Ladies and gentlemen, thank you for standing by and welcome to the Q1 2016 Boston Scientific Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. And as a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Susie Lisa. Please go ahead.

Thank you, Roxanne. Good morning, everyone, and thanks for joining us. With me on today's call are Mike Mahoney, President and Chief Executive Officer; and Dan Brennan, Executive Vice President and Chief Financial Officer. We issued a press release earlier this morning announcing our Q1 2016 results, which included reconciliations of the non-GAAP measures used in the release. We have posted a copy of that release as well as reconciliations of the non-GAAP measures used in today's call to the Investor Relations section of our website under the heading Financial Information. The duration of this morning's call will be approximately one hour. Mike will provide strategic and revenue highlights of Q1 2016, Dan will review the financials for the quarter and then Q2 2016 and full-year 2016 guidance, and then we'll take your questions. During today's Q&A session, Mike and Dan will be joined by our Chief Medical Officers, Dr. Keith Dawkins and Dr. Ken Stein. Before we begin, I'd like to remind everyone that on the call, organic revenue growth is defined as excluding the impact of sales from divested businesses, changes in foreign currency exchange rates and sales from the acquisition of the American Medical Systems Male Urology portfolio over the prior year period. Also of note, this call contains forward-looking statements within the meaning of Federal Securities laws, which may be identified by words like anticipate, expect, believe, estimate, and other similar words. They include, among other things, statements about our growth in market share, new product approvals and launches, clinical trials, cost savings and growth opportunities, our cash flow and expected use, our financial performance including sales, margins, earnings and other Q1 2016 results and Q2 and full-year 2016 guidance as well as our tax rates, R&D spend and other expenses. Actual results may differ materially…

Thanks, Dan. Roxanne, let's open it up to questions for the next 30 minutes or so. In order to enable us to take as many questions as possible, please limit yourself to one question and one follow-up. Roxanne, please go ahead.

Thank you. Our first question comes from the line of Bob Hopkins, Bank of America. Please go ahead.

Hi, thanks and good morning, and thanks for taking the questions. So, to start out, Mike, obviously this is one of the best growth quarters you guys have had in a while, and congratulations on the great start to the year. I was wondering if you could talk to us a little bit about just the broader macro environment and the health of the markets you're in, and maybe just talk about the factors driving growth. And I would really appreciate it if you could talk a little bit about Uro and Endo as well and some of the products that are driving growth in that division because obviously that's where you had some really nice outperformance Thanks. Michael F. Mahoney - President, Chief Executive Officer & Director: Yep. Yeah. Good morning, Bob. Thanks for this question. Overall, the market growth we see consistent with what we've mentioned in the past, kind of playing in 3% to 4% growth markets overall for Boston Scientific. And similar to our Investor Day presentation, we're investing in the faster growth markets that would basically accelerate the growth profile another 100, 200 basis points in the markets that we serve. So, with kind of similar growth rates in IC and Cardiology and CRM kind of in the low-single-digit range and more in the 4% to 5% market growth rates for our MedSurg. But I guess what we're most proud of is really, across the board, with the exception of CRM, we're growing – and EP, we're growing significantly faster than our competition. And that's really driven by our product launches and really excellent global execution. We're really pleased with the growth in Asia. Profit almost 15%, very strong growth in Japan, very strong growth in Europe. So, across our businesses or regions, our teams are really delivering. In terms of your question on Endo and Urology, we're very thoughtful about the AMS acquisition and we're seeing the benefits of the commercial synergies between those organizations given the additional commercial footprint that we have as well as the broadness of the bag. And you're seeing that with a really acceleration of our legacy Urology division, in part due to the synergies of our AMS business. We continue to invest in physician training for our Stone Institute, and we continue to benefit from the category leadership based on the premise of the AMS acquisition. In Endoscopy, it's a very innovative division, and we continue to lead innovation with our digital SpyGlass system which is really a terrific platform for us that we can continue to build from, and that also helps drive pull-through of our core portfolio. So, the R&D teams are executing as well as the commercial teams, and we continue to be committed to our durable mid-single-digit revenue growth, our operating margin expansion, and our double-digit EPS growth over the long term.

Great. Thanks for that. And then a follow-up maybe for Dan. Dan, can you just help us? Was there any, in your view, selling day mismatch this quarter versus a year ago? And then on the operating margin performance in the quarter, it sounds like over the course of the rest of the year, there's going to be some incremental spending because obviously you're guiding to a lower operating margin than you started out in Q1. So, maybe just comment on the selling day year-over-year, and then also maybe quantify and describe some of the extra spending that you're going to be undertaking here in the remainder of the year. Thank you. Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Sure, Bob. First, quickly on the calendar, no, we don't believe there's an extra impact in Q1. There was obviously a leap year day. But then when you factor in the timing of the Easter holiday, believe it's a true 8% growth for the quarter organically. Relative to operating margin, so I think when you look at Q1 at the 25%, and then you look at the 24.25% which is the midpoint for the full year, one of the key changes there is, as I mentioned in my prepared remarks, the reinvestment of the medical device tax benefit over the rest of the year. So, little delayed in Q1 getting off to that start, but committed to reinvesting the entire amount for the rest of the year, so that's one. And I think there's R&D timing as well in Q1, so, our Q1 R&D was 10.7%. If you look at the guidance range, you'd see 11.5% at the midpoint. Part of that's the med device tax reinvestment, and part of it's just the timing of overall R&D. So, that's another 80 basis points there going from the 10.7% in Q1 to the overall average of the 11.5% for the full year. So still, as you look at the 24.25%, still significant growth versus last year, 190 basis points, and feel good that we're striking a good balance between delivering differentiated adjusted operating margin and investing for a continually growing top line for the future.

Great. Thanks very much.

And our next question comes from the line of David Lewis with Morgan Stanley. Please go ahead. David R. Lewis - Morgan Stanley & Co. LLC: Good morning. Just a few quick questions. Mike, I guess the issue for us this quarter is that we expected an inflection quarter sometime this year. Obviously, it's coming earlier. But I guess as we think about the balance of the businesses, we actually thought there could be acceleration from whatever the growth rate was in the first quarter out. And I wonder, can you point us to tailwinds, headwinds in the business throughout the balance of the year based on this thought of acceleration throughout the year? And then, with specific attention, perhaps, within cardiovascular, you talked about those businesses, but in terms of stents, WATCHMAN, Lotus, what's really driving that strength in cardio? So, acceleration and then, particular cardiovascular, and I have one quick one for Dan. Michael F. Mahoney - President, Chief Executive Officer & Director: That is a multipoint question. Thanks, Dave. Just overall we are pleased with our performance in the quarter. We took the guidance up from 4% to 7%, to 6% to 8% organically, not impacting AMS. And as I mentioned, the businesses and regions are performing at a nice level. As we look, we obviously anticipate a solid second quarter given our 6% to 8% guidance in second quarter. We do face a couple headwinds throughout the year. We do anniversary some key product launches in our Peripheral Vascular as well as our Endoscopy business. We do anticipate some Japan reimbursement cuts that we'll be working through. And we're very bullish on our WATCHMAN program, but we're also anniversarying the initial launch. So, there are a few headwinds but overall, we have an excellent product cadence.…

Our next question is from the line of Mike Weinstein, JPMorgan. Please go ahead.

Okay, guys. So, when's the last time Boston Scientific grew 8% organic? You guys know the answer? Michael F. Mahoney - President, Chief Executive Officer & Director: I'll bet you Dan knows. I don't. Daniel J. Brennan - Chief Financial Officer & Executive Vice President: I'd say 10 years, Mike.

2Q 2005. Daniel J. Brennan - Chief Financial Officer & Executive Vice President: That's right. Michael F. Mahoney - President, Chief Executive Officer & Director: There you go. Let's do it again.

What strikes me in particular is if I look at the U.S. performance and I back out CRM and I back out AMS, I'm getting to about 15% growth for the U.S. business in aggregate, which is obviously very, very strong. So, I want to circle back first to Bob's question just to make sure you don't think that there's anything kind of unusual going on in selling days, and I heard your answer there. But we are seeing this particular strength, and not just Boston Scientific. We've seen this in some other end markets over the course of the past week that have come in stronger. Anything that you think is going on that showed up this quarter in particular that is driving this real increase in volumes? And I'm speaking not just of your own performance, but do you have any theories on the broader market looking stronger this quarter than we've seen in a while? Michael F. Mahoney - President, Chief Executive Officer & Director: Yeah. Good morning, Mike. We don't see a big change in the market from our peers that have reported. We were seeing a 1% to 4% growth rate with the exception of one, which is higher than ours. So, we do feel like we're growing faster than most of our peers. And I also think we're going through maybe a bit of a cycle of some good innovation and some mix benefit. We clearly see a lot of enthusiasm, for example, for S-ICD, despite our headwinds in the near term on MRI, which we're pleased with the pace for approval, we're getting nice mix benefit from S-ICD as well as global uptick of the S-ICD, particularly in Japan. And I think our strategy of category leadership, which we've really stressed for a number of years now is starting to pay off. Many of the large systems in the U.S. are willing and wanting to partner with Boston Scientific given our current platform as well as the pipeline that we've committed to. So, I think the markets are steady. We have a nice pipeline that's helping some of our mix benefit. And I think, importantly, we're really building up our capabilities outside the U.S. Our Asia business grew very well. And just this year, we've done a grand opening for our Malaysia plant. We have a new R&D center in India. We have new training centers. So, our capabilities in Asia are significantly stronger than they used to be. So, that's also helping to strengthen our business.

Mike, if I look at the Interventional Cardiology business in the U.S., if I look at the Peripheral Vascular business in the U.S., I mean, both just had exceptional quarters; Interventional Cardiology up 21%, Peripheral Vascular up 13%. Would you mind just peeling the onion a little bit and help us understand how those businesses are doing as well as they are? Because obviously, that's well above expectations. Michael F. Mahoney - President, Chief Executive Officer & Director: Yeah. I think it really speaks the category leadership. So, two words that get used a lot in the industry, but I think we're delivering it. We have an excellent portfolio. Interventional Cardiology, as I mentioned, I'm in Korea here at this large conference. And we believe we have the best drug-eluting stent in the marketplace. We have an excellent imaging platform with IVUS and we're launching FFR. We're the leaders in chronic total occlusion. We have the WATCHMAN product for interventional cardiologists who want to implant it, and a very promising and differentiated TAVR valve. So, I think our category leadership strategies are working in cardiology, and similarly in Peripheral Vascular with our – I won't go through all of them, but the Bayer acquisition, really has exceeded the investment models that we've had in terms of synergies and growth. And our drug-eluting stent platforms with the stents and the balloon are doing quite well.

I'll let some others jump in, but congratulations, guys, on a obviously a fantastic quarter. Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Thanks, Mike. Appreciate it. Michael F. Mahoney - President, Chief Executive Officer & Director: Thank you.

And our next question is from Rick Wise, Stifel, please go ahead. Rick Wise - Stifel, Nicolaus & Co., Inc.: Good morning, Mike. Good morning, everybody. Let me turn to one area of weakness. Obviously, CRM, High Power down 4%, Mike. Can you talk a little bit more about that? And specifically, you called out the replacement headwinds. You've been talking about the replacement headwinds in CRM and High Power for a while. My sense is from your comments in the past is that that – it's going to shift more to neutral or even a tailwind at some point in the not too distant future. Can you give us any more concrete thoughts about when that happens and the kind of drag it is now and how that could change as we look to 2017 and beyond? Michael F. Mahoney - President, Chief Executive Officer & Director: Yeah. Thanks for the question, Rick. Just regarding our CRM performance broadly and I'll comment on the replacement headwind. It's really as we projected almost a year ago. We knew we were going to have some challenges in the U.S. Our Asia business, our Japanese business and our European business in CRM are doing quite well and growing either at or above market. And the two launches will help us improve growth, we anticipate, in the second quarter and for the second half. And also the team continues to improve operating income margins despite negative growth in the quarter which is good to see. On the replacement headwinds, we don't have any additional breakdown of data that we're going to provide on this call. But I will say – and I think in the future we'll consider providing some additional detail so we can quantify that – but similar to our last…

And our next question comes from the line of Bruce Nudell, SunTrust. Please go ahead.

Hi. Good morning. This is actually Imron Zafar in for Bruce. Thanks for taking my question. I wanted to ask a couple questions about the TAVR business. Can you just talk about where you think you are in Europe vis-à-vis market share and where you think you can go in the next, call it, couple years in that geography? And then also, if you could just give any commentary around this litigation with Edwards on transcatheter valves in the U.S.. Thanks. Michael F. Mahoney - President, Chief Executive Officer & Director: Yeah. So, on our Lotus program, as Dan outlined, we continue to invest a significant portion of our med device benefit in our Structural Heart franchise. In terms of share, we don't break out our share specifically in Europe. We are more limited versus some of our peers in terms of number of countries we're selling into. So, we're waiting to get reimbursement still for France. So, that's a large market that will open up for us in the future. But we continue to grow above market in the markets that we're serving, particularly in Germany. And the physician feedback continues be very strong on the low PVL rates which we believe are best-in-class and really the control and fully achievable and repositional capabilities of the platform. So, we continue to invest and we're excited about the enhancements of our depth guard technology that I mentioned in the prepared comments. Keith, any additional comments you want to mention on Lotus? Keith D. Dawkins - Global Chief Medical Officer & Executive VP: Yes. So, we've got a pretty rich number of presentations, the EuroPCR next month on Lotus; late-breaking trial on 1,000 patients from the response study, bicuspid valve subgroup from the response study, subclavian approach from the response study, a Lotus symposium, and on the stent side the EVOLVE first human-use five years data for the first time. And then, obviously, as we said at ACC, coincident with London Valves later this year, we're anticipating launching LOTUS EDGE which has a number of features including 14 French compatibility, more simple implantation procedure, more flexible device, and the depth guide technology which reduces the amount that the valve dips into the left ventricular outflow tract during deployment. So we have a lot going on with Lotus and then the additional sizes of 21 and 29 millimeter. And we've completed, as Mike said in his statement earlier, the REPRISE Japan study which is important.

Okay. And can you just give any color on the litigation with Edwards? Michael F. Mahoney - President, Chief Executive Officer & Director: Yeah. Yeah. We're not going to comment on our pending legal matters.

Okay. Thank you very much. Michael F. Mahoney - President, Chief Executive Officer & Director: Yep.

Our next question is from the line of Vijay Kumar, Evercore. Please go ahead.

Hey, guys. Congrats on a great quarter. So maybe, the first question I had was maybe a housekeeping question on a – you mentioned ICD declines and double-digit growth in stents. Was that in both geographies? When you say stents up double-digits, was that double-digit in both geographies, U.S., o-U.S.? And similarly on ICDs, I'm just wondering whether declines was only in the U.S. or did you see declines in o-U.S.? Michael F. Mahoney - President, Chief Executive Officer & Director: So, Dan, do you want to comment on that one? Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Yeah, Vijay, thanks for the question. We're not going to get too specific in terms of the growth rates by geography. Obviously, we think of Japan, we had approval for SYNERGY early in the quarter, so we're off and running there. We're on offense there. We had SYNERGY in the middle of the fourth quarter in the U.S., so strong growth there in stents. And Europe which has had SYNERGY for a long time is still doing very well. So, no, I don't want to quote specific numbers for each of the regions there. And I think, overall, I think Mike's commentary around CRM was pretty detailed, that if you think of – we're doing very well in Japan. We're doing well in Europe. And the CRM softness has been more of a U.S. product gap issue and we've hopefully solved a couple of those product gaps with the recent Quad approval and with the MRI safe brady approval.

Understood. And I just had one follow-up, Dan. When you think about the longer-term operating margin rate, I know you guys have laid out the 25% margin targets for 2017. Can you just talk about the leverage and your confidence in bending the SG&A line? Because it feels like just looking at the trends, the 25% might be – there's upside to that 25% number for 2017. And then any comments beyond 2017? Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Sure. We've stated publicly before that by 2020 we believe we'd be at 27% to 28% operating margin, just at operating margin as a company, and the 25.1% is a great start to the year. But as I mentioned, the average for the year should be between 24% and 24.5%. And as always, we seek to strike that balance between delivering the adjusted operating margin and ensuring that durable consistent revenue growth for the long term. And if you look at our numbers this year, if you look at 6% to 8% organic revenue growth, 190 basis points of adjusted operating margin expansion at the midpoint of the range and adjusted EPS growth of 14% at the low and 18% at the high end, I think we're effectively achieving that objective. And as you look at 2017 and beyond, we look to continue to deliver high performance and that's the goal.

Thanks, guys.

Our next question is from the line of Josh Jennings, Cowen and Company. Please go ahead. Joshua Jennings - Cowen & Co. LLC: Hi. Good morning. Thanks a lot. Wanted to hopefully start off with a question for Dan and just a follow-up on the operating margin discussion and some of the strength you saw in Q1 and particularly in the guidance. Can you talk about AMS integration and is AMS contributing already to operating margin? And how do you see the AMS contribution going through the year and also as it flows down into the bottom line in the accretion levels that you guys had guided to historically? Are you still on track there? Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Yeah. I think the short answer to that Josh is that we are right on track. So we had talked about $0.03 accretion in the year from AMS. We're on track to achieve that. And then next year, we had talked about $0.07 and we should be on track for that. And the difference is really some of the integration costs that we have this year with respect to the quality remediation and some of the things like IT and such that are pushing that down a bit this year. And next year, you should see the full power of what AMS can bring to the margin story for the company. Joshua Jennings - Cowen & Co. LLC: Okay. Great. That's helpful. And then, Mike, I was hoping to just follow up on the CRM business. Clearly you have some nice approvals over the last month and particularly this week on the MRI, filling that MRI-safe product gap on the low-voltage side, and you initiated your MRI-safe trial for high voltage. I just wanted to get your level of confidence, your team's level of confidence in the timelines there. And maybe just help us think about the steps going forward in terms of times of enrollment and during the enrollment period and follow-up period just to help us think about the safety of that mid-2017 timeline on the high voltage side. Thanks a lot. Michael F. Mahoney - President, Chief Executive Officer & Director: Yep. Sure. We feel comfortable with it. I think we've been reasonably accurate on the forecast for some of these big product approvals with the Quad and the MRI pacer. So, we're looking at call it mid-2017, maybe to hedge that a bit, third quarter 2017 for approval of our tachy MRI product.

Roxanne, let's take one more.

Right. And our next question comes from the line of Matt Miksic, UBS. Please go ahead.

Hey, Vic, I'm on. Hi. Thanks for taking our question. So, a couple, if I could. One on WATCHMAN, just a follow-up on some of the questions that have already been asked. But what we hear, I guess, from centers, obviously NCD in place and differentiated device. And I think everyone's excited to see how this rolls out. But there is some question, I guess, about how profitable this is to some of these centers. For some, it does seem to be a little bit on the tight side for pricing net of reimbursement, but at the same time doesn't seem to be, from what we can tell, a significant impediment to interest or early adoption. So, any thoughts on how you see that playing out over time or regionally playing out as it begins to pick up steam here? And then I have one follow-up for Dan. Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Sure. So the NCD was a nice win for us. And we believe we really have the right sweet spot in terms of the WATCHMAN pricing. It is financially viable at most of the heart centers that we have contracted with. So, we stay very close to that, and it's really part of our category leadership strategy. So, we want to price it at the appropriate level given the investment that we've made in the platform, as well as future clinical trials that we're supporting as we advance this new therapy. But we do believe it's financially viable and a healthy product with appropriate margins for the vast majority of our hospital that are using this today.

Okay. That's helpful color. And then for Dan, on some of the work you're doing to drive manufacturing efficiencies and working capital efficiencies, net operating asset turnover here, obviously a key driver for ROIC and you do have an opportunity there from what we can tell. It's obviously a focus. Wondering if you could sketch out how we should see that begin to play out because understanding your manufacturing rationalization or the efforts you have underway, it may not be apparent from the numbers, on a turnover basis, the improvements that you're making. But would love to get a sense of when that'll start to become apparent and maybe start having an additional impact on returns on capital. Daniel J. Brennan - Chief Financial Officer & Executive Vice President: Sure. I think I'd like to believe you'll see some of that impact this year. So, we have a significant emphasis on reducing inventory, and I had mentioned that in some of my prepared remarks, and trying to prove that, from our perspective, we can grow sales at the rate they we're doing but also optimize inventory. And we have a lot of work ongoing to try and do some things to rationalize that. And from a cash flow as well as the other metrics that you mentioned, reduce inventory overall by the end of the year as a company. So, my goal would be that as we go through the year, you'd see that. It was pretty reasonable compared to Q4 of last year, inventory this year. And so we've stemmed the tide a bit now and I'd look to, for the last three quarters, to see that reduce which will help all of the turnover and asset metrics as well as the contribution of working capital to cash flow.

Excellent. Thanks so much.

All right. With that, we'd like to conclude the call. Thank you for joining us today. We appreciate your interest and before you disconnect, Roxanne will give all the pertinent details for the replay. Thank you.