Ladies and gentlemen, we thank you for standing by, and welcome you to the CoStar Group Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions given at that time. As a reminder, this conference is being recorded. I will now turn the conference over to Richard Simonelli. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to CoStar Group's second quarter 2016 conference call. Thanks for joining us. Before I turn the call over to Andy Florance and Scott Wheeler, I have some important facts for you. Certain portions of this discussion contain forward-looking statements, which involve many risks and uncertainties that can cause actual results to differ materially from such statements. Important factors that can cause actual results to differ include, but are not limited to those stated in CoStar Group's July 27, 2016 press release on our second quarter earnings results and in our filings with the SEC, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q under the heading Risk Factors. All forward-looking statements are based on information available to CoStar on the date of this call, and CoStar assumes no obligation to update these statements whether as a result of new information, future events, or otherwise. Reconciliation of non-GAAP net income, EBITDA, adjusted EBITDA and all of the non-GAAP financial measures discussed on this call to their GAAP basis results and reconciliation of forward looking non-GAAP guidance discussed on this call to the most directly comparable GAAP measure are shown in detail along with definitions for those terms in our press release issued yesterday, also found on our website. As a reminder, today's call is being broadcast over the Internet and is available at costargroup.com, where you can also find our Investor Relations page. A replay will be available approximately one hour after the call and will be available for approximately 30 days. To listen, you can call 1-800-475-6701 within the United States or Canada or 320-365-3844 outside the U.S. The access code is 397279. A replay of this call will also be available on our website soon…

All right. Thank you very much, Andy. Looking forward to that next 30 years and the $250 billion. Andrew C. Florance - President, Chief Executive Officer & Director: Only 29.5 years.

Only 29.5 years to go for me. As Andy mentioned, we're pleased with the performance in the second quarter of 2016. Today, I'd like to provide a bit more color on the results in addition to what we've already communicated to you in our second quarter press release, which we sent out yesterday. My comments are going to focus on the financial results, some performance metrics, and then our 2016 outlook. Regarding our financial results, revenue in the second quarter 2016 increased 21% over prior year, which translates into a 15% growth rate on a pro forma basis. These pro forma results include the revenue from Apartment Finder for 2015, net of the revenue streams that we eliminated such as Finder Social. Now, looking at our revenue performance by services, we're very pleased with the acceleration in revenue growth in CoStar Suite from 12.5% year-over-year in the first quarter of 2016 to 13.9% year-over-year in the second quarter of 2016. The acceleration in the growth rate is underpinned by continued strong CMA sales as well as the refocusing of our information sales force back to selling information products following our successful Apartments integration. With this strong performance, we believe that CoStar Suite will continue growing in the 12% to 14% range throughout 2016 as opposed to the 11% to 13% range that we've previously communicated. The information services revenue growth for the second quarter was in the low single digits, as expected. You'll recall that information services includes revenue from our LoopNet information products, LoopNet Searcher, Property Comps and Property Facts, which we are not actively selling in advance of our planned integration of LoopNet and CoStar expected at the end of this year, as Andy was talking about. Accordingly, we expect revenue growth rates in information services to decline…

Our first question is from the line of Brett Huff with Stephens. Please go ahead.

Good morning, guys. Hope you're doing well. Andrew C. Florance - President, Chief Executive Officer & Director: Thank you, Brett.

Thanks, Brett.

My question is on the net new annualized bookings and the net new bookings. Just to make sure, I understand, it seems like that was a negative growth, because both the tough growth or (35:11) because of the big-time media spend last 2Q and because of the shutdown or the deemphasizing of the sales of the info products, but we had a lot of questions from folks asking, when will that normalize and when – which should we see that start to get positive again on a year-over-year, or even sequential basis? Andrew C. Florance - President, Chief Executive Officer & Director: And you're referring to the impact of LoopNet Premium Searcher, Premium Comps and Property Facts or ...?

Yeah. So, I think two things is what you guys said that, and then also just the tough comp because you had so much media spend in 2Q last year? Andrew C. Florance - President, Chief Executive Officer & Director: Right. And then the shutdown of the Finder Social, and non-core revenue. So the LoopNet information products will remain volatile through the first quarter of 2017 for sure. And again we're in a position where we do not want to artificially try to accelerate or intervene to accelerate sales of a product we intend to discontinue before long. So that will – and we don't want to begin aggressively converting LoopNet customers to CoStar Suite until we have 100% of all LoopNet content available within CoStar Suite so there is no reservation factor for a convertee.

Yeah. Andrew C. Florance - President, Chief Executive Officer & Director: So we anticipate that being first quarter 2017. So we would begin looking to report a clear consistent progress with that in second quarter 2017.

Great. Andrew C. Florance - President, Chief Executive Officer & Director: Did you want to add anything to that latter part of that, Scott?

Yeah. Keep in mind that as we transfer to CoStar Suite, you'll see that growth obviously in the CoStar Suite sector. And so, if you're looking really at only information services then as you'd expect, that's going to continue to decline as we get the more of the value shifted into the CoStar Suite sector. Andrew C. Florance - President, Chief Executive Officer & Director: And over the long-term it would go to zero and hopefully be transitioned over to CoStar.

Our next question is from the line of Sara Gubins with Bank of America.

Hi. Thank you. Just a follow-up on that discussion. Could you size the amount of revenue that you expect to effectively eventually go away by the first quarter of 2017 and do you think you'll be able to recover all of that into CoStar Suite during 2017 and is this any different from what you've been talking about previously around doing some sort of hybrid product between LoopNet and CoStar? Andrew C. Florance - President, Chief Executive Officer & Director: It is not different, it's what we've been talking about for, I guess gosh, I hate to say it, but two years now.

Yeah, quite a while. Andrew C. Florance - President, Chief Executive Officer & Director: But ...

It's getting there. Andrew C. Florance - President, Chief Executive Officer & Director: Yeah, so the PCPF component, the Property Comps, the Property Facts component which is immediately impacted in the first quarter is what ...

Yeah, it's about $35 million to $40 million. Andrew C. Florance - President, Chief Executive Officer & Director: The total is $35 million to $40 million. And then the (38:24) is probably $18 million or so, roughly. And so the $18 million – and then the other part, we basically phase out. The half that we phase out over probably an 18-month cycle beginning in the first quarter 2017, but we do that prioritizing the most likely to convert and upsell first and our goal would be to be able to show a net overall uptick in revenue during the course of 2017 from that effort, but again we look at it. It's only estimating, you're just trying to make an estimate with your best belief. I'm pretty darn confident that it represents up to a $50 million cannibalization of the higher value products and it represents an upsell opportunity of $250 million. So I think, again it can't be known, but it's in the $200 million to $300 million positive range, and I think that would be captured over five years to 10 years overall.

Thank you. Next in queue is Brandon Dobell with William Blair. Please go ahead. Brandon B. Dobell - William Blair & Co. LLC: Hi. I just want to make sure I connect two dots here. First, the number of salespeople you're adding through, I guess, the balance of this year into 2017. How that will fit with – I guess it's the changes you're making in advance of combining the LoopNet and CoStar databases to really push the CoStar information suite. How do those two things align, and is there some connection between that answer and how we should think about the net new number the next two quarters or three quarters? Andrew C. Florance - President, Chief Executive Officer & Director: Well, as you know, growing the sales force in the next two quarters does not grow the revenue in the next two quarters dramatically Now, we do have some pent-up growth already in the Apartment side. So, we probably have in the range of 30 folks to 40 folks in the pipeline to be added to productive sales or production sales for apartments that will go online in the third quarter and fourth quarter. So we have about 30 people to 40 people that will become productive in the third quarter or fourth quarter in the Apartment side. We'll probably see some benefit from that. The information LoopNet side will be a little bit slower. And then, we're going to bring on a second component later in the year, where we're creating 40 hunter territories in the Apartment side. And again, then they probably won't really be – their work will not be visible to the first quarter 2017. But that growth in cost is already reflected in our earnings guidance and in the raising the earnings guidance for the year. So, we're reinvesting some of the outsized beat for the year.

And what's encouraging about this, Brandon, as you look at our sales head count that is obviously down 50 plus heads from where we were last year at this time. And even with that we achieved second highest sales quarters in both Multifamily and CoStar even at these depleted levels. So, we're really encouraged that the effectiveness, if you look at the productivity of the sales force on an individual basis has grown dramatically between now and a year ago. And so, that's definitely encouraging for us and we'll underpin the plans to want to continue to grow sales as that productivity is still rising. Andrew C. Florance - President, Chief Executive Officer & Director: Yeah. The productivity, especially in the Apartment side is really quite impressive. And I'd also say that, just to give you some color on that, it's always tough to pull together two equal-sized sales forces into one and then restructure it all in the course of a quick 12 months. I'd have to say I just completed – last week I completed a two-day – our bimonthly two-day apartment sales manager meeting. And the group is really cohesive now and stable, and really rowing in the – pulling in the same direction, I think really strong. So we can see that we have – we're reaching 80% of our clients each quarter, which is a mandatory thing. And – but we only have enough feet on the street to reach about 15% of our prospects each quarter which is just lost revenue opportunity. And we're – when we meet with a – when we do have a demo with someone who is marketing their apartment building, we have about a 30% close rate. So, given that we can only reach 15% of the prospects, we want to reach 100% of the prospects each quarter, hence we're scaling the sales force a little bit.

Next in queue is Sterling Auty with JPMorgan.

Hi, this is (43:37) in for Sterling. Thanks for taking my questions. Just quickly about the Apartments.com unique visitors in relation that you gave on the release. Does that include the new traffic from Move.com and Realtor.com? If you can just give us more color on that, so, that we can give more of an apples-to-apples comparison from a year-over-year standpoint. That would be really helpful. Thank you. Andrew C. Florance - President, Chief Executive Officer & Director: Sure. It does include that Move.com traffic, Realtor.com traffic as well. I'd have to say that that is not a large driver. I don't have exactly a number, but I know that it represents, gosh – it represents a little less than 4.5% of our lead flow. So, one of the things is that a residential site like that, a site that's got both residential and for rent on it, drives dramatically less lead flow of like a fraction of the lead flow of the dedicated Apartment site drives and then it also has a lower conversion rate. So it's not the meaningful driver of that story. One of the things that was a remarkable benchmark this quarter was that Apartments.com, one site, not the whole network of sites – Apartments.com one site beat the unique visitors of our second closest competitors' four or five sites combined. So it's really where we thought this would be more of a story of a network of sites, the Apartments.com traffic is pulling so far ahead that it's really just about Apartments.com.

Next in queue is Bill Warmington with Wells Fargo. Please go ahead.

Good morning, everyone. Andrew C. Florance - President, Chief Executive Officer & Director: Good morning, Bill.

Hi, Bill.

So the $250 billion figure, is that a full year number or is that a run rate exiting 2046? Andrew C. Florance - President, Chief Executive Officer & Director: Third quarter.

Third quarter. Okay. Andrew C. Florance - President, Chief Executive Officer & Director: Third quarter. But we might revise that.

Okay. Andrew C. Florance - President, Chief Executive Officer & Director: Guide upward on that number.

All right, now the real question. On the Apartment sales force, if you could help me understand again, how big is it now and how long before you get to parity with the CoStar Suite sales force? Andrew C. Florance - President, Chief Executive Officer & Director: I think it's – by head count to-date on our payroll it's in parity. But 35 of them, let's say, 30 to 40 of them are still in training or just coming out of training. And that training period includes maybe currently four weeks to five weeks of training, and then a mandatory no-sell period of about three weeks to four weeks where they have to visit 100% of the clients in their territory. So it's about a two months to three months phase-up. And so – but they'll all start coming on line in this quarter and the following quarter. And then, we would have a larger sales force in the Apartments.com side of the house in the – coming in the first quarter of 2017 as we add another 10 account managers and then 40 hunters.

And next in queue is Andre Benjamin with Goldman Sachs. Andre Benjamin - Goldman Sachs & Co.: Hi, good morning. Andrew C. Florance - President, Chief Executive Officer & Director: Good morning, Andre. How're you doing?

Hi, Andre. Andre Benjamin - Goldman Sachs & Co.: Good, good. So, I just want to talk a little bit about the core Suite. I know there's a lot of focus on Apartments and the LoopNet up sell, but with the headline number for growth in the Suite, could you talk a little bit about how much of that is driven by underlying user or number of corporations, or teams growing relative to pricing. And then, similarly, the year-over-year growth was about $12 million. How much of that is from the broker-client space that most people are traditionally focused on versus the institutional investors in other buckets you're trying to grow? Andrew C. Florance - President, Chief Executive Officer & Director: So, I would say that not a lot of it is – there's not much of it coming from price increases. So, we have – I would say it's inflation, sub-inflation, two points, three points depending on which inflation you're using. So, it's really an expansion of the client base and new logos coming on board. A little bit of – like I think there was a big Bank of America deal where they were expanding the number of heads in there, but a lot of its coming from people who are buying Multifamily information services from us in CoStar. So, a lot of business is coming from banks and lenders. We are making good progress with folks like Fannie Mae and some other organizations in that side of the world. So, a lot of its institutional owner, but we're still adding brokers. But the real season for focusing on the brokerage industry is in Q1 2017, once we do the LoopNet conversion. So we still have tens of thousands of brokerage firms who want to add to the client base and the real push on that happens next year. Did that answer your question, or what did I leave out there? Andre Benjamin - Goldman Sachs & Co.: Nope. That was it. Thank you. Andrew C. Florance - President, Chief Executive Officer & Director: Okay. Thank you. Appreciate it.

Next in queue is Patrick Walravens with JMP Securities.

Yeah, hi. This is Natasha on for Pat. We were just wondering what ... Andrew C. Florance - President, Chief Executive Officer & Director: Hi, Natasha.

Hi. Andrew C. Florance - President, Chief Executive Officer & Director: You could be Pat.

What is the appetite for M&A, in particular for property management software solutions like RealPage or Yardi? Andrew C. Florance - President, Chief Executive Officer & Director: RealPage, Yardi. I've never heard of them.

We should look them up. Andrew C. Florance - President, Chief Executive Officer & Director: We should look that up...no, I'm teasing. Those are – I'd have to say those are some great companies; huge customer presence, mission critical functions to those industries. And you could put MRI in there; you could put Entrata in there, but they're also very complex and they don't move share very quickly. So, I would say that in the apartment marketing space, there's been a lot of share shift. We're telling you that we believe there's a lot of share shift in the last two years. It wouldn't move like that in the Multifamily property accounting space. It is developed over 30 years to 40 years, that kind of share, and people don't – switch costs are very high moving from one system to another. We think it's more advantageous to have a positive 'coop-etition' with those players and there is an unlimited number of things we can be doing on the revenue generation side for the industry right now, without getting into direct competition with one or another of those folks. So we're open to different things. We're more focused on the revenue generation side of the business right now. We're lazy. We don't like to work hard. So... Okay. Thank you.

Our next name in queue is Ian Corydon with B. Riley & Co. Ian Corydon - B. Riley & Co. LLC: Thank you. You talked about some of the trends you're seeing in the apartment space with respect to absorption and rent growth. I'm curious what kind of conditions would have to occur before you might get concerned that advertising spend might actually contract for the apartment space? Andrew C. Florance - President, Chief Executive Officer & Director: Well, the thing that would worry me more is dramatically lower vacancy rates, and I don't think that's what's going to happen. Both in the CoStar information business and the Apartments business, when vacancy rates start moving to 1% and 2%, there's no such thing as marketing. The nice thing in the Multifamily spaces are such high churn though that people want to maintain that lead flow and they can in fact, push rents, but I'm more concerned about ultra-low vacancy rates. I'm less concerned about vacancy rates expanding. So, if vacancy rates expanded to the 10% rate, I think you would see a lot of bankruptcies occur. And if that happens, there's plenty of capital in the world. There is overall a fundamental housing shortage in the United States, residential housing shortage, so the capital would flow in and the new capital would come in at a lower cost base and stable balance sheet and would aggressively market to fill those vacancies. That's our view and I think we would have a painful time seeing any of our customers lose their properties, but we would come out of it and it would cause short-term friction. It could be a 90-day cycle where the property drops off, before it comes back on, but we would benefit. The one thing that I think is happening right now and again I'm only estimating, but we watch it carefully, I think one of things that is happening now is that over the past five years or six years, I believe apartment communities used to maintain substantial advertising contracts with multiple ILSs for the same property. I think that people are beginning to reduce the number of ILSs they use and that's because of these super-low vacancy rates. Fortunately, our product is strong enough that they're choosing our ILS as the one to remain with to the best of my knowledge. So big picture, I am not, I'm more concerned as a taxpayer what it might to do to bailout programs and deficit than I am to what it does to Apartments.com advertising spend.

Our last question is from the line of Andrew Jeffrey with SunTrust.

Hi, guys. Thanks for squeezing me in. Andrew C. Florance - President, Chief Executive Officer & Director: No problem there. Always, we do that.

Hey, Andy, you mentioned a nice lift in apartment community revenue yield or revenue per community and it seems that that reflects pricing to value. You also mentioned, I think that some of your competition is now perhaps cutting price in order to take share in a competitive environment. It would seem that given the value add and the quality of the data, et cetera that CoStar is in a position where it could actually start to price to value more effectively. Is that something that we could see drive revenue growth over time in the Apartments business? Andrew C. Florance - President, Chief Executive Officer & Director: Certainly, so one of the things we intentionally did is when we selected Apartments.com as the first company we wanted to merge with, we made it a point to select the lowest cost provider. We wanted to have the group with a lowest cost point on the belief that if nobody had more than 10% share of the market and you have a fixed brand development marketing budget line, you're better off going in there at lower cost and trying to achieve much higher volume, and if other people play a high price point game and have lower volume and can't invest in branding, they're in a tough place. So, we like being somewhat aggressive, and we like taking share. You said – you mentioned one thing that our competitors are reducing price to take share, I think they're reducing price to hold share. I believe they're losing significant share, I think they're losing shocking share. So, we would, I mean I do believe that's there. When we get major customers who we value telling us the kinds of things they're telling us about, the kind of lead flow we're generating comparatively…

Thank you. Andrew C. Florance - President, Chief Executive Officer & Director: And I think we have one more question. No? We're all set. Well, thank you everybody. We appreciate you joining us in the second quarter earnings call and I look forward to talking to you on the third quarter.

That does conclude our conference for today. Thank you for your participation and for using AT&T Executive TeleConference service. You may now disconnect.