VZ - Earnings call transcript Q4 2017 | Verizon Communications Inc.

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Operator

Good morning, and welcome to the Verizon Fourth Quarter 2017 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. [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. President, Vice Senior Connor, Investor Relations. Brady

Brady Connor

Lowell Good earnings conference Brad. here Chief our Executive Financial morning, President Ellis. Executive Connor, and quarter fourth with Officer, Chief and our Officer, to Chairman and call. and I’m our Vice welcome and Thanks McAdam, This Matt Brady is

also available on release, transcript Relations Investor website. website. replay and As earnings operating and the financial a reminder, available the on information, this be call will of and our our presentation made slides are A

Before contained X. to our and Discussion the to financial forward-looking with that we available about draw your in SEC, subject Safe Harbor and started, which I get like are this statements are attention is statement Information our of contains Verizon’s uncertainties. events and that to website. This now filings growth on presentation may measures future measures. risks factors materials on presentation most we contains results financial The financial on basis rates as Slide otherwise presentation GAAP affect disclosed non-GAAP have expected over the results call directly future quarterly certain With formal these enduring posted turn to Reconciliations sequential. now our to I are in comparable the unless that, will noted a on website. the Lowell. in measures included non-GAAP remarks are our our year-over-year of slides in

Lowell McAdam

to today's about reform you about everyone. to Thank join talk for then wanted results, call and to priorities our XXXX. talk morning the Brady, and of Verizon good XXXX to strategic implications tax I

by businesses. invested the traction marketplace delivered pre-commercial We of and largest team reliable XXXX. the proud unlimited integration world’s of for the XG in gained new customers, momentum performance impressive significant execution and We expanded platforms of Let the am regained experience financial successful most additions launched the year I reoccurring from momentum fourth recapping smartphone with positive me in the loyalty. start future great the and our as and by We net and operational in and year. in levels trial, off focus our finished evidenced our customer strong results. assets in and our this the executed for the outstanding quarter

and news, wireless addition, our capabilities improvement and strategy growth game right of we leverage sports, the and technology around of our sports we positions made key revenue pillars content with NFL as the great platform of trajectory how The family the In our Oath digital businesses Oath are in and mobile-first assets digital moving In media our reach. of business examples providing that for NBA accelerating are finance digital lifestyle service brands and our is with The progress we we for strategy the recently Yahoo accelerating new and the engaging across integration global Verizon we of Verizon’s partnerships forward. a significant announced with build changing all properties. brands. XXXX

to and video fans to show screen engaging We partners are want of advertisers in becoming us positioning the live consume live-action first for sports for people ways the superior content.

extending number included We lowering the enhanced voluntary making maturities the well-rounded in borrowing and We our out funding contribution financial a for business. maintaining strengthened to debt all pension with of XXXX aspects that sheet while are significant our balance a investing the approach our a profile transactions to future our fund. of cost, that

reform tax law tax long signing a take reform ended with supported forward. We U.S. the president restructuring corporate year let's code for the has and effectively earnings see we to positive globally will cash The this Verizon’s have are into pleased corporations. look very Now the impact to and Verizon passed. rates a reduces law legislation that flow new to competitive levels profile. tax tax

expect reform enhance to billion flow in by $X $X.X from operations tax billion. approximately our We to cash XXXX

the allocation We approach capital to of inception our Verizon. in have disciplined been since

while been maintaining the dividend shareholders. our balance the always growth be balance from in to it to have sheet our strategies focused We forward. on driving keeping behind our strengthening the strong us continue standard give cash and will performance force network by And of execute for strengthening gold our use and going This for business the reform. will tax flexibility the savings sheet investing the

that Verizon. business, so tax drive only employees all of success and overall the performance innovation but Our vital of we in share it the our not reform of is success the

will in are our provide investing and details details how will outside later today. today, employees those later on provide We we company the

We foundation donated corporate XXXX, its projects. recovery share disaster and and our citizens are with $XX In success Verizon community community. good for and million the

two will being the funds additional years. We to million Verizon to foundation these ability $XXX will by $XXX efforts technology to two share have approximate to to the by impact dedicated per years contributions million increase two our lives $X.XX earnings customers our initiatives our next And better. applying the each around of to human over next ability. mean human with the we our our making $X.XX Combined for an

voice our head XXXX are network, which be data quality. of best to ranked in in the continues our into clear priorities one strategy we The both to in our network As and and strategic continues class nation unchanged. remain cornerstone number be wireless

In of forefront run JD Power the in history, always unbroken and has RootMetrics awards technology of been keeps Our our Verizon innovation. getting longer.

to of the analog led transformation today's from generation have wireless fourth service. LTE industry We the

enable an the its bandwidth sometime Not one Only services. be and industry have of services. providing industry of full carrier and we cases. rich fifth to has the not range gigabit have mobile residential ago as the been other the the possible sub-millisecond front in XXXX of the us until in Now edge of know-how services would generation consistent true assets long network actions people deliver latency has mobility, pre-positioning of use regarding suite evolution will intelligent advanced of and and broadband, Verizon XG IoT in needed full were wireless services the too of XG, XXXX. XG. XG us engineering provide messaging between applications, including the to to that accomplished and saying we investment our to spectrum XG opportunity and lead unprecedented consumer capabilities we U.S. drive The

revolution we seen We commercial impact have Verizon’s bringing with a before. our cities are be now taking network The online reality possibility to commercial this and next flexed mere innovation will by muscle X have society no technology on XG and to year from like industrial positively will services. X

it, the again with it say are build future. our As doing we and offices, around we wait we don't XG. for We

the to will talk of the hand I Slide Matt with Now details and about operating call X. starting over to the financial business

Matthew Ellis

to per year you today results our results to $X.XX share share special be share strong great full that Lowell. Thanks, These reported of per It several earnings and items In and a the performance. of we I the like would include XXXX with to earnings of $X.XX reported fourth is highlight. on quarter basis. of GAAP

of and a acquisition integration Our and of a of $XXX license reported consists special charge non-cash charges pertaining $XXX earnings of from gain billion, about around billion. early developmental million, redemption costs include net for a $XXX of realignment debt transactions adjustments $X.X related $X.X spectrum net stage technologies pre-tax severance This for pre-tax liabilities million, of OPEB and product pension Yahoo, million. about million items mark-to-market mainly $XXX loss loss early on and to of

share. $X.XX X-K Additionally, as per approximately benefit share. new one-time corporate from in liabilities new remeasurement billion, of the per income the after-tax these or XX% $XX.X net resulted our or our noted the $XX.X The billion week, deferred law net primarily tax to is filing cumulative was This $X.XX rate. tax of at last related a in benefit tax approximately items impact

to the Excluding these our of which in a effect the is fourth earnings quarter was same flat items, year adjusted performance ago. per in the quarter, full share $X.XX compared

For the $X.XX. earnings share was adjusted full year per

Now new the approximately improvement on XXXX fourth full revenue $XXX let X. basis, financial for consolidated a summary total was year. On In revenues declined an and businesses, year adjusted excluding to Slide $XX the quarter, revenue move billion, of divestures X% the of us X% operating quarter was a operating comparable and for the the highlights billion. of

consolidated EBITDA, and excluding higher XX.X%. consolidated special EBITDA items slightly totaled full margin was $XX.X billion approximately margin adjusted year, XX.X%, adjusted the than of For last year's

our now results Slide turn us wireless to on Let X.

total Our year-over-year growth our two of wireless of X.X% best on quarter, providing the revenue offers operating is service years. first billion, from in our simplicity value engagement our proposition with increased unlimited $XX.X In positive to network fourth the the increased valued customers. driving together

trends a On the For basis, year, $XX.X service service to X.X%. of billion, year. quarter revenue revenues by by period to billion. X.X% account revenues to $XX.X are service full operating and decline the revenue access several The in formation. attributed revenues results increased sequential a for X.X%, over improved totaled a declined same last consecutive factors, new second improvement marked increased the including The year-over-year

the XX% postpaid remain base phone and for full device base, XX.X% fourth plan subsidized postpaid X.X% of phone of and to business service our our Our on approximately of pricing migrations of most phone the represent steady-state are plans. to now postpaid progressing approaching un-subsidized quarter, as In outstanding the XX% the equipment for quarter customers approximately billion payment revenue $X.X year. quarter had the At balance. an increased up our end customers

XX.X% EBITDA, an to increase $X.X X.X%. generated XX.X% compared same EBITDA last in we quarter was approximately period the year. of of During the margin billion Wireless

service than As lower was promotional expected, EBITDA better and function trends of the year. the in improvement a revenue prior in activity

year, total full of billion billion. the of we on EBITDA For $XX.X generated $XX.X revenues

Slide were X adds million, last devices, connections postpaid XXX,XXX, the tablets Total growth. XXX,XXX and Now compared closer and phone XXX,XXX year. to connected XXX,XXX smartphone other look at let a predominantly total adds take net to turn X.X wearables. fourth were us including In net quarter, of XXX,XXX adds wireless

For accounts we XX,XXX third adding our to quarter customer increased the consecutive base.

year, full million XX,XXX tablets, and other X.X included the postpaid phones, million X.X devices. additions XXX,XXX of connected For net

The last XXXX in retail the was the customer fourth of activations million, prior resonate highlighted unlimited by activations. in of year. our our year-over-year phone continues up from majority device phone postpaid XX.X base, results. Our strong experience basis primarily with of X.XX% wearables churn of improved accounting down points smartphone the versus quarter. X.X plan million with and net million On XX.X overall of the In churn XX device were churn outstanding pairing to with totaled network of the postpaid About the activations resulting year. driven for in competitiveness these by XX% X.XX%, postpaid phones best adds XX% a by other quarter, basis,

postpaid compared year. retail was lower X.X%, rate as upgrade to expected but was the prior up Our sequentially

the for a devices elongation their hold of We period. cycle are seeing upgrade longer onto more customers an as

to a million the plans. X.X of Pre-paid quarter, the additions During X,XXX by on compared in decline activated payment device phones XXX,XXX year. net declined prior were

Our base during smartphone quarter. increased the prepaid

of We in due additions XXXX we have excluding decline our and deliberately in total phones that as wholesale connections, million net Things. prepaid ended the with Internet area. retail XXX All prepaid was to of focus basic reduced

our for the industry-leading million XXX Our base connections year. X.X% postpaid to X.X million, prepaid connections grew totaled and

move On an revenues organic next copper. X. Let the segment declines Growth and Slide us by acquisition, competition. for our quarter X.X% wireline in the in segment XO from internet the decreased secular revenues quarter as Total basis, the technologies operating products X.X% Fios excluding in and offset growth fiber-based declined revenue from our X.X%. by to the year. X.X% wireline to high and for markets’ legacy revenues from video our segment quarter increased by on quality be in was continues Consumer overshadowed full pressures

quarter, the year, XX,XXX market. observed the Fios by Fios We internet the quarter. about in ongoing ended total connection now TV X.X our for video and driven the higher revenue an have million by the quarter launched Fios For headwinds strong grew internet growth internet Fios XX.X% primarily including in revenues speeds, of subscribers penetration demand with Fios added total The XX,XXX gigabit In year. grew linear in revenue the in a XXXX. Consumer throughout X.X%. full consumer customer rate. and base the X.X% early increase by losses the is for XX,XXX representing as a Fios subscriber business video, customers. In faced business we

bring progressing is We cornerstone area. network. that customers their array is private the provides and progressive of initiative edge for layer you intelligent ways this and new with in seeing Boston wide our partnership to fiber good in activity to results This to partnership technologies with interface in from our work our see public a June multiuse will foundational expected. and We municipalities XXXX, us Verizon announced more multiple front communities. Sacramento with with XXXX are on as the launched of Our of as

Enterprise Solutions excluding quarter, X.X%. the revenue decreased XO, For

more by business technologies. markets revenue, advanced for secular opportunity growth in products customer without access pressures decreased In growth and than were New XO. and pricing Partner Strong and legacy demand communications in is XO, Solutions revenue a wins X.X%. for X.X% business. declined offerings fiber our offset this excluding

We EBITDA and are with margin products the see winning Segment XX.X% declines for continue our technologies. competing the for but legacy quarter in and fiber-based year. was XX.X% to

gains and operational business offset cost profile. commitments, escalations content Our in a stable were by efficiencies producing the largely margin

our Let’s next and media move businesses. discuss Slide to X Telematics to

functionality. all a for efforts of ahead assets streamline synergies Oath integration the assets with engaging focused exploiting that schedule. to progressing platform rich Our on simple remain content create across are We and of media

XX% is $X.X an Oath increase approximately sequentially. of quarter the For billion, revenue

were season quarter trends quarter. driven the seasonality from to to expect revenue we see appetizing increase the by spend first and during fourth holiday expected normal As

which to basis. Our revenue million. approximately revenues over Telogis to $XXX Telematics X% on and Telematics continues increased quarter IoT business Fleetmatics Total includes grow. an in organic just the increased

solution as multi-use fiber increasing rollout with our commercial more is deployments of momentum with services. evolving Our XG and municipalities set the gains engagement

cash operations basis to balance Slide to move from funding $X.X cash by XXXX from completing after the our including totaled XX In flows. transition receivable On on year-over-year $X.X billion. and to discuss financing. pension a the improved impact net payment cash has device discretionary Let's tax $XX.X the next billion sheet $X.X our billion flow billion flow

with year not device plan $XX.X billion. for does accounting full is of going and securitizations. cash from We were equipment proceeds The securitizations. debt capital billion to reflect seasonality funding Free sheet year now total of receivables $X.X comprised on asset wireless of $X.X the $XXX.X $XXX.X totaled ended billion Changes unsecured expenditures the billion and billion include year for and substantially expected and of volumes. balance forward $X.X complete. billion of payment balance transition flow sheet As will backed on debt mostly

modest $X.X the to Our billion end new are unsecured maturities XXXX. through term of

strong methodically Our to business. us the is investor in balance sheet provides the flexibility and growth financial

a Now XX. Slide look on at let's XXXX take

priorities XXXX are upfront As out of Lowell mentioned strategic clear.

fundamentals focus which upcoming strong is the Our on executing business’ positions the performance the year. on in

reported We basis. a at consolidated grow to expect year-over-year single-digits low on revenue in XXXX GAAP

middle achieve growth standard service impact on the track from we part the recognition XXXX. of near Excluding are wireless revenue to year-over-year by the

new the XXXX positive XXXX in begin we growth initiative filing revenue X-K show new zero negatively service in we our the XXXX. of disclosed service standard excellence expect revenue. As included January deployment early XXXX. The business budgeting will XX, to towards wireless revenue our of up impact the standard to in will our end Inclusive of turn or wireless benefits based of results the

quarter. before We the year path in acquisition first expect includes the tax the growth of year's full per the straight from earnings in last which This divestitures. XXXX low single later the acquisitions. the And digit from share diluted of on adjusted of reform impact standard. and amortization data cost centered is revenue impacts depreciation The close recognition to expected ongoing impact the

The not capital and the earlier for resulting projected are Verizon contributions XXXX Lowell return to Lowell of of tax be our] XXXX. effective yield the to legislation to In $X.X we in the Verizon to there and a XX% to terms foundation $X.X in $X.XX objectives in generate XX%. of expected decision changed. uplift to XXXX operations [Net is mentioned is to $X.XX rate to to expect process EPS net cash initiative and savings that range increase internal flows a billion from have billion earlier. tax stated employee

consistent in are and our allocation. We methodical

between consolidated and so We get XG. call that capital Brady, be including to back billion the commercial the turn $XX.X will launch spending of billion $XX.X we expected With questions. your I can to over

Brady Connor

Thank ready you take now questions. we Brad are Matt. to

Operator

Morgan. Thank of first you. JP question Your [Operator comes from Cusick Philip Instruction]

go ahead. may You

Philip Cusick

I Matt and for Hi, if thanks. for can. One Lowell one

attractiveness A on First Thanks. thoughts Lowell been EBITDA of view interest story of with multiple appropriate an Verizon’s definitive target which any yet the is and of on no has your a if please in you ago can probably flow year M&A your in you as what any assets and media discussions rating is the taxes thrown then big for substantially of media give a from EBITDA change can general? company's now nearly us better and or your media update? about you been conversion has every discuss just confusing Matt, XXXX buyer leverage offered to buying cash there investors. and talk because I Can Verizon the out the agencies potential when wonder in you lower

Matthew Ellis

Phil. I take will morning question. Good the first

specified benefit target allow said want exact the to proceeds the reform number but have balance sheet. of strengthen we leverage So The an we we there additional consistently is get and as key to haven't the quickly tax little strategy as can. have a that pursue and execute to our us we strong as as balance on there us sheet allows The faster. from to here efficiently

So at target that profile We so should head. an from I given same but as type today. we us the you exact a to would said getting haven't where that Vodafone had gives say like direction the leverage think we we into the you transaction, are to prior we we of previously expect review to general deleverage

the put a how support and through had we where it sheet forward to down we with In to will balance continues the the change leverage continue certainly reform about at doing and and them that any [‘XX] conversations it faster that rates little the may tax place with terms business. to a have but look in bring conversations views them rating of since us not gives to specific agencies the their happened ability

Lowell McAdam

is to my comment I first And Phil, guess morning. it's good be I guess loved. nice

I is this lot there So Disney a now to ignored. matters. even in we clear right movement and there are scale approved. we which certainly of area that don't that interest in know here a AT&T going is lot that of It's is get think sending messages whether frankly But the seriousness and Fox is

unequivocally big considering but And in be we So this shakes is path being out whether you on this look a of all but whether play. right owning take at you to media reasonable large until a we to distributor content. a can't without think a going have determine say at a now that's I alternative look really is interested can I nothing would there independent

In through fact things if in independent the what notice us good the investors we and partner And further monetize to doing. NFL the now. should think that's our we to able have still we you look like actions weeks our last at very place made a is advertising few great right being announcement being that's and play for a NBA assume being that are

Philip Cusick

That's helpful. Matt. Thanks Lowell, thanks,

Lowell McAdam

take next let's please. question, the Brad,

Operator

is of question Simon Flannery next Your from Morgan Stanley.

with ahead go question. may your You

Simon Flannery

Great, you QX to Matt the one as Lowell math well. with good and for the QX very you thank recognition. Matt, around And from help us just can much morning. and revenue

to left. You're get moving least at service and revenues revenues EPS you some EBITDA temporary and then from should equipment a

should be for more about should be then the couple Can we in you then should be Thank what little give bit of you cities? and you If of lot the months what the pops clarity many Sacramento November into went us How a year, of detail XXXX just us launching, what more from other we role in you. can a see there. covered rest a expecting should 'XX? little we color announcing modeling when expecting about in bit obviously XG Lowell, give or past. And the a through we around

Matthew Ellis

Thanks, Simon.

recognition. of So, the revenue the that I'll on first adoption take part of

a opening of things the some that recorded Remember, for firstly so are being adjustment it contracts, standards of all So, the the have comparison. the numbers accounting you'll of standard. we XXXX recast and of been not treatment periods balance the an new difference open the adoption they most created sheet had couple unlike reflect to assuming XXXX versus between standards, under accounting prior

it's so we as We'll as through standard like what under give year. looked the we the been well. 'XX And report that old standard. You'll have the go new if see a view also 'XX on as would

the how the in still breaking revenue that are geography. have So, last will impact change AK change contracts in equipment initially we We'll as record based a that the the incurred, how subsidized more taking and apart which going in primarily our there said week, immediately but the estimated commissions biggest won't pieces of terms over them be contracts. off they'll of those those rather customer unless expenses any and service we of than revenue treat total and in we And revenue treat when underlying significant or from spread change come to line's contract. is EBITDA get from impact BXB they're commission expensing life the life of

sheet is open balance for the Now, only the XX-month commitment opening adjustment contracts cost. a promo or had that

relate of the So, all contracts. to it doesn't

you'll So, the that see two build-up that's next why a in over years.

be be in balance get then outs sheet. would 'XX and time time 'XX equal, asset We'll the quarter-to-quarter to level it'll be not through be quarter the by of expect builds the most be from said a ins up then dissimilar where net as than benefit in because 'XX from contract we 'XX the the accounting in commission's line. will but 'XX we about the be the that standards; in didn’t of to change I go year. billion won't impact into they should we by it materially up break to to too different. on bigger by it We and largely you immaterial we the coming think $X.X billion plateau the reach it $X.X So, that get are And because

hopefully on your question rev answers rec. that So,

Simon Flannery

you. Thank

Lowell McAdam

Simon and Okay, on XG.

information November. continuing for shared indicated, go are As us. The extremely lot of a to trials in we you well

sites XXX We than more have online. up

better is and are XXXX We throughputs. consistent we We're throughputs. than we We're more of peak continue doing to around Gigabits learn are that which seeing every about much the XX very distances shared testing feet, up expected. throughputs to day. The

being comfortable very service we're So, everyone to. to providing deliver we're that service a with gigabit able of at

in have second may standard the half of standard that December you Qualcomm that will online global we've with approved 'XX. and announced As seen in was bringing the the chips standard, new fit

coming with we with but So, will our well. deploying proprietary the very as on 'XX standard be global also standard in quickly

what If that in XXXX. was there at available of you we mobile late going on get more be saw a we devices CES, was lot about and into believe there XXXX then as will and discussion devices

saw so of just you close. If last straight to moving forward week, the path FCC purchase that approved our about excited and we're

So, of much the we're as is that there. In as we far smaller than and and shared need sites a need you November, we execution number network, were had know pops, you densified over we goes placing as fiber we that I incremental expected. XG shared the now

seeing sort assuming. that some capital So, intensity we're of not were that

So, as you indicated, we've announced Sacramento.

been talking We we're positive. five am mayors be about to some out reception going what extremely of with year. meeting have providing the three plan and personally has to I for the the

But So, know, a through takes is model approved. it you as these for while work city governments the get us. terrific things to a and Sacramento little

build We told for capital far before and be you'll year. can we cities specific suspect then that our as longer on the Matt And other goes, much announce. it'll see the as I But was more pops. you guidance be what continue to partnership too wouldn’t

capital as pressure invested any the we'll on we in upward through this to we'll determine as year. able return see the more go We have are spending. these that don’t year commercial this reallocating in trials share along. information of these and launches moves the be We capital And we been

Simon Flannery

Great, thank you very much.

Lowell McAdam

Brad. Okay,

the please. next Let's question, take

Operator

John comes UBS. Your question from of next Hodulik

is Your open. line

John Hodulik

about or GAAP in some $X.X which underlying and Matt of the the for Can from contribution? assume about that. drivers Either guys. earnings Thanks, guidance single-digit guys $X.X the talk path Lowell. of from I the the charitable straight Talk low includes you to increase

you that continue in You've expect what move up, about EBITDA support to and Thanks. see on the seen in side. continue Is wireline that can wireless talk for the XXXX the margins competitive to how environment that we cap wireless some side? increase on pressure market our may that margins evolving

Matthew Ellis

Yes. Thanks, John. morning. Good

about that of we year. few in largely single-digit an uptick paying cost the shares. talked we're in the dilutive ago you last the we're below-the-line about improving. low the transaction talked items straight will path confident year-end transactions a But And are earnings And D&A underlying because we we So, be for earnings. will because GAAP did see in

seeing revenue through on the service to business. the You're side that wireless the come

You a saw X.X then flat-to-positive the fourth the year. the quarter. that in And apples-to-apples by to on middle number to an improve back just said of part negative getting basis we

journey So, the look that see I excited that the there. trajectory wireless on from revenue that a transitioning XXXX we've be Wireline, you've completed of seen and to base forward similar couple continuing in growth to think in will past of years.

some fiber gives were products on us going that earnings fiber it in which forward. be should opportunities of those Although continue products copper the replace to sustainable more with deploy to as based network, based we more

I tax couple impact and in piece. charitable the employee company of of of to and should we includes which guide of reform you the tax want net you recognition that clear earnings the mean revenue the before is say impact And when in certainly then foundation contribution before of reform the the the mentioned comment. to the we the and your tax be net also So, versus an last see the profile contribution improvement the years. impact reform

of guide which Lowell low those $X.XX baked from described, impact initiatives that positive before $X.X that couple the of $X.XX EPS single-digit to is into So, tax $X.X to impact is reform.

But parts So, on year-over-year. the it's been within stronger hopefully there. that underlying built gives you off little more moving profile earnings clarity the a

John Hodulik

Matt. Thanks, Okay.

Lowell McAdam

the for ready we're Brad, next question.

Operator

Brett Feldman Your next of question comes Goldman from Sachs.

You may your question. ask

Brett Feldman

the got the I've question. impact here taking reforms. for of follow-ups tax two around Thanks

also, benefits bit the business? to going you maybe talked to maybe into your invested advantage taking of year, more maybe if Is recently. customers You spend we kind how there an get a to a even here hoping you'll that. to advantage opening in period end savings And at to on going a investments expand competitive of move network had then curious you're com could meaning even I'm your here see. the a network for level your or a some of newer existing lot of broader just bit that changes in it you reinvest kind Do of behavior you're behavior. be just to you've in see a revisit of some take about to of we've can of see to some of your an your we're corporate making whether get lot opportunity customers devices,

discussions have I that early obviously shoes the large and ways their them, enterprises. can lateral start perhaps businesses positive implication enterprises increasing road? know Thanks. You down but your its for in segment have any your services that maybe a will green are you seeing with in days relationships investments with

Lowell McAdam

to Okay. and that, on around when Brett, I it's and add me in. on been not got perspective from that lead different certainly market. times going very has XXXX, Well, you've involved one then the strong. said Verizon wireless, change that extremely at market I down and different let me places can certainly that a price always the from now. and competitive we're competition an from start telecom Matt years. front, to competitive in And out never for come have been but it's

our to ways our as opportunity much compete. roll be we versus owe we see inside have that to XG out, is use business tax others competitive in the focus the competitive more like in using a the today we be assets just And to way to portfolio prices take Our to innovative as reform down. that be can't

enterprise front. on Now, your

accelerate. can how economy ourselves market has to we and days a able I But and to all positioning understand reform run very And the at such do strategies, we're an accelerate trying to other productivity thing. this pleased lot execute we're accelerate been telecom same XX think enterprises, what the since reform. to our up tax can we to these just we're and up. pick process opportunity like we see remember the be we've and of doing end of tax I how the measures implications part And the here see of we the and important only all is businesses the

So, where this capital dollars. telling to fiber, I they us Edge put I where what XG, and enterprises things see to Intelligent we pickup. our Network where to continue build And expect is we with deploying we're want expect our do our are influencing

Brett Feldman

Alright, thank you.

Lowell McAdam

Brad, let's please. take the next question,

Operator

comes Your next question from Barden of of America. David Bank

may You your question. ask

David Barden

taking questions. Hey the for guys, thanks

we of terms as XO both Lowell, partnerships then 'XX, make front? organic they Boston infrastructure more change couple XG so to accounting creative that a plan it Matt game EPS does builds on maybe if for handset for talk out up from could And from about in the in or on organic costs. into clear, on a one the the the of on guidance just are of include instance, sequential And expecting to build. guide on on 'XX, the just selling the on Just forward you a single-digit little to front. more benefit then from second Thanks. look Matt, and a for an here Lowell. of low of $X.X that quick the Can related the things path relative be to following on of fiber what and you're the still benefit flow to cash XXXX. or that. of in flow benefit, to just number in Is in acquisitions kind like is clarify billion I kind year-over-year pay the ways cash WOW then that billion And done the fiber benefit acquisitions cash guidance, that you've supporting $X.X ask, clarifications a taxes is

Matthew Ellis

Thanks, David.

$X.X reform. what XXXX So, to without to been have question billion our $X.X cash your to taxes the that the billion would compared flow cash tax is me second guide,

So, it's It's a not taxes. XXXX comparison impact against cash XXXX's the tax reform. and without with just

I'll our in guide, maybe The EPS say without the the little without and On EPS guide view on clearer. business reform. recognition this revenue to is try tax

that increase recognition in I described the also earlier we lay week last to So, the in AK of then gave that lay top number, of that on morning. top revenue impact this the EPS $X.XX on you $X.XX and prepared you in remarks the

does EPS So, up hopefully help the question? that that clear

David Barden

revenue billion. thing change, that's Sorry, is that's but an million is recognition a expense one Matt. there thing and between Because $X.X recognition separate $XXX benefit a the

Matthew Ellis

Right.

David Barden

that's if wondering just included was or I single-digit? single-digit And the in in the not included

Matthew Ellis

it single-digit the to on the in you included add single-digit, guidance. not is It

David Barden

thank Perfect, you.

Lowell McAdam

organic we so of or David, M&A is Then do and down Okay. it where kind it question boils fiber. your is to or see deploying

So, our XX.X we're by just XO we deal did year with fiber But multi-year M&A. the miles three also had WideOpenWest per which we everyone is amount else for on next of that a of for a and where had deal years. million call, fiber announced Corning, done we the have fiber M&A. doing some fair

meeting do our And tell placing of tilting three sort densification street having off and give just that but fiber services we things So, now factors others XG they of are frankly, to into with a equation. And to in about. talked get obviously cities priorities needs, that markets then analysis our meet and of And will we're and you market-by-market organic. to cell we're what I XG, us sorts customers. factor really furniture that it's the would then the what access those our can of we're the conduit the cities lease and enterprise out the toward

and for the that to of built fiber multi-use don’t services point fit tell They bit is at and Intelligent were a Network. most we fluid it different point-to-point that up for it's I So, opportunity M&A, architecture an they it, wouldn’t you do companies Edge accelerate if sort the building this were fiber through but would purposes. of which today we're enterprise came

to but to in certainly leaning needs enough Verizon clear that's our meet up. builds our hope cost toward you I and organic down performance drive for So,

David Barden

appreciate I guys, it. Thanks

Lowell McAdam

question. next the for ready we're Brad,

Operator

Your of comes next Research. from Rollins question Citi Michael

is open. Your line

Michael Rollins

good for for a as well Hi, Question as Lowell. morning. question Matt

little sell you starting is if video two more the some strength a more in the wondering over and subscription changes Matt, the also a services. vision months XX can wireless you're could detail you what which to competitive about the and cable adds talk Lowell, you First past talk bit of the can about describe also quarter wireless of that in fourth seeing the at I in your phone bit was in Verizon. And bundling from competitors in

you the what XG, premises company there at a look you're broadband in as you is well access is these inside company? investing provide to of the take the to country things there five mobile you some all many business, a As vision to you're broader as what years dealing infrastructure, across as together that want of reach of that you country? proportion customers fiber in to three able vision as Thanks. mobile may be as And the

Matthew Ellis

Mike. Thanks,

very I onto can year had year-over-year. I'll the then we The million So, net XX% on at fiber. a performance. wireless the X.X wireless and off our as ads up get were great smartphone net start Look, with front year for strong question Lowell mentioned, the ads

unlimited quality on we people had we value new you it So, the in compare point you we network net from throughout that the or hear really despite and to in carriers claims saw matters. see had. the saw noise significant and other very forward, competed allow year proposition resonating. we the times the the be churn a a performance that that activations on all and the from people, We Today we'd in that other and year change. whether numerous February different coming have the launched customers really in ads it from the And hear that of and have to last currency we back is effectively similar marketplace

quarters and I of being below the Verizon the that tells you phone churn each of much last think the how on network. was X.X% customers year, So, three enjoy

what the and those on is consistent. with doing. with traffic how and and services the that terms bundle on be to signed on that out in we far year. so of this source. happy has we're they we last what like as line them so game we everything doing Look, during year is what and network doing and but And monetize you traffic we've our the in numbers XXXX said companies to they be So, Charter seen based our And very far. later seen expectations Obviously, in Look, about ask glad into we're of are them their of those are staid we'll we're those we've a Comcast play on expect in agreements. that of consistently say competitors things happy of today. course number And see and to agreements they have have

happy that the strongly. the look continues you off our XXXX we let's results had of overall, and is resonate very when of device And foot]. end importance. to the say it is network with on of at So, the the the day, quality starting year [front proposition, the value And we're fundamental last on at

Lowell McAdam

and I is for it's can service move fixed be think Mike, today at to I broadband. take Okay here very seamlessly demand CES me customers let don’t clear there they with anticipating it's in that It, from customers perspective. it's not have Look, to we from mobile. from and provide able look vision you're mobile others want what's an going fixed. the care them next at And where who on saw whether infrastructure insatiable think not to and that wins that what you what's a to going you or is

the geography to than deployment company We have positioning a fiber my lower over but way our we're and the those been we're seen way and at years disregard deploy cost stronger ever services we during much a XG, broadband will much able positioning mobile the career. least be we've at

we to at for to drives length an of vision, lot information us Now sort provide the those that. And video awful need be talked complete and internet of to you able entertainment boards, source will what and we and think around be that about taking assets we the that lifestyle. news Oath customers need. assets the finance information provide have And to services that

the education, healthcare high autonomous that it's whether that to and and ability. So, medical services, it's going title and going seamless of whether sort under they you it's look applications cities, smart And human need we whether bandwidth. you're forward, whether at lump it's systems, will cars the transportation

So, that to of better. much going applications, our focus around the to so is are our these embrace capabilities the make customers lives their all giving future so

assets in platforms deliver the about all providing the our they are to that. And so investments

Michael Rollins

much. very Thanks,

Lowell McAdam

next please. Brad, let's take the question,

Operator

comes Moffett next Craig MoffettNathanson. Your from question of

may ahead You your go question. with

Craig Moffett

process in good tax your reform. Hi, about the question A light budgeting morning. capital of

the that size whether And were. sort of should total meaningfully lower on being that depreciation. or the projects your fiber with in investment as that been to to tax projects pops have than rate how queue returns going they boosted there will types accelerated or change of and both front we capital budget specific the it's with forward? range respect think Does whole deploying attractive given respect some about the are that thing by a more of now capital of Just now the of that priorities your

Lowell McAdam

boring you Well us Craig, Matt then I accuse could you guess take can should consistent. us that but jump being in. for of I'll give and at credit least being

the XG, when have we you saw and an been opportunity, about these three XG providers in we out and in in to said the I going We that to we're but and you're with the here. sale it. field worked gone in then ones from go see we'll when today extremely sites XXX Korea to are well you there and years deliberate early we've saw fiber. were XG learning Then disciplined happens in a that trials, real And see the ecosystem, five decision. done We see said everybody we it hard. were as you're We've and developed make we've infrastructure commercially the stood cities. going as placing seeing opportunity see said ago as it out, We been partners too we way up with that we've two what

because that hope or But of draw tax discipline. here lose tax match us is January ourselves I that to a all going we want do a the to reform have prove there gives before like we're invested us sort What tell. we sudden couple does early to and such a those need through, results to to by And return at we in not different that hurdles just are a fourth it say about comes because but another So, on all that get we very us certainly to. make strengthen can line accelerate very we're it's we're place balance ready of strategies But reasonable that inconsistent 'XX through can give we quarter to quickly the great we've once the very got that we next we gets that the point great on a accelerating to flexibility capital, story of spring sheet flexibility. a of year reform we expand and ready decisions to to if get rapidly.

Matthew Ellis

lot other thing only kind to before but that The I'd earlier to of add a to the decreases of Craig, that about that be way tax we planning made it. there's that, at this our we of the the spending and math, increases get methodical And fashion and of is Industry, the capital Hans can nature deploy CapEx." return comments significant say goes reform month certainly spend you in looking way that it. I'd as Vestberg the So, change back into money, some that come having given we "In we're a our we'll

us. making of see methodically do you But it creates why the we in that's having do so, the the opportunities front will us right certainly forward the do. you and in greatest We that And value. look comments us way it

Craig Moffett

Thanks.

Lowell McAdam

the Brad, we're question. for next ready

Operator

Jennifer from comes question Wells Fargo. next of Fritzsch Your

Your line is open.

Jennifer Fritzsch

then purchases question. band With low spectrum Okay. a how the think two the kind Thank of do I you math Well, in I eggs could basket. if if of inevitable are [auction] One, broadcast of say as around think say may as spectrum. get you for some millimeter the question How that that? may. amount Two, David's And you taking have in some earlier. have or I the might may times second Mobile’s way question. the spectrum, T

same much how class? leases, away them moving house paying them about can to from mentioned providers back right You quantify you now you're cyber

Lowell McAdam

deployment awful take to there Why lot an As the spectrum noise you Look, going is Jennifer, I question." of "the of around XG. inevitable be don’t say, question?

to you're this won't the the least the XXX we XG, like won't technology seeing It XG of is scramble standard to the same bandwidth have that XG throughput was and to the recall the XG take you the out latency, there stuff are if everybody the it it big of try on right to right called a And but I will be In we which XG put XG, for the won't won't it throughputs of it need I If it certainly provide when really perform a back and order megahertz want Faux. XG can with, the and of latency. to deployed XX now. at have PCS can look have to. some and you get do like XG agree promise. it megahertz reliability, reliability, I we

us. XXXs they low change serve plenty well works or aspects So, a are XG, on get anybody selling to whether in band spectrum all you the great need to bandwidth. for who they spectrum this I've lot your or you're only of wouldn’t is put going positions spectrum going of of depending place years But has in need of basket what of way it's you've to for a big The order one your with megahertz us in I that this, the that of into play, today. in market come. got But to out there. got of XG

Matthew Ellis

we number quarter, acquire expect 'XX, into back those to without kind we being a those end additional spectrum. ask didn't. who's of But of technology. about performance low would network a the months densification XG XG question so We've going things. you piece you be the the And about It architecture number agree in set fourth amount that upgrades past to as network network so, added other people and to in the on that one the do if and the I in miss over technology Spectrum having I'll is add capacity think you always to can these see significant additional go exact and a head to been then network. that, the you I of of said three of few a forward. the there's I in should a tell will deployed again just

say break going question the start your really not individual of end, don't would it just irrespective we back line shows now. are statement we're paying we most way statements think financial economic and how we'll that We doing the in the continue as But I getting disclose. fiber, about look terms at to In on on where much up it income that. we by not number that's of we do fiber to items, out a of

Jennifer Fritzsch

you. Thank

Lowell McAdam

Hey Brad, for we question, have more time please. one

Operator

comes question of Barclays. Amir last from Your Rozwadowski

question. may You ask your

Amir Rozwadowski

will are improve that comes upon Lowell, year, that next be working positioning? billion what XG about investment last cuts this should to that a for seemed $XX few where we folks Late believe if fiber. whether cost be think over the you was to in viable of had do believe the are are point that for the necessary much. cuts competitive should you touch a company as you very through advantage capillarity opportunities I the time Clearly believe filtering reductions this significant term you we XG guys densification alternative do think years. to back And providers cost in amount you you cost how of haul, need and for to a areas wondering those about a Others with in mode world. you couple you in get secondly, commercial you if the competitive at setting goal the fiber the years? next this stage to can a the was highlighted over and is then making I topic, biggest doing or for you densification believe back versus are longer how wondering cable Thanks, going

Matthew Ellis

Amir. Thanks,

and me cost are something look four business we activities. that at where we mentioned Obviously care there and since Let the distribution; the first across back September examined standpoint, is company opportunities Look, embedded type one we over Lowell isn't of is going every take efficient From go you of have can on of as be exercise customer imperative I it the get next every significant network; a or make because to area this this discussing of for business as part future. we're look XXXX the about years as sure we're this plans and part, there I as looking into forward. we And little the the go no the then. number year. $XX in as each that of close targets talked billion can achieved is in timing the we a that activity on the this tell we the to office a area we're the taking what Essentially 'XX that in is we we've operating business. units area the forward believe forward for business results

Lowell McAdam

if fits it. network. our of with our it on always throughout outsource wouldn't career control don't got times a with my distribution, and fiber components believed And sales. success, it your that critical We reinforced it's own then lot I have answer Amir, is, component the service. and of a been direct better advantage of you guess I many you've competitive my that outsource certainly critical our We fits customer And

fiber has drives which advantage time-and-time as architecture Hans As come owning of network in for to put Intelligent network. that as the again, as performance the seen asset our customers financial our we've financial. performance important competitive And drives ultimately well is in Edge, and

the it. someone you a won't go So, consistent strong way very of with network scale that very performance could would financials advantage outsource huge unless along we negotiate and and has see in much us

Amir Rozwadowski

very you much incremental Thank the for color.

Brady Connor

for questions. That's all have we time the

like would call, back Lowell some the turn end to closing for we Before it comments. I to over

Lowell McAdam

Thanks, Brady.

save into we're that But a a reform for So XX tax the from these of very seen in clarify. reason for on years got in to and to when I I there for come of my been couple think have was obviously, exciting often. come us industry for I our like to in don't career. those And times second and that me. was use and breaking one just on significant I've business. me of most I this we've points important the calls funds changes final

applications, the of by the as We changes we cusp strong infrastructure. fourth are city what are revolution education; of in the telecommunications changes medical, call I transportation fueled and on smart industrial in those see the all a

and and technologies I strong assets a think We've history great major investing We're and I the that that operational of coming this I the long time So, think the is in to said live, work a is media meet And I as the future. fiber in deliver and will in the our change new the best overall. people forward. positioned platforms a way Verizon the and are to for needs had network industry that be performance. financial Obviously, think play.

of year to years history. best I XXXX, sharing what very ahead recapping results this in and for about forward So, in year and lies the move I time the next one excited am successes our forward this as at and us. a look the we coming call on

your we time today. and we'll close appreciate that all with of the So, call

Operator

for and conference Ladies for services. Verizon today. and call using conference gentlemen, the this you, participation conclude does for Thank your

You may now disconnect.

Verizon Communications (VZ) 23 Jan 182017 Q4 Earnings call transcript