Welcome to the HCA Third Quarter 2016 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Mr. Vic Campbell. Please go ahead, sir.

All right, Kyle. Thank you very much. Good morning, everyone. As usual, Mark Kimbrough, our Chief Investor Relations Officer, and I would like to welcome all of you on today's call including those of you listening to the webcast. And with me here this morning, our chairman and CEO, Milton Johnson; Sam Hazan, our Chief Operating Officer; and Bill Rutherford, our CFO. Before we turn the call over to Milton, let me remind everyone that should today's call contain any forward-looking statements, they're based on management's current expectations. Numerous risks, uncertainties, and other factors may cause annual results to differ materially from those that might be expressed today. Many of these factors are listed in today's press release and in our various SEC filings. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the significant uncertainties inherent in any forward-looking statements, you should not place undue reliance on these statements. The company undertakes no obligation to revise or update any forward-looking statements whether as a result of new information or future events. On this morning's call, we may reference measures such as adjusted EBITDA and net income attributable to HCA holdings, Inc. excluding losses or gains on sales of facilities, losses on retirement of debt and legal claims which are non-GAAP financial measures. A table providing supplemental information on adjusted EBITDA and reconciling to net income attributable to HCA Holdings, Inc. to adjusted EBITDA is included in the company's third quarter earnings release. As you heard, the call is being recorded and a replay will become available later today. With that, let me turn the call over to Milton Johnson.

All right, thank you, Vic, and good morning each of you joining our call this morning. I trust most of you have had the opportunity to review our third quarter results released this morning. I will make a couple of comments on the quarter, touch on a couple of other topics, then turn the call over to Bill and Sam to provide more detail on our third quarter results. I'm very pleased with our overall performance and execution in the quarter. We've continued use or free cash flow to invest in our markets to support future growth and we've returned cash to shareholders through share repurchase. Let me touch on the results for the quarter at a high level. The company experienced a solid quarter with revenues for the third quarter totaling $10.27 billion, a 4.2% increase from the prior year, driven by 1.5% equivalent admission increase and a 2.7% net revenue per equivalent admission increase in the quarter. Net income attributable to HCA Holdings totaled $618 million, an increase of 37.7% while earnings per diluted share totaled $1.59 per diluted share or $1.61 per diluted share before gains on the sale of facilities, losses on retirement of debt, and legal claim calls. Earnings per diluted share for HCA Holdings before gains or losses on sales, losses on retirement of debt, and legal claims cost increased 37.6% compared to the prior year. As noted in our release this morning, the company also recognized reductions in its provision for income taxes due to the adoption of a new accounting policy on equity award settlements of $11 million or $0.03 per diluted share, and $51 million or $0.13 per diluted share from the completion of IRS review of the company's 2011 and 2012 federal income tax returns. Adjusted EBITDA totaled $1.957 billion…

Great. Thank you, Milton, and good morning, everyone. I will add to Milton's comments and provide more detail on our performance and results for the third quarter. As we reported in the third quarter, our same facility admissions increased 0.7% over the prior year and equivalent admissions increased 1.3%. Year-to-date equivalent admissions are up 2% over the prior year. Sam will provide more commentary on volume in a moment and I'll give you some trends by payer class. During the third quarter, same facility Medicare admissions and equivalent admissions increased 1.8% and 2.5%, respectively. This includes both traditional and managed Medicare. Managed Medicare admissions increased 3.4% on a same facility basis and represents 33.5% of our total Medicare admissions. On a year-to-date basis, Medicare equivalent admissions are up 3.2% over the prior year. Same facility Medicaid admissions and equivalent admissions increased 2.3% and 3.4% respectively in the quarter, fairly consistent with our recent trends and our year-to-date growth of equivalent admissions of 3.2%. Same facility self-pay and charity admissions increased 0.7% in the quarter. These represent 8% of our total admissions, which was unchanged from last year's third quarter. Year-to-date, our same facility uninsured admissions are up 5.2% from the same period last year. Managed care another including exchange admissions declined 1.8% and equivalent admissions declined 1.4% on a same facility basis in the third quarter. However, on a year-to-date basis, same facility managed other and exchange-equivalent admissions remain slightly up. Same facility emergency room visits increased 2.7% in the quarter compared to the prior year. Same facility self-pay and charity ER visits represent 20.1% of our total ER visits in the quarter compared to 20.5% last year. On a year-to-date basis, same facility emergency room visits have increased 4.6%. Intensity of service or acuity increased in the quarter with…

Good morning. Let me begin by giving you some of the quarterly volume stats that I normally provide on these calls. Once again, the company continued to have broad-based growth across our markets and wide-ranging growth across the various facilities and service lines that make up our business. For our domestic operations, on a same facility basis, 10 of 14 divisions had growth in admissions, 10 of 14 divisions had growth in adjusted admissions, and 12 of 14 divisions had growth in emergency room visits. Freestanding emergency room visits grew 12.5% and accounted for approximately 40% of our overall ER growth. Hospital-based emergency room visits grew 1.8%. In addition to the solid portfolio performance across our 42 markets, the company's growth across its diversified service lines was also strong. For domestic operations on a same facility basis, inpatient surgeries grew 0.9%, which increased surgical admissions to 28.6% of total admissions in the quarter, an increase of 100 basis points as compared to last year. Surgical volumes were particularly strong again this quarter in cardiovascular, orthopedic, and general surgery categories. Outpatient surgeries were slightly down in the quarter by 0.3%. Hospital-based outpatient surgical volumes declined 0.9%, while volumes increased 0.4% in our freestanding ambulatory surgery division. This softness was felt across multiple service lines and across many markets, and we were not able to identify any particular issue that drove the softness. Behavioral health admissions grew 1.5%. The issue with physician staffing shortages that we discussed last quarter was still the primary driver of the slower growth in this service line. Three of our largest behavioral hospital units had staffing challenges. And without them, the company's admits in this service line would've been up 4.5%. Rehab admissions grew 4.3%, which was an acceleration in the growth rate as compared to the…

All right, Sam. Thank you very much. At this time, Kyle, if you'll come back on, we'll move to Q&A. I do encourage everyone, I know we've got a lot of folks on the call today. And as usual, please try to limit your questions to one at a time. Thank you.

We will take our first question from Sheryl Skolnick with Mizuho Securities.

Good morning. So thank you for mentioning that this was a tough comp in a tough quarter. From that perspective, I think folks have maybe forgot to put it in that perspective. But I'm curious since you're seeing this moderating in growth, one of the ways you might deal with that is by repositioning the portfolio to perhaps focus your capital spending and your capacity expansion efforts in more attractive markets. Was that behind the Oklahoma transaction that you announced at a curious time last night just before earnings or was there some other reason? If you could explore that a little bit and what the opportunities are with deploying capital, I'd appreciate it.

All right. Sam, you want to take that up?

Thanks, Sheryl. Oklahoma City, let me just give a little background and then I'll relate it to your question, I think, Sheryl. We had a relationship that dates back to 1998 with, I'll say it's the University of Oklahoma. It's a more complicated structure than that because of how the state had to do a transaction with us. But we've had this relationship since 1998 and when the hospitals came together, there were a lot of challenges both for HCA and the University Hospitals. When you look at where we are today, which is almost 20 years past, this has been a remarkable success from, I think, everybody's standpoint and a very innovative public-private partnership. So there's been a lot of investment, a lot of new programs, market share gains, and so forth that have really benefited the system. The way the deal was structured, it was structured as a lease. And we were in a situation, as was the hospital there, where it needed additional capital and unfortunately, the other side was not in a position to extend the lease in any significant way that allowed us to get comfortable in making the kind of investment that needed to be made. So it was felt by both parties that it was better to go ahead and start the unwind now so it could be orderly for both sides of the equation. And that's where we wound up announcing this transaction yesterday. It was a complicated deal to get into and a complicated deal to get out because it was very intricately structured. So that does allow us in the context of what we needed to make his investment there coupled with the type of lease that we had to look at repositioning the capital to be a source for whatever we want to do, whether it was more capital expenditures or other components of our capital allocation strategy. And so it does fit into that and I think that's part of what we considered as we went through our negotiations and our strategic analysis of this particular market.

All right, Sam, thanks. Milton, you want to add something?

Yeah. Let me just add that what Sam described, the structure of this particular arrangement, was unique to OU and to Oklahoma City. Our other partnerships that we operate do not have the same structure. So it is a very unique structure how that deal was put together back in 1998. And just wanted to make it clear that our other partnerships did not have that same structure.

All right. Thank you. Thank you, Sheryl.

Sure.

We'll take our next question from Kevin Fischbeck with Bank of America.

All right, great, thanks. I want to go back to your comments around volume growth moderating, the I guess demand growth in your markets moderating. And it sounds to me like you are saying it's moderating back to what you see as long-term normal numbers but I guess there's a lot of concern around surveys, and etc., around Q3 volumes and thinking about what the long-term volume is. What's your degree of visibility or confidence that 2% is the right market demand in your markets based upon where things have been trending the last several quarters?

All right, Kevin, thank you. Sam, I think we'll pitch that back to you.

We go through a process annually where we conduct a forecast of future demand for HCA markets based upon population trends, on macroeconomic factors, on aging and so forth. So that's always a fundamental approach of our business planning process. In addition to that, we compare historically to a longer view to see what the patterns have been in our markets on a historical basis. And we try to merge those two views into our company thinking and company view right now, and that's where we get to the 2% demand on the inpatient side. We think outpatient demand has a little more growth than that. So that process is consistent, and that's where we have landed on our view. There's nothing to suggest from one quarter in this particular year that that particular view is off. And so we're relatively confident today. We haven't finished our analysis for all of 2017 and on that anything materially has changed. I think one thing that's positive in the overall demand is that commercial demand continues to be reasonably solid inside of HCA's markets in these two periods that I discussed in total. And so that's an encouraging metric that suggests our portfolio of markets still have reasonable growth on the commercial side. Obviously there's puts and takes to that, but that particular metric I think gives us some confidence as well that our markets are still relatively healthy and present a reasonable opportunity for growth for the company.

All right, Kevin. Thank you.

And we'll take our next question from Josh Raskin from Barclays.

Thanks, good morning. Was curious when you talked about the freestanding ED growth and then your growth also in urgent care centers, sounds like that was up 40% or so. You're growing both sides. How do you guys think about that as both a threat and opportunity and how do you decide within a market if you want to open up a freestanding ED versus urgent care center other than the obvious regulatory and certificate of need if necessary, etc.?

All right, Josh, thank you. I think you're winning the lottery here, Sam.

Well, we have evolved are freestanding emergency room strategy over the past 5 years. I think 5 years ago, we had maybe 12-15 freestanding emergency rooms, we have 56 that are operational today, and I think by the end of 2017 or early 2018 we'll be north of 70. And in that particular strategy, we feel pretty good about how we place those. We see the urgent care as an additional wrap-around, if you will, our freestanding emergency room strategy, where there are certain moments of certain markets where urgent care is the best answer because of either competitive hospital systems or other freestanding emergency rooms, and it provides a component that wraps around our freestanding emergency room or hospital emergency room strategy. So there's a blend of what the right facility is for the right situation. There's population, there's traffic, there's location of other hospitals and other freestanding emergency rooms. And we go through this process of mapping out the market and determining what exactly is the right fit and how do we go about building this network further. In some respects, we try to build an urgent care strategy around our emergency room strategy which is built around our hospital strategy. So it's almost in concentric circles of facilities that create a fairly broad HCA network in these large markets, allowing our patients to enter the system in different forms or different fashions and also creating relatively favorable price points, if you will, for our payers where they can direct as they feel they need to direct but keep them in the HCA system. So it's hard to give you a specific because we have to look at the individual markets, but those are some of the general approaches that we take.

Okay.

Thank you.

We'll take our next question from Michael Newshel with Evercore ISI.

Thanks, good morning.

Morning, Michael. You're a little faint. You may want to lean in to your phone a little bit.

Oh, great, how's that?

Much better.

Great. So, can you talk about how your exposure to health plan exchange exiting your markets and just in general if there's any change in your level of network participation in exchanges for 2017?

All right, Michael, thank you. Bill, do you want to – or Milt...

I'll just make a couple comments about it. Obviously, a lot of movement in exchanges in our markets, as you see in most of the markets across the country. That being said, we still expect product to be available in our markets and probably multiple products in our markets. And we're really watching to see how this open enrollment period develops to see how the lines move around as a result of some of the plans pulling out. Overall, I think on a material level, HCA continues to be very well positioned in exchanges. I expect that we will see some growth, possibly, in our exchange business even into 2017. But obviously, there's some disruption in the marketplace and we're watching very closely. Bill, I don't know...

Yeah, I'll just add in. There's clearly a lot of discussion around the plan participation and premium adjustments and what that might do to enrollment. It is early for us to kind of give estimates for 2017, but we were encouraged by recent reports that they're expecting some increase in the exchange enrollment. We'll have to see where that enrollment is coming from for next year to refine our estimates. I also believe it's important to know we've heard this in various investor meetings during the course of the year, but we got data that suggests there's almost 4 million people in our markets that are eligible for subsidies that have yet to participate. And so we are somewhat optimistic that some of those remaining eligible people may find their ways in enrollment. In terms of plan exiting, most of our major markets, if not all of our major markets, there's another plan offering to catch those lives. So again, I think we're optimistic that health reform will continue to contribute to the company.

All right. Thanks, Bill. Thanks, Michael.

We'll take our next question from Ralph Giacobbe with Citi.

Thanks. Good morning. Just a quick one first. Any prior period revenue that came through in the third quarter? And then separately, just the slowing managed care volume – just any commentary around what may be driving that? And perhaps how to reinvigorate that category? Thanks.

Bill?

Yeah, Ralph, I'll take the first. There was no material out-of-period revenue adjustments in the third quarter.

And then, Sam, you want to talk about managed care volume?

Yeah, I'll say this in general. Obviously competition for commercial business is the most intense in all of our markets. Everybody understands the implications of the commercial book, and so there's significant competition in that particular area. But what HCA is doing structurally to compete in those environments is similar to what we just talked about. How do we create outreach into these commercial segments through outpatient facilities, through freestanding emergency rooms, through growth in our outpatient surgical platforms where we can start to develop relationships with our patients in a way that allow them to be connected and loyal to the HCA system? Additionally, with our physician strategies, we're very targeted in working with our physicians who have commercial books of business to expand their capabilities, allowing us to reach further into those particular arenas and hopefully drive downstream business. And then finally, working with our health plan to come up with ways to help them grow in a way that benefits our system. So I think our overall approach is built around the basics of our growth architecture, including where we deploy capital expenditures. We're focusing our capital on those facilities that have great opportunities in commercial markets or in outpatient facilities in commercial markets. So that's a part of our screening, if you will, for deploying capital because the return prospects are greater in those particular scenarios. But our competitors do that, too, so it's a very competitive landscape, and there's movement in and out periodically from who's gaining and who's losing in those environments. But we're very comfortable with the approach and how we have deployed it. We think there are new opportunities with customer relationship management through digital technologies, patient navigation and other ways to differentiate HCA further, and we're continuing to invest in those initiatives as well. And we think we've got opportunities to respond to this dynamic and this market as we move forward.

All right. Ralph, thank you.

Thanks.

We'll take our next question from Scott Fidel with Credit Suisse. Scott Fidel - Credit Suisse Securities (USA) LLC (Broker): Thanks. Interested if you could talk about the underlying wage inflation trends that you're seeing in the third quarter? Clearly it looks like expense management overall was quite strong, but just interested in the underlying inflation trends that you're seeing relative to earlier this year. Thanks.

All right. Thank you, Scott. You want to...

Well, let me just mention – this is Milton. I mean, we're not seeing really any substantial change in our wage rate and wage inflation. I think as we've been saying over really the last few quarters, we have pockets of wage pressure from time to time. We're always monitoring the marketplace. We make those adjustments. It's in our run rate, and nothing in particular this quarter, Sam, that I see in the wage inflation that's any different from recent trends.

And I would add, Milton, that our cost per FTE, when we look at our SWB per FTE, which includes benefits, contract labor and wages as a whole was actually at its lowest point on a year-over-year growth rate in the third quarter. So we have seen moderation in contract labor. We have, as Milton said, made these adjustments ongoing to different markets in different situations as they've surfaced, and we're at a pretty good point we believe with wages. There are clearly some still pressure points across the company, but it's not in all 42 markets. And it's not requiring us to do something uniquely across all 42 markets.

All right. Thank you, guys. Thanks, Scott.

And we'll take our next question from A. J. Rice with UBS.

Hi, everybody. I know over the next month or two you guys are going to sit down with the field operating people and think about budgets, but at a high level – and obviously not asking for specific guidance but more broad thoughts about, what are the big variables? I mean, it sounds like a lot of things you sort of feel like you have pretty good trajectory, but as you think about next year, are there any broad headwinds, tailwinds, that people should think about or keep in mind? I know figuring out volumes is always one source of volatility, but I guess you're saying probably around 2% is the way to think about at least the entire company. But how about more broadly, away from volumes? Any other headwind, tailwind that you'd highlight?

All right. A. J., thanks. Milton, you want...

Well, obviously, A. J., as you just stated we're not prepared to give 2017 guidance this morning. We'll do that on our next call. But we've been I think pretty clear about how we think about the business. Volume is a big variable obviously in our business but, as Sam just described, we have our processes and ways that we look at the future. And we've been very clear that we think in our markets over the longer term, somewhere around 2% is the outlook. And we've been, I think, very public about that. When you think about the pricing side of our business, we've got good visibility into our managed care portfolio and our managed care book, and a substantial portion of 2017 under contract with rates and structure similar to what we've had the last couple years. So a pretty stable outlook there. And then wage inflation and overall inflation in our markets, the outlook is probably similar to what we've been seeing in the last couple of years. We just talked about wages, and no particular broad-based pressure there. So we feel good about where we're headed going into 2017, coming out of this year. But we've got a lot of work to do, as you said, over the next two months to put the details around all that. But our long term guidance of this 3% to 5%, 4% to 6% sort of EBITDA growth is – we've been very public about our expectations and don't see changing that this morning.

I think that's good. And I guess the other thing I would add is, I think we have good visibility on Medicare, and we don't see any material changes in the Medicare revenue outlook.

Thanks, A. J.

We'll take our next question from Gary Lieberman with Wells Fargo.

Good morning. Thanks for taking the question. Vic, maybe this is one for you, but any thoughts on additional states that you're in expanding Medicaid and how the outcome or different outcomes of the election might impact that?

Gary, I think most everyone would agree, if the Republicans gain control of the White House and what have you, there will be pressures and probably less opportunities for states to expand Medicaid. If the Democrats are in place there, I do believe that there will be consideration, hopefully. Maybe see some additional incentives, maybe a little more flexibility in bringing some states to bear. And you would hope that some of the states that haven't expanded Medicaid will look at this as, ACA is not going away. There's money there that can help our states and get people insured. So I'm not about to say every state goes, but I think you'll start to see some – hopefully, you'll start to see some movement.

Any states where you're more optimistic than others?

You know what, it's hard to point out states. I mean, I sit here in Tennessee and I'm hoping Tennessee will go there because I know at one point our governor tried and, again, you've got the issues – not only the governors don't have total control but you had a Republican governor here that would've liked to expand it and his state legislature wasn't going to let him do it. You would hope that maybe the ball can move there, and there are half a dozen other states that might be in similar positions that might consider it.

Great. Thanks a lot.

We'll take our next question from Justin Lake from Wolfe Research.

Thanks, good morning. Sam, you talked about inpatient demand up 2% in your market, and I was just curious what you would project for adjusted admission growth given that – with that number? And can you give us your view on the sustainability of your 20 or 30 basis points of market share gains target as you go into 2017, given your earlier comment here? Thanks.

All right. Sam?

As I indicated, Justin, the outpatient side of the equation we think is growing slightly faster than the inpatient died and we've estimated over time that there's maybe 50 basis points of add-on, if you will, to the adjusted admissions factor. So it puts you in that 2.5% zone as maybe a demand growth for adjusted admissions. Obviously, the emergency room is a big piece of that. Outpatient surgery is the second-largest piece of that component, and then it drops off from there where it's not as segmented as those two, when you start looking at the outpatient market. With respect to our market share trends, historically, you're correct. We've tended to average 25-40 basis points per year of company-wide market share growth. That has slowed a little bit because we've seen more suppliers in certain components of our business, as I indicated in my commentary, and then we've seen other components of our strategy, if you will, replicated. So we're having to up our game. And that's what we're doing. Our teams are challenged with coming up with innovative ways to deal with the competitive dynamics that have taken place within our markets. Again, we're leveraging great ideas from one market to the other to help the company stay ahead of our competition where we can. And we think some of our outreach efforts, our urgent care strategy, and our very effective physician development strategies will continue to help the company stay competitive and hopefully put ourselves in a position to sustain our market share gains as we move forward. It's really difficult for me to say how one year, the next year's going to play out, because I don't have visibility into exactly what our competitors are going to do, but largely our competitive landscape is not significantly different than what it was in the previous year. So I think that could be some incremental movement from one market to the other, and we just need to be prepared to deal with that. And I think we are. And we're doing everything we possibly can to sustain that kind of performance.

All right. Thank you, Justin.

Thanks.

We'll take our next question from Frank Morgan with RBC Capital Markets.

Good morning. Sam, you gave some comments earlier about the different regions, butt I was – 10 out of 14 with positive growth – but any other more detailed geographical color, parts of the country that are doing better or worse? And then, any parts of the country where you're seeing any pressure on these supplemental payment programs? Thank you.

All right. Sam, you want one? And Bill, two.

I think the statistical challenges that we've had with admissions and so forth were somewhat acute in East Florida division and the West Florida division. But that was mostly attributable to the Medicare Advantage observation issue. The number of patients in our hospitals in both of those divisions were up when I bundle the two. But when it comes to admission statistics, then it obviously looks like those two divisions had challenges. When we get underneath that, we don't see that to be a significant issue. When you look at Texas compared the Florida, the state of Florida is a little bit more in a growth mode as far as the overall market, slightly up, but Texas continues to be a very good market for us with respect to overall growth of our markets and so forth. We have had a little bit of challenge in a couple of Western markets, because of some dynamics with some of our competitors that got back into health plans when previously they weren't in certain health plans. So we've seen some of our physicians go back to our competitors. But all-in-all, a 10 out of 14 is very good. And just on the admission side to give some perspective, the four that were down, one of them was down 0.5%, one was down 1% – this is admissions – one was down 1.5% and one was down 3%. The one that was down 3% had the most Medicare Advantage issues. On an adjusted admission basis, one of them was down 0.2%, one was down 0.4%, and one was down 1.3% and 1%. So we're talking almost 14 out of 14. And when we normalize for some of these things, it would have been a little different number. So that's part of how we're looking at it, Frank, and we don't see anything unique in any one particular market that's really compromising the company in any significant way.

And Bill, you want to take...

Yeah, just real quick. You know our largest supplemental payment program is in Texas with the Texas Waiver program. That is scheduled to continue through December 2017. I know there's ongoing discussion between the state and HHS how that may be adjusted post December 2017. It's too early for us to call, but it looks like it's stable through next year.

All right, thank you.

Thank you.

We'll take our next question from Brian Tanquilut with Jefferies.

Hey. Good morning, guys. Question on capital deployment. You have cash flows remain really strong. You're getting $750 million from Oklahoma. What do you see in terms of where acquisitions for next year, what areas? And then, how are you thinking about returning capital back to investors, both buybacks and the possibility of a dividend? Thanks.

All right. Bill, do you want to lead on that?

Sure, Brian. Well, we're at that time of the year when we're working on our plans and, as mentioned in my comments, we'll finish our current $3 billion dollar share repurchase authorization by the end of this year and we'll have substantial free cash flow next year. And as we think about capital allocation, think about our cash flow from operations, probably be somewhere around $5.3 billion to $5.5 billion this year. As we think about that cash and the allocation of the capital, the first thing we do is reinvested back in our existing markets. And this year, that'll probably be about $2.7 billion. I would expect next year would be a similar amount, maybe up a little bit, but around that same number. So that leaves us substantial free cash flow that obviously we could use for acquisitions. We always have a pipeline. We're looking for opportunities. Most recently, those acquisition opportunities have been tuck-in acquisitions complementary to our existing markets or in outpatient acquisitions like urgent care that Sam's talked about. We'll probably continue to see those opportunities into next year we'll be obviously well-positioned to take advantage of them as they come to us. Larger acquisitions, they're always a possibility. We remain optimistic we'll have some good opportunities. But as you know from recent years, those are hard to predict when they will happen. But again, we remain with the balance sheet and the financial capability to take advantage of those if they present. And we'll always be looking out for those opportunities. And that leaves us then returning cash to shareholders. And I don't think any of these are mutually exclusive. I mean, I think if you look at HCA, we've had a very diversified approach to our capital allocation. I think we'll continue to have a diversified approach to capital allocation and we will be looking at deploying additional cash to shareholders in 2017. We will be reviewing the possibility of a dividend. We'll have to think that through. If we decide to do it, we'll probably talk about that in our next call. But we'll continue, I think, to be a repurchaser of our stock. We've been very pleased with investing our free cash flow back in our company stock. We think we've been doing that for a number of years since we've been public again. And it's been, I think, a great return on investment for our shareholders. So that's how we think about it, and we'll have more details on exactly what we'll do in 2017 when we have our fourth quarter call and release our 2017 guidance.

Thanks, Brian.

Thank you.

We'll take our next question from Matt Borsch with Goldman Sachs. Matthew Borsch - Goldman Sachs & Co.: Yes, thank you. Maybe just if you can comment on the Medicare Advantage observation issue, how that's come up. Has it been specific to one payer or one or two payers or has it been across the board? What do you think has triggered that and how you're dealing with it?

All right, Matt. I think, Sam, you want that one?

Yes. The issue is more than one payer. That's the first point and it's more than one market. It's mainly in the Florida markets, like I said, but we have seen situations like this before in other markets in Texas. And I think you have to deal with it on really three ways. One, we have to work with the payers to come up with a process that doesn't put us in a situation where we're disputing each other's classification of patients. And we're doing that. We're having active dialogue with payers now on the concerns that we have. We're listening to their issues seeing if we can find resolution there. The second thing we can do where we disagree, we dispute and go through a dispute resolution process to try to resolve it. That's obviously a little bit more of a protracted process. And then the third thing that we do if we can't reach a resolution on either one of those steps is we work with our medical staff to establish what we believe to be appropriate clinical protocols and require that those protocols be processed, if you will, appropriately by physicians who are making those decisions. We have done that in some instances and that's allowed us to get through this particular situation. The economics are not significantly different between observation and inpatient in some payer contracts, but others it can be. And that's where we have to be, again, very appropriate in how we respond to it. But those are some of the approaches and we continue to work through those in this particular situation that we have, primarily in Florida.

Thanks, Matt. Matthew Borsch - Goldman Sachs & Co.: All right. Makes sense. Thank you.

We'll take our next question from Whit Mayo with Robert W. Baird. Whit Mayo - Robert W. Baird & Co., Inc. (Broker): Hey. Thanks. I don't think I've heard much of an update around the HCA's physician strategy in some time and I think you aligned with some medical schools in the past year, particularly in Florida. Just curious if there is any new strategy around physicians, G&E programs, anything new that you're developing that you can share?

All right. Sam, you want that one?

The physician strategy for the company I think has evolved significantly over the past five or six years where we have grown our active medical staff, Whit, by about 2% to 2.5% per year. We have roughly 38,000 physicians who are active participants on HCA's medical staff across all of our entities. Of those 38,000, about 4,000-plus are employed by the company, a split between primary care and specialists in that particular category. But what we have done structurally is evolved our approach to interacting with our physicians and providing them voice in our facilities, creating efficient and clinically capable institutions and really showing our physicians that we can grow the practices for them in a way that meets their objectives. And I think that's sort of the HCA way, if you will, around our physician approach. We have evolved, as I indicated, over the five years, and we believe it makes sense in a lot of our markets to advance medical education training. And we have added graduate medical education programs across the company over the last year and we will continue to invest in additional graduate medical education programs. That is providing opportunity for us to respond to market needs where there are physician shortages. It's also creating opportunities for us to improve our operations within our facilities. And then finally, it's addressing potential strategic issues and allowing us to generate physicians who can support our service line development and our overall growth agenda. So we're very excited about where we are with our graduate medical education program. We have consolidated that division into our Physician Services Group under Mike Cuffe, who has deep experiences with that. And he and his team are working to bring about best practices to create academic curriculum that can be scaled across the organization. And we think this is going to be a unique model that makes for a very competitive and responsive graduate medical education solution for many individuals who want to go down this path.

All right. Thank you, Whit. Couple more questions.

We'll take our next question from Ana Gupte with Leerink Partners.

Yeah, thanks. Good morning. So my question is on the other two components of your growth model. The volumes you say are 2% but looks like the mix shifting to lower-priced service sites is going quite aggressively, and there's price discounting with mandatory bundling. What are you thinking about on pricing growth? And then on sustainability of bad debt, which was a pretty important component of your growth for this year?

All right. Bill, you want to start.

Yeah, I'll give it a start. So our pricing, if you look at our revenue per equivalent admission, has been very stable over the past quarters and years. We anticipate 2% to 3% growth of NRAA, we saw 2.7% this quarter, and it's fairly consistent for the past several quarters. So as Milton mentioned, we've got pretty good visibility into our contracting position for next year. Couple that with our program investments, I think that's a good stable range for HCA. Bundle payments is being initiated. We participate in that, but it's not yet really a material factor that alters kind of the revenue profile for HCA at this stage, but I think we'll continue to see more of that going forward. And on bad debts, our uncompensated care trends have also remained very stable. You look at our uninsured volume trends for this quarter, 5% on a year-to-date basis, which is lower really where we anticipated them falling out at, in the high single digits. So I really characterize that overall environment for HCA as very stable.

Good. Thanks, Bill.

Thank you for the color.

We'll take our next question from Gary Taylor with JPMorgan.

Sorry, had to find the phone. Thank you. Maybe just as a little bit of a follow-on, I just wanted to ask about your view on sustainability of margins. I think you began the year, you upped your long-term EBITDA growth forecast of 4% to 7%, but now we've had a few quarters where the revenue alone is at the lower end of that. And to get into that EBITDA growth forecast, you'd have to see some margin expansion, which seems difficult with revenue at the low end. So can you just talk about your view of sustainability of the company's current margins as you move out the next couple years?

All right. Thanks, Gary. Milton?

Yes, I'll make a couple comments. Bill may have some thoughts too. Gary, as you know, looking at our margins over the last several years, it's been very stable, somewhere around the high-teens level, close to 19%, or above 20%. And so right now we are near 20% and we're running at the low end of our revenue expectation, which is, say, in that 4% to 6% range. So I'm very, very pleased with the team's execution in terms of this quarter to have EBITDA growth just under 8% off just over 4% net revenue growth is a real, I think, compliment to the execution. I want to give that compliment to the team. I think as we go forward, that's kind of the outlook we have. We think in this sort of inflationary environment that we're in, if we can grow revenue – if we're at the low end of our expectation, our goal is to maintain margins. If we can move to the high end, we think there could be some good opportunity for margin growth. From time to time, we're making investments for the future, we're investing in programs like trauma. We're investing in physician programs that Sam's touched on. And a lot of those investments have to run through the P&L and not just on the balance sheet. And so we'll make – we have been making those investments. They're in the run rate, and we're going to continue to make those, because really it's our future and it's going to allow us to continue to grow. So from time to time we may move around a little bit with that, but I feel like as an objective and a long-term outlook, I think our margins are at a very good level, but I think if we can grow our revenue at the high end, there's still some opportunity, I think, for margin growth.

Thanks, Milton. We have time for one last question.

We'll take our final question from Lance Wilkes with Bernstein. Lance Arthur Wilkes - Sanford C. Bernstein & Co. LLC: Hi there, folks. Two quick questions on your managed care contracting trends. Was interested in how much narrow network growth you're seeing and how important that's becoming going into 2017 for you? And then comparably, what sort of increase are you seeing in your risk taking or capitation or other sorts of arrangements with managed care?

All right. Sam, you want to conclude with this one?

The narrow networking issue is most applicable to the exchange contracting and not to the overall broader commercial book. So exchange volume builds (57:13) about 2%, 2.5%. I would say a component of that, not all of that, is connected to narrow networking and those type of structures. And that's not really gaining ground significantly on the larger commercial book. With respect to the company taking risk and so forth, we do have some elements of risk taking, it's predominantly on a physician practice side and not on the hospital side of the business. So it's a very small piece of the company's overall revenue. But more inside of our physician component than it is inside of our hospital component. And that's where our contracts are really positioned in the next two to three years, and that seems to be what our payers are asking of us and what we think is right for the company. So.

All right. Sam, thank you. Lance, appreciate it.

Thank you all for participating today and look forward to seeing you soon.

And this does conclude today's conference call. Thank you all for your participation. You may now disconnect.