Welcome to the Quest Diagnostics Third Quarter 2015 Conference Call. At the request of the company, this call is being recorded. The entire contents of the call, including the presentation and question-and-answer session that will follow, are the copyrighted property of Quest Diagnostics with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Quest Diagnostics is strictly prohibited. Now, I'd like to introduce Dan Haemmerle, Executive Director of Investor Relations for Quest Diagnostics. Go ahead, please.

Thank you, and good morning. I'm here with Steve Rusckowski, President and Chief Executive Officer; and Mark Guinan, our Chief Financial Officer. During this call, we may make forward-looking statements and also discuss non-GAAP measures. Actual results may differ materially from those projected. Risks and uncertainties that may affect Quest Diagnostics' future results include, but are not limited to, those described in Quest Diagnostics 2014 Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Our earnings press release is available and the text of our prepared remarks will be available later today in the Investor Relations Quarterly Update section of our website at www.questdiagnostics.com. A PowerPoint presentation and spreadsheet with our results and supplemental analysis are also available on the website. Now, here's Steve Rusckowski. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Thanks, Dan, and thanks, everyone, for joining us today. This morning I'll provide you with the highlights of the quarter, share a few comments on the industry dynamics, and review progress on our five-point strategy. And then Mark will provide more detail on the results and take you through guidance. We grew revenues, margins and earnings in the third quarter. Revenues grew 1% on an equivalent basis to $1.9 billion. Adjusted operating income grew approximately 7% and operating margin expanded by 130 basis points compared to the prior year, once again reflecting improved operational efficiency. And adjusted diluted EPS increased approximately 7% to $1.28. Before I get into our strategy update, I'd like to talk to you about industry dynamics, starting with the recent CMS proposal related to PAMA. We are currently reviewing the draft and are sharing our perspective with the trade association. As you're well aware, this is an important issue for every lab because it…

Thank you. The first question comes from Isaac Ro with Goldman Sachs. You may ask your question. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Good morning, Isaac.

Sir, please check your mute button.

Isaac? You want to move onto the next question, Christine? And if Isaac comes back in, we'll take him.

Thank you. The next question comes from Ricky Goldwasser with Morgan Stanley. You may ask your question. Ricky Goldwasser - Morgan Stanley & Co. LLC: Yes, hi. Good morning. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Good morning, Ricky. Mark J. Guinan - Chief Financial Officer & Senior Vice President: Good morning, Ricky. Ricky Goldwasser - Morgan Stanley & Co. LLC: So just had kind of like a follow-up question on the volume and one on PAMA. So we talked a lot over kind of like the first half of the year about the easing comp into second half around the contracts, right, with your anniversary from last year. We haven't really kind of like seen a significant uptick in the third quarter; so can you just kind of like walk us through kind of like what you're seeing in evolving environment and how should we be thinking about volumes for the remaining of the year? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Yes. So thanks, Ricky. Well, first of all, let me go back and refresh ourselves on where we've come from and the progress we've made. Then, we'll talk about specifically what we're seeing in Q3 and Mark and I will tag team this. First of all, if you recall, back in 2017, we said at our first Investor Day that this had been a company that had declining volumes and we needed to first slow down the rate of decline, flatten that out and start to show improvement and continue to show progressive improvement, and that it would take time. So if you think about the past few years, if you go back to 2013, our organic revenue declined by about 4%. If you go back to 2013, our organic revenues…

The next question comes from Bill Quirk with Piper Jaffray. You may ask your question. William R. Quirk - Piper Jaffray & Co (Broker): Great. Thanks, and good morning, everyone. Hey. Good morning. Mark J. Guinan - Chief Financial Officer & Senior Vice President: Good morning. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Good morning. William R. Quirk - Piper Jaffray & Co (Broker): So I guess, a follow-up on the utilization comment, I was hoping you could just add a little color to the comment around some of the market softness that you're seeing. Was that I guess overall utilization or should we think about that being specific to any particular sub-segment, like drug testing for example? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Sure. Mark, you want to... Mark J. Guinan - Chief Financial Officer & Senior Vice President: No, that was overall. That was not segment specific. Generally, when we're commenting it's the largest portion of our business that we're commenting on any – not any of the unique sub-segments. So actually, we saw some pockets of strength so it seems as if some hiring may have picked up in the economy so actually that business is doing better than the broader business but it's kind of the base overall routine in esoteric testing volumes compared to the trend we have seen earlier seem to slow a bit in July and August especially. Stephen H. Rusckowski - President, Chief Executive Officer & Director: And though we did see, as we said, we did see some pick-up at the end of the quarter and we did see good growth once again in our genetic and esoteric business. We said that last quarter as well. We're encouraged by that and our results on…

The next question comes from Jack Meehan with Barclays. You may ask your question.

Hi. Thanks, and good morning. I just wanted to ask another question on PAMA, and certainly understand we don't have perfect data today without the survey, but just as you look at the framework that CMS used to lay out what an applicable lab is, it appears, at least based on the definition today, that Quest and lab were going to be a good portion of the survey. I think it's around 1/3. What do you think as you look at some of your rates on the routine side of the business versus what Medicare is today? Do you think the 6.5% cut that they laid out is a reasonable assumption to use? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Again, I'll repeat what I said earlier. Until they gather the data, it's hard for us to speculate what the results will be. We don't have, along with they, good visibility on the rates. That's why they want to gather the data. We don't know what other analysis commercial contract rates are by code. There's an enormous amount of data here. We have over 3,000 tests. We have multiple contracts. And if you read what they propose, it has to be done by TIN number, which adds more complexity. So if you look at what we have to do, it's a lot of reporting and we're just one of hundreds of labs that are required to report. So we've got to go through the data. As far as what was in that report or in the guidance around an estimate, we're not sure where those estimates come from other than an interesting data point with some cherry-picked results that they've seen. We'll see what the data supports and we'll make sure there is sort of a thorough process to get to our fair rates in the marketplace for the value we deliver. Mark J. Guinan - Chief Financial Officer & Senior Vice President: And, Jack, as I'm sure you're aware, when we looked at the Avalere study, even without hospitals, we didn't expect significant reductions in the clinical lab fee schedule. When we shared that, hospitals were included. In fact, in many cases, Medicare was paying less. So you then have the CBO scoring which is another data point which would suggest more reductions than Avalere but certainly not anything overly draconian and then you have what's come out from CMS based on their proposal being even higher. So these estimates are all over the board. As Steve said, until we get some actual data it's kind of hard to answer that question.

Yes, that's fair. And then just one around the commentary around the M&A pipeline; do you think that some of the discussion around PAMA has either delayed some of the transactions taking place or does that change the way you evaluate targets in the market? Thanks. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Well, first of all, many hospital outreach labs that we look at and we have purchased have a larger percentage of their business with Medicare. And so we do take into consideration what the Medicare rates will be in our evaluation of the business. Second is if that in fact is true, then we believe this could be a further catalyst of more outreach businesses interested in looking at their options. And what we've said we have a nice M&A pipeline. Many of those assets that we're considering are hospital outreach assets. And we're encouraged by it and we still believe with the projections of what we have for rates that on the cost synergies when you realize by bringing their volumes into our infrastructure, we can build a nice business case related to the cost synergies associated with those acquisitions. So it's been a deliberate part of our strategy. It's key to what we believe will happen in this marketplace that is more hospitals relying on us for their laboratory services. And the second part of our working with hospitals or hospital outreach opportunities where we help them with their impatient laboratory, we are working on a number of very large opportunities there and we hope to share some of that with you in the next few months and going into 2016. So stay posted, but we're encouraged by the progress and I think all the change that we see happening in healthcare in general is going to be a further catalyst for more interest than what we've been talking about for several years.

The next question comes from Amanda Murphy with William Blair. You may ask your question. Amanda L. Murphy - William Blair & Co. LLC: Hi. Good morning. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Hey, Amanda, how are you? Amanda L. Murphy - William Blair & Co. LLC: Mark – good. Mark, I just had a follow-up, I don't think we specifically addressed why you guys expect to be at the lower end of revenue guidance for the year. I apologize if I missed that. Are we to assume it's because of some of the volume commentary you made or is there something else there that we should be thinking about? Mark J. Guinan - Chief Financial Officer & Senior Vice President: That's a large driver certainly, Amanda, but the other one is if you recall after the first quarter when we had a little more impact from weather than we had anticipated, at that point I shared that for us to get towards the upper end of the range, we would've had to execute some meaningful M&A. So while we went into the year thinking we could do the 2% to 3% without any M&A after the first quarter headwinds we had based on weather, especially in the Northeast, and in Boston specifically record snowfalls where we have a very important share and a large portion of our business that it was going to take some M&A. So as you've seen that we have announced two deals this year, one of them just last night, Superior, and then MemorialCare. Those are not large enough at this point and we're not done early enough to contribute significantly in 2015. So therefore, a combination of a little bit of unexpected volume softness in Q3 and then not getting…

The next question comes from Bill Bonello with Craig-Hallum. You may ask your question. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Hey, Bill.

Great. Good morning, guys. A couple of questions; so for the last several quarters and especially this quarter, you're starting to show some really impressive growth from an operating income standpoint, which is something that we haven't seen for years frankly. And I'm trying to understand as you look forward, whether you think that kind of leverage either through cost savings or other factors is sustainable into 2016 and beyond? Do you think if you don't see an uptick in sort of volume or pricing that it would be, you would have to revert back to sort of lower operating income growth or is there enough on the cost saving side that you can drive growth even if the macro environment sort of doesn't improve? And then I do have a follow-up after that. Mark J. Guinan - Chief Financial Officer & Senior Vice President: Yes, thanks for the question, Bill. I'm sure you recall that at the Investor Day in November, I talked about and Steve talked about the fact that we thought – we foresaw 2% to 5% revenue growth through 2017; 1% to 2% of that coming from M&A, so on organic level of growth of 1% to 3%, and earnings growth, not earnings per share but earnings growth, of 8% to 10%. And that was going to be fueled by three drivers. One was going to be some of the continued synergies and leverage we would get out of the transactions we executed in 2014 carrying into 2015. The second driver was our Invigorate program which moving our goal from $700 million in run rate savings to $1.3 billion and we didn't lay out how that would drop through by year. But given the size of that growth in savings and efficiencies, we talked about the…

Great. And then if I can, just one slightly unrelated follow-up. But you talked about potentially we could see some exciting stuff with big deals to manage hospital, even in-house labs, et cetera. Can you talk about as you think about what you're doing on the hospital side, whether it's managing hospital lab business directly or purchasing outpatient outreach business, but particularly the former, what impact that might have in terms of sort of metrics that we're looking at? And in particular, I'm thinking about capital intensity, return on invested capital, et cetera. Is that a higher return proposition for you and how does it fit from sort of just a margin standpoint? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Bill, I'll begin with this and then I'll turn it to Mark on the returns and how that affects our goals we've laid out. First of all, it's both. And it's both managing hospitals' in-patient laboratories in some form. And in some cases, it might not be entirely, but some portion of it. And then finally is helping them with their outreach business. In some cases, we would acquire their outreach business, which we have done for the last three years. And as so much in healthcare goes, you see one strategy, you see one strategy. So we've engaged with the C-Suite around their lab strategy. When this goes well, we are their lab partner going forward. We've demonstrated this already with a number of our joint ventures we have and a number of the outreach businesses we've acquired. We're clearly their lab partner going forward and I think this is a direction that we'll see more of in the future as this healthcare system in this country continues to evolve. Now with these potential deals around…

Excellent. Thanks so much. Mark J. Guinan - Chief Financial Officer & Senior Vice President: Thank you. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Thanks.

The next question comes from Dave Francis with RBC Capital Markets. You may ask your question.

Hey. Good morning, guys. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Hey, Dave. How are you?

I'm well. Thanks. Wondering bigger picture, do you guys have a perspective or I was wondering if we could get your perspective on just kind of what do you see overall volume-wise given your results and your perspective here? Just kind of what the puts and takes are from a broader perspective relative to kind of what's likely to kind of resolve some of the softness that you saw in the last quarter? Is there something going on with the mix of high deductible health plans, with the newly insured? Again, your bigger picture take on what's going on volume-wise? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Yes, sure, Dave. I'll take this to start and I'm sure Mark will add to it. First of all, if you look at the market, there is a bunch of puts and takes as you describe it. First of all, we believe the Affordable Care Act and the number of uninsured decreasing will add more lives to the system. What we've said consistently when people have insurance we believe they need what we do, therefore that would be good for us. Albeit, what we have seen so far for lives in the system for the Affordable Care Act are much less than what we anticipated back three years ago, as we all know. But we've said in the past few quarters that we are starting to see some of those Medicaid lives enter the system, so that is providing some volumes. And most people would agree that there will be increasingly less uninsured in this country in the years ahead, and that's what we have modeled in our expectations going forward. So, that's number one. Number two is, there continues to be a push for higher deductible insurance programs offered…

Yes, no, that's helpful color and I appreciate that. A quick follow-up. On the Inovalon announcement that you guys had recently; can you talk just very briefly about what your go-to-market strategy is there? Is that a product that your sales guys are capable of selling themselves given the footprint that they have, but the difference in what they're typically selling or do you have to rely on the Inovalon guys? How are you going to go to market with that? Thanks. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Yes, great question. First of all, we're very encouraged about the prospect, the opportunity with Inovalon. The reason why we think this is so encouraging and why Inovalon thinks it's so encouraging is our presence in healthcare. So if you think about our presence, particularly in the work floor of healthcare, we have over 200,000 placements of our quarter entry results reporting system, called Care360. We interface with all the EMRs you can think of on the planet, the large EMR companies like Epic and Cerner and McKesson and also the small homegrown activities. We sell to 50% of physicians in this country; we sell to 50% of hospitals, so we're right in the center of the ecosystem of healthcare, so therefore we have a large presence. And the nice thing about that is, what we will do with Inovalon is attach their capability into the workflow of physicians. So, it's not something they have to disrupt their workflow to get access to. And so we're working on the actual integration of their applications into our applications, so the physician or the administrator when they're working through the workup on the patient and the completion of gathering all the information on the patient, we'll be able to access all that information. As far as go-to-market, like so much in healthcare, it's obviously complicated. We have people that call on physicians, both primary care physicians and all specialists. That portion of our sales force will be informed and we are talking to the customers about this prospect. We also have an information sales force. These are highly specialized people that can get into more of the content associated with this. And Inovalon as well is providing some capabilities on the ground level, as well as broadly to support the sale, as well, from a real specialist perspective. So it's a hybrid sales approach, but we are encouraged about the prospects for us and Inovalon going forward and we have launched this in the fall to get off to a good running start going into 2016.

Great. Thank you. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Thank you.

The next question comes from Robert Willoughby with Bank of America Merrill Lynch. Please limit yourselves to one question at this time. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Hey, Bob.

Hey, Steve, on that Inovalon deal, I guess my question would be, how did you arrive at a 50%/50% revenue share for it? It seems to me with the connectivity that you have that you cited, the data you have, aren't you bringing a lot more to the table? Can you maybe flesh that out? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Yes, well, I appreciate you saying that, Bob. We believe we bring a lot of value to the table. On the same side, they bring all the content to the table and there's a lot of content. They've built a nice capability with their quality metrics application, the collection of all claims data real-time. So there's some very sophisticated approaches to gathering the information and serving that up to physicians. So we think the 50%/50% split fairly recognizes the value we deliver and the value they deliver, and it's a good partnership. So we think that's a fair split, but we are happy about the value I think we bring to the table because we think it's a good opportunity for us. Mark J. Guinan - Chief Financial Officer & Senior Vice President: Yes, Bob, just real quickly. I mean the analog might be some small independent lab came up with a new esoteric test, okay, so they created the whole test. They didn't have the ability to sell it to the health plans as well as we could, and then to do the pull-through with, as Steve said, our coverage, that it's going to be ordered basically like a CPT, kind of like a test. And so I think you'd say, okay, yes, 50%/50% is pretty fair. They did the innovation, obviously they've got the IP, et cetera, and we're really the commercial arm to help sell that and educate people on the value and the opportunity.

And just maybe a question on the cost associated with setting this up and then the deliverable itself. It's a one page of report or a two page, and maybe just, can you give like an anecdotal example of what the report might look like? And then, just lastly, how do you get the doc to pay for it? Is the payer going to pay for it? I mean how do we get over that hurdle? Stephen H. Rusckowski - President, Chief Executive Officer & Director: Yes, well, first of all, the reports vary based upon what you're asking for, so some of the patient history are nice, well-presented summary of patient history. The quality metrics are somewhat of a simple, this is what you need to do to close the gaps in Care related to quality metrics to qualify for stronger HEDIS Scores and your Star Ratings, so that's another report. As far as the pay for here, in many cases it will be the risk-taking organization, the insurance company would be the person that has the motivation to do this. But in other portions of this, particularly related to the HEDIS Scores, it could be the provider organization that's clearly incentive to do a better job of closing the gaps in Care and see the value, and therefore will pay us for this. Mark J. Guinan - Chief Financial Officer & Senior Vice President: And in terms of the investment required, Bob, it was a little more complicated than adding a couple of test codes to our compendium. That's kind of the way you should think about it. It's not a significant investment required to get this capability in our Care360. Okay.

The last question comes from Michael Cherny with Evercore. Please limit yourself to one question. You may ask your question.

Great. Thanks, guys, and thanks for squeezing me in. I'll make it one simple question. It's a clarification question. Just, Mark, on the reported volume for the quarter, is there any way you can break out the M&A contribution? If I'm reading correctly, I believe the only deal that should have contributed is MemorialCare; so any sense on what's organic versus what came from M&A? Mark J. Guinan - Chief Financial Officer & Senior Vice President: It's pretty much all organic, Michael. And then the quarter M&A was less than 10 basis points.

Okay. That's perfect. All right. Stephen H. Rusckowski - President, Chief Executive Officer & Director: And as we said earlier, we expected some M&A sooner. We have got a nice funnel for M&A and you'll see that in subsequent months. But the third quarter was pretty clean, but it was the fourth consecutive quarter of organic revenue growth.

Okay. Perfect. Thanks, guys. Stephen H. Rusckowski - President, Chief Executive Officer & Director: Okay. So thanks, everyone, for joining. As we have shared, we had another solid quarter. We are making good progress executing our strategy. We do appreciate all your support and interest in our company and have a great day.