Ladies and gentlemen, thank you for standing by. Welcome to the Intuitive Surgical Q2 2019 Earnings Release Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Calvin Darling, Senior Director of Finance, Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to Intuitive's second quarter earnings conference call. With me today, we have Gary Guthart, our CEO; and Marshall Mohr, our Chief Financial Officer. Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in the company's Securities and Exchange Commission filings, including our most recent Form 10-K filed on February 4, 2019, and 10-Q filed on April 19, 2019. Our SEC filings can be found through our website or at the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements. Please note that this conference call will be available for audio replay on our website at intuitive.com on the Latest Events section under our Investor Relations page. In addition, today's press release and supplementary financial data tables have been posted to our website. Today's format will consist of providing you with highlights of our second quarter results as described in our press release announced earlier today, followed by a question-and-answer session. Gary will present the quarter's business and operational highlights, Marshall will provide a review of our second quarter financial results, then I will discuss procedures and clinical highlights and provide our updated financial outlook for 2019. And finally, we will host a question-and-answer session. With that, I will turn it over to Gary.

Thank you for joining us today. The second quarter of 2019 was a solid one for Intuitive with healthy customer interest and demand for our products. Overall procedure growth met our expectations, while capital placements exceeded them. Global procedure growth was approximately 17% in the second quarter of 2019. Growth again centered on general surgery in the United States, with positive contributions to the global growth rate from Germany, France, and Japan. In China, we are pleased with procedure performance, given the recent release of systems under the new quota. Turning to the United States, year-over-year growth in the quarter was 16%. General surgery growth again accounted for the largest increase year-over-year, accompanied by expected moderation of growth in U.S. urology and gynecology. Underlying this performance, we saw a continued strength in bariatrics and cholecystectomy, with modest tempering of growth rate in hernia and colon resection. Given the different types of procedures being performed by general surgeons, we see additional demands on system access and accounts as well as increased demands on our representatives' time to support different procedure types. We believe system placement strength in the U.S. is driven in part by the desire of general surgeons for increased access. We have efforts ongoing to manage these issues. Calvin will take you through global procedure dynamics in more detail later in the call. With regard to our installed base, placement of new systems in the quarter was strong with growth in total placements rising 24% from Q2 of 2018. Net of trade-ins and retirements, our da Vinci installed base again grew 13% over Q2 2018 to approximately 5,270. The mix of system placements this quarter moved towards our flagship Xi System, while both sales of X Systems and trade-ins remained healthy. The proportions of systems placed under operating leases…

Good afternoon. I'll describe the highlights of our performance on a non-GAAP pro forma basis. I will also summarize our GAAP performance later in my prepared remarks. A reconciliation between our pro forma and GAAP results is posted on our website. Key business metrics for the second quarter were as follows: Second quarter 2019 procedures increased approximately 17% compared with the second quarter of 2018, and increased approximately 7% compared with last quarter; procedure growth continues to be driven by general surgery in the U.S. and urology worldwide. Calvin will review details of procedure growth later in this call. Second quarter system placements of 273 systems increased 24% compared with 220 systems last year, and increased 16% compared with 235 systems last quarter. We expanded our installed base of da Vinci systems by 17% to approximately 5,270 systems. This growth is consistent with last quarter and slightly higher than the 12.5% increase last year. Utilization of clinical systems in the field, measured by procedures per system, grew approximately 3.5%, which is slightly lower than last quarter growth of approximately 4%, and below the 5% growth last year. Our revenue overview is as follows: Second quarter 2019 revenue was $1.1 billion, an increase of 21% compared with $909 million for the second quarter of 2018, and an increase of 13% compared with $974 million last quarter. Instrument and accessory revenue of $579 million increased 22% compared with last year, which is higher than procedure growth, primarily reflecting customer buying patterns and increased usage of our advanced instruments. Instrument and accessory revenue realized per procedure was approximately $1,920, an increase of 4% compared with the second quarter of 2018 and a decrease of 2% compared with last quarter. Systems revenue for the second quarter of 2019 was $344 million, an increase of…

Thank you, Marshall. Our overall second quarter procedure growth was 17% compared to 18% during the second quarter of 2018 and last quarter. Our Q2 procedure growth was driven by 16% growth in U.S. procedures and 20% growth in OUS markets. In the U.S., Q2 procedure results were generally consistent with recent trends. Q2 growth was again driven by growth in U.S. general surgery, thoracic and benign gynecology procedures. Q2 2019 U.S. procedure growth was 16% compared to 17% last year and last quarter, reflecting anticipated slight moderation in mature urology and gynecology procedures and general surgery growth rates. In U.S. general surgery, second quarter hernia repair and colorectal procedure growth remained solid, although at slightly lower growth rates than last quarter and last year. Other general surgery procedures such as cholecystectomy, bariatric and liver and pancreatic cases made increasing contributions to growth in Q2, with higher growth rates than last quarter. As anticipated, U.S. procedure growth in mature urology and gynecology procedure categories moderated in Q2 compared to last year. U.S. gynecology growth and urology growth were in the mid-single digits. dVP growth specifically was in the low single-digit range, in close alignment with the underlying incident rate for prostate cancer. As a mature procedure category, we believe that our U.S. prostatectomy volumes have been tracking to the broader prostate surgery market. In other U.S. procedures, adoption of lobectomies and other thoracic procedures was again solid during the second quarter. Second quarter OUS procedure volume grew approximately 20% compared with 22% for the second quarter 2018 and 21% last quarter. Second quarter 2019 OUS procedure growth was driven by continued growth in dVP procedures and earlier-stage growth in kidney cancer procedures, general surgery and gynecology. Q2 OUS procedure growth faced modest working day headwinds due to the timing of…

[Operator Instructions]. And our first question comes from the line of Bob Hopkins with Bank of America.

So first question, I wanted to ask about U.S. procedure growth. By our math, the overall Q2 U.S. growth on the procedure side accelerated a little bit when you take into consideration the year ago comp, but you called out some slight moderation in hernia and colorectal. So I was wondering if you could just talk about that a little bit. Like was that -- was the growth you experienced in hernia and colorectal this quarter different than you expected? And how do you manage through this issue of kind of managing access?

This is Gary. We saw a tad of moderation. I think demand remains strong, and what we're really seeing is what we indicated to you. We have two things going on. One is there are a lot of different procedure types, and now, in busy centers, competition for system access. We can of course solve that with additional systems placed as well as work with folks on efficiency of use. And we're doing both. And you've heard that from us over the last several quarters. The next one is our commercial teams have been growing in the United States to support the growth of the company. And it takes some time to have teams come up to full productivity and we're -- the percentage of new folks in new territories has been ticking up the last couple of quarters. And it's -- the new ratio is amongst the highest we've had in the last few. Employee retention has been great. It's really around increased need to get increased case coverage, and so there, it's supporting our new folks in the field with tools and some of it is just time on task.

Yes. Bob, from just a pure mathematical standpoint, you know we track adoption curves pretty regularly around here. And it's a mathematical reality that really all points along the curve, the rate of growth actually declines. So our results here in Q2 is aligned with what we would have expected. And clearly, there's a lot -- substantial remaining opportunity in both hernia and colorectal procedures, and our checks with surgeons generally indicate healthy demand.

That's great. And then just one on the system side because revenue growth from system sales this quarter was much higher than the first quarter due to mix, as you called out. But the placement numbers and the placement growth in both quarters suggest very strong underlying demand for your systems in both quarters. I was just wondering if you could talk a little bit about the differences you saw from Q1 to Q2 in that mix dynamic and what that suggests about the outlook for the rest of the year on the system side.

This is Marshall. We have seen, as you suggested, reasonable strength in terms of system placements. I don't think there's anything really different quarter-to-quarter other than the mix. In other words, the buying behaviors of the customers hasn't changed. We're seeing a nice cycle on trade-ups. And -- but we did see, again, more Xis this quarter. And there's volatility or variability between quarter-to-quarter as it relates to particularly our distribution channel. And so we saw fewer distributor sales this quarter and more direct sales. And our direct sales are at a higher price than what we sell to our distributors as they incurred the selling costs associated with those systems. So that's really -- that's the color that we would provide on systems revenue.

Marshall, is it fair to look at it and say, if you view the first half as a whole rather than in different quarters, you'd get a better picture?

That's true, Gary. You should -- when you look at ASPs, you should think about the combination of the 2 because 1.31 was a low point and 1.54 is a high point.

The next question comes from the line of Tycho Peterson with JPMorgan.

Maybe I'll just follow-up on that last question. Why should ASPs take a little bit of a step back? You did -- you skew more toward fully featured system sales. Obviously, your procedure mix is expanding. Why logically should ASPs step down a little bit going forward?

You should expect that the -- again, distributor sales tend to be variable quarter-to-quarter. So, I think you should blend the first quarter and the second quarter when you're looking at what level of the distributor sales you should expect. And I think same thing with the mix of Xi and X, just depending on the geography, X is targeting geographies where reimbursements are pressured. And so this quarter, just based on mix, we wound up selling fewer Xs and that should even out as well.

And we've had a couple of quarters now of operating leases in kind of the low 30s, it was 29% at the end of last year. Is this kind of the new norm in your view? Or how should we think about operating leases in terms of mix going forward?

I don't think about it as a norm. I think that there's going to be variability quarter-to-quarter. And yes, Q2 is slightly lower, if not close to being the same as Q1. But I think, over time, we will accommodate customers, and we think that on the other hand, leases are positive for the company in that they -- as I said in my prepared remarks, it increases the recurring revenue. It eliminates volatility. It also enables an upgrade cycle when and if new systems come out. So we think it's a positive and so we'll supply those to customers as they ask for them. I would guess that over time -- or we're predicting over time that there's the possibility that the percentage actually will increase.

Okay. And then on IRIS, I know it's early days, I didn't really hear you bring it up in the comments, but can you just talk a little bit about interest levels for kidney and liver and how we should think about the expanded use of that going forward?

I think the interest from the forward-leaning surgeons is very high. I think, in general, people are looking out seeing additional access to data. IRIS, just a reminder for everybody, is the integration of preoperative imaging, 3D imaging into a case in real-time. We're not in the clinic yet. We do have our 510(k) clearance. We're working through agreements with first customers. We don't expect revenue this year. I think, directionally, there's quite a lot of support. I think part of what we want to develop in the market as we go forward are use cases and really getting the value statement for them in terms of what it drives, either accuracy or efficiency or both. Early response is great, but these things take a little time to develop and to develop the evidence base that goes behind it.

Next question comes from the line of David Lewis with Morgan Stanley.

A couple of questions here. I'll start with Gary. Gary, last year, procedures began to inflect from a mentor perspective and they still remain pretty strong. As you think about the next inflection for procedure growth, I mean, do you think it's more likely that it comes from new systems? Obviously, SP, Ion creating this access, you've already talked about it on this call, or accessing new geographies, Japan and China. I notice you already mentioned in a comment that just a few systems in Japan -- sorry, in China, was able to drive some demand. So across those 3 buckets, Gary, systems, access, geographies, what is the most likely driver of the next wave of procedure inflection?

I think in the near term, access in core markets is going to be important. What's been nice here in the last few years is the procedure base has been building. So healthy double-digit growth rates in procedures, and absolute growth numbers are starting to become substantial and making sure that those surgeons who want access to the system have it has been important, and it's been one of the drivers for our increased flexibility and agility in capital acquisition models. As you look at SP and Ion, both of those are interesting platforms that I think, over time, will expand the total available market for robotic systems and diagnostics in single-port or single-access surgery. They take some time to develop. And the speed with which they develop is, as I said in the script, paced by additional indications and manufacturing scale. Longer term, I think those things are exciting, but it will take some time to go through. Geography, we've seen real successes but they take time. Japan has been a great success. They're doing a really nice job. But it is really heavy lifting to do all the things required to build market access, from partnering networks to training centers to the clinical evidence base to support additional adoption. So I think those things are important. We have invested in them and we'll continue to do so. So short answer, maybe not a perfect modeling answer but I'll leave that to you.

Okay. And then just maybe a follow-up for you, Gary, just trying to get a sense of thinking about the SP rollout and the Ion rollout, your Ion commentary was fairly consistent with the first quarter. If I think about the first 4 quarters of SP, obviously ex-ing out the manufacturing issues last quarter, do you see Ion rolling out from a system placement perspective in a similar fashion to SP? Is there a reason why it would be faster in the first four quarters of commercialization? Or slower?

Yes. I'd anticipate measured in these first 4 quarters of launch as we optimize our systems on our side and also gathering our data. After that, we'll see. I don't think I'd predict it one way or another for you. The indications in Ion, we feel pretty good about to get started. I think the size of that market is real, and so we'll see a year from now, I think, as to how fast we want to move. On SP, it has, I think, great long-term potential. It requires additional clearances, in the U.S. anyway, to keep moving and so we'll do that in sequence.

Next, we'll go to the line of Amit Hazan with Citigroup.

Let me start with one on the quarter and just follow after that. So on the quarter, the I&A versus procedures, I&A was up 22%, procedures up 17%. That's the widest gap I can recall in a little while. You touched on it a bit, but maybe just a little bit more color. Is it that new and advanced instruments driving something that's sustainable? Or are there onetime things in there that we should consider?

Yes. I think, in general, we have seen increasing revenue, instrument accessory revenue per procedure. Obviously, there's variability by quarter based mostly on the timing of customer orders. But in general, we've been gradually increasing. And the biggest aspect of that has been increasing usage of the advanced instruments, from vessel sealing, the Vessel Sealer Extend we launched recently, now to stapling as well, and the 60-millimeter stapler we launched last year and are more fully available this year in the U.S. So I think that's been the biggest factor that's probably been more than offsetting most everything else, whether it's more procedures in general surgery, hernia repair and others that may be lower tool usage. So I think that's the biggest factor there.

And just a slightly longer-term question on flexible endoscopy with surgical instruments. One of your bigger future robotic competitors has been talking about this publicly now for the first time in just the past month or so. Can you talk to how much of a priority this is for Intuitive? What you can tell us about the opportunity from a robotic perspective?

Sure. In general, as we've described before, we like to think in platforms. And what I mean by that is if we can build some core technologies from advanced imaging to great precision to great software, then we can mix and match those core capabilities to pursue different endpoints clinically. And so you look at SP, SP is an exceptionally powerful system that brings together four instruments through a single access point. You look at Ion, and Ion has exquisite sensing and a flexible endoscopy or a flexible diagnostic platform. Over time, I think those two different sets of ingredients give us a lot of opportunity and optionality. And so I think those things are interesting and they could open for us additional clinical markets over the long term. That said, product design is subtle, and architectural choices are really, really important. Doing it right, getting a great clinical outcome comes down to sub-millimeter precision and microsecond timings of these electronics. And as a result, we want to make sure that we really deliver on the things we put in the market, from SP to Ion. So we're not sprinting to go as broad as possible. We really want to make sure we deliver against the commitments we make and for the customers who purchase our products. There's a fair amount of history out there of companies that have failed to attend to the details and start strong and peter out. And so we're careful and thoughtful about it.

Next question comes from the line of Larry Biegelsen with Wells Fargo.

First, could you talk about the strategic and financial implications of the Fiberoptics acquisition? And I had one follow-up.

Sure. I'll speak to why we did it. This is a -- Schölly is a strong team and a supply chain partner that has been important for us over many years. Clearly, great imaging manufacturing capability, design capability and processing is a core part of surgery of the future and interventions of the future. As we've grown, we wanted to make sure that we can continue to invest in that space, both on the design side and on the manufacturing and production capability side. It's been a great partnership with that team. We respect them and have been very productive with them. And so that gives us additional optionality and agility going forward in a core part of our business. On more of deal specifics and logistics, I'll turn it over to Marshall.

So we entered into an agreement to acquire certain assets and operations from Schölly for a cash consideration of approximately $100 million. The exact amount of the consideration and timing of the closing is subject to certain closing conditions. And so that will occur over the next future periods. And the employees will transfer after each of the closing events occurs.

And then, on Ion, we haven't heard you talk about the opportunity or timing outside the U.S. What's the status, particularly in China and rest of the world?

Yes. On the specifics on China, we are in discussions with China's regulatory agencies about how best to bring it to market and timing there. I don't have a definitive answer for you yet, but it's an active discussion. Clearly, we believe there are end-user opportunities and value, health care value to bring in China and in Europe and in other markets. And we'll take it in sequence. We think this is a powerful set of technologies and a powerful platform. We are still in the early days. Our greatest organizational focus right now is on really understanding the technology and the use of it carefully. The early clinical results are great and they are differentiated relative to other products in the market, so far, in these early days. That's really important to us. We will focus there. And as we build strength and experience and scale, then it gives us a lot of opportunities to engage the rest of the world.

Next, we go to the line of Lawrence Keusch with Raymond James.

This is John Hsu on for Larry. Maybe if we could start, without providing guidance for 2020, can you give us some high-level guideposts for how we should generally think about investment spend next year going into 2019? You obviously have a lot of products on your plate this year, but just any high-level color would be greatly appreciated.

Well, we'll give you a better color when it comes to January about what's going to happen next year. But the things that we're investing in are not short-term investments. They take -- they occur over a long period. And so you should expect that spending will continue to -- continue on those and on other matters going forward. And as we grow the company, of course, there's an increased amount of support that's necessary to grow the company, particularly on the sales side in terms of personnel and commissions. And so I think spending will increase. I won't give you anything more specific than that until we get later in the year.

Maybe I'll just speak for our philosophy a little bit. We think the opportunity for improved performance and, therefore, opportunities for the business are substantial. And what paces us as to how we decide how much we'll invest and when is that which we think we can do with excellence. Generally speaking, we see more opportunity than we think we can pursue. We wind up saying no to some things that are probably good ideas but we don't know that we can perform them well. And so that's what balances our investment portfolio. And we'll continue to use that philosophy as we plan out 2020 and go forward.

Great. And then just on the balance sheet, you obviously have $5 billion-plus in cash, you bought back some stock in the quarter, you also did a tuck-in acquisition for imaging capabilities. Can you just remind us how you think about your capital deployment priorities at this point?

Yes. The philosophy and approach to capital deployment hasn't really changed. But to remind you, we think about that cash obviously to operate the company. We're making investments in our future. We want cash. The market is volatile in terms of -- the environment is volatile in terms of tariffs and other things going on. We want to make sure we've got proper investments to be able to deal with those. And then, ultimately, we look for opportunities to buy back stock and return cash to shareholders.

Okay. Great. And then just -- I could sneak one last one in on the tax rate. I think you mentioned the medical device tax coming back in 2020. By my estimate, I think we're coming up with an impact of roughly $30 million. Is that a decent ballpark for how you're thinking about the impact of product gross margin in 2020?

Yes. When we're talking about medical device tax we were recognizing in the past, we charge that expense item to cost of sales. So it impacts our gross margin there. We saw an impact around 70 to 100 basis points then. And it's probably a similar kind of impact, should that be reenacted.

Next, we'll go to the line of JP McKim with Piper Jaffray.

I wanted to ask one on just this push to -- on trade-ins and upgrading the installed base to Generation 4. I think, after the last quarter, I think, half the installed base was still older generation. And so can you give us an update on where that is today? And then just how -- strategically how important is that to you to get everyone on Gen 4 ahead of competition that, in theory, should come sometime next year or after that?

I'll give you the numbers and let Gary talk to the strategy. You heard on this call, it was another 38% of our system sales involved trade-ins this quarter. It's likely to continue to be a significant part of our capital sales in future periods. At this point in time, it is about 45% of our installed base of 5,270 systems that are Gen 3 and prior, mostly SIs.

We think it helps. I mean, as to the strategy, we think our customers appreciate it. Many customers now are multisystem owners, or across their integrated delivery network, they have systems at different hospitals where surgeons visit. So having consistency helps them. Gen 4 products have a greater access to advanced instruments and other technologies and are well appreciated. So in that sense, we think we can lean in and help those organizations go do it. There's a different set of regulatory clearances. In different countries around the world, there are different trade-in economics in each country. So as you think about the analysis, you think a little bit about which region and which country can move most quickly, and we work through that as well.

Okay. And then, if I could ask one on just -- the comments you made on the general surgery dynamics with hernia and some of the others is tempering based on just law of large numbers. But the shift to bariatrics and some more on chole, I mean, the shift in turnaround on general surgery, what does that do for your instrument ASPs? Are they more advanced instruments as you shift to different procedures in general surgery?

Highly variable. You look at choles, those are lower revenue-per-procedure cases. If you look at bariatrics, it's the other side where a lot of staple pliers are used. So it's a highly variable landscape.

Bariatrics is in early innings. And as we start to optimize the instrument kit therein, we're seeing really pull from the market there. We haven't changed our priorities in the U.S. sales force with regard to general surgery. We continue to believe there is opportunity and value in, of course, hernia and colorectal procedures. The bariatric side are really customers coming to us and starting to move that along.

Next, we go to the line of Richard Newitter with SVB Leerink.

I have two and housekeeping. With the housekeeping, can you just quantify what the selling day headwind was, what your procedure growth would've been excluding the -- not the selling day, but some of the headwinds that you had described related to the holiday timing and whatnot? And then, Gary, I was wondering, with respect to the capacity issues just getting robot time, are there certain types of procedure mix cases or certain types of institutions where you can proactively get in front of those capacity issues to get there before they occur? And is there any kind of characteristic of the institution's procedure mix that specifically is leading to capacity constraints?

Yes. First, on the working day, really minor in the quarter. Not a big thing. We mentioned in the commentary, overall, maybe a 30-ish basis point impact on procedure volume, with a much larger portion attributable outside the U.S. due to the timing of Easter.

On the capacity side, as we've said in the past, our customer base doesn't -- one size does not fit all. Each institution runs with different operating cadences within their organization. So in some places, we see extremely efficient capital utilization. Really, a focused actuary approach where they have very high predictability and get a lot of procedures out of the system. We're delighted to support that. And we help to benchmark that and teach others as they need it. We see other institutions that, for various reasons, are operating at lower capital capacity for some reasons that are quite good. Some may be teaching institutions, some may be institutions that take on the most complex comorbid patient sets where predictability of procedure duration is difficult. So you can imagine, if you're sharing a system between a thoracic surgeon who's performing lung cancer procedures and a general surgeon who's doing hernia repairs, the cadences and rhythms in scheduling are quite different and you're going to get less optimal scheduling. To the extent that we can have those conversations up front and help them optimize, we do. That's something we've been strengthening over time, so I think we can do better than we do today.

Great. If I get one more, just the China utilization pickup on just 8 systems placed under the quota, did that surprise you that it was able to translate into a pickup in volumes so quickly? I was always of the impression that you needed -- there was going to be a lag time to train institutions. If you could comment there.

I don't know if we were surprised. I'd say we were pleased. That tells you the level of commitment and motivation of those customers to make their investment productive. Last questioner, please.

Yes. The last question comes from the line of Imron Zafar with Deutsche Bank.

First question is on Japan. I believe you noted some moderation in procedure growth there, but at the same time, we're still seeing some very strong capital equipment placement numbers this quarter. Can you just sort of give us some color on what's driving these placements? Is it more sort of greenfield robotics programs that are looking to get into presumably urology? Or is it the established customers wanting to get more into general surgery? In light of the sort of the less financial incentive that they have, I'm just wondering if there's any -- if the growth should continue to slow going forward in general surgery.

It's a combination of greenfields, where you have hospitals that are positioning themselves to do the newer procedures that were approved for reimbursement last year. And there's still a trade-in cycle going on in Japan. Our distributor had sold SIs on leases, and as those leases are coming up -- are coming due, then we see customers wanting to upgrade to the newer technology.

Okay. And then we've heard some mention from some surgeons on some third parties that hospitals can ship instruments to their -- that are approaching the end of their useful life and that this limited useful life can be extended presumably via some sort of a software intervention or something. Is this something that you're seeing any impact from? Or is there any regulatory preclusion that would limit the ability for companies to do this kind of stuff?

On how good an idea is it, the people in reprocess like that are bound by the same regulatory framework that we are in terms of assuring the quality of that product and making sure it's not sold as an adulterated product, and they have to take on that burden and it is a sophisticated one. Calvin, I'll let you respond.

No. Yes. I think that's essentially it.

In terms of materiality of it.

Yes. And you look at our revenue per procedure, I mean, it's -- we've talked about that a little bit and I don't think we've seen any impact on that.

That was our last question. In closing, we believe there is a substantial and durable opportunity to fundamentally improve surgery and acute intervention. Our teams continue to work closely with hospitals, physicians and care teams in pursuit of what our customers have termed the quadruple aim: better and more predicable patient outcomes, better experiences for patients, better experiences for the care teams, and ultimately, a lower total cost to treat. We believe that accomplishing this aim takes the integration of 3 elements: first, a deep understanding of the human interactions across the continuum of care; second, smart and connected systems, imaging and instruments that augment care teams; and third, the ability to measure impact through analytic insights and translation of these insights into action driving positive change. Thank you for your support on this extraordinary journey. We look forward to talking with you again in three months.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive TeleConference service. You may now disconnect.