Good day and welcome to the Cardinal Health fourth quarter fiscal year 2016 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Sally Curley. Please go ahead.

Thank you, Ronald, and welcome to Cardinal Health's fourth quarter and fiscal year-end 2016 earnings call today. We have a lot to get through this morning, including our fiscal 2017 outlook. And we also recognize that most of you have a very full earnings reporting day today, which is why we thought it might be helpful to move our call a little earlier this morning. As we have limited time on the call, if we don't get to all of your questions, please feel free to reach out to us after the call ends. But first, today we will be making forward-looking statements. The matters addressed in the statements are subject to risk and uncertainty that could cause actual results to differ materially from those projected or implied. Please refer to the SEC filings and the forward-looking statements slide at the beginning of the presentation found on the Investor page of our website for a description of risks and uncertainties. In addition, we will reference non-GAAP financial measures. Information about these measures and reconciliations to GAAP are included at the end of the slides. In terms of upcoming events, we will be webcasting our presentation at the Morgan Stanley Global Healthcare Conference on September 14 at 9:20 AM Eastern in New York. Today's press release and details for any webcasted events are or will be posted on the IR section of our website at CardinalHealth.com, so please make sure to visit the site often for updated information. We hope to see many of you at an upcoming event. Now I'd like to turn the call over to our Chairman and CEO, George Barrett. George? George S. Barrett - Chairman & Chief Executive Officer: Thanks, Sally. Good morning, everyone, and thanks to all of you for joining our fourth quarter and…

Thanks, George, and thanks to everyone joining us on the call today. George said our team delivered another strong year of earnings growth and cash flow in fiscal 2016, and this just highlights the great work of our Pharmaceutical, Medical, and corporate teams to deliver these record results for our customers and shareholders. Our proven track record of success combined with our aspirational goals position us to deliver meaningful measurable value for our shareholders now and well into the future. We remain committed to a disciplined and balanced approach to capital deployment, including our dependable dividend payout ratio of 30% to 35%. We also continue to aspire to a non-GAAP EPS compound annual growth rate over any three-year period of 10% to 15%. So with that additional context, I'd like to go into more detail on our fourth quarter results, then our full-year highlights, and finally a preview of our expectations for fiscal 2017, including some of our underlying assumptions. I have a lot to cover but I'll leave plenty of time to answer all of your questions. Please note that with all of my comments, I'll begin with GAAP and then provide the comparable non-GAAP figure. The slide presentation on our website will be a helpful guide throughout this discussion, as it includes our GAAP to non-GAAP reconciliation tables. Let me start by discussing the strong year-over-year financial performance our team delivered this quarter and year. You can follow along on slides three through slide 12 in our earnings presentation. For the fourth quarter of fiscal 2016, GAAP diluted earnings per share from continuing operations grew 16% to $1.02, while non-GAAP EPS grew 14% to $1.14. These results contributed to full-year GAAP and non-GAAP EPS growth of nearly 20%, to $4.32 and $5.24, respectively. Fourth quarter consolidated revenues grew…

Thank you. And we will take our first question from Eric Percher from Barclays. Please go ahead.

Morning. This is David Ho on for Eric. So my first question is on that $0.55 headwind from net customer activity. I was just wondering, Mike. Could you provide a little bit more detail? How much of that, or is the majority of that due to the Safeway loss? And I'm assuming it also includes repricing assumptions around customers like Prime and Kmart, so was wondering if you could provide a little bit more color on that.

Absolutely; thanks for the question. Hopefully, you guys all found this slide to be helpful. Let me do this, just in case there's other questions. I'll give you a little bit of color on the $0.55, but I'll give you also a little color on the other pieces too, just to be helpful. First of all, if you hopefully got it in color, the first three components -- net customer activity, generics program, and existing or remaining businesses -- those numbers all represent midpoints of a guidance range – of a range that we established for each one of these. And so just think about that. There is a range for each of these. The capital deployment is essentially the bottom of the range because we've already achieved the $0.10 through the share repurchases that we've done. As far as the net customer activity, the things that are included in there would be, for instance, as you mentioned, the loss of Safeway. All of the repricings that we experienced that we expect to experience this year in Pharma, which we expect to be at normal levels, is also well with normal medical repricings, and then the impact of any other wins or losses that we would be having in customers. The generics program bucket includes the headwind we talked about with generic drug manufacturing pricing assumptions and then the tailwinds of both generic and launches and Red Oak Sourcing, which again, while tailwinds, will be less than what we experienced in 2016 versus 2015. And then also our assumptions around generic penetration are in there. In that final bucket, existing or remaining businesses, that would be everything else, such as Specialty China growth, Harvard, the negative impact of PMod [Pharma Modernization] that we talked about, et cetera. All those other things are in that bucket. So hopefully, that gave you a little bit of color.

All right; that helps definitely. And I guess my follow-up would be on that midpoint number, we've noticed that Cardinal has a history of exceeding that midpoint by about 6%, and I was wondering. Is there anything different this year versus prior years? Is this a year with less risk at the beginning of the year because maybe the generics piece -- there's less upside? So I'm just wondering if there's more room to grow from here.

Yeah, thanks for the question. I would tell you that, as every year, I don't think it's any different than we try to do any other year. I would tell you that I believe this is an achievable plan. We've put a lot of thought into this. Clearly, there are a lot of different dynamics affecting the year, and we try to risk-adjust each and every one of those, so hopefully that helps a little bit.

And we'll take our next question from Ross Muken from Evercore ISI.

Good morning, guys. I appreciate you laying out the challenges to this year and respective of your long-term aspirations. As you are thinking about some of the temporal items that are affecting the business, how did you think about the pushes and pulls of maybe other things you could have done to accelerate the growth rate this year but maybe that's not in the best interest of the long term, whether it was getting more aggressive with acquisitions or something on the cost side? I'm just curious what the debate was like, and I guess it maybe speaks to the fact of your confidence in the long term that you felt like you didn't need to do something now. George S. Barrett - Chairman & Chief Executive Officer: Good morning, Ross. It's George. It's a little hard to answer that question, but let me do the best I can. We obviously have a goal of having this long-term creation of value for our shareholders, and of course on the short term making sure that we're hitting our numbers, executing, and are very disciplined. We've tried to continue that tradition. We will be very disciplined about the moves that we make, the way we deploy capital, the acquisitions we consider. All of those are really with the thought about where care is going and making sure we're on the right side of care. But again, we are very much focused on making sure that we do what we say we're going to do in the short term and that we execute very efficiently. But we'll continue to look for those opportunities to drive the business. As you know, we're a pretty strong generator of cash, and capital deployment for us is a resource that we recognize is an opportunity for us to create value for all of you as shareholders. So we'll continue to bring that approach to it.

Great. Thanks, guys. George S. Barrett - Chairman & Chief Executive Officer: You're welcome.

Our next question comes from Charles Rhyee from Cowen & Company. Charles Rhyee - Cowen & Co. LLC: Thanks, guys, for taking the question here. Maybe, George, I could ask you a question about Medical here. You were talking about as we move to episodes of care across 90 days, to change the way providers have been thinking about their costs. Are you saying that – are you then going to the market here trying to sell a suite of products that crosses the episode of care itself? So are hospitals really looking to buy maybe physician preference items that will be used for a case tied then to discharge planning? My understanding is that's not really how they buy today. How are those discussions going, and how quickly do you think we'll get there for people to think of it that way? George S. Barrett - Chairman & Chief Executive Officer: So let me just respond to this broadly first, Charles. I think the movement towards value-based care is pretty clear. I think the horse is out of the barn in that regard. Making it happen in practice, as you know, is quite challenging. We're at early stages in this sense. So there are certain episodes of care we're aligning on what the outcome we're looking for is, where the appropriate period to measure can be quite straightforward. There are other episodes of care where it's extremely difficult, and the time horizon in terms of measuring outcomes is more difficult. So I think we have to recognize that we're in a period of mixed systems, where we'll be living for some period of time with traditional fee-for-service models as well as outcomes or value-based models. Not every provider or every payer is completely ready to move forward on all…

And we'll take our next question from Ricky Goldwasser from Morgan Stanley. Zachary W. Sopcak - Morgan Stanley & Co. LLC: Hey, good morning. This is Zack in for Ricky. I wanted to ask first about the moving parts on the Pharmaceutical segment and how you think about what organic growth was in the quarter versus in fiscal 2016 and how that compares to the – I realize it's not organic, but the flattish expectation for growth in fiscal 2017.

Thanks for the question, Zack. I'm not going to get specific on the split between organic and non-organic within the segments. But if you think about our slide on page 19, we did split it down for the overall company to try to give you a little color in that we're expecting capital deployment, which will be the combination of stock repo and some tuck-in acquisitions, to be in the 2% to 3% range. And then we expect the business growth to be 3% to 6% in total. And again, if you remember, I did say that I expected the Pharma segment to be essentially flat for the year but a little different on a quarter-to-quarter basis. Zachary W. Sopcak - Morgan Stanley & Co. LLC: Got it, thanks for that, and then a question on Specialty. So as you mentioned, Specialty is exceeding your targets and expectations for fiscal 2016. As you head into 2017 and further on, how do you think about Specialty impacting both your margins as well as your cash generation?

I continue to be very excited about what's going on in Specialty. Last year we wanted to give you a revenue goal, which we said was $8 billion, which we far exceeded. And really the reason we gave that last year, and it's probably not something we'll be giving forward, is because we want you to understand the scale and breadth of that business, that we've grown so quickly, that it's truly at a scale where we have all the relationships that we need with pharma manufacturers as well as the suite of services to serve providers downstream. We do continue to expect double-digit growth in the Specialty business for 2017. We're excited about both our offerings upstream to providers as well as downstream – or upstream to manufacturers and downstream to providers. So I think we're really well positioned in that business. I think that our margin rates, I think it's going to be higher margin rates on the upstream services to manufacturers. We're at typical distribution margin rates on the downstream services to the providers. George S. Barrett - Chairman & Chief Executive Officer: Zack, I would just add. Some of you probably will know, which is that, again, if you look at the pipeline coming out of the biopharmaceutical world, Specialty is going to continue to be a priority. So our positioning, as Mike said, both downstream with the providers and upstream with manufacturers, I think is quite strong right now.

And our next question comes from Bob Jones from Goldman Sachs. Nathan Rich - Goldman Sachs & Co.: Hi, this is Nathan Rich on for Bob this morning. Mike, going back to your comments on Cordis and the update to the accretion range, specifically on the increased SG&A investments that you guys are planning to make, could you just give us a little more detail behind the nature of these investments? And is there any change to your expectations for the top line contribution from Cordis?

So thanks for the question on Cordis. First of all, I just want to make sure. We feel really excited about Cordis. We think things are going really well. We've got all of the key employees, management team, sales folks in place. Things are going incredibly well. So just a couple quick things to note, really the difference between the $0.20 accretion we had last year and the $0.15 that we're now updating it to is mostly FX. And obviously, that's something that we can have some impact in the way we price and stuff but is obviously hard to control. So the biggest piece of that change really truly is FX. Why I want to emphasize the SG&A just a little bit was to let you know that we're incredibly committed to making sure that we do no harm to the current sales business and that as we get through our TSA agreements with J&J, that as we build up to and support it internally, and then exit off of those other agreements, we've decided to be, I guess I'd use the word conservative in the sense of managing our expenses so that we don't cause any disruption to the supply chain and do anything that would make lives for our sales guys tougher. So we feel good about this. We feel like we have really good plans to deliver. And that's also why I mentioned before that we would have some variability between quarters because in some cases it was as we were ramping up our expenses, we're still on the TSA, so we have slightly double expenses in certain periods as we then walk off the TSAs as we move country to country. Nathan Rich - Goldman Sachs & Co.: Great. And then you also highlighted the record operating cash flow for the year. Just given your assumption for fiscal 2017, do you think that this level of cash flow performance is sustainable for next year?

I think we're going to continue to have strong cash flow, but we don't guide specifically to cash flow, so I can't give that to you. But I think that we're going to be, just by the nature of our business and our strong focus on working capital, we're going to continue to have strong cash flow numbers. This was a record year, and it creates a lot of options for us to take a look at different ways to deploy that capital. Nathan Rich - Goldman Sachs & Co.: Okay, thanks for the questions. George S. Barrett - Chairman & Chief Executive Officer: Absolutely.

Operator, next question?

Yes, our next question comes from George Hill from Deutsche Bank.

Good morning, guys, and thanks for taking the question. I guess, Mike or George, I'm going to go back to that slide 19 where you guys talked about the multiyear aspirations, and that was the 2013 to 2017 period. I guess if we think about the next five years, should we think of those multiyear aspirations as still holding, or is the most recent year, that being fiscal 2017, what we should think of as a more normalized run rate for the business?

I wanted to make sure that I did emphasize – we still believe that over any three-year period we can achieve 10% to 15% non-GAAP EPS growth. So whether you look at 2016 through 2018 or 2017 through 2019 or going forward, there's nothing at this time that as we project out what we think we can do, not only with the strong position and performance of our businesses but also with our significant and disciplined approach to capital, that we think we can still continue to deliver the 10% to 15% non-GAAP EPS growth. And then on the dividend payout, we intend to continue to differentiate that dividend and keep our payout in that 30% to 35% range, which is again something we feel with our strong cash flow and continued earnings growth we're going to be able to continue to do.

Okay, that's very helpful. And I guess just if we think about – you highlighted the moving pieces in the guidance in fiscal 2017. If we look at the core U.S. drug distribution business, recognizing that there's the Safeway roll-off, Nuclear, Specialty, and China are all growing fast, I guess what I'm trying to figure out is on a like-for-like basis, is the core U.S. DSD business expected to be flat or actually shrink in fiscal 2017?

I can't go into a split again with the core other than what I gave you from an overall Cardinal standpoint. I will tell you, though, that remember that we mentioned a few other things related to the Pharmaceutical segment and the assumptions. So from a headwind standpoint, Safeway, as you clearly mentioned, is a headwind. Also, we have our normal repricings. Then we have the headwind from the increased expense we're going to incur this year, which we specifically related to our Pharmaceutical IT investments because we've had such significant growth in our Pharmaceutical business, including acquisitions, that that will be an important area for us. And then the generic manufacturer deflation that we've talked about, the impact on our business on that, and then specifically the manufacturer branded agreements that we talked a little bit. But I do want to make sure you know that PD is not shrinking. We feel really good about the strength of all of our businesses in PD, both China, Specialty, and the core PD businesses. And then the tailwinds that we've talked about, as I mentioned just those, remember, just one other thing I mentioned that's important, we expect Red Oak and generic launches to continue to be tailwinds for us, but just less in 2017 versus 2016 than they were 2016 versus 2015, just because of the nature of the generic launches. There are fewer of them out there and because we synergized Red Oak so quickly and we had a lot of impact from it in 2016. And again, it will be positive in 2017 but less than it was in the previous year.

And our next question comes from Lisa Gill from JPMorgan. Please go ahead.

Thanks very much and thanks for all the comments. George, I'm wondering if you can just maybe talk about what you're seeing in the marketplace for your contracts that you have with manufacturers that are not under inventory management agreements. Are you seeing any changes at all in the marketplace? And obviously, we have seen some of these manufacturers that have gone through some changes. Are they changing the way they're contracting with you at all? George S. Barrett - Chairman & Chief Executive Officer: Good morning, Lisa. I'll start and then I'll let Mike jump in. Actually, we're not really seeing any noteworthy change here. Relationships with our manufacturers are really good. Again, we have different product lines that we're seeing launched these days, so more products that are coming through Specialty. But I would say in general, the basic tone of the conversations is positive, and the basic nature of contracting is quite similar. So, Mike, I don't know if you want to add there.

The only thing I would add, Lisa, that maybe is a slight change that would be important to note is that typically in the past, we said that about 80% of our fees from branded manufacturers were non-contingent to inflation. And with recent renegotiations of agreements and various moving parts, we expect that to be 85% at a minimum this coming year. And so that means that now 15% or less of our margins on branded manufacturers will be subject to inflation, which again I think reduces the overall risk and exposure going forward. And as you've heard me say in the past, on that 15% that is contingent, we view that in a thoughtful way working with manufacturers that we believe can still deliver a consistent type of return for us. So I think that's probably the only slightly moving part that I've seen with our agreements.

Okay, great. Thank you. George S. Barrett - Chairman & Chief Executive Officer: Thanks, Lisa.

Our next question comes from Garen Sarafian with Citi.

Hi, thanks for taking the questions, a couple clarification questions actually. So on Red Oak, I was under the assumption that it was already a nice run rate, but you stated the incremental contributions. Just to be clear, is this just the normal benefit as volumes increased for the JV, or are there new functions Red Oak will be taking on? George S. Barrett - Chairman & Chief Executive Officer: Let me start. And again, I'll make sure Mike clarifies if it's not clear. So really, what we were trying to say was the benefit as you move from 2017 to 2016 is less than the benefit that occurred from 2016 to 2015 because it was really the ramp-up basically. So we really had – the first year ramp-up was more dramatic, but the general direction is positive. I would say the relationship right now is really strong. Red Oak is a highly functioning operating entity with some scale, and so we continue to explore ways to create value from that. Mike is on the board. Is there anything you want to add?

The only color I would add I think if I understand where you're going was, while I would tell you we were fully ramped up, with any sourcing business, every year you challenge yourself to take cost out and get better and better, whether it's on the Medical side, where the team this past year did an excellent job of continuing to take cost out on our Cardinal Health branded products and the ones we source no different than Red Oak Sourcing. I was at our board meeting just last week, and I continue to be impressed with the data analytics and analysis the team are doing as they look for opportunities to lower our cost and again work with manufacturers in different and unique ways that we hope are win-wins, with always the goal being transparent and clear with our manufacturers.

I guess where I was going with that is with that nice slide on page 18 with the bridging from 2016 to 2017. The generics programs line has $0.35 attributed to it. So just trying to figure out how much of that was marketplace dynamics versus very unique to Cardinal's Red Oak program. So it sounds like most of that is from just the marketplace dynamics of generics coming on board.

Well, I would say Red Oak is going to be one of the big positives in there. Generic launches will be a positive, and then generic penetration will be a positive. And then on the flip side, what we're seeing in terms of generic deflation is the negative in there that offsets some of those upsides. And again, as George and I both mentioned, the upsides from Red Oak and launches were a little smaller this year. But also remember, it's really basically impossible to pull apart all those pieces because they all work in tandem together. When you see pricing pressure, you're looking for cost renegotiations, et cetera, et cetera. So a lot of that works together, which is why we grouped it together.

And our next question comes from Greg Bolan from Avondale Partners.

Hey. Thanks, guys, for squeezing me in here. Just keep it real quick. So if we think about where your minds were very end of April the last time we spoke with regards to generic deflation and where your minds are today, our work suggests that the ratio of inflationary to deflationary generic prices has really come back into a more normalized level, maybe even still slightly above a normalized level, certainly less than 0.5%. Has that changed at all just in terms of your mindset? Does it seem like there's more of a stabilization? And as we think about the back half of fiscal 2017 into the first half of fiscal 2018 – I know we don't want to get too far out -- but just does it feel like from a year-on-year comparable basis it's starting to stabilize? George S. Barrett - Chairman & Chief Executive Officer: So why don't I start just giving some historical perspective, and then I'll let Mike jump in. This is the environment that we've been in now for quite a number of months, and so we have over the years seen these swings from time to time. And over the last couple years is a particularly noteworthy stretch. But I would say this is a dynamic with which we're familiar. And I'm not sure that it's changed our mindset in any way. I think we understand the nature of the market. This is a kind of market we've lived in. We're extremely effective at sourcing products, and I think our teams do a great job of commercializing them, and I think we've been picking up new customers. So generally speaking, I'm not sure that our mindset has changed in any way. Mike, I don't know if you want to add anything

I would agree with George on that in terms of a mindset. This is an environment we know how to operate in. And again, I think we're incredibly well positioned with our partnership with CVS Health, with Red Oak, and the investments we're making in our pricing and analytics teams across both Cardinal and at Red Oak. There are less items going up in price if you're talking about that from a mix standpoint. But when you take a look at the core items, whether you look at it and look at items four years older or two years older or how many players, generally we're seeing similar deflation to what we saw in historical periods in those buckets. We're just tending to see fewer and less larger I guess increases when we do see the increases, which I think is having the impact which you saw from a few years ago. George S. Barrett - Chairman & Chief Executive Officer: I think that's right. The difference is really in a relatively small set of the total.

Got it. Thanks, guys. George S. Barrett - Chairman & Chief Executive Officer: Thanks, Greg.

Our next question comes from Robert Willoughby from Credit Suisse. Robert Willoughby - Credit Suisse Securities (USA) LLC (Broker): Hey, George or Mike, you mentioned the Cardinal at Home products a few times here. You're expecting above market growth here. What's incremental to that strategy for 2017? Why are you so upbeat that it's going to grow above the market? And then secondarily, where does that stand as a gross margin driver for you in your hierarchy of things? Is this in the top bucket, or is that too small to care about at this point? George S. Barrett - Chairman & Chief Executive Officer: Good morning, Bob. I don't think it's small. Again, this is a good contributor to us. I think the drivers of growth here are largely demographic. I think what we see is an increasingly aging population. And so I think in general, the winds are going in our direction here. We have more patients being discharged, in some cases more quickly. As you know, the incentives are changing a bit. We are competing very, very effectively. We are generating more flow of Cardinal brand, which is actually still in its relatively early phases of work. So I would say as we are able to drive more of our own Cardinal brand through that channel, it actually makes us more effective. And that's a little bit of that flywheel that we've seen in other parts of the business, where as we can create more product flow-through, it's more efficient for the customers, which creates more volume, which allows us to do that much more effectively. And so I think that's the key to that business model. And we feel very good about our ability to source, drive Cardinal Health products, and expand our presence in that channel.

The only thing I would add, Bob, around your question about why we're above market is I think a couple other things hit me. One is we have tremendous billing capabilities there and also outstanding payer relationships. We think we probably have – not probably have – I think we have the largest breadth of relationships with payers. So we make it easy for discharge planners and folks (1:10:43) when they want a one-stop shop to go to someone who can handle all of the needs of the patients to come to us. So I think our ability to make it easier for those folks, our breadth of our line, including the Cardinal Health products, as well as I would tell you I really believe in the team up there is some outstanding folks I think are the reasons why we're growing above market. Robert Willoughby - Credit Suisse Securities (USA) LLC (Broker): Is there any change in the retail strategy itself of how many storefronts you might be selling through?

I wouldn't say there's any change, but we continue to grow that relationship with our various customers. The team is doing a nice job. Jon and Don work together across P&M [Pharmaceutical and Medical] to look for opportunities and work with, whether it's retail, independents, regional chains or large chains, to find opportunities where we can help them create endless aisles in this area of these type of products and us to be their back office for them. So we are absolutely continuing to cross-sell those products. Robert Willoughby - Credit Suisse Securities (USA) LLC (Broker): All right; thank you. George S. Barrett - Chairman & Chief Executive Officer: Thanks.

Our next question comes from John Kreger at William Blair. John C. Kreger - William Blair & Co. LLC: Hi, thanks, a quick follow-up on slide 19, Mike. The 10% to 15% longer-term EPS growth goal -- should we assume that there's any capital deployment in that number?

Absolutely, that assumes that there will be capital deployment in that number. It'll be a combination of stock repurchases, acquisitions, as well as any capital deployment we use for capital expenditures. So it clearly includes capital deployment. George S. Barrett - Chairman & Chief Executive Officer: And by the way, when we went back to the Analyst Day a couple years ago when we laid out these goals, that was also something we articulated. John C. Kreger - William Blair & Co. LLC: Great, and then just a similar follow-up. If you think about your segment-level guidance for 2017, are there any additional acquisitions baked into either the Pharma or Medical guidance?

At this time, the only acquisitions that would be baked in, in a sense, because there are no real acquisitions baked in, but we said that capital deployment would be 2% to 3%. So we have given some room in there to either do some small tuck-in acquisitions or to be able to do some additional repo. So from that sense, from an overall company standpoint, there is some I guess capital deployment that could be either acquisitions or stock buyback embedded in our earnings guidance, but no specific company necessarily at this point in time.

We'll take our next question from Steven Valiquette from Bank of America Merrill Lynch.

Thanks, good morning, George and Mike. We've also been publishing an EPS bridge from fiscal 2016 to 2017 as well, so I'm glad you guys are on board with the same concept. I truly don't want to get granular as I try to compare on this call, but I would say just big picture, we had a benefit from new generic launches but an equal sized hit from generic price erosion on older products. So we were right around zero or neutral for generic profits for Cardinal overall for fiscal 2017. You guys obviously have a positive $0.35 contribution at your midpoint. I just wanted to try to dive into that a little bit deeper on what some of the positive contributors are. The first question might be, do you have generic pricing as a positive contributor or subtraction? And also, are you anticipating maybe a lot of unit volume growth in generics within your customer base that might be driving a lot of that earnings as well? I just wanted to get more color on that $0.35. Thanks.

The three positives that are in there would be Red Oak Sourcing would be the most significant of the positives in there, again, the year-over-year benefit. I've mentioned a couple times it's smaller than 2016 versus 2015, but it's still a very important number to us. So that's clearly a positive. Generic launches are a positive again, while smaller than the prior year. And then we also do have some assumption of penetration of current accounts, that we will be able to take some of the generics that they're buying directly from other folks and buy them through us. So those are the three positives or the tailwinds. And then on the negative side, it's the generic deflation issue and the impact that that creates from inventory gains as well as the impact on our selling prices. That impact of generic deflation is the bad guy in there that we've talked about in the past.

And would Harvard accretion be in there? I don't know if somebody asked that or not. Was that part of that?

No, Harvard would be down in the – overall performance would be down in the third bucket, existing or remaining businesses. We just put all of that down in that bucket.

And our next question comes from David Larsen from Leerink.

Hi. Mike, could you talk a bit about the operating margin in the Medical division? I think you mentioned there were a couple of one-time benefits last quarter. It just seemed like the sequential delta there was fairly significant. Thanks.

Thanks for the question. So in Medical, this was what we predicted in our last quarter. We thought with all of the moving parts on Cordis related to the building up of internal expenses to take over the various operations being managed by J&J right now on the transition service agreements that we would have some variability between where we're ramping up and ramping down. We also have some FX impact in there. And then there are a few other puts and takes that we've had between the quarters that are just creating some variability. And so I'd probably look more at Q3 and Q4 combined than I would to try to look at any one single quarter over the last couple quarters. And this noise will begin to reduce as we go over the next couple quarters and begin to get off the TSA agreements by our fourth quarter this year.

Okay, fantastic. And then, Mike, I know you led the Pharma division for a long time. You probably know more about Pharma pricing than pretty much lots of folks on the planet. How is Red Oak performing relative to your expectations? And what's going to turn that 20% decline in Pharma operating income in 1Q around so dramatically? It sounds like you're going to have to have a pretty good growth rate in 2Q and 3Q going forward. In your view, what's the one or two things that's going to turn that around?

Thanks for that question, a couple things. First of all, remember, a big reason for that Q1 decline is really how incredibly strong Q1 of 2016 was. If you remember, back then I mentioned there was a subset of a few specific generic items that we had anticipated would deflate on July 1 of last year, and they didn't. They ended up staying very much higher-priced than we anticipated, which created a lot of extra margin on those items in Q1. Those items have subsequently deflated, and so they're not creating as much margin. So that's one of the big headwinds in Q1. You also have the Safeway piece in Q1 of this year, where it was a customer that was very late in its contract life that we had fully synergized in terms of Red Oak Sourcing and had penetrated essentially about 100% of the generics there. So you have those two big things that are there. And then as you really look forward, the team is just doing a lot of things, as I've mentioned, around focusing on penetrating current customers, which is going to continue to grow us, continuing to invest in data and analytics. Some of the good work we're doing on Harvard, Specialty, Nuclear is really improving as a business. And so I think we're going to have much better comps as we move forward over the next couple quarters, so we would expect our second half to be much better than our first half on Pharma. But I don't think there's anything in there. We don't have to pull a rabbit out of a hat or anything to get there. I think Jon and his team have a really great set of plans to execute and get us where we need to be. George S. Barrett - Chairman & Chief Executive Officer: Dave, if I could just add to it, our Pharma business is competing really effectively right now. Our position is really strong. I love where we are with our customers. Red Oak Sourcing is really effective. So as Mike said, there are some somewhat unique things in the comparative data, but we really like the positioning.

Operator, I think we are going to try to go through the rest of the questions in the queue, if we can.

Indeed, we have one final question actually from Mr. Eric Coldwell from Robert Baird. Eric W. Coldwell - Robert W. Baird & Co., Inc. (Broker): Hi. Actually my question was covered just a minute ago and for the second time. I'll let you guys wrap up. George S. Barrett - Chairman & Chief Executive Officer: Thanks, Eric.

Thanks, Eric.

Thank you, Eric.

There are no further questions at this time. So, Mr. Barrett, I'd like to turn the conference back over to you. George S. Barrett - Chairman & Chief Executive Officer: Sure, thank you. Listen, I know all of you have a really busy day today. We appreciate your jumping on a little early with us today and very much appreciate your joining us for the call. So we hope to see many of you in the coming weeks. Thanks to all of you and have a good day.

And that will conclude today's conference. We thank you for your participation. You may now disconnect.