Good morning, everyone, and welcome to HealthSouth's First Quarter 2015 Earnings Conference Call. At this time, I would like to inform all participants that their lines will be in a listen-only mode. After the speakers' remarks, there will be a question-and-answer period. You will be limited to one question and one follow-up question. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Mary Ann Arico, Chief Investor Relations Officer.

Thank you, Laurie, and good morning everyone. Thank you for joining us today for the HealthSouth first quarter 2015 earnings call. With me on the call today in Birmingham are Jay Grinney, President and Chief Executive Officer; Doug Coltharp, Executive Vice President and Chief Financial Officer; Mark Tarr, Executive Vice President and Chief Operating Officer; John Whittington, Executive Vice President, General Counsel and Corporate Secretary; Andy Price, Chief Accounting Officer; Ed Fay, Treasurer; Julie Duck, Senior Vice President of Financial Operations. Before we begin, if you do not already have a copy, the press release, financial statements, the related 8-K filing with the SEC and the supplemental slides are available on our website at www.healthsouth.com. Moving to slide 2, the Safe Harbor, which is also set forth in greater detail on the last page of the earnings release. During the call, we will make forward-looking statements which are subject to risks and uncertainties, many of which are beyond our control. Certain risks, uncertainties and other factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations are discussed in the company's SEC filings, including the Form 10-K for 2014, the Form 10-Q for first quarter 2015 when filed and previous filings with the SEC. We encourage you to read them. You are cautioned not to place undue reliance on the estimates, projections, guidance and other forward-looking information presented. Statements made throughout this presentation are based on current estimates of future events and speak only as of today. The company does not undertake a duty to update or correct the forward-looking statements. Our slide presentation and discussion on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most directly comparable GAAP measure is available at the end of the slide presentation…

[Operator Instruction] Your first question comes from the line of Whit Mayo of Robert Baird. Whit Mayo - Robert W. Baird & Co., Inc. (Broker): Hey. Thanks. Good morning. Maybe just start first with the Cahaba denials. Is there any specific claim or case mix group that they're reviewing? Or is this just an issue more from their widespread targeted pre-pay review across the entire industry? Mark J. Tarr - Chief Operating Officer & Executive Vice President: Yeah. Hey, Whit. This is Mark. It's really across the board. There doesn't seem to be a specific clinical group that they're focusing in on. We've had claims against a broad variety of clinical grouping. Whit Mayo - Robert W. Baird & Co., Inc. (Broker): Yeah. I mean, looking at their website, I mean, they list a lot of the denial rates across a lot of the CMGs they're reviewing. And just as an example, looking at the neurological CMGs back in the fourth quarter, it looks like the prepaid claims in Alabama across 92 providers, they denied 99% of the claims, so it just seems somewhat interesting. My second question was really just on Encompass and the pipeline and how you think about start-ups versus acquisitions in the HealthSouth legacy markets. And is there a target that you have in mind for the number of markets you'd like to move into this year? I know you've earmarked maybe $30 million to $40 million of capital, but just not sure on the size or the number of markets. Jay F. Grinney - President, Chief Executive Officer & Director: Yeah. I think that the markets that we are able to enter is going to be driven, in large part, by opportunistic acquisition opportunities. The plan is not to attempt de novo acquisitions. As you know, many states have moratoria in place on new home health licenses. So, the focus is really on acquiring agencies in existing markets. Whit Mayo - Robert W. Baird & Co., Inc. (Broker): Okay. Thanks a lot. Jay F. Grinney - President, Chief Executive Officer & Director: All right.

The next question comes from the line of Josh Raskin of Barclays.

Hi. Thanks. Just want to follow up on the two sort of not in guidance bad guys this quarter. So, first on the litigation, was there any form of accrual or anything previously on the balance sheet or was this all a big surprise? And I guess I'm curious why not sort of a charge or something like that. And then, just a follow-up on Whit's question on the other one, the collections issue on the IRF side, I'm sorry, did you say – do you think that's more industry-wide or do you think it's HealthSouth, does this relate to anything you guys have seen in the past? Just sort of more color on the history there. Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: Hey, Josh. It's Doug, and I'll take the first one. And that is, the case was uninsured and there had been no prior accrual. And the fact of the matter is that it came together very quickly. And ultimately, when we looked at the facts and the circumstances, we determined that it was better to settle this thing expeditiously than to incur additional legal expenses in drawn-out litigation, but there was no prior accruals. And it is not something that is typically covered by insurance programs.

Okay. Got you. Jay F. Grinney - President, Chief Executive Officer & Director: And then, Josh, relative to the second part of your question. We have a high number of our hospitals fall under one particular fiscal intermediary who has been particularly aggressive at their chart reviews and the number of claims that they have denied. So, that is not really different than what we've seen in the past, but they've been particularly aggressive here as of recent quarters.

And Mark, is there – there's no sort of recourse you have other than this Administrative Law Judge that could take potentially three years, is that the problem? Jay F. Grinney - President, Chief Executive Officer & Director: Well, this is Jay. The recourse that we have is certainly putting these challenged denials into the ALJ process. But we are also reaching out to this particular MAC. And they have expressed an interest and a willingness to at least sit down and to hear our position. There are no – unfortunately, there are no other remedies. When we have gone to CMS in the past, we have not been told that there's a willingness on Baltimore's part to intervene in decision making at the local MAC level. They rely pretty heavily on the discretion and the judgment of the individual MACs. And they are somewhat reluctant to get in and to second-guess them. Now, having said that, if we get to the point where we're unable to get a resolution on these matters, especially as it relates to the documentation issue, there's nothing in the final rule that says claims can be denied because of inadequate documentation. And so, our position on this is that they're denying claims that shouldn't be denied. So, if we get to a crossroads there and we're not able to move forward, we'll certainly make efforts to go to CMS central and to try to advocate our case up there. But it's – there isn't an easy, simple, fast solution to this. Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: And what you're seeing is that the confluence of increased claims denials and the lengthening of the adjudication process is exacerbating the impact on both bad debt expense and ultimately on net…

Your next question comes from the line of Chris Rigg of Susquehanna Financial Group.

Good morning. Just to stay on the same topic, just some clarification around the numbers. The $1.5 million that you talked about, is that an increase over what you were previously expecting, or is that the total amount in the bad debt in the quarter related to this issue? Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: The $1.5 million is the difference between the 1.7% bad debt expense number we reported and the 1.5% estimate included in our guidance at the beginning of the year. The delta on a year-over-year basis was approximately $3 million.

Okay. And then the total denial pool thus far for you guys, can you give us a sense for how much that is? Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: During the quarter, we had about $16 million, $16.5 million of new denials.

Okay. Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: And the rate has been at a higher level. Really, it's something we started to see spike up in Q3 of last year. It was higher in Q4 and at a level comparable to Q3 of last year and the first quarter of this year.

Okay. And then last one, just on M&A. When we think about the strategy going forward, in terms of sort of allocation of M&A dollars, is it going to be now more skewed towards tuck-in Home Health or still primarily focused on the Inpatient Rehab side? Thanks a lot. Jay F. Grinney - President, Chief Executive Officer & Director: Actually, both. That's one of the great things about combining our two companies is we have more than enough free cash flow to continue to fund the growth that we see in the IRF space. On top of or in addition to that, we are able to fund the growth for the Encompass operation. So, we're able to fund growth across both segments. And fortunately, we're not in an either/or situation.

Your next question comes from the line of Dana Nentin of Deutsche Bank.

Good afternoon, everybody, or good morning. This is Josh Kalenderian in for Dana here. Just first, at the time you mentioned the Encompass deal, that of your IRF discharges to a home health location, only about 8% or 9% of those were going to a HealthSouth or Encompass Home Health location. Have you started to see any increase in that since the deal closed? Jay F. Grinney - President, Chief Executive Officer & Director: Modestly, it has occurred very slowly, in part because we really have not begun that formal process. Although it is underway now, we did not begin that immediately in the January-February timeframe. We were putting our focus more on the integration of the legacy HealthSouth agencies with the Encompass operating platform, but we are certainly looking forward to those relationships firming up. I think as everybody on the call knows, there's always the issue of patient choice. But having said that, we also believe that there is an opportunity. In fact, I would say that we have a responsibility to our patients to introduce them to the services and the capabilities that our home health company, our partnership company can provide. We believe that those services are superior to home health services that can be provided by any other company out there. And so, we will, over time, look to establish stronger relationships with the referring physicians and to really be very assertive in introducing Encompass's capabilities to our patients and their family members.

Okay. Great. Thank you.

Your next question comes from the line of A.J. Rice of UBS.

Hi. I know you guys have talked around this, but I just – I'm looking for sort of the simple bridge here in some way. You did $156 million in EBITDA in the first quarter, will add back to $4 million of litigation that's included in that. And to get to your sort of midpoint of your guidance, you need about a $170 million run rate for the next three quarters. I don't think there's great seasonality there, but what would be the couple of things that step you up from the run rate you exit the first quarter at to those? If you can just sort of distill that, that would be helpful. Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: Sure. Hey, A.J., it's Doug. You asked for a couple, but I'll give you four things that kind of...

Okay. Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: First is, as you mentioned, we had that $4 million settlement on the employee sexual harassment in Q1 that won't repeat itself in the subsequent quarters. The second is, and this is specific to Q2 really, but if you look at our pricing at 1.8%, I mentioned that that was related to some timing issues. And without dragging you down into the weeds, the timing issue was really that there was one extra workday in the month of March this year versus the prior year.

Okay. Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: And because we're on an accrual basis, that lowers pricing, you wind up seeing a bounce back in that pricing in the second quarter. So, that factors into its impact predominantly on the same-store contribution. The third is that you'll have a increasing favorable impact in each subsequent quarter from the four de novos or the four new hospitals – excuse me, that were brought on board in the fourth quarter of last year. As Jay mentioned, those facilities will roughly break even from an EBITDA perspective in Q1. But their contribution will ramp up through the course of the year. And finally, just based on the composition of the Encompass business and predominantly the same-store growth within their business, as well as the contribution from agencies acquired in 2014, their EBITDA contribution also increases through the course of the year.

Okay. That's great. And maybe just a quick follow-up, on the home health deal pipeline you mentioned. Is there some way to think about the order of magnitude of capital you would allocate to that area? What is sort of – how do you think about how much you're likely to grow that acquisition-wise in the next few years? Douglas E. Coltharp - Chief Financial Officer & Executive Vice President: As was included in the slide that we had in our deck regarding uses of free cash flow at the beginning of the year and has stayed the same, we've got a placeholder for $35 million to $40 million of agency acquisitions in there. We think that that's a good number to factor into your planning, but it's not a limit. So, we see quality opportunities and the Encompass team is comfortable that they have the bandwidth to continue to bring those on board, we can go above that. But right now, we think that the good estimate is something in that $30 million to $40 million range.

Your next question comes from the line of Gary Lieberman of Wells Fargo.

Good morning. Thanks for taking the question. Is there any kind of meaningful difference in the revenue per episode or episodes – visits per episode between Home Health – the HealthSouth Home Health operations and Encompass? Jay F. Grinney - President, Chief Executive Officer & Director: The Home Health – the legacy Home Health from HealthSouth was predominantly therapy-related. We didn't offer anything, but therapy services. If you look on page 25 of the supplemental slides that were out there, and I realize there was a big deck. But if you go back to the step – that page and you look at the revenue per episode, you can see that – and go to the far right, you can see the 25 legacy home health agencies and the pricing there, revenue per episode was tracking higher than what we saw in the Encompass operations.

Okay. Great. Thanks for pointing that out. And then, can you talk a little bit about the integration, if there is any, between the HealthSouth sales and marketing teams and the Encompass sales and marketing teams, and maybe just walk us through how a hand-off might work from a HealthSouth facility into Encompass? Mark J. Tarr - Chief Operating Officer & Executive Vice President: Yeah. Hey, Gary. This is Mark Tarr. Really, yes, the sales teams are collaborating together, but primarily, it happens within the hospitals as we have our directors of case management that are assigned to each one of our patients and responsible for their discharge plans. The degree of which they communicate and coordinate with the liaisons from the Encompass team will better coordinate that discharge and have a smooth transition at the time of discharge from our hospital into the Encompass Home Health segment. Jay F. Grinney - President, Chief Executive Officer & Director: And I would say, Gary, that we are – to be very candid, we are in the very early stages of that formal relationship and more coordination between the various sales efforts. I think that that's an opportunity that will be there for us to take advantage of over time. But right now, that's in its really early stages.

Your next question comes from the line of Frank Morgan of RBC Capital Markets.

Good morning. I wanted to go back to the discussion around capturing that patient volume (42:41) to your home health care agencies now from your rehab hospitals. Who is really the main decision maker in that process? Is it really the doctor, the patient, the family, the discharge planner? I'm assuming that has to be sort of a delicate conversation. But who do you see implementing that decision the most, and how difficult do you think it will be to capture all your discharge volume and capture it in your Encompass Home Health? Jay F. Grinney - President, Chief Executive Officer & Director: Well, I think that the answer is all of the above. Unfortunately, Frank, there isn't a single individual that, across the board, always is the dominant factor. Physicians certainly play a role. As you know, patient choice is a requirement. Case managers can influence the process. So, when we look at the opportunity to provide a superior level of home care services for patients who are being discharged from our hospitals, we're looking to approach all of those parties to introduce them to the capabilities of Encompass: the higher quality of care, the higher patient satisfaction. As you know, there are going to be a lot of just on-the-ground, hand-to-hand combat kind of things that we have to overcome. There may be physicians who have medical directorships with the existing home health companies or agencies out there, we'll have to overcome that. There may be existing referral patterns that have to be reassigned, reestablished. But we do think that over time, we'll be able to get a large number of those patients into our home health operations. And if you think about down the road, to the extent that we get more involved with bundled payments, to…

Thanks for all the detail. And then, Jay, since you mentioned BPCI, are you involved, has anybody asked you to participate with them as part of one of the BPCI programs now or are you doing anything on your own? Thanks. Jay F. Grinney - President, Chief Executive Officer & Director: Yeah. We have several hospitals participating in the Model 3, and we have several hospitals participating as part of the Model 2. Mark, do you want to elaborate on that? Mark J. Tarr - Chief Operating Officer & Executive Vice President: Hey, Frank. We've got five hospitals that as of April 1 are participating in a Model 3, one episode per hospital. We have three others that will be added on effective July 1. So, as of this week, we had 24 patients in the programs, so we'll see where that goes. We'll have to get a better idea about what we will have to do to position ourselves in the future should this take on a larger scale.

Your next question comes from the line of Kevin Fischbeck of Bank of America Merrill Lynch. Joanna S. Gajuk - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Hey, good morning. This is Joanna Gajuk filling in for Kevin today. Thanks for taking the question here. Just quickly, on the Encompass acquisition and the business itself, you mentioned you expect the EBITDA ramp-up over the year. But I believe it's a function of just the growth of its health plan. So, can you comment on the margin outlook for that business? I guess the numbers you gave for Q1 indicated margin in the 15% range. So, is there something you can talk about the ramp-up in margin over the – through the year and how it compares to prior year? Jay F. Grinney - President, Chief Executive Officer & Director: It was a little hard to hear you. I think the question related to what are our expectations for the Home Health and Hospice segment margin over the balance of the year? Joanna S. Gajuk - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Correct. Jay F. Grinney - President, Chief Executive Officer & Director: Yeah. And we don't see it moving materially from where it is right now. You'll get a combination of some leverage opportunities as acquisitions that were made previously continue to mature. But that's going to be at least partially offset by new acquisitions coming into the fold. So, it won't be materially different. Joanna S. Gajuk - Merrill Lynch, Pierce, Fenner & Smith, Inc.: All right. So, it's pretty much – so the growth you're talking about, to A.J.'s question about EBITDA ramping up through the year, it's a function of the top-line growth rather than the margin expansion in that business, correct? Jay F. Grinney -…

Thank you. At this time, I will turn the call to Mary Ann Arico for any additional or closing remarks.

Thank you. As a reminder, we have an Investor Day scheduled for June 10 in New York City. If you have not already RSVP'd and would like to attend, please let us know. If you have additional questions, I will be available later today. Please call me at 205-969-6175. Thank you.

Thank you for participating in HealthSouth's first quarter 2015 earnings conference call. You may now disconnect.