spent the last few years in a very heavy investment cycle, it’s no secret. We’ve been getting ready for a world where mobile technology and premium video content would intersect. And we've been convinced for a long time that this intersection was inevitable. And when it happened, we wanted to have the foundation laid to make the intersection a very different experience for our customers. And that foundation in our mind begins with a network that’s engineered and designed for the special requirements of video. It has to have deep capacity, it has to have broad distribution. And if you would look at slide 11, you can see that this is exactly the foundation we built. Our high-speed network is engineered and it’s built for video. It's an LTE network that covers nearly 400 million people in the U.S. and Mexico; there is nobody else that’s even close. We're building out fiber to 12.5 million locations. This network is software defined, and that gives us unique scalability at the lowest cost per megabyte around. It's a network with an elegant path to gigabit speeds and 5G. And in terms of capacity, we're really in the unique position here. We've been invested $27 billion in spectrum over the past five years. And as a result, we have the premier spectrum position in the industry, 40 megahertz of fallow spectrum.…

Okay. Cathy, we are ready to take the Q&As. And so, why don’t you queue up the first question?

[Operator Instructions] Our first question will come from John Hodulik with UBS. Please go ahead.

Randall, you brought up two important topics in your prepared remarks, the tax reform and regulatory changes that we are seeing in Washington. Maybe first, from a tax reform standpoint, what's your view on how this unfolds and what it could mean, maybe especially related to guidance for AT&T in 2017 and beyond? And then, obviously, new leadership with the FCC with Ajit Pai, just initial views on what that can mean for telecom regulation in the U.S.? Thanks.

Okay. Thank you, John. I had the opportunity to meet with what was then the President-elect couple of weeks ago, and I got to say I was impressed. I was meeting with the CEO, it was obvious. And the President had a very specific agenda in terms of what he thought was critical, and that was tax reform and regulatory reform, and we spoke at length about each of those. And I would tell you that the man, the President is focused on these. And so, laughed with a degree of optimism that this could actually be pulled off this year. Now, what does that look like? We've seen the President's proposal; we've seen Paul Ryan's proposal, both of them I think trigger the impact that I have been talking about for quite some time. And that is, if we want to get off this 1% to 2% growth plane, there is nothing that will trigger that like tax reform. I mean, everybody knows the numbers. We have the most uncompetitive tax structure in United States, it’s the highest tax rate in the developed world in the United States. And to bring that into competitive levels, and you pick your number what tax rate you think that is, will have a stimulative effect, we’re convinced. In fact, we know at AT&T, if you saw tax rates move to 20% to 25%, we know what we would do; we would step up our investment levels and there are things we would like to accelerate, if we had a more favorable tax environment. So, John, my guess in terms of where this lands is probably no better than yours. But, I do think a lower corporate tax rate is likely, I think it's more than possible, I think it's likely. I think…

Thank you. Our next question is from Phil Cusick with JP Morgan. Go ahead, please.

Can you talk for me about the success of foreign cross selling, broadband and wireless into DIRECTV homes? We haven’t really seen the pick up yet of broadband, the way we would expect it with DIRECTV coming in? And how's that been going into wireless as you discount across those businesses; has it been more existing customers that are tying things together or are you really starting to see a cross-selling effect? Thanks, Randall.

I’ll tee it up, and then John, I'll let you follow up my comments. But, as we told you, coming into the year, it was going to take time to get the cross-selling, just the plumbing and the mechanics in place to be aggressive on cross-selling. And we are at a place now where the last three quarters we have seen multi product sales just continue to escalate. And they are little bit behind our plan, but I would tell you, the last two quarters are starting to catch up to plan. So, cross-selling on each sale is really getting to levels that we’re feeling more and more comfortable with and better about. So, I think it's really good. Early on, you hit the nail on the head; it has been our existing customers that are attaching the services to each other. And so DIRECTV customers, who are attaching unlimited wireless with their DIRECTV bundles, but we are seeing some migration of wireless through the DIRECTV product sets s well. And I think the best place is this is manifesting itself, Phil. We were probably not the most promotional in the industry in the fourth quarter. And we set a record low churn rate in the fourth quarter. And it's getting to a point where we are beginning to be able to attach causing effect to a lot of the integrated solutions and the integrated offerings including unlimited data, data free TV and so forth. So, we’re early in the game, the plumbing is now getting put in place and the billing is getting refined; we’re still not completely there on the plumbing, and we’re investing a lot of money to make that happen. But early indications, we’re feeling pretty good, are starting to take hold.

Yes. The only thing I’d add, Phil, is if you look at the churn characteristics and then really strong performance on the mobility side, we attribute some of that to this video bundle with the wireless property. We have about 8 million customers now on that unlimited video bundle, and we believe that that's providing real cross, if you will, product improvement. Finally, if we look at where we are going with the fiber to the prem on the 4 million homes we are selling into, the vast majority of those high-speed broadband sales are taking multiple products with us. So, that continues to go well, taking not only the broadband but the video and also the wireless. So, that continues to go well. And then lastly, the attach rates that we are having through both, the video and the -- excuse me, the broadband and the video product continue to improve throughout the year. And so, the efforts that Randall talked about and training -- getting the plumbing right and training the call center people and training the tax and so forth is paying off. We remain optimistic about it; we’re going to be cautious and make sure that we prove it out, but it is going well. And as I say, the strongest point might be the $8 million customers who quickly bundled their video and their wireless offering, and you see it quietly frankly in the churn results we have. It's really very good.

If I can follow up, how did the sales of paying DIRECTV NOW customers lineup to either your wireless or fixed businesses?

I think what we will you is that we are still going through all that details and you got to remember the DIRECTV NOW customer sales are much different with regard to the necessity. When you are paying with the credit card online, the information you have with regard to physical location and so forth is different. But, what we are finding is, as we mentioned, they are more urban, they are younger and they are apartment dwellers. And so, they are giving us an opportunity, we believe, to penetrate a market wireless and other products where we don’t -- where we are not as effective as we are in some of the other markets. So, we think it's real opportunity. So far, it is lining up I think as expected in that urban, that multi-dwelling unit, that young marketplace and then a marketplace that, if you will, we have an opportunity to grow share to get to some of the same levels as we have of share in some of the more established markets.

Thank you. Our next question is from David Barden with Bank of America Merrill Lynch. Please go ahead.

I guess, if I could too, the first one for you, Randall, just in terms of Pai’s is pretty clearly stated positions on the open internet order and price regulation, and even things like zero rating. Could you kind of map out a game plan that AT&T would have for taking advantage of that? And what kind of appetite do you see in Silicon Valley in the content community for trying to take advantage of some of the zero rating offerings that AT&T has? And then, second, if I could for you John, on the guide, if you could, maybe unpack the revenue growth outlook a little bit as to what the biggest moving parts are. And if I annualize the depreciation benefit you got quarter-over-quarter, it looks like there is about 1.8 billion of lower depreciation incrementally in 2017 that would otherwise help earnings. I think you said it was going to go away to other non-cash items. If you could kind of lay out what those are would be great. Thanks.

Hi, David. As it relates to our plans, on zero rating under a Pai chairmanship, I’d say that you shouldn't expect that they will change. We were going hard, and we had worked very diligently to put in place a mechanism that makes this capability available to all comers. Anybody who wants to take advantage of zero rating, they can come in and take advantage of the lowest wholesale rate we offer, and they could do the exact same thing. So, we put this in place in a very thoughtful fashion, in a fashion that is consistent with many, many years, in fact decades of precedent in terms of how we implement something like this. And so, we actually were quite confident that zero rating, as we were implementing it, was fine under a Pai chairmanship or anybody else’s chairmanship. Now, the FCC obviously issued a letter the last week of the prior Chairman’s tenure, and the letter was critical of it. But we think the letter is without basis, any legal basis. And so, you should expect to see us go hard. We're having some really good success in the marketplace with this. This is a value proposition that our customers area loving. 200,000 DIRECTV NOW subscribers are on it; they are taking advantage of it; it is a very elegant experience if you’re a customer that you’re watching AT&T content and it's not counting against your data bucket. So, that’s a big deal and it's proving to be very advantageous in the marketplace for our customers. So, you should expect to see us continue that and continue to push aggressively on this. I'll tell you, if you wanted a prospective on 200,000 subscribers and how attractive this was in the marketplace at $35 price point, we launched U-verse back in 2007. It took us a year and a half to get to 200,000 subscribers on U-verse. So that’s the elegance of this platform and the attractiveness of it to our customers. So, we're pretty excited about it.

David, with regard to the kind of giving a little some additional insight into the guidance, I'll go about it this way. On the mobility side, we've seen the penetration of mobile share value plans, unlimited plans and these bundled plans increase dramatically over the last three years. So, we’re substantially through that migration. And we believe that with that, we have this opportunity to not only retain customers and continue to show good subscriber mechanisms results, but also have an opportunity on the revenue side to prove that out. We're not giving specific guidance on individual items. Secondly, with regard to the handset business, we did see a year-over-year slowdown in handset upgrades, even in the fourth quarter, even with the launch of a new device, an iconic new device. So, we are learning about what the customers want. We've given them their choice; they shown up with more BYOD; they chosen to hold their devices longer and pay off their equipment installment plans in full. And that's all been good for us; it's been good for our retention, for our customer accounts, for our churn, but quite frankly it will impact depending upon how popular sales are, how many upgrades we have, the revenues going forward from the equipment sales. I'll point out, this year, we had gross adds that grew year-over-year, we had upgrades that were down significantly year-over-year. And so, we are sharing in the new competitive market, but our customers that are staying with us, because of low churn are choosing to hold devices or bring their own devices to us. On the business side, continue to have good penetration, good success with wireless, Internet of Things, connected devices all the capabilities there. And our outlook is still optimistic about that. The challenges with regard…

Thank you. And we'll go next to Mike McCormack with Jefferies. Please go ahead.

Randall, maybe just a quick comment on the overall competitive landscape in wireless. We saw a lot of different happenings this year, and you guys are obviously doing some bundling, T-Mobile getting aggressive, at least initially that free iPhone deal back in September. Just getting a sense for how would you characterize the industry and how do you think that changes as we look into 2017? And then, maybe just one for John on the economics, as you think about U-verse subscribers moving off the U-verse platform onto DIRECTV proper, what's the sort of economic trade off there?

Hi, Mike. Competitive landscape, it’s really competitive. And in terms of what we think it looks like this coming year, we think it's really competitive this coming year. And it was -- fourth quarter was just a very promotional quarter. All the competitors got very, very promotional, and free devices and buy one get one free type stuff. We were probably less promotional than most and doing that while maintaining what was for us a record low churn rate, we felt really good about. Our intention, as we move forward, is the same as it was the last quarter, and that is we're going to compete with differentiated solutions. And this integrated solutions for us is really, really important. And as we pointed out and as Phil was probing on, we’re starting to get real traction in the marketplace of integrating our products and solutions, and our churn rate goes down so precipitously, when we get more than one product bundled together and particularly, as we begin to do some creative things like DIRECTTV NOW and the TV Everywhere app on DIRECTTV is proving to be incredibly powerful. This thing -- the last numbers I looked at, John Stephens, you can you correct me if you have more recent information. But the volumes were growing like 40% month over month sequentially, and that’s the amount of consumption that people are using on their iPads and their smartphones and streaming video from DIRECTV on their devices. And that’s why the free data TV is so important, and is such an important variable for our customers. And so that is how you should expect we will compete again in 2017, we're getting better and better at putting these packages together for our customers, and the customer adoption rates continue to go up. So, I think the next year is going continue to be very promotional; it's going to be probably, time will tell what happens on pricing, but I think you should expect the promotional activity to continue, we will compete with bundling and integrated solutions.

Mike, on the U-verse versus the DTV platform, I think it’s pretty straight forward. One is we still have some content cost differentiation and some package capabilities that are important, and we can achieve those. Frankly, it frees up the data capacity on the wired network, allows us to then provide broadband speeds that are quicker and quite frankly alleviate some of the CapEx in the back office, so to speak, or back into the network, and that's a positive thing. Third, it eventually lead us to the ability to use one graphic user interface support cost, on product support cost and one standard, if you will, face to the customer and those are all important. The other opportunity though is does give us the opportunity to go to the customer and visit with the customer and make sure we maximize all the products and services we can sell to them including not only the broadband, not only the video, but wireless and others. So, that's how we think about it. We certainly are committed to continuing to provide a quality video product in either case and we are continuing now to, if you will, provide an over-the-top that allows us to do it whether we utilize either a wired or a satellite network. So, we're trying to cover all bases to look at all opportunities.

Mike, I don’t want to bounce around on you but I want to follow up though on the competitive environment because all I spoke of was the consumer side of the market. I want to make sure that we didn’t leave out. The lion share of our wireless business is business side, and we are continuing to grow their very nicely, our wireless business to business customers. And that again, like the consumer side, but we’re much further down the path on integrated solutions in wireless. Because if you think about where this has gone and where we are having our greatest success is our customers, getting them from the mobile device on a secured network VPN connection into the cloud using NetBond and back out without ever touching to public internet. This is proving to be very powerful capability for our business customers. And then, we are having incredible success brining IoT solutions to bear along with this. And we think we’re leading the industry in the Internet of Things capabilities that are integrated in are VPN and in our mobile business together, it's proving to be a really powerful combination for our customers as well. And so, bottom line, the growth of wireless from our B2B side of the house or business customers is continuing to be fairly robust, and it's a terrific business. And that is kind of the big proof point on if you could truly bring integrated solutions to bear, the significance it has in the market, and you compete in the different level, not just on promotions and price.

Thank you. We now have a question from Amir Rozwadowski with Barclays. Please go ahead.

I was wondering if we could touch back on your guidance for 2017, and your guidance calls for adjusted operating margin expansion. How should we think about the trajectory of your wireless business within this context, against a backdrop of what you mentioned will likely be a continued healthy pricing environment for wireless? And then, in terms of your guidance for free cash flow, you are pointing to $18 billion in 2017. Previously, you had suggested that cash flow could reach about $20 billion by 2020 plus. Based on this current trajectory, it seems that that target could be pulled forward excluding Time Warner as well as any tax legislation changes. Is that a fair assumption? And what are the operational puts and takes that could get you there?

Let me take a shot at this. First off, first regarding the margins, as you might expect, we are not going to give individual guidance on margins but I would point out something that I think is straight forward. And that is we have gotten 78 million 4G LTE POPs built in Mexico; we've got a 160 plus markets that we've got distribution, brand, knowledge, sales opportunities, and if you will, effective markets, and we've grow the base of customers to 12 million. So, we expect improvements in Latin America. You guys can see the numbers are clearly just in Mexico particularly, you can see they’re clearly displayed with what we did in Mexico. So that will in and of itself, give us a tailwind to improving margins. That’s the first point. Second point, we clearly have momentum in our wireless business on improving margins. The team has shown that every quarter this year going back to last year. Challenges there are the point when we decide to, as they did in some cases in the fourth quarter, decided invest in growth, and we will continue to do that on a very diligent, thoughtful manner. It was very effective in the fourth quarter, the team still came with great record margins. But I don’t want to specific statement guidance on margins, because we want to make sure the business units have those tools at their disposal, when they are performing at this level, to invest in growth and get good customer. So to summarize and really if you look first at the opportunities to get there, it’s everything the network operation is doing, the fact that year-over-year our, if you will, back office, our network, our ATNO [ph] costs are down. If you see the heavy lifting work, if you see what's going on in the sales teams and the business unit operations and their tremendous performance on management expense, those all give us momentum. You see what's happening in Mexico in a sense that we have now built that platform out significantly and are ready to start operationalize it; that will give you that confidence. I feel really good about that opportunity.

Amir, to John's comment, he’s made it twice, and it bears pairs repeating and maybe emphasizing, and that is there is a lot going on inside this business right now. And by virtue of software defined networking implementation and a lot of the automation that is going on in our network and IT organizations, that big cost structure, the network, the big iron network and all of our IT costs. Year-over-year, they are actually down, and not in consequently, they’re down. This cost curve is actually on the run. And I've never seen this in my -- I’ve been doing this 35 year and I have never seen anything like this. In 2017, we're forecasting the exact same thing and feeling really good about our ability to execute on keeping that cost curve moving down is providing a lot of support in a world of aggressive pricing and so forth to allow us to be competitive in the marketplace. So, that’s a really important variable to take note of.

Amir, with regard to your comments, we are guiding to $18 billion in free cash flow, we feel good about that, it comes from all the activities that the entire team has pushed forward this year, really sharp cash flow management, everything from our supply chain, our working capital up and down, our management teams, our sales guys help us with it, everybody up and down the line, the network -- construction guys, managing their inventories, managing everything in the flow, all of that. So, we feel good, feel confident about getting to that $18 billion level. We're not going to guide past next year, but yes, that march or that drive or that progress towards $20 billion is really occurring, and we feel good about the progress we're making. I don’t know that -- I don’t believe we've given any target of a year to get to any specific level outside of next year. But with that being said, we're expecting the $18 billion range next year and we feel really good about the cash generation opportunities of this business. What Randall just said is just an easy way to give that credibility when the hard costs of this business are going down year-over-year, when the management team is performing at their level, you get momentum, when you get momentum when software network function virtualization up to 34% and have a track now to 75%. And when you see those kinds of things happening, it gives us confidence that we can continue to grow the cash of this business, which is really an underlying support for the overall profitability; it's really the proof of the overall profitability of our business.

Thank you. And our next question is from Simon Flannery with Morgan Stanley. Go ahead, please.

John, I know we've talked a lot about taxes already, but could you just give us a sense of what your cash tax rate is likely to be relative to your book tax rate this year, assuming no changes? And then, Randall, we talked about the economy a couple of times, but you usually give a broader view of what you are hearing from CIOs and CEOs and others in terms of the environment. I thought there were a couple of comments in the business solutions about some pressure in some of the legacy products. Is there any change there or is that sort of business as usual?

So, I'll take a stab with the cash tax question. I'll say it this way, we’re not going to give specific guidance on cash taxes. It's clearly included in our overall cash guidance. What I'll suggest you that the depreciation rules, the bonus depreciation rules, we see a lot of benefit to companies that invest in Latin America as we do, but still in place. And there is no significant large changes in our assumptions. And so, I can't point to anything that I would imply would significantly change -- that I could point for an easy significant change in the year-over-year basis. Specifically, we're talking about a $22 billion CapEx range, which is similar to what we spent last year. And as I think we on an every year basis are very, very diligent about managing our cash from the tax side and there is no reason to expect that to change. With that I'll leave it at that and hand it off to Randall.

On the economy, Simon, we have assumed for 2017 a steady as she goes economic growth rate or GDP growth rate, it's actually a sub 2 is what we have built into our plan, what's built into these numbers that you are looking at here. I would tell you my sentiment I don’t think is unique among the CEO community, and that is that I am optimistic as I look forward, and I'm optimistic that if we get line of sight to real meaningful tax reform, if we get line of sight to -- and it won’t be when it passes, when we get line of sight, we will begin to think differently about areas we are investing in. I don’t think I'm unique in that regard. Conversations I'm having with CEOs, as we get line of sight to this, I think you are going to see people begin to open up the first look and begin to invest at a higher level. And so, once that happens that is -- there is no driver to economic growth like investment. I happen to be a supply side guy, I think the math and the science is with me on that. And as investments ticks up, economic activity ticks up, hiring ticks up; as hiring ticks up, spending ticks up. And so, I'm actually of a mindset that if we get a tax reform, we could exit this year doing something better than what is in this plan. And so, call me optimistic. And if we get tax reform, I do think that there is upside to these economic forecasts. And if we get tax reform, I would suggest that maybe upside to these guidance that we are giving you but it’s wait and see. And I'll also say that it's not an inconsequential attitude, if you will, among the CEO community about the potential in terms of what can happen with regulation. And nobody thinks that regulations should go away. We all believe that the customers still needs protection and safety and all that is so critical. But we've had a regulation that has been just unpredictable; it’s interfering with how you think about designing products; it’s interfering with how you think about entering new markets. And if you really begin to get confident, the regulatory burden is rationalize somewhat, that in and of itself is going to free up investment. And so, I think as you know, GDP and economic growth is much a function of attitude and confidence as anything else. And I would tell you, a lot of people are feeling confident that there is going to be meaningful tax reform that’s going to have its effect, but too early to tell right now. We're kind of -- our guidance is premised on a steady as she goes, but I think there is some potential for upside on the economy, if we get tax reform.

Thank you. Our next question is from Brett Feldman with Goldman Sachs. Please go ahead.

I am actually just going to follow up on that because Randall, you said you would see the opportunity to invest more, if there was tax reform. And it sounds like part of that is simply supporting your customers who would probably have more investment needs and more growth. But are there certain business cases that you guys have been looking at where if there is tax reform, all of a sudden the math changes a lot and I'll just make something up, for example, instead of stopping at 12.5 million fiber homes, you would go much beyond that. I am just trying to think about opportunities that are unique to your business where you might accelerate capital if the reforms go the way you hope they would.

So, I can -- you touched on one, would we go beyond 12.5, I don’t know, but would we accelerate the 12.5, I think we try to look at whether we could bring some of those forward. We're in the process of deploying 40 megahertz of spectrum, are there some things we would do forward some of the wireless build and bring our speeds, our mobile speeds up considerably. And let's assume, and by the way this is unknown, but we were to win the first net bid, we want to go faster on the deployment of first debt with tax reform. I mean there is just a long list of things that the business cases really good, or you could accelerate some of your build requirements and accelerate the business cases on many of these.

And Brett, I’d offer -- this is exactly what happened this year with our fiber to the prem build. The team hit this year's goal and hit this year's CapEx budget, so to speak, prior to year-end, and they came back and said we can keep going and we can get more done efficiently and effectively but you’ve got to give us some more money. And we did just that with bonus depreciation in place this year, it gave us that opportunity to justify the business case and move it ahead. That’s one of the variances, if you will, in our CapEx spending, but it's exactly the situation you're talking about.

With that, I believe that will be the last question. And I appreciate everybody participating in this. I've got to tell you, we're feeling really good about what we have built here. And as we look forward to bringing Time Warner into the fold and doing some very unique things with media and entertainment and content in this foundation of networks, we're feeling really, really positive and excited about bringing that together. So, thank you for your attention, and we will talk to you next time. Thank you very much.

Thanks everybody and on your way home tonight, please remember no text is worth a life. It can wait. Thanks and take care.

Thank you. And ladies and gentlemen, that concludes our conference for today. Thank you for your participation and for using AT&T Executive TeleConference. You may now disconnect.