Good morning, and welcome to the Verizon Second Quarter 2015 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the floor will be open for questions following the presentation. It is now my pleasure to turn the call over to your host, Mr. Michael Stefanski, Senior Vice President, Investor Relations.

Thanks, Marley. Good morning, and welcome to our second quarter 2015 earnings conference call. This is Mike Stefanski and I'm here with our Chief Financial Officer, Fran Shammo. Thank you for joining us this morning. As a reminder, our earnings release, financial and operating information, the investor quarterly and the presentation slides are available on our Investor Relations website. A replay and a transcript of this call will also be made available on our website. Before we get started, I'd like to draw your attention to our Safe Harbor statement on slide two. 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 to our website. The quarterly growth rates disclosed in our presentation slides and during our formal remarks on a year-over-year basis unless otherwise noted as sequential. Before Fran goes through our results, I'd like to highlight a few items. GAAP reported earnings for the quarter were $1.04 per share compared to $1.01 per share in the second quarter of last year. There were no special items of a nonoperational nature in the second quarter of this year. The second quarter of last year included $0.10 per share from a gain on the sale of Spectrum, so on an adjusted basis EPS growth was 14.3%. Adjusted EBITDA growth for the quarter excluding this prior-year gain was 6%. Through the first half of the year, earnings totaled $2.06 per share compared with adjusted earnings of $1.76 per…

Thank you, Fran. Marley, we're now ready for questions.

Thank you. We will now begin the question-and-answer session. Your first 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. Fran, could you kind of give us a little bit more color on the change in the revenue guidance for the year? Obviously what's different between when you were expecting 4% versus 3%? And then obviously what the moving parts are to get accelerated revenue growth in the second half? And then I think the second question would be, for the markets reacting to something today, I think it's the sequential movement in the ARPA or the ARPU. And obviously there's lots of moving parts in there. There's the impact of EIP. There is the impact of mix change. But I think the market is also trying to see through those and figure out what the net movement is in terms of people pricing themselves up in the buckets and generating more ARPU versus some of the givebacks and the competitive pressure we are seeing inside the system at Verizon. If you could give us more color on how the net is moving on pricing inside the base, that would be helpful. Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. Good. Thanks, David. So at first on the revenue guidance. So, look, I mean coming into this year we set a priority that we said we would protect our base, and I think if you look at the results of the first quarter and the second quarter, the churn speaks for itself, with four basis points improvement from the first quarter year-over-year and then the second quarter year-over-year with the 0.90% being the lowest churn rate in the last three years that we posted up. In addition, some of the other changes in the assumption fact is the take rate of Edge.…

Thanks, Fran.

Next question, please?

Your next question comes from Simon Flannery from Morgan Stanley. Please go ahead with your question. Simon Flannery - Morgan Stanley & Co. LLC: Thanks a lot. Good morning. Fran, you talked a bit about productivity and cost initiatives earlier. Can you just update us on the steps you're taking to offset the dilution from the divestiture to Frontier next year? And perhaps in the context of that you can just update us on the union negotiations? I guess that deadline's coming up here shortly. Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. Thanks, Simon. So on productivity and cost, look I mean we've been at this now for three years and our VLSS program, Verizon Lean Six Sigma program continues to generate savings. I mean if you just look at Wireline year-over-year down almost 8,000 employees from a year-over-year basis and still generating the great customer service and the volumes that we have there. So that speaks to the efficiency that we're getting both in the network efficiency side, reduction of over time, and of course as the industry matures now you're looking a lot of houses that already have an ONT on the side of the house. So it's less labor because you're just activating the house that now doesn't really need much of a truck roll to go to it. So there's a lot of efficiency there. In the Wireless side, a lot of concentration around self-serve and customer service centers. And then we go to structure around the Wireless unit. So we're still on that whole productivity cost routine and we still believe that we have a very full runway in front of us and you're going to continue to see us take cost out of this structure. If you just…

Marley, next question please.

Your next question comes from Phil Cusick of JPMorgan. Please go ahead with your question.

Thanks, guys. I guess, Fran, if you could start on expanding on Custom TV, any update on discussions with programmers there? And are people sort of – it seems like people are taking smaller packages than they would've otherwise. What's the average number of add-ons and any particular favorites that people are either walking away from or going to? And then second, just a housekeeping issue. I wonder if you can detail for us the impact of AOL on the P&L, just sort of rough numbers on the different areas and how you're going to report that going forward. Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. Thanks, Phil. So on Custom TV, I mean obviously we know we were paving the path for a new venture here to give customers what they wanted. Obviously, I'm not going to comment on any litigation matters currently in effect with Disney and ESPN as everyone knows that we're being sued on the contractual arrangement there. So I'm really not going to talk about that. But look, I mean we continue to have a great partnership with Disney and ESPN and we will continue to work through that disagreement in our business relationships. And I will tell you, if you just look at the over-the-top product, I mean ESPN is participating with college sports in that product. So we will continue to work with ESPN and the lawsuit will take its own course of action. And again, we believe we're in our contractual rights to offer what we're offering. From a customer selection perspective, I will tell you this has certainly exceeded our expectations. As we saw through the quarter once we launched this, we saw the uptake rate increase. As I said in my prepared remarks, over…

Thanks, Fran.

Marley, next question, please?

Your next question comes from Brett Feldman of Goldman Sachs. Please go ahead with your question. Brett Joseph Feldman - Goldman Sachs & Co.: Thanks, and thanks for the comments on the retention efforts. Just as a follow-up to that, you've seen your churn rate in postpaid decline year-over-year for two quarters now. Do you have conviction you're going to be able to see your churn rate sort of stay at a low run rate for the balance of the year in light of your focus on it? And then just you noted that you are still planning on launching the mobile video service this summer. Are we going to see the full rollout this summer or is it going to be something that's going to be phased in over time and just along those lines, where are you with the adoption or the penetration of your multi-cast devices? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. Thanks, Brett. So look, first on churn. We've made, as I said coming into this year we were really going to concentrate on protection of our base and I think we've shown that. If you just look at, and we don't really disclose this but if you just look at our basic churn rate, we've seen even double what we've seen in the overall churn rate improvement, so we are maintaining those basic phone customers and converting them into a 4G LTE smartphone device and we're seeing really good progress on that. And that's part of the $80 price point that we have in the market. It's been very, very successful for us in the retention of our customer base. But speaking on the churn piece, I just want to caution everybody, be careful because there is seasonality…

Next question please, Marley.

Your next question comes from Mike Rollins of Citigroup. Please go ahead with your question.

Hi. Thanks, and good morning. Two questions for me. Fran, first just a housekeeping item. I'm wondering if you could disclose the receivable amount for the equipment installment plan that you sold, both current and noncurrent at the end of the second quarter. And then more strategically, can you talk about how important the Wireline business is for the health and profitability of your Wireless business and how important it is or isn't to keep those two businesses together over time? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Thanks, Michael. So first off on the receivable, we're fairly flat because keep in mind that we continue to securitize the receivable that removes that receivable from our books. So it's consistently flat between $2.5 billion to $3 billion so it really hasn't changed much. On the overall Wireline perspective, look, I mean, we've sold the three properties in the South, Texas, California and Florida because they were islands to us, very difficult properties to operate from our scale perspective. There's still a lot of copper in those footprints and Frontier does a much better job with that and strategically it just didn't fit for us. But, look, I think if anyone was to enter the broadband market the East Coast would be the first place that they would go. I mean we have an incredible footprint that stretches from Washington DC up through Boston. The broadband connection to those homes along with our Wireless product and the population of that segment is critical to us and it is a strategic asset for us to continue to market and launch with our Wireless product and over the top is going to feed into more of that as we go in here strategically. So right now, Lowell and I sit and we're very satisfied with the portfolio of assets we have. From an enterprise space, that enterprise asset is very critical to our enterprise customers, both from a Wireless and a Wireline perspective, so they're important relationships to us. So right now, I mean I'm not saying that if someone didn't come in and take a look at the assets – as we've always said, we're open to anything. But right now, strategically we are very satisfied with the asset portfolio we have and it's strategic to us. So right now we're content with what we have.

Thank you.

Next question, please.

Your next question comes from Mike McCormack of Jefferies. Please go ahead with your question.

Hey, guys. Thanks. Fran, maybe just a quick comment on margin pacing throughout the year now that we have more Edge uptake, just how we should be thinking about that typical fourth quarter seasonality? Second, on the Wireless side, anything on your radar with respect to leasing plans? And then just finally on the enterprise piece, I know you mentioned pricing and the competition there. Just trying to get a sense for, is there something going on that's incredibly irrational? Or is it just a byproduct, more competitive in certain areas? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Sure. Thanks. So, Mike, on the margin pricing, look I think that the financials speak for themselves and of course we'll get a lot of flavor around how EIP helped the profitability and all this. Bit again, as Mike and I have continued to say, if you look at total revenue and the total EBITDA margin, that kind of neutralizes out the impact of the EIP and you see that we're increasing this year-over-year. And even if you look at Wireless margin at 56% in this quarter, even if you normalize out the EIP benefit, you're still over 50% margins for that business. So I think it speaks to itself of the – we continue to be an "and" company. We're going to grow and we're going to generate the profitability and we're going to do this in a very disciplined manageable approach. And we've said that we felt that coming into the year that we would hold our margins given all the competitive pressures, and we're still on track to do that. So I think the margin itself speaks for itself. And from a seasonality standpoint the one thing I would say going back to the…

Great. Thanks, Fran.

Next question, please.

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

Okay. Thanks. First on the Edge take rate, Fran, how high can this go over time? You gave the guidance for 60% next quarter but do you see a time where in the not-too-distant future you could phase out subsidized plans and move all towards these Edge plans? And then the other number that stuck out was the lower churn. You talked about some of the efforts to lower churn. Do you think you can maintain this level of sort of below 1% going forward? Thanks. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah. Thanks, John. So on the Edge take rate, look, I mean this is where the market has gone. If you look at all the advertising in the market, it's around the access point, and this is where we're at. So I think that where we're going to end up here is you'll never get to 100% overall because of corporate accounts and so forth. They're not going to take an installment type plan. So I don't think we ever get to "100%" in our base. But from a consumer standpoint, yes, I could see us getting to where we're more heavily, very heavily concentrated on the installment side of the house, and quite honestly as I said from a frontline perspective it'd be much easier for them to just sell one product. So simplicity is important to us. So you're going to see us, as we gradually move through here, that the market is moving us there so we're eventually going to get there. From a churn perspective as I said, I think with all the programs we have going, we're making very good progress in our base. Our customers are loyal. You've seen us running our new ads and some of our customers are coming back to us because they were dissatisfied with where they went. So I think that this all proves to again, the basis of how Verizon Wireless has been successful and will continue to be successful is the quality of our network, the consistent performance that our network gives to our customers, and the breadth of that network across the United States. So that's really what it comes to and as I've said before, the number one reason a customer leaves you is because of quality of the network, price is number two. So the quality of the network still is overwhelmingly more important than price, not to say that customers are not price-sensitive but we think that we can continue to be very competitive and protect our high-value-base. So yes, I do think that we'll continue on this track.

Okay. Thanks, Fran.

Marley, next question please.

Your next question comes from Amir Rozwadowski of Barclays. Please go ahead with your question.

Thank you very much and good morning folks. I'm wondering if we could switch gears a little bit in terms of the network investment strategy here, Fran. We start to hear things coming out of Washington – 600 megahertz seems to be like pushing for early 2016 start. First of all, how do you think about the timing on the reality of that happening and how should we think about your strategy around the need for low band spectrum? And then sort of a bigger picture question here, I mean, clearly focus remains on providing a compelling network experience from your side particularly if I think about your CapEx investment and shifting towards Wireless. I was wondering if you could talk a bit more about some of the technology evolutions that you folks are embracing. Clearly when we speak to folks sort of in the push to small cells perhaps some of the software defined networking at (51:35) which we haven't seen from any other players, and stuff along those lines to really try and optimize the network throughput, any additional color would be most helpful here? Francis J. Shammo - Chief Financial Officer & Executive Vice President: So thanks, Amir. So on the networks side as far as the incentive auction goes, yeah, the FCC is now saying that they're going to hold the auction first quarter of 2016, probably at the end of the first quarter of 2016. As you know, they had a meeting on July 16 where they were going to set the rules but that actually got postponed. So we'll have to wait to look at what the auction rules are and decide whether we're going to participate at the appropriate time. The only thing I would say is based on the AWS-3 auction, hopefully…

Amir, thank you. Marley, we have time for one more question and if you could queue that up, I appreciate it.

Your last question comes from Jennifer Fritzsche of Wells Fargo. Please go ahead with your question.

Thanks, Fran. Following up on Amir's question on spectrum, in the past you have said you would consider a longer-term lease agreement with a potential partner. Is that still the case? Or given your recent comments just now about capacity, what are your current thoughts on any sort of longer-term lease agreement? Francis J. Shammo - Chief Financial Officer & Executive Vice President: Yeah thanks, Jennifer. Well, I always say you never say never, right? So look – I mean, we're open to any options, but as far as the leasing of spectrum goes, as I said before, in order to protect the viability of our network and our planning and our capital allocation, this would have to be almost a lease in perpetuity so that you could never be held hostage by anybody because once you deploy a spectrum in your network, if somebody turned around 10 years from now and said, I think I'm not going to lease that to you any more, that would be detrimental to your business, and you can't just – you just can't let that happen. So I guess under the right terms, and conditions it would be something that we could look at, but I would tell you I think that's very, very difficult given the asset that you're leasing here. So I think that's the perspective, and we're concentrating on our build. The one thing I didn't answer on Amir's question was SDN, and we're into that. I mean, obviously, LTE in itself is a software-developed network and it gives you the scalability of giving richer network experiences, and our team is working on that and we've been working on that for quite some time. So there's a lot of things that will bring efficiency to the network. I mean, there's CRAN out there. We are in the initial – obviously 5G is being talked about in the industry, of course Asia is involved in 5G and of course we will start to get involved in the standard-setting around 5G. So there's a lot happening in this industry from a technology standpoint, so spectrum's important, it will always be important, but it's not the only tool we have in our toolbox. So from that perspective, we're concentrating on that strategy that we outlined coming out of the AWS-3 auction.

Thanks, Fran.

Hey, Marley, thank you, but before we end the call I'd like to turn the call back to Fran for some final comments. Francis J. Shammo - Chief Financial Officer & Executive Vice President: Okay. Thanks, everybody, and again thank you for joining us this morning. I'd just like to end though at, through the first half of 2015 we continue to execute on the fundamentals, we position our business for the future and we always return value to our shareholders. On a comparable basis, first half's consolidated revenues grew 3.5%, earnings grew 12.6%, cash flow from our operations was up 11.9%, Wireless revenues increased over $2.5 billion to just under $45 billion. We positioned ourselves for future growth, we acquired valuable mid-band spectrum in the FCC auction, invested $8 billion in capital year-to-date and made a very strategic acquisition in AOL. AOL acquisition greatly accelerates our digital media and advertising platform capabilities, which will become a critical element of our OTT strategy and our revenue growth for the future. We returned $9 billion to our shareholders through the first half of this year, $4 billion in dividends and $5 billion in an ASR program. We certainly look forward to a very positive second half of 2015 with confidence and our ability to execute our strategy and create value for our customers, our shareholders and our employees. Thank you again for joining us today, and have a great day.

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.