Good day and welcome to the TriNet Group, Inc. Third Quarter 2015 Conference Call and Webcast. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference call over to Mr. Alex Bauer, Investor Relations. Mr. Bauer, the floor is yours, sir.

Thank you, operator. Good afternoon, everyone, and welcome to TriNet's 2015 third quarter conference call. Joining me today are Burton M. Goldfield, our President and CEO, and Bill Porter, our Chief Financial Officer. Burton will begin with an overview of our third quarter operating and financial performance. Bill will then review our financial results in more detail. Bill, Burton and I will then open up the call for the Q&A session. Before I hand the call over to Burton, please note that today's discussion will include forward-looking statements, including predictions, expectations, estimates or other information that might be considered forward-looking. During today's call, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. These forward-looking statements are also subject to risks, uncertainties, and assumptions that may cause actual results to differ materially from statements being made today. We encourage you to review our most recent public filings with the SEC for a more a detailed discussion of these risks and uncertainties that may affect our future results or the market price of our stock. In addition, our discussion today will include non-GAAP financial measures. For reconciliations of non-GAAP financial measures, please see the company's public filings including the most recent Form 10-Q filed with the SEC and the Form 8-K filed today, all available on our website. Finally, we are not obligating ourselves to revise our results or publicly release any revision to these forward-looking statements in light of new information or future events. With that, I will turn the call over to Burton for his opening remarks. Burton M. Goldfield - President, Chief Executive Officer & Director: Thank you, Alex, and good afternoon. I first would like to apologize in advance for my voice. I have laryngitis. We are pleased that our…

And thank you, sir. The first question we have comes from Smitti Srethapramote of Morgan Stanley. Please go ahead. Danyal Hussain - Morgan Stanley & Co. LLC: Hi, Burton, Bill, and Alex. This is Danyal Hussain calling in for Smitti. I'd just like to start off with a question on the claims costs. So this quarter again, they were 94% of insurance revenue, which is atypically high. And in last quarter, you did increase guidance, I think, by about $5 million per quarter. So that seems to explain some of this difference, but not all of it. And you did lower guidance for the year. So just trying to understand how this came in line with expectations and what you were expecting for the quarter. Thanks. William Porter - Chief Financial Officer & Vice President: So for Q3, we pretty much came in, Danyal, as we had expected on the benefit performance component, which is the premiums came in in line and the claims came in in line. For Q4, we are slightly lowering our forecast. And that's just based on the experience that we received in Q3 on both claims and premium data. It's not a large change, but it's change that we think is prudent given we're still working our way through some of the insurance initiatives that we discussed. Danyal Hussain - Morgan Stanley & Co. LLC: Got it. And could you just talk about the claims in general and how they differed from last quarter? Is it all just California again? And did you get any color – I think, from Blue Shield, you called out last time, but were other companies seeing sort of the same issues in California? Thanks. William Porter - Chief Financial Officer & Vice President: Sure. Now, California was pretty much coming in as we had expected it would from Q2, slightly higher. But that's been kind of in line with what we saw. So no real changes, I think, in the rest of the country. Danyal Hussain - Morgan Stanley & Co. LLC: Okay. And then maybe one last quick one, if I may. I think you had a consultant come in. Just wondering if they've delivered a recommendation yet, or if you're still just waiting for other ingredients to make a decision going forward? Thanks. William Porter - Chief Financial Officer & Vice President: Sure. As Burton mentioned, we're working through a number of both operational and insurance constructs as we work our way through the fourth quarter. And so part of that is getting some consulting advice on a couple of different fronts as well as looking at pricing both from carriers and the reinsurance markets. All of those things are happening, and we're making progress. But I think we just have to wait for them to develop until we can report out in Q4 when we do our earnings. Danyal Hussain - Morgan Stanley & Co. LLC: Great. Thank you.

Tien-tsin Huang, JPMorgan.

Hey. I just wanted to build on that last question, just on everything coming in line in the third quarter. I heard you say the lower net insurance sort of outlook based on the claims and the premiums, et cetera. But anything else that's causing sort of the lower view? Is there anything from a retention standpoint or pricing that you're seeing, conversationally? Just fundamentally trying to build on just the claims change. Thanks. William Porter - Chief Financial Officer & Vice President: Sure. No, it really is just a refinement on the benefit performance for the net insurance side, Tien-tsin. It's a small change on a relatively large number, is really what's resulting in us slightly lowering the Q4 outlook.

Understood. And then just, I guess, given that, does that change the bigger picture question of how you want to address volatility and pricing in the claims picture overall? Burton M. Goldfield - President, Chief Executive Officer & Director: Hey, Tien-tsin, this is Burton.

Burton (21:02). Burton M. Goldfield - President, Chief Executive Officer & Director: Absolutely, not – a great question. Absolutely not. Q3 came in line. I was thrilled with that. I just want to be cautious on Q4. As you realize, we have not enacted the changes. And until I do, the fundamental construct remains the same. So during Q4, before we set up 2016, we'll put some of those constructs in place. The progress we've made both on the consulting front, the personnel front and the insurance and reinsurance constructs is excellent. So I'd characterize that we made progress on all three fronts, and there are options available to us. And we'll talk more about that. But the bottom line is until we lock that down, I am committed to doing something.

Okay. Fair enough. One more, if you don't mind. Just a quick one on the... Burton M. Goldfield - President, Chief Executive Officer & Director: Sure.

Looking at the cash flow statement, it looked like you guys did a small acquisition, if I saw that correctly. Can you verify that? I think it was (22:10) acquisition? Burton M. Goldfield - President, Chief Executive Officer & Director: No, that's very fair. We did see the ability to acquire some technology that we think will be useful as we continue to build out our platforms. And so that's what was accomplished in the quarter, and we'll talk more about that as we announce which particular vertical platforms that will be able to add to in Q4.

Okay. So more technology driven. Thank you. Burton M. Goldfield - President, Chief Executive Officer & Director: Yes.

Paul Ginocchio, Deutsche Bank.

Hi. Good afternoon. This is Ato Garrett on for Paul Ginocchio. Burton M. Goldfield - President, Chief Executive Officer & Director: Hey.

So, just going back to some of the options and things that you're considering about how to manage the insurance cost experience. Can you just like list out or maybe just give us some directionality about what kind of things you're considering, one, and then two, like what portion of your business do you think could really be affected? And then, three does that really change your – at how you think that might affect your go-to-market position in terms of your competitiveness in the marketplace, if you do like a pricing change does that really change how you're going to go to market? Burton M. Goldfield - President, Chief Executive Officer & Director: So, let me repeat what we talked about. There's really three areas. One is taking the insurance operational construct and putting it under an SVP of Risk reporting directly to me. I expect to get more strategic and operational focus on this area of the business. We will be looking at enhancing our forecasting capabilities and ability to monitor and manage that part of the business. The second area is new insurance constructs either on one end of the spectrum would be more fully insured plans. Today 40% of our plans are fully insured, 60% of our plans are high deductible plans and whether we should move more towards the fully insured side of the plans. The opposite end of that spectrum is reinsurance, which would be a combination of either reducing pooling limits – today the pooling limits are somewhere between $350,000 and $1 million by carrier. Reducing those pooling limits and/or putting in aggregate pooling limit in place, meaning a total limit on the entire claims activity in any one quarter to dampen that volatility. And so that's the insurance construct. And among those we do not expect it to impact our ability to continue to grow at 15% top-line revenue growth each and every year. And from a pricing standpoint we believe over time we can continue to price the risk but remove the volatility from the business.

Okay, great. Thanks. And just looking at the growth rates between your WSEs and your sales teams, it seems that your sales team growth is staying pretty steady, over 20% last three quarters where we've seen some slowing down on the WSE growth. If you can just talk about what might be driving that disconnect, whether it's a timing issue or anything else. William Porter - Chief Financial Officer & Vice President: Sure, Ato. As we look at it, it's one of the things that we continue to focus on, which is really bringing in the new sales talent, training them, getting them up to speed. It's a challenging piece of the business as we've talked, and the biggest thing we're focused on is trying to get the newer reps moved over to become experienced reps. And so that's the component that we're continuing to focus on at some point. Hopefully, those two will align where we can – we'll start to see more of those reps move over and see higher growth rates. But at this stage, I think it's still work in process, and we think we're making good progress. But the two growth rates will never really align as we've talked because the existing installed base is so large, it's not going to completely align with the growth on the sales force. But that being said, we think we are making progress, but it will take some time to see that reflected in the growth rate.

It sounds like it – would it be fair to say that that's more of a ramping issue than anything else of your sales force as it grows? Burton M. Goldfield - President, Chief Executive Officer & Director: Yeah, it's a ramping issue. Where it will become more evident is in Q1. The new reps came on by, as previously stated, by July 1. They trained between July and December, focused on the January through March sales. So you'll have a very good indicator on the success of the new sales reps based on new sales in Q1. So they don't have a quota until the Q1 of 2016.

Okay, great. Thank you very much. Burton M. Goldfield - President, Chief Executive Officer & Director: No problem.

Next we have Tim McHugh of William Blair. Timothy McHugh - William Blair & Co. LLC: Hi. Thanks, guys. Just I guess not to beat the dead horse, but I'm trying to understand, I guess, if trend came in line with what you thought during the quarter, why change the assumptions? I would assume you got fairly conservative after last quarter. So I'm trying to guess what changed that caused you to be more cautious than you were last quarter as we think about Q4? William Porter - Chief Financial Officer & Vice President: Yeah, Tim, again, they're fairly small changes to fairly large numbers in terms of both premiums and claims. And so as we looked at what we saw with our experience across all the carriers, it – our actuarial forecast indicated we should make a slight change to the numbers based on the most recent information we have, and that give the result of why we lowered a bit in Q4. So could we say we're being more cautious? Yeah, we could. But, again, we're trying to take the most current information we have and reflect that in our outlook. Timothy McHugh - William Blair & Co. LLC: Is there anything about how the trends progressed during the quarter? I guess, I mean, did it get, well within line with your number for the quarter? Was September more challenging and that's why you're updating the projection? Burton M. Goldfield - President, Chief Executive Officer & Director: Tim, if you look at how the adjustment in Q2 was allocated, it was definitely allocated to Q3 and likely allocated to Q4. Actually September was very good, and I'm just trying to be conservative. Timothy McHugh - William Blair & Co. LLC: Okay. And then have you tried changing the…

David Grossman, Stifel Financial. David M. Grossman - Stifel, Nicolaus & Co., Inc.: Thank you. If I take the – more or less the midpoint of your guidance, it would seem to suggest that you'd be doing EBITDA margin somewhere in the 28% range. Does that guidance assume that you're breaking even on the healthcare business? Does it imply that you're losing money or perhaps making a little money on that business for the calendar year? William Porter - Chief Financial Officer & Vice President: Yeah, David. This is Bill. It's going to be right around the breakeven level. But again, we'll finally see how it sorts out in Q4. But it's going to be approximately an NNR of around 85 (31:22), which is the breakeven estimate we gave before. But again, a small change on a large number could give us the resulting adjustment we did for Q4. So, not dramatically different, but enough to make a small adjustment. David M. Grossman - Stifel, Nicolaus & Co., Inc.: Right. So without – I know you have a process of reevaluating the strategy. However, if you're breaking even on that business this year and you're contemplating changes for next year, is there any reason for us to think that even if you do pass through some of that risk that that effort or that initiative would be, at least, margin breakeven if not accretive if properly executed? William Porter - Chief Financial Officer & Vice President: I think we'll wait to really give our outlook for Q4 once we've finished the work. And so I think that's the right way to look at it. And we'll have a lot more to talk about once we have the construct and the team further in place in Q4. David M. Grossman -…

Next, Jason Kupferberg of Jefferies LLC.

Hi. This is Amit Singh for Jason. Just wanted to talk on the WSEs again. I mean, the year-over-year growth in WSEs has been on a decline over the last few quarters, as you were talking about all the initiatives that you're taking and still being able to grow 15% top line going forward. So what type of WSE growth should we expect over the next year for you to be able to do this type of organic growth? If nothing changes in pricing, should we expect at least the 15% year-over-year growth going forward? William Porter - Chief Financial Officer & Vice President: Yeah, again, I think the volume should pretty much align with the total organic growth rate. So, yes, I do think that's a reasonable assumption.

All right. Perfect. And then again on the – it was previously asked on the margins, previously you had been guiding to a top-line growth of 15% organic and then 33% EBITDA. It seems like 33% EBITDA is not going to be the case once you guys do the overhaul, so to speak, of the overall operations. So, is there any sort of guidance where the EBITDA margins could land? I mean, we're talking about in the fourth quarter if it's break even, you'll be around 28%. Is that the way to look at the business going forward? William Porter - Chief Financial Officer & Vice President: No, I think we should wait, and in 2016, once we have the insurance and constructs in place, I think we'll be able to provide you with just a really better outlook. So as Burton mentioned, we're really not focusing on 2016 in this call, so I think you just have to hold on to that question until we finish the results of our insurance work and we can really give you, I think, better information and guidance on our Q4 call.

All right. Thank you.

Next we have George Tong, Piper Jaffray. George K. F. Tong - Piper Jaffray & Co (Broker): Hi. Thanks. Good afternoon. Going back to the earlier question on the lower 4Q guidance based on the latest claims and premium data, could you provide some additional color that related to the frequency of acute medical claims that's coming in? Or is related to the demographics, is it related to the cost of claims, or some other factor? William Porter - Chief Financial Officer & Vice President: Yeah, I don't think it's – we don't have anything that's that specific, George, to indicate a change. It's really a slight change in the outlook on premiums and the slight change in total claims, and there's many different components to those. But I think both of those are the things that are just driving the change that we did for Q4. So we're trying to be, again, a little bit more cautious given some of the experience we saw in Q2, and we think that's the right way to do it for Q4. George K. F. Tong - Piper Jaffray & Co (Broker): Okay. Got it. And then on the professional services side, professional services revenue per average WSE ticked down slightly in the quarter even with a relatively easy comp like last year. Could you talk about pricing trends you're seeing in professional services? William Porter - Chief Financial Officer & Vice President: Sure. And generally, we do see a year-over-year decline in the third quarter, but we're not seeing anything that I would say is a trend. There are a number of items, which do affect price per average WSE. And there's mix within products, there's mix within size within products, and there's also a little bit of what comes in in…

And with that...

That does conclude our question-and-answer session and today's conference call. We would like to thank the management team for their time today. And we thank you all for attending today's presentation. At this time you may disconnect your lines. Thank you and have a great day, everyone.