Ladies and gentlemen, thank you for standing by. Welcome to AT&T's Third Quarter 2018 Earnings 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. I would now like to turn the conference over to our host, Mr. Michael Viola, Senior Vice President, Investor Relations. Please go ahead, sir. Michael J. Viola - AT&T, Inc.: Okay. Thanks, John. Good morning, everyone, and welcome to the Third Quarter Conference Call. As John had mentioned, I'm Mike Viola. I'm Head of Investor Relations here at AT&T. Joining me on the call today is, first, Randall Stephenson, AT&T's Chairman and CEO; John Stephens, AT&T's Chief Financial Officer; John Donovan, Chief Executive Officer of AT&T Communications; and John Stankey, the CEO of WarnerMedia. Randall is going to provide some opening comments, turn it over to John Stephens, who is going to cover the consolidated segment results. Also he'll provide an update on our deleveraging plans. J.D. will give a business update for the Communications segment, including comments on FirstNet and 5G. And John Stankey is going to join us for the Q&A part of the call. I'd also like to just update quickly on our upcoming analyst event. We now plan to do a video webcast, a single sell-side, buy-side meeting. It's going to be here in New York in the late afternoon of November 29. And so more details to that will come in the next few days. Finally, I want to call your attention to our Safe Harbor statement before we begin. It says that some of the comments today may be forward-looking. As such, they're subject to risk and uncertainty. Results may differ materially. And additional information is available on the Investor Relations website. I also…

Thank you. And first, we'll go to the line of Simon Flannery with Morgan Stanley. Please go ahead. Simon Flannery - Morgan Stanley & Co. LLC: Thank you very much. Good morning. So, Randall, I think recently you talked about the free cash flow as part of the deleveraging, getting to a $25 billion floor, the value exiting 2018. I wonder if you could just elaborate on what's driving that? And how you see that evolving over the course of 2019? Thanks. Randall L. Stephenson - AT&T, Inc.: Sure. Hi, Simon. Thanks. Simon Flannery - Morgan Stanley & Co. LLC: Morning. Randall L. Stephenson - AT&T, Inc.: Yeah, what I said through I think it was last month was that we had told The Street, we had told everybody we would do $21 billion-plus this year in free cash flow. And that includes $2 billion of merger costs associated with the Time Warner deal. And so the $21 billion, plus the $2 billion, which doesn't recur next year, puts you at $23 billion. And that all – the $21 billion also only included a couple billion, $2 billion of Time Warner cash flow. So you put Time Warner in for a full year, you get to $25 billion exiting this year as a run rate. Now if you just kind of want to test that number, if you look at the first quarter we just posted here, in terms of what our free cash flow was for this quarter at $6.5 billion, annualize that, and you're at a $26 billion-plus kind of run rate number. And so just to kind of help you simplistically understand how you get to a $25 billion number, that's kind of the path that we're on right now. And that assumes no growth in our…

And we'll go to John Hodulik with UBS. Please go ahead.

Okay. Thanks. Maybe for Randall, a broader question. You guys have voiced a lot of confidence in the financial performance, which we just heard, and the strategic vision of the company. But the market's clearly not giving you credit for a lot of these things. As you talk to investors, what do you think it is that the market's missing? Is it what you just went over there, the cash flow profile of the company versus the debt? Or if you could just sort of – what do you think is missing from the equation, given the performance of the stock? Randall L. Stephenson - AT&T, Inc.: I think in terms of missing from the equation, I feel like we're tracking on plan right now, John. As I pointed out earlier, the debt is very manageable. I'm very comfortable with the debt, the deleveraging, and getting down to 2.5 times by end of year next year. I think the cash flow characteristics of the business today already have us there. And that assumes that we have no further growth in 2019 in terms of our cash and our EBITDA. Cash flow is growing at a 14% year-over-year pace. And so I think what we're going to have to just demonstrate to the market is continued performance in the Mobility side of the business. I think we have very good momentum. As I mentioned on the prepaid side, Cricket is just defining that category and doing incredibly well. And that's an incredibly profitable customer base that we're building there and doing very well. The postpaid is doing well. ARPUs are growing in Mobility. And EBITDA looks really good. And so if we can get this, the Entertainment Group, which is our broadband and our TV business, to stability, and we get Mexico to EBITDA neutral, to even EBITDA growth next year, then you have an equation that looks like really good cash flow growth for the next three, four years. And so I think what we have to do is continue executing and posting quarters. I actually am pleased with this quarter. And we continue to do this, I think the markets will reflect that.

And is EBITDA growth a part of that story? I mean, just it declined about 2.2% this quarter. Last quarter it was down about 5%, which is a nice trajectory to be on. Do you expect that trajectory to continue? Randall L. Stephenson - AT&T, Inc.: Yeah, look, I mean, the EBITDA is driven by our Mobility business. And so can we get the Mobility business to good solid EBITDA growth? And I'll let John Donovan provide more color on that. But I think we have a high degree of confidence that we can get Mobility to EBITDA growth. And so, yeah, to answer your question, we need to demonstrate sustained EBITDA growth on the company. WarnerMedia, I mean you're seeing EBITDA growth today. Mobility, you're seeing us at EBITDA growth. Can we extend the Mobility EBITDA growth and get Entertainment Group to flat? Then there's your recipe for EBITDA growth. John, would you like to add any color on the Entertainment Group? John M. Donovan - AT&T, Inc.: I'd love to. So if you look at the components of the Entertainment Group, what I think gets lost sometimes is it's a broadband-led world out there right now. If you look at the broadband portfolio, our fiber footprint build has given us a lot of inventory to sell into. If you look at the industry's rate of decline on linear video, you find that we're doing dramatically better than the industry where we have fiber footprint. We're doing dramatically better than the industry in churn and acquisition where we have 25 meg and greater. Where our stress is is in the linear, in areas where we're priced with just the linear video. And we're going to have to take actions to continue to improve how we're doing there. But with…

Okay. Thanks for the color, guys. Michael J. Viola - AT&T, Inc.: Thanks. Just can we take the next question, please?

We'll go to Phil Cusick with JPMorgan. Please go ahead.

Thanks, guys. John Donovan, if I could follow-up on what you just said. Can you dig into more on the trends in linear and DIRECTV NOW this quarter? I think that we and other people were a little surprised by the numbers, given the commentary about resiliency in September in DIRECTV NOW, but you said it was better than expected. Was the sequential slowdown a gross add or mostly a churn challenge? Thanks. John M. Donovan - AT&T, Inc.: Well, if you look within the portfolio of the base that we've got, a lot of you folks have done your analytics, done surveying, and it's shown that DIRECTV NOW product, generally, we have tremendous engagement. But within DIRECTV NOW, it's a tale of two cities. It's folks that are just jumping from promotion to promotion and really spinning in the industry between us, Hulu Live, YouTube TV. And so what we're learning, where and who those customers are, what people are viewing. And so we actually expected a far worse outcome than we had. Its resiliency we – when we raised pricing and took promotions off – we were not at all promotional or very, very limited promotions of that product overall. And then we started to shift our mix. So what we're after is customers that are highly engaged, that find the product compelling and use it a lot. That will lend itself towards being able to be supplemented by an ad model over time. And so what we wanted is to secure that base. And that's what we're going to focus on. So going forward, our own team forecasts the growth of the OTT category lower than I think a lot of the analyst community does. Because after a first big slug with the introduction of fulsome packages, we're starting to learn now the customer base that's using this. And so if you look at linear TV, it's really going to be about broadband and how do we use broadband to lead ourselves into premium TV. And then get an OTT package that's well-suited to the people that are going to be the heavily engaged users. That customer base that we burned off, if you will, in the third quarter, and that we may or may not going forward chase in any given quarter, is always available. It's very promotionally-sensitive and price-sensitive, so you can always go get that business when you find the economics to do it so – or advantageous as a result of, for instance, what you can do on ad-supported models. And so we learned a lot about it. We've streamlined the content packages. We've changed the mix of customers we're taking in with a bias towards getting people that are heavily engaged, that are buying on the higher end of those OTT offers. Michael J. Viola - AT&T, Inc.: Thanks, Phil. Go ahead, Phil.

I was going to say, can I follow up once more on the question earlier? John, did you just say to expect stability in video EBITDA next year, as well as growth in broadband? So are you guiding us now to growing Entertainment EBITDA? John M. Donovan - AT&T, Inc.: No. What we're saying is we expect to see stability in the Entertainment Group as total, fueled in part by our solid performance in broadband as we get the 14 million fiber-to-the-prem customers available to sell into. So the broadband results, which we are optimistic about, will add to our ability to get to overall stability in the Entertainment Group.

Great. Thank you. Michael J. Viola - AT&T, Inc.: Next question.

We'll go to Amy Yong with Macquarie Research. Please go ahead. Amy Yong - Macquarie Capital (USA), Inc.: Thank you and good morning. Maybe one on advertising. Can you talk a little bit more about Xandr? I think a lot of us have seen cable's JV (48:31) in the past. How are you thinking about this differently? What are you doing differently? And I think you recently signed up Frontier and Altice. What's been the receptiveness with those two in terms of the ad community? And then maybe as the last part of the question, how does this then shape your view on Entertainment EBITDA? Thanks. John M. Donovan - AT&T, Inc.: So this is John. Let me try to take a stab at it and ask Randall to jump in. First of all, when we looked at our opportunities with regard to the data analytics and the information that we had available, as well as the advertising opportunity, the first thing was to go out and get a collection of talent that has been established at Xandr that can really give us different insights, different capabilities, and we've done that. The second piece was then to get the – and so and those included data analytics capabilities that are specifically talented towards or gifted towards the advertising space. Secondly, you need to get the technology platform and the ability to continue to develop data driven products. AppNexus was key to that, not only with their supply side and demand side platforms, but quite frankly, with their core talent, which is their engineering group. That brings us engineers that have this capability and have dealt with this for a long time, a great experience there. When you combine those assets then with the tremendous data we have from a 25…

We'll go to David Barden with Bank of America Merrill Lynch. Please go ahead.

Hey, guys. Good morning. Thanks for taking the questions. I guess the first one for John Stephens on deleveraging. So, John, could you – two things I guess, two sub-parts. Could you elaborate more specifically on kind of what assets specifically are of a large enough magnitude to be relevant to the deleveraging conversation? And also does the deleveraging target have an asterisk next to it relevant to spectrum spending? And ignoring the millimeter wave, things like CBRS and C-Band. Or are you guys comfortable with where you are spectrum-wise and you can focus exclusively on the deleveraging? And then just a housekeeping item, kind of following up on Amy's question on advertising. I think advertising is kind of showing up in a lot of different places. It's being double counted in some other places. It's being eliminated in third places. So could you kind of just run through, John Stephens again, kind of where we're seeing advertising show up? And what's being reported where? Thanks so much. John J. Stephens - AT&T, Inc.: Great. So let me take the last one first. Advertising is showing up at about a $400 million run rate. And just pure advertising in the AdWorks, the advertising segment, and that is from ads that are sold on the legacy TV, linear TV business, or in DIRECTV. So the revenue is showing up in advertising segment as well as about just under $6 a month on the customer base in the Entertainment Group. And then that is eliminated through company eliminations at the corporate segment. Secondly, there's about $40 (56:12) worth of revenue this quarter from AppNexus. That's reported in the advertising business segment and only there. Third, there is about – we run about $1 billion, or maybe it's a little bit less than that, this quarter in advertising in Turner, in WarnerMedia. That's reported there. That is not reported in the advertising segment because Turner manages that, WarnerMedia manages that internally. And then what we do is we provide a supplement to show you a full picture of the advertising capabilities or revenue streams for the total of AT&T. And that supplemental adds those two numbers together and that's included in our disclosure sheet. So that's just an effort to make sure we give you full transparency with regard to what our total advertising is. So that's how it's recorded. That's how it's reported and it gives you comparable information for DIRECTV compared to other participants in the TV industry, gives you the information appropriate for advertising, gives you the information appropriate for WarnerMedia, and how they compare to others in the media industry. So it's just an effort to make sure we give comparable data that you can utilize as you look at other companies.

Great. John J. Stephens - AT&T, Inc.: With regard to asterisks, there are no asterisks. The 2.5 [times] range, which means if we come in at 2.51 [times] or 2.52 [times], we're going to say we met our mark. That's what the range is about. It's not – it's about 2.51 [times], 2.52 [times] and we did our jobs. We're not that – we don't want to come across as being that precise or that forward knowing that we can predict that. But there's no asterisk with regard to, if you will, any asset purchases. With regard to asset sales, I'd just say it this way. We go through the listing of real estate we have, and I know this sounds a little bit – if we go, for example, the new opportunities on credit process that came through the Tax Reform Act (sic) [Tax Cuts and Jobs Act] (58:14). We have real estate all over the country that falls into those. We have a whole different category of real estate sales that may qualify or may be interested on that. If you think about our administrative buildings and, quite frankly, across the total new AT&T, you've got a whole opportunity. So I'm not going to get into any major transactions. Certainly, as you can imagine, that might not do anything to help the valuation process. But we're looking at everything. And needless to say, that total listed – total dollar amount of assets is material even for us, and we'll continue to work it and focus on it. We got a great plan. We have cash from ops, managing CapEx as we go forward with so many of our projects getting completed. That generates great free cash flow and solid EBITDAs with merger synergies and improvement in our business, that we've got a great way to get there. The asset sales are an additional way to make sure that we meet and exceed these goals. But no list of assets on this call today.

Great. Thanks, John. John J. Stephens - AT&T, Inc.: Sure. Michael J. Viola - AT&T, Inc.: Okay. We'll take one more question.

And that will be from Matthew Niknam with Deutsche Bank. Please go ahead.

Great. Thanks for getting me in. I'll ask about Wireless. Can you help us think about the churn step-up in the quarter? Whether it was tied more to pricing actions or any sort of change in the competitive backdrop? And then seasonally, I think there's been another step-up that you've typically seen in the fourth quarter. Do you anticipate another step-up off of the 0.93% that you saw this past quarter? Thanks. John M. Donovan - AT&T, Inc.: Yeah, if we start with the revenue side of the formula, we feel pretty strongly that with the last four or five quarters of growth – and that's just not year-over-year improvement. When we go to absolute growth, you start to have that kick into the base of your revenue. We took price action, so we expect the churn to tick up as a result of those price actions. And a lot of that has subsided now because the price actions occurred in late first and through the second quarter. And so we feel very good about where we are right now in both customer acquisitions. And by the way, by the data that we looked at, if you take the third quarter, we believe we were the least promotional of all the carriers out there. And yet provided some good net growth on both the traditional postpaid business at Cricket, which you've heard a lot of excitement about today. So if you look at the total performance on phones, smartphones, we had a really good quarter. And we're starting to get growth out of Cricket. We're getting growth in the core business. And we're the least promotional of all the carriers, both from the standpoint of when you look at our share of voice in advertising and the financial promotions, incentives…

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation, and for using AT&T's teleconferencing service. You may now disconnect.