Centene Corporation (CNC) Q1 2016 Earnings Report, Transcript and Summary

Edmund E. Kroll - Senior Vice President-Finance & Investor Relations Michael F. Neidorff - Chairman, President & Chief Executive Officer Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President Kenneth Rone Baldwin - Executive Vice President of Insurance Group Business Unit Jesse N. Hunter - Chief Business Development Officer & Executive VP Ken Yamaguchi - Chief Medical Officer & Executive Vice President

Scott Fidel - Credit Suisse Securities (USA) LLC (Broker) Chris Rigg - Susquehanna Financial Group LLLP Christine Arnold - Cowen & Co. LLC Kevin Mark Fischbeck - Bank of America Merrill Lynch Peter Heinz Costa - Wells Fargo Securities LLC Andrew Schenker - Morgan Stanley & Co. LLC A.J. Rice - UBS Securities LLC Sarah James - Wedbush Securities, Inc. Joshua Raskin - Barclays Capital, Inc. Brian Michael Wright - Sterne Agee CRT Ralph Giacobbe - Citigroup Global Markets, Inc. (Broker) David Howard Windley - Jefferies LLC Ana A. Gupte - Leerink Partners LLC Matthew Borsch - Goldman Sachs & Co.

Good morning and welcome to the Centene Corporation First Quarter 2016 Financial Results Conference Call. All participants will be in a 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 over to Ed Kroll, Senior Vice President of Finance and Investor Relations. Please go ahead. Edmund E. Kroll - Senior Vice President-Finance & Investor Relations: Thank you, Emily, and good morning, everyone. Thank you for joining us on our 2016 first quarter earnings release conference call. Michael Neidorff, Chairman and Chief Executive Officer; and Jeff Schwaneke, Executive Vice President and Chief Financial Officer of Centene will host this morning's call. The call should last approximately 45 minutes and may also be accessed through our website at centene.com at the Investor Relations section. A replay will be available shortly after the call's completion also at centene.com or by dialing 877-344-7529 in the U.S. and Canada, or in other countries by dialing 412-317-0088. The playback code for both dial-ins is 10083202. Any remarks that Centene may make about future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in Centene's most recently filed Form 10-Q filed today April 26, 2016; Form 10-K, which was filed February 22, 2016 and other public SEC filings. Centene anticipates that subsequent events and developments will cause its estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. And with that, I'd like to turn the call over to our Chairman and CEO, Michael Neidorff. Michael? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Thank you, Ed. Good morning everyone and thank you for joining Centene's first quarter 2016 earnings call. We are very pleased to have closed the Health Net acquisition within the first quarter as projected. I would like to begin with a few comments on why the addition of Health Net is transformational. In closing the acquisition, Centene has achieved the following: further critical mass including additional product diversification within the government-sponsored healthcare space. We are a $40 billion-plus company. We are the largest Medicaid managed care organizations in the country, serving 6.7 million Medicaid members at March 31. We are the leader in three of the largest Medicaid states; California, Texas and Florida. We are the largest provider of managed long-term support services, one of the fastest-growing segments of the market. We have a 4 Star Medicare Advantage product that can be exploited to additional market. And we provide services under contracts with the U.S. Department of Defense and Veterans Affairs. This greater scale enhances the positive view of Centene nationally as well as by state and local government. It strengthens our ability to help shape sound public health care policy. In addition, it enhances our purchasing power and is beneficial from a balance sheet perspective. Centene is now clearly a large-cap company in stock. We recently joined the S&P 500 Index. This is important to us as this index is regarded as the best single gauge of large-cap U.S. equities. Additionally, it will widen our potential investor base and lead to increase liquidity of our stock. Lastly, this acquisition enhances and solidifies the sustainability of Centene's long-term growth rate. I would now like to comment on the timing of the approval process and provide an update on integration. While the regulatory process in California was lengthier than expected, it was fair and the undertakings contained no surprises. We will be making investments in certain state-affiliated investment-grade vehicles as well as in a local service center. The placement of a service center in California is consistent with Centene's local approach. We will work with the state to find a suitable location in an economically-disadvantaged area, where job creation is needed. The investments and charitable contributions associated with these undertakings have been included in our guidance and will be made over a multiple-year period. The planning portion of the integration process was largely completed prior to closing. Our integration team did extensive work to ensure a smooth and seamless combination. We were able to ground running the day of the close and the integration is proceeding as expected. Before I provide first-quarter highlights, I want to remind you that our first quarter results included only eight days of Health Net's financials as the transaction closed on March 24. Our prior guidance had assumed a March 1 close date. We have updated our 2016 guidance to reflect the latest close. This is a timing issue only and we remain confident that our previously-anticipated run rate earnings remain on track. Additionally, we have adjusted our reporting to reflect the increased scale of the business and our new product mix. We believe this provides meaningful information to investors and it will continue to evolve as we complete the Health Net integration. Turning to the first quarter financials, we are pleased with the results of the first quarter. There were many moving parts when combining the two companies, including one-time charges and prorating with timing. Total revenues increased 36% year-over-year to $7 billion. Membership at quarter end was 11.5 million, representing an increase of 7.1 million members or 162% over the first quarter of 2015. The HBR improved 110 basis points year-over-year to 88.7%. The first quarter pre-tax margin, excluding acquisition related costs, improved 30 basis points year-over-year to 3%. We reported adjusted diluted earnings per share of $0.74. This compares to $0.55 in the first quarter of 2015. Jeff will provide further financial details including the updated 2016 guidance in his prepared remarks. A quick note on flu, we saw an uptick in flu during the first quarter. The flu appears to have peaked in March and overall costs were in line with our expectations. Overall, we continue to see as well as anticipate stable medical cost trends. Next market and product updates, first we will discuss recent Medicaid activities. Washing state, in April, Centene commenced operations under the Apple Foster Care contract in Washington as a sole provider for this program. The contract is performing in line with expectations and we anticipate serving over 20,000 foster children. With the addition of this contract, Centene would serve approximately 100,000 foster care beneficiaries across all of our markets. Nebraska, also in April, Centene executed a contract with Nebraska as one of the three managed care organizations to administer the state's new Heritage Health Program, which covers 230 Medicaid, CHIP and ABD enrolled. This contract is expected to commence in the first quarter of 2017. Texas, we expect the STAR Kids contract in Texas to commence in the latter part of 2016. Centene is the only managed care organization in Texas that participates in all of the state's Medicaid and Medicaid-related product lines. Next, Medicaid expansion. At March 31, we served approximately 985,000 Medicaid expansion members in nine states. This represents an increase of more than 650,000 recipients over the first quarter of 2015. This growth was primarily driven by the addition of Health Net's Medicaid expansion members. In January, the Governor of Louisiana signed an executive order to expand Medicaid coverage under the ACA. This is expected to begin in July and is now included in our updated 2016 guidance. Now Medicare & Duals, at March 31, we served over 303,000 Medicare and Dual beneficiaries. We continue to expect to launch additional Medicare Advantage plans in four Centene states in 2017. The new Medicare Advantage plans will be launched under our 4 Star banner, which will give us the benefit of incremental premium revenues. Next, Health Insurance Marketplace, Centene's exchange experience continues to be favorable and we are achieving margins at the higher end of our targeted range. Our marketplace strategy has been and continues to be focused on targeted low-income subsidized individuals, many of whom were previously Medicaid eligible. We designed our exchange solutions to be able to leverage our Medicaid platform including provider networks. In the majority of our markets, we have both Medicaid and market-based product offerings. We coined the term churn to reference those members who can retain coverage through a high-quality affordable Centene product in either Medicaid or the exchange. In the first quarter, over 90% of our exchange members were subsidy eligible. This is consistent with 2014 and 2015. Centene has maintained a disciplined approach to pricing from day one. In fact, we are in a net payable position for the 3Rs program. At March 31, we served over 680,000 exchange members across 15 states. At year-end, we expect over 550,000 exchange beneficiaries due to the normal attrition. Now, Centurion, our correctional health business continues to successfully expand. At March 31, we served 59,000 correctional members represent year-over-year growth of 38%. In April, Centurion replaced its existing one-year contract in Mississippi with a new three-year contract, which is expected to commence in July. Also in April, we began providing correctional health services in three regions in Florida. This marks Centurion's sixth state population. Finally, commercial, we ended the first quarter with over 830,000 commercial members. We are fully committed to the success of the existing business, especially in California. However, we have no plans at this time to expand into additional states. Shifting gears to our rate outlook. For Medicaid, we continue to expect a 2016 composite rate adjustment of between zero and 1%, consistent with the past three years. We have known rates for our Medicaid business representing approximately 65% of the projected 2016 member months. For Medicare Advantage, final 2017 rates were announced on April 4. These were in line with our expectations of an approximate 1% increase. In conclusion, with first quarter results we're off to a good start in 2016. We expect this momentum to continue throughout the year. We are on track with our integration of Health Net. Our synergy targets remain $75 million for the first 12 months following the close and $150 million in the second 12 months following the close. While we remain committed to long-term margin expansion, we continue to expect that 2016 pre-tax margins remain relatively flat compared to 2015 as we focus on integration. Our growth pipeline is bigger than ever with the additional products and capabilities in healthcare. We are optimistic about the future and our ability to extend Centene's leadership position in government-sponsored healthcare. As a reminder, our Investor Day is on June 17 in New York City. We look forward to seeing you then. We thank you for your continued interest in Centene. Jeff will now provide further details on our first quarter financial results. Jeff? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Thank you, Michael, and good morning. This morning I will begin with highlighting the results for the first quarter of 2016 and then provide an update on our 2016 full-year guidance, including the acquisition of Health Net. First, I would like to highlight the effect of the Health Net transaction on the first quarter 2016 results. As previously announced, we completed the acquisition of Health Net on March 24, 2016 for a purchase price of $6 billion, including the assumption of debt. In connection with the completion of the acquisition, we incurred approximately $189 million or $0.83 per diluted share of transaction costs, which includes accelerated stock compensation and severance, investment banking fees, legal costs and the present value of a $65 million charitable donation under agreements with various regulatory agencies. Additionally, we have included eight days of Health Net activity in our first quarter of 2016 results. The eight days of activity represents approximately $350 million of revenue and had a minimal effect on our HBR, G&A ratio and adjusted diluted earnings per share. Now on to the first quarter highlights. For the first quarter, membership was 11.5 million members, an increase of 162% between years, driven by the Health Net acquisition. Total revenues were approximately $7 billion, an increase of 36% over Q1 of 2015. Diluted loss per share for the first quarter of 2016 was $0.13 and adjusted diluted earnings per share is $0.74, when excluding Health Net acquisition costs and intangible amortization compared to $0.55 on an adjusted basis last year. In more detail, total revenues grew by $1.8 billion in the first quarter, primarily as a result of expansions for new programs in many of our states in 2015, growth in the Health Insurance Marketplace business and eight days of revenue for the Health Net acquisition. Our Health Benefits Ratio was 88.7% in the first quarter this year compared to 89.8% in last year's first quarter or 88% for the fourth quarter. The 110 basis point decrease year-over-year was loss from the improvement in the overall HBR for higher-acuity membership, particularly long-term care, and growth in the Health Insurance Marketplace membership, which continues to perform well. Sequentially, the 70 basis point increase from the fourth quarter reflects a later start to the flu season, which was more fragment with the first quarter of 2016. In the first quarter, 18% of premium and service revenues came from new business compared to 23% in the first quarter of 2015. The existing business metrics for the quarter includes Health Net since the acquisition date and we expect the percentage of revenue from new business to decrease to a single-digit percentage by the end of the year due to the larger revenue base and the denominator. The Health Benefits Ratio for new business were 90.6% and 88.3% for existing business in the first quarter. The Health Insurance Marketplace product continues to perform well in 2016 with over 680,000 members at March 31. With the addition of Health Net, we continue to be in a net payable position for the risk corridor and risk adjustment components of the 3Rs. As part of our initial valuation procedures associated with the acquisition, we have reduced the book value of the Health Net risk corridor as equal to zero. Additionally, consistent with our historical accounting practice and guidance, we will not report any risk corridor receivables through 2016 benefit year. Our general and administrative expense ratio was 11.3% in the first quarter this year or 8.3% without the costs associated with the Health Net acquisition compared to 8.3% last year and 8.7% in the fourth quarter, also excluding Health Net acquisition costs. The decrease from the fourth quarter of 2015 reflects the reduction in costs related to build and enrollment period for the Health Insurance Marketplace product. During the first quarter, we incurred $0.02 per diluted share of business expansion costs compared to $0.06 in the prior year. Investment and other income was $15 million in the first quarter compared to $9 million last year and $8 million in the fourth quarter. Interest expense was $33 million for the first quarter of 2016 compared to $10 million for the first quarter last year and $11 million in the fourth quarter last year. The increase is due to the issuance of $2.4 billion of senior notes on February 11 of 2016 to fund the cash portion of the consideration for the Health Net acquisition. Consistent with what we've done in the past in matching our balance sheet exposure to short-term interest rates, on March 30, 2016, we entered into an interest rate swap agreement for a notional amount of $1.6 million, converting a substantial portion of our senior notes to the floating rate of interest at the 3-month LIBOR plus 4.36%. We reported tax expense of $17 million on a pre-tax income of $2 million for the first quarter of 2016 due to the non-deductibility of certain Health Net acquisition costs as well as the non-deductibility of the health insurer fee. GAAP diluted loss per share from continued operations for the first quarter was $0.13. Adjusted diluted earnings per share for the first quarter was $0.74. Adjusted diluted earnings per share excludes $0.83 associated with the Health Net acquisition costs and $0.04 associated with intangible amortization. Cash and investments totaled almost $8 billion at quarter end, including $139 million held by unregulated subsidiaries. We estimate our NAIC risk-based capital percentage to be in excess of 350% of the authorized control level. Debt on March 31 was $4.3 billion, including $515 million of borrowings on our revolver. Our debt to capital ratio was 44.3%, excluding our non-recourse mortgage notes compared to 34.7% in fourth quarter 2015. Our medical claim liability totaled $3.9 billion at March 31, representing 42 days in claims payable, normalizing the Health Net acquisition. During the first quarter, we made provisional estimates for the fair value of the medical claims liabilities associated with Health Net. We have not completed our fair valuation exercise and the announcement is subject to change. Any change to the provisional estimates will be reported as an adjustment to the opening balance sheet and will have no effect on net earnings. Cash flow from operations was $195 million in the first quarter compared to $45 million in the first quarter of 2015. Additionally, you will note that we have adjusted our reporting this quarter to reflect the scale of the business with new products. We believe this provides meaningful information to investors as we continue to evolve as we complete the integration of Health Net. This concludes my remarks for the first quarter results and now I would like to provide an update on our full-year guidance. We have adjusted our 2016 guidance to reflect the March 22 closing of the Health Net acquisition. We have lowered the top and bottom end of the revenue guidance by $1 billion. We lowered both ends of our adjusted diluted earnings per share guidance by $0.05 to reflect the transaction closing shifting from March 1 to March 24. Changing closing date does not have an impact on our run rate revenues or earnings. We now expect total revenues to be between $39 million and $39.8 million, which represents an increase of approximately 73% at the midpoint of our guidance range as compared to 2015. Our 2016 guidance for our Health Benefits Ratio is 87% to 87.5%, a decrease from 2015 of approximately 160 basis points at the midpoint of the guidance range. Reduction in HBR year-over-year is due to the addition of Health Net, which operates with a lower HBR due to the higher mix commercial business and growth in the Health Insurance Marketplace, which operates in lower HBR, higher G&A ratio. General and administrative expense ratio is expected to be between 9.4% and 9.9% in 2016. On an adjusted basis, and excluding acquisition costs, the G&A ratio is expected to increase by 75 basis points between years to 9% to 9.5%. This increase is due to the addition of Health Net, which operates at a higher general and administrative expense ratio due to the mix of business, offset by additional leverage associated with revenue growth and cost synergies. Other revenue and expense, interest income is forecasted to be between $90 million and $100 million and interest expense is estimated to be between $180 million and $190 million. We estimate business expansion cost of $0.25 to $0.30 in 2016. We estimate that our effective income tax rate for 2016, excluding non-controlling interest, would be 55% to 57%. A relatively high effective tax rate reflects the impact of non-deductibility of the health insurer fee and the non-deductibility of certain acquisition costs associated with the Health Net acquisition. 2016, we anticipate the health insurer fee increases to approximately $450 million. We estimate our diluted shares outstanding to be between 162.5 million and 163.5 million shares. 2016, we expect GAAP diluted earnings per share to be between $2.45 and $2.80, adjusted diluted earnings per share to be between $4 and $4.35. These amounts include Health Net and the related synergies for nine months and eight days of 2016. Adjusted diluted earnings per share excludes two items; first, the amortization of intangible assets associated with the acquisition, which we estimate to be between $0.50 and $0.55 per share; and two, Health Net acquisition-related expenses, which we estimate to be between $1 and $1.05 per diluted share. Additionally, our guidance assumes no receivables for the risk corridor program and payable for the risk adjustment program in 2016. We believe the guidance we now provided today are generally consistent with financial information in the joint proxy statement, adjusted to include only nine months and eight days of Health Net activity due to the March 22 closing. We continue to expect $75 million of net synergies in the 12 months following the closing of the transaction. We estimate our operating cash flow to be between 1.5 times to 2 times net earnings. That concludes my remarks and operator you may now open the line for questions.

Thank you. We will begin the question-and-answer session. Our first question is from Scott Fidel of Credit Suisse. Please go ahead. Scott Fidel - Credit Suisse Securities (USA) LLC (Broker): Thanks. First question, just interested if you can give you us some insights into how the Health Net business has been performing recently, interested in sort of some of the products or markets for them that may be performing better and if there's any markets where they're seeing any headwinds relative to when you were initially anticipating the guidance? And then, just relative to the Health Net. Jeff, just wanted to clarify it was little hard to hear you, just on Health Net's risk corridor receivable, just want to clarify you did say that you wrote that down to zero, right? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. This is Jeff. I'll answer the second question first, which is, yes, we did write that down to zero and I think we'd mentioned that previously on our Investor Days that that was the anticipation of the plan. Scott Fidel - Credit Suisse Securities (USA) LLC (Broker): Okay. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Scott, I think regarding your first question, I think we commented it's performing in line with our expectations. And Rone, you may want to add some comments, some more color to it, but it's against what we originally planned, is a little bit up and down. But on balance, in total, it's performing where we expected.

That's exactly right, Michael, in line with our expectations, in aggregate. Scott Fidel - Credit Suisse Securities (USA) LLC (Broker): Okay. And then, just a follow-up question just on the exchange business. And first, if you could tease out what the California exchange enrollment was out of the total? And then, just talking about sort of the additional growth that you had this year, if there's any particular states where you saw that driving the growth? And then, just any early indicators on if the risk mix or the membership profile of the new growth is different than the existing HIX members that you've already added? Thanks. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Yeah, I think I'll start with the back with the last question first, we're starting a pattern here. But I would say that we're seeing the mix consistent with what I described in the churn and our strategy for 2014, 2015 and now 2016 is intact. The other question relative to California, I don't have an exact number at hand, but it was a sizable chunk of the business. Scott Fidel - Credit Suisse Securities (USA) LLC (Broker): Okay. Thank you. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Thank you.

Our next question is from Chris Rigg of Susquehanna Financial. Please go ahead.

Good morning. Thanks for taking my questions. Just kind of a follow-up here to Scott's question on the risk corridors. Health Net, historically, there has been always sort of these perpetual concerns about their days claims payable. When we think about the medical claims liability at this point, were there any other sort of reconciling adjustments at close to the reserves or do you feel comfortable where they were at on March 24? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, Chris, this is Jeff. In my prepared remarks, I mentioned relatively all the fair valuation exercise related to the Health Net balance sheet, it remains open and really just due to the timing of the closing being relatively close to the end of the quarter. So, what I indicated was that we've made provisional estimates for all these things and we would expect that there is potential for true-up in the second quarter as we complete our fair valuation exercise.

And that would not run through the income statement or it would just be a one-time item that you would spike out? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: No, that would not run through the income statement. Those effectively go back to the day-one opening balance sheet that we would've acquired. So, those would be balance sheet-only adjustments.

Okay. Great. And then, just a more forward-looking question. Obviously, you still have the four companies involved in the big M&A transactions right now, obviously, speculation about divestitures there. Are you guys interested at all in potentially being a potential divestee for Medicare Advantage assets or do you think you're going to go at it organically at this point? Thanks. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Well, I think there's a couple of elements; one, we do not participate in any processes or auctions or whatever you call it today. So, to the extent that is, we're out of that. Two, the controlling issue, and particularly in the Medicare-related business, will be the network. If they have a network that's not in our sweet spot, which is at the lower socioeconomic level, then we won't have any interest in it. So, we have so much organic opportunity. I mean, our pipeline is very robust. We're not really of a mind that we need that to meet our growth targets. If it's there and it makes sense, we do it.

Great. Thanks a lot.

Our next question is from Christine Arnold of Cowen. Please go ahead. Christine Arnold - Cowen & Co. LLC: Hi there. I know the regs were just out last night and they're voluminous. Do you guys have any first-blush takeaway, positive or negative? And can you give us a sense for potential large contracts on the RFP radar screen? Is Louisiana still on track for July 1 and where does Alabama stands? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Okay. I'll agree with you on your first statement. It was voluminous and it did come out late last night. We did have a quick review of it. We see nothing that's troublesome to the Medicaid business and we're comfortable with what we've seen. We'll continue to evaluate it and if there's something different we will try to let people know through healthcare conferences and things. But right now, it seems just fine. Your second question was? Christine Arnold - Cowen & Co. LLC: A sense for potential large contracts? Is Louisiana still on track by 1, and where does Alabama stand? Is there anything else we should be seeing on our radar screen? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Louisiana, we believe, is on track for July 1, and Rone, I think, Alabama is on track for...

Yes, Alabama is on track for the fourth quarter this year. Michael F. Neidorff - Chairman, President & Chief Executive Officer: For the fourth quarter this year. And then there's other ones we're obviously waiting to hear like others – I mean it's been public that we're one of the people that bid on Pennsylvania. So, we expect to hear about that momentarily and that would probably be a first quarter start. So, there's a lot out there. Christine Arnold - Cowen & Co. LLC: Great. Thanks.

Our next question is from Kevin Fischbeck of Bank of America. Please go ahead.

Great. Thanks. I just wanted to ask you about the exchanges. Obviously, you've got United looking to exit a number of exchanges and some of them, they're your biggest competitor at the local level. Just wanted to see what you thought or if you were at all concerned about the potential to take in some of that membership when you've got some of your competitors leaving? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Well, I think United – and I've a lot of respect for Steve Hemsley and his people and what they do and their approach to things. But they're in a different market than we are, from what I can see. They lost a lot of individuals at ACA and they're at the higher end in the platinum and the gold. To the extent that they have a membership that would fit within our model, sure, we'd take them on. But I'm not anticipating a large gain from that either, just because of the differences.

And are you looking at entering more state exchanges for 2017? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Right now, that's under evaluation and based on the results we've had to date, we would continue to do it. Obviously, it works where we have our Medicaid. I think I commented in my prepared remarks that it works well where we have a strong Medicaid product, because it – we get the term we coined, churn, in and out of Medicaid. So yes, we would do that where those factors are in place.

And I think you said that you're going to enter four states for Medicare next year. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Yeah.

Any color on discussions – potential discussions with provider networks and things like that, how that's progressing? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Well, obviously, we believe it's going well. And once again, in many conferences I've commented it's a $700 billion category, of which 65% is at 400% of the Federal poverty level and lower. And that's our sweet spot and that's where our networks are now. And so, to the extent – and that's why when people ask about some things that others may have to give up, we question the network that they serve. But we think we have in place a network that that population prefers to use and we'll just expand it, very candidly, when you're in Medicare, you have more orthopedic surgeons and other things that affect more the elderly population. And so, we are filling that out as appropriate and we have a strong team doing it.

All right. Great. Thanks.

Our next question is from Peter Costa of Wells Fargo Securities. Please go ahead

Thanks for the question. You're no longer spiking out loss ratios by segment. Can you give us a feeling for how those loss ratios may have progressed this year or this quarter? And then, in particular, the Medicare – I'm sorry the Medicaid expansion business, what's going on in the rate environment there? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Jeff, do you want to make some comments? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I think the Medicaid expansion business has been relatively consistent. I think, as you're aware, there's minimum MLR rebate payables in a lot of our states. So, the HBR year-over-year has been very consistent. I think in my prepared remarks, we mentioned improvement in the complex care HBR year-over-year and quarter-over-quarter. That was really driven by what I'd say the long-term care and some of that in the duals product as well. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Yeah. And in terms of what we spike out and how we do it, I think we also commented that's going to have to evolve because with the eight days of Health Net added in, it changed the mix dramatically. And yet, there was not a lot of time to take that approach and feel comfortable that we're giving you the kind of information that made sense at that point. So, we will continue to work on it. And I think we've always looked for transparency where we had confidence and we're providing sound information.

Okay. Thanks. And in terms of – this is a follow-up, the specialty services business seemed to be a little bit under pressure relative to the way it's been the last year. Can you talk about what's going on there and what you expect going forward? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. So, if you're looking at this service revenue line, the decrease is really due to a lower volume in our Specialty Pharmacy, specifically related to hepatitis C and I think that's probably a general industry trend there. And then, we did have the loss of a co-op customer in our Pharmacy Services business. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Jesse, anything you want to add to that? Jesse N. Hunter - Chief Business Development Officer & Executive VP: No. I think that's right. I mean those are – I think as Jeff referenced on the Specialty Pharmacy front, there's some more macro trends with respect to that particular therapy and then just a one-off customer-specific item that was in the one-time category.

Okay. Thanks.

Our next question is from Andy Schenker of Morgan Stanley. Please go ahead. Andrew Schenker - Morgan Stanley & Co. LLC: Thanks. Just following up real quick on the services line there, I mean, when should we see Health Net volumes flow through the various components within that? Are there some contractual obligations limiting your ability to kind of roll through some of maybe the pharmacy or the behavioral services into their book? So, how should we see that play out there? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, I mean, I think what you'll see is if you take Centene's 2015 service revenue and roughly layer in the government services business for Health Net, then that would be kind of close to what we would expect for 2016, obviously, prorating for the nine months and eight days. Andrew Schenker - Morgan Stanley & Co. LLC: Right. But then going forward, is there – how should we think about the longer-term upside opportunity as well? Jesse N. Hunter - Chief Business Development Officer & Executive VP: Yeah. I think the part of the issue – or Andy, this is Jesse Hunter. So, part of the issue is how that will be reported. So, you have some internal versus external. So, to the extent that you're talking about the integration, if you will, of specialty services, that is – comments there are consistent with what we talked about separately. There is very much a plan to in-source what we can in terms of the specialty services. That will happen over the course of time in a way that we feel like those things can be done efficiently and effectively. But that won't necessarily flow through the kind of the line item on the P&L that you're referencing. Andrew Schenker - Morgan Stanley & Co. LLC: Okay. Thanks. And then you called out the investment and expansion costs of $0.25 to $0.30, a little hard to hear on the call, but it sounded like there was only $0.02 in the quarter. So, if you can maybe talk about how those costs ramp through the year? I assume there's some pretty heavy investments in the end of the year for Nebraska. But anything else we should think about around seasonality of those cost items? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I think you're right. It's probably weighted more towards the end of the year, specifically with Alabama and Nebraska. Andrew Schenker - Morgan Stanley & Co. LLC: Okay. And then, just one quick modeling question as well. Run rate interest expense given the timing of the debt issuance and the corridor and the swaps, I mean, what should we be thinking about for the run rate interest expense going forward? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I think I gave you the – I mean, it's kind of challenging to tell you that, because a lot of our interest expense now is based on a floating rate of interest, right. So, I think I gave you the components, the $2.4 billion, obviously, the coupons we issued, the $1.6 billion is at LIBOR plus 4.3%, but it would be north of $200 million on an annualized basis. Andrew Schenker - Morgan Stanley & Co. LLC: Okay. Thank you.

Our next question is from A.J. Rice of UBS. Please go ahead.

Thanks. Hi, everybody. Maybe one granular question and then one big-picture one. In the Q1 cost trend, obviously, your MLR year-to-year improved nicely, as a lot of the Managed Care companies and providers, for that matter, are calling out leap year and Easter. And you said that flu was in line with your expectation. How about those two dynamics and how much of an impact did they have? Do they offset each other in your view? Any comments there? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. This is Jeff. I mean, I think the way we always look at leap year is just it's an extra day of medical costs when we do our forecasting when we put our budget together. I think Easter may have had a slightly favorable impact to that. But the way we really forecasted it was just we include an extra day of medical costs in the quarter.

Okay. Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: So, again, I think the improvement that you're seeing is reference to the complex care and additionally the growth in the Medicaid expansion obviously – excuse me, the Health Insurance Marketplace products, right, and they carry a lot lower HBR than our average.

Sure. Sure. Then maybe a bigger picture, there's a lot of – there's moving parts this year, even more than usual. There's always a lot of opportunities and some challenges. I wonder, if you look at the guidance that you now are blessing and reiterating with the exception of the three-and-a-half-week delay on the deal, would you point to one or two things that look like might be the – if you end up beating the estimates, coming ahead of the estimates, that those would be the likely sources of potential upside? And is there one or two things that are the challenges you face as you look out at the rest of the year? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Well, I think if we saw something that was certainly one sided I think we would adjust the guidance in line with that. So, there's no one thing that we can call out. And Jeff can add if he wishes. The only thing I'd call out that's a positive or a negative. But as I've talked about historically, we have a size and a scale that with 24, 25 states growing the number, 260 different contracts within those states, at any given time, you'll have one contract in a state that's an issue and you will have a couple that are offsetting it. So, it's the security and stability of diversification. So, that's what makes it so hard to call out any one particular thing, because I'd like to think there's no one issue that can have a total deleterious effect on the whole company. Hope that helps.

Okay. All right. Thanks a lot.

Our next question is from Sarah James of Wedbush Securities. Please go ahead.

Thank you. I wanted to circle back to the exchange risk mix. It looks like in the Q, risk adjusters were up about 120% versus the combined Centene-Health Net at year end and at 680,000 enrollment, I was getting up about 36% from the 500,000 range you previously talked about. So, I'm just trying to understand the delta there between the degree to which risk adjusters went up versus the degree which enrollment went up? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, this is Jeff. I mean I think you're correct. Risk adjustment, the liability payable did increase during the quarter. I would say that is a function of – I mean we're seeing the same kind of member demographics that we've seen consistently. And as you're aware, we've been in a risk adjustment payable for the last two years. So, adding additional member volume has really just increased that risk adjustment payable.

I guess I'm – the degree of difference between the enrollment change in the adjuster balance was just surprising. One of your peers this quarter had talked about their risk mix deteriorating. So, I just wanted to make sure there wasn't any sign of that. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Yeah, that may be their – that's their issue. I think in our comment I said that we saw our performance at the high end of our range. So, our experience is contrary to that. You would have to ask them why their performance is so different from ours.

Sure. Absolutely. And then I know it's early days on it, but as Zika tends to progress to South Florida, are you noticing any increased demand for OB visits or ER and how is the dialog going with the state on how to address those additional costs? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Ken, do you want to comment on the... Ken Yamaguchi - Chief Medical Officer & Executive Vice President: Well, to-date, there has only been just symptomatic flu-type cases of Zika. There has not really been a case of the catastrophic consequences except for one in Hawaii. We're tracking that. The projections of Zika are really unpredictable based on Latin American experience. But we are optimistic that the government's position or file chief's position that the burden, the disease burden on the United States should be very small is probably very accurate. And the cost of testing or visits should be relatively minimal.

Great. Thank you.

Our next question is from Josh Raskin of Barclays. Please go ahead.

Hi, thanks. Good morning. Just a quick... Michael F. Neidorff - Chairman, President & Chief Executive Officer: Good morning.

...clarification or two. Thanks, Michael. Just the Health Net merger cost went up about $0.30. I know it's excluded from your adjusted earnings. But is that just the charitable contribution or was there something else in there? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, Josh. The primary driver was the present value of the charitable contribution and there was some shifting of, I would say, stock compensation, severance, really spending over the quarters versus all one-time. But the charitables are the most significant item.

Okay. That's helpful. And then what was the Health Net membership change on sort of a sequential basis, if you can just look at what Health Net membership did? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, Josh, I don't think we're going to get into too much of that. I'd say it's relatively flat. But again, we're not really going to start separating the Health Net and Centene business on a going-forward basis. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Yeah. I think, I mean we made a very conscious decision last year that at this point now it's all Centene and we'll just reported it as a consolidated Centene business as trying to compare one from the other. I mean, I just look at the total and it's all headed the right way.

Okay. I just wanted a starting point, but that's fine. And then, just lastly on the Medicare expansion, I know you guys talked about the four new markets. What does success look like? What sort of critical mass do you need? Or should we think of this as existing Medicaid market, so infrastructure may be more in place, you don't necessarily have to see a big ramp in membership to make those plans successful next year? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Yeah. I think the infrastructure, of course, is in place. And the advantage we have is that we have very strong decentralized plans that, if you will, to coin a word, our local CEOs and their teams know how to indiginitize product in their market, because you don't just take something from California and parachute it in, right. So, there's that aspect of it. I think the thing that we're cognizant of and thinking about is there's a different acquisition costs in Medicare products, some of us have done historically understand. So, it will not take a gigantic, significant amount of critical mass to start to see it provide some margin to us. But I expect in the first few quarters to have some expense that will not necessarily be fully offset by the revenue. And that's something we'll get more into at year end when we have the specifics and give guidance on 2017, as we always do.

And Michael, what's – so then, just on that, what's the network strategy? I assume you'll need to augment your networks for different providers in the Medicare business versus Medicaid and I'm curious what your thought is on rates. Are you paying off a Medicare Fee Schedule or do you think you can look something more like Medicaid? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Well, I think it will be a combination depending on the particular services. And we're going to – as I said earlier, I think you're going find – you're going to have more orthopedic surgeons type. You're going to have gerontologists. You're going to have certain – you may have more of rheumatologists, those things. And some of those sub-specialties, I expect the rates will be higher than the Medicaid level, because we're not using that much in Medicaid. We're not driving the volume there. So, it's a matter of just being very surgical as we demonstrated before. But the primary care will be our current network and we'll adjust the rate as we see appropriate as we do now with the exchange versus Medicaid. But it's all in line with providing adequate, equitable reimbursement and protecting our margin.

Perfect. Perfect. Thank you.

Our next question is from Brian Wright of Sterne Agee. Please go ahead.

Thanks. Good morning. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Good morning.

Could you give us an update on kind of adjusted scripts on a – annually on a combined basis and maybe how that compared to before the transaction? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Scripts?

Yeah? Michael F. Neidorff - Chairman, President & Chief Executive Officer: As I said, we're kind of looking at it as a total business now. And to try and break that out, it probably takes more time and energy for any benefit from our running the business.

Is that thought of as an area in the synergies category or is there any opportunity in their? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Sure, there's synergy. Jesse, why don't you...? Jesse N. Hunter - Chief Business Development Officer & Executive VP: Yeah, Brian, this is Jesse. So, definitely, as we referenced before, pharmacy is a meaningful part of the overall synergy story. So, the additional volume from the combined business is part of that. But we're not going to go down the path of breaking out specific script volume in conjunction with that. Michael F. Neidorff - Chairman, President & Chief Executive Officer: I mean, I might add, Brian. I've said in various investor conferences, we're now purchasing $5 billion in pharmaceutical. So, you're going to get the benefit of that kind of scale. In my script, I commented on the purchasing power this company now has as a $40 billion company versus a $22 billion company.

Great. Great. And if I could just have one detailed follow-up, with the new exchange members, do those go into the existing MLR or new business MLR? Just how does that break out? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, we include those in existing. I think our definition of new and existing was a significant – a geographical or product expansion. So, these are really in existing states. And so, we count that as organic growth and it's in the existing business.

Great. Thank you so much. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Thank you.

Our next question is from Ralph Giacobbe of Citigroup. Please go ahead.

Thanks. Good morning. Just want to circle back on the risk corridor. Is the write off, the $214 million, previously on the Health Net books or has that number changed? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Well, obviously, there had been – it changed, because there is activity between the December balance sheet and when we acquired the company on March 24. So, I'm not going to get into the exact number, but...

Okay. And then, I mean, maybe can you help us with the timing at least in terms of when you get visibility from the government, because you wrote it down to zero, if you get anything back. I mean I know last year it was 13%. Can you help us with timing? Does that ultimately run through the P&L, if you get anything back? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I guess, the question is if we get something back, and yes it ultimately would. I mean, our requirement under accounting standards is to fair value that receivable as of the date of acquisition, using information as of the date of the acquisition. So, that's what we did. Again, these are all provisional estimates. We haven't finalized that. But that's what we did and that would be our view.

Okay. Fair enough. And then, looks like you had a fairly big increase in the return of premium payable on the balance sheet. I think it went up to about $579 million, it had been running at a couple hundred million. Is that just the addition of sort of Health Net? And is that all rebate dollars? And does that just reflect sort California coming on and the rebate back from the Medicaid expansion? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah, yeah, that's – you're correct. It is the addition of Health Net. I think if you look at Health Net's 10-K, they've disclosed it over the last couple of years they've had increases in the MLR rebate payable in the California business, specifically related to the Medicaid expansion. So, that's all driven by that amount. I think the dollar amount of that rebate is somewhere north of $400 million on rebates for the Medicaid expansion business for Health Net in California.

Okay. That's helpful. Thank you.

Our next question is from Dave Windley of Jefferies. Please go ahead.

Hi. Thanks. Jeff, on your provisional estimates, and you referenced that you've also taken a look at medical claims reserves on the Health Net side and made some provisional estimates there. Would be willing to add some color to that directionally, magnitude, anything like that, that would help us there? I'm thinking about that in the context of the combined days claims payable dropping by a couple of days? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. No, I'm not going to get into any specifics. Again, I think the most important piece is that really with the timing of the acquisition, we've made what I would call high-level estimates and we haven't completed the analysis. And we look to complete the bulk of that analysis in the second quarter. Again, the accounting requirement's to make sure that we have those reserves at fair value as of the acquisition date. So, I mean, realistically, we should only be responsible for eight days of March, right. So, that's the work that we're looking to complete in the second quarter.

But you're responsible for liabilities that predate the acquisition, right, because you're buying their liabilities too? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: That's exactly right. But we fair value those. We have not completed our analysis on those yet. And any adjustment to the opening balance sheet, again, would be a balance sheet-only adjustment.

Yeah. Okay. Okay. So, separate question. On the synergy commentary, Michael, you referenced the $75 million, we're familiar with that number. I think the way that was presented originally was it was $75 million for each year in addition to or over and above any savings that Health Net had previously expected to achieve through their Cognizant deal. So, I know you're expecting to get both buckets. What about the pace of achievement of the Cognizant-related savings that they're no longer Cognizant-related, but are those kind of pro rata with your synergy achievement or are they on the old schedule or how should we think about that? Michael F. Neidorff - Chairman, President & Chief Executive Officer: I think it's all there, it's pro rata. I mean, if you look at our guidance, it's been consistent. We're realizing it as we expected it. And you know we – Mark is familiar with all of it, having come in as CIO and just working through it and it's where we expected to be and it's pro rata and it's just as we have reported previously.

Okay. Michael F. Neidorff - Chairman, President & Chief Executive Officer: We're achieving what we want.

Okay. Great. Last question, what are your expectations around reduction of debt to cap over time? What's your target and by what timeframe? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Jeff, we've talked about it. Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I think we previously commented that we're looking to get our debt to capital ratio into the high-30% – mid-to high 30% range in the next 18 months to 24 months. I think that still continues to be the plan.

Okay. Great. Michael F. Neidorff - Chairman, President & Chief Executive Officer: And we started off with a little higher midpoint because of the stock price, but we'll still get there.

Okay. Great. Thank you.

Our next question is from Ana Gupte of Leerink Partners. Please go ahead.

Yeah. Thanks for fitting me in this morning. The first question's, again, on the regulatory framework for the managed Medicaid Federal MLR floor, trying to get some clarity on is this going to again be on a blended basis across the expansion in TANF lives with long-term support services, ABD and so on? And in essence, does it become a tailwind for you as you kind of cross subsidize this or does that come out of the final reg? It wasn't clear to me and does that differ by state? Michael F. Neidorff - Chairman, President & Chief Executive Officer: You probably had – we've had our board meetings and our committee meetings and things taking place last night and today. You probably had a little – I mean, I'm not trying to be smart about it, but you've probably had more time to look at it than we had to this point. And I just had our Washington office give us a quick summary that they see nothing deleterious to our operation and no surprises. And that's the extent I have right now until the team moves past the next day or so and then can really dig into it.

Got it. Okay. Understood, we'll look forward to an update. Another regulatory question sort of, I guess, in 2017 I completely understand that you with the 250% sort of roughly limit on the exchanges are more profitable than those that are seeking to be more than Medicaid Plus. But next year when reinsurance goes away and then United's exiting from multiple states, might there be pressure as they're pooling the risk with you on your risk adjusters? And do you foresee margin compression in states that are...? Michael F. Neidorff - Chairman, President & Chief Executive Officer: I think if you look at – on the risk adjusting, we feel we're the net payer in our states. So, it really does not have an impact as in the same sense that somebody that has the receivable.

But would it be a net payable to a larger degree, if you will, next year because the margins for the Aetnas and the Anthems of the world, and the Blues, will be even worse, I would imagine, unless they get a huge amount of price increase. Even if so, they may not get...? Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I guess maybe I'm not following the question 100%, but I mean if our acuity goes up, our payable on risk adjustment would go down. So, if that's what you're trying to state.

No, I was more saying that risk adjusters will be pooled – though you are profitable and maybe they are not, it's a pooled program as I understand. So, if they're in worst acuity, even though you may get better acuity, might your payable be meaningfully higher than it is in 2016? Because if they raise prices a lot, healthier people could fall off and their risk gets worse, if you will. So, I'm just wondering what happens there. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Rone?

Well, I think we price for the estimated risk pool in the state and we try to be careful about looking at the changes that are going to happen from one year to the next with respect to that risk pool. And I think we've had a pretty good track record with respect to being able to do that to this point. I think that if they raise their prices some of the healthier members we would hope would accrue to us with respect to that. And again, we try to carefully look at the dynamics of how that would affect the actual risk adjustment amount that we might have to reflect related to our acuity, including how the risk adjuster pool works in each state. And I think that we've reflected what we think is an accurate view of the dynamics for 2017. Just back to another comment you mentioned that the reinsurance program is going away in 2017 and that is certainly something that will need to be reflected in our pricing in 2017 and something that we're very mindful of.

Thanks so much. Appreciate squeezing me in. Michael F. Neidorff - Chairman, President & Chief Executive Officer: Thank you.

Our next question is from Matthew Borsch of Goldman Sachs. Please go ahead. Matthew Borsch - Goldman Sachs & Co.: Yes. Thank you for squeezing me in. I had a question on the – I know you don't want to break it out, but when you're starting with this Health Net – large book of Health Net ACA exchange membership, is it profitable now and was it profitable when you exclude the risk corridor from that business or do you have to do something to get it to profitability? And what level of profitability is that, because I assume it's somewhat less than what Centene has realized?

Yeah. So, this is Rone Baldwin. In aggregate, the exchange business at Centene – excuse me, at Health Net has been profitable. The one area of challenge with respect to the exchange business at Health Net has been Arizona. And Health Net did take actions with respect to this open enrollment period to make changes in the product lineup and the pricing for Arizona to be able to get that back on track. But California, they pursue a strategy very similar to Centene's strategy in terms of tailored narrow networks with a focus on the subsidized population. And that's worked well for them and they're seeing results in line with what we've seen on the exchanges. And this does – this is a view that also takes into account the risk corridor and with respect to not booking any receivables for it going forward. Matthew Borsch - Goldman Sachs & Co.: Okay. And then just one more, if I could. As you think about California moving ahead, how do you think, what's going to be the key growth driver in that market? Given the Medicaid expansion has already happened, the exchange take-up has been fairly robust, where do you grow in that market? Michael F. Neidorff - Chairman, President & Chief Executive Officer: Well, I think there's – it will still be very balanced growth. There's probably 4 million lives unidentified – undocumented as well as unidentified Medicaid lives, plus all the categories that are there that will provide growth, this ongoing exchange business, we continue to increase penetration. So, it's what you see against all our markets with other new products and things that we do over time. And I'm not going to tip my hand to the competition what I have in mind, but we have thought and expect it to grow consistent with our rates of growth. Matthew Borsch - Goldman Sachs & Co.: Okay. Thank you.

Our next question is a follow-up from Christine Arnold of Cowen. Please go ahead. Christine Arnold - Cowen & Co. LLC: Hey, and thank you again. I have a quick follow-up on the tax rate in 2017. You've referenced before changes to the compensation tax rate and then there has also been a new FASB rule, how should we be thinking about the tax rate in 2017, obviously, excluding HIF, like an ex-HIF tax rate, 2016 to 2017? Thanks. Jeffrey A. Schwaneke - Chief Financial Officer & Executive Vice President: Yeah. I'm not going to get into 2017 tax rate guidance. We're a little early for that. But I will tell you, and we've have quoted this number before, that the HIF is roughly over 10% to our tax rate. So, that will be – obviously get you somewhere in the 40% range, but that's all I'd say at this point. Christine Arnold - Cowen & Co. LLC: Okay. Thanks.

This concludes our question-and-answer session. I'd like to turn the conference back over to Michael Neidorff for any closing remarks. Michael F. Neidorff - Chairman, President & Chief Executive Officer: All right. Thank you all. I think – I would hope you've got the sense that the integration is going very well. It's at or ahead of schedule, that the teams are working well together, that the business is where we expect it to be and want it to be. And we look forward to giving you in-person report at our June conference in New York. So, have a good second quarter along with us. Thanks.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.