Greetings, and welcome to the CVS Health Second Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Ms. Nancy Christal, Senior Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, LaTonya. Good morning, everyone, and thanks for joining us. I'm here this morning with Larry Merlo, President and CEO, who'll provide a business update; and Dave Denton, Executive Vice President and CFO, who will review our second quarter results as well as guidance for the third quarter and year. Jon Roberts, President of the PBM; and Helena Foulkes, President of the retail businesses are also with us today and they'll participate in the question-and-answer session following our prepared remarks. [Operator Instructions] Now I have one key date to announce this morning. We plan to host our annual Analyst Day in New York City on the morning of Wednesday, December 16. At that time, you'll have the opportunity to hear from several members of our senior management team, who'll provide 2016 guidance as well as a comprehensive update on our strategies for growth. We plan to email invitations with more specific details later this month, so please save the date. Again, that's Wednesday, December 16, and if you don't receive an invitation by early September and would like to attend, please contact me. Also, please note that we posted a slide presentation on our website just prior to the start of this call. The slides summarize the information you'll hear today as well as some additional facts and figures regarding our operating performance and guidance. Additionally, our Form 10-Q will be filed later this afternoon, and it will be available on our website at that time. Please note that during today's presentation, we'll make forward-looking statements within the meaning of the federal securities laws. By their nature, all forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements for a number of reasons as described in our SEC filings, including the Risk Factors section and cautionary statement disclosures in those filings. During this call, we'll also use some non-GAAP financial measures when talking about our company's performance, including free cash flow and adjusted EPS. In accordance with SEC regulations, you can find the definitions of these non-GAAP items as well as reconciliations to comparable GAAP measures on the Investor Relations portion of our website. And as always, today's call is being simulcast on our website, and it will be archived there following the call for 1 year. And now, I'll turn this over to Larry Merlo.

Well, thanks, Nancy. Good morning, everyone, and thanks for joining us, and I'm very pleased to have the opportunity to discuss the strong second quarter results we posted today. Adjusted earnings per share increased 7.7% to $1.22. That excludes $0.03 of acquisition-related transaction and financing costs, and it's $0.02 above the high end of our guidance range. Operating profit in the retail business declined 1.4%, coming in better than expectations while reflecting the tougher comparison to last year. And operating profit in the PBM increased 7.1%, in line with expectations. We generated $523 million of free cash during the quarter and more than $2.1 billion year-to-date, keeping us on track to achieve our full year free cash flow goal and to continue to return significant value to our shareholders. Now given our outperformance this quarter, along with the previously announced acquisition-related decision to reduce this year's share repurchases by $1 billion, we are, once again, narrowing our guidance range. Excluding acquisition-related transaction and financing costs, we currently expect to achieve adjusted EPS for 2015 of $5.11 to $5.18, and that compares to our previous range of $5.08 to $5.19. And Dave will discuss this guidance in more detail during his financial review. Now let me provide a brief update on the status of our pending acquisitions before reviewing the performance of our business. In May, we announced we entered into an agreement to acquire Omnicare, the leading provider of pharmacy services to long-term care facilities. The Omnicare acquisition provides a new pharmacy dispensing channel for us, enhancing our ability to provide the continuity of care for patients as they transition through the health care system, and we remain very excited to assume leadership in this adjacent space. Omnicare also has a complementary specialty business that will augment our capabilities. Now…

Thank you, Larry, and good morning, everyone. As I typically do, I'll begin today by highlighting how our disciplined approach to capital allocation continues to enhance shareholder value. I'll then follow that with a detailed review of our strong second quarter results as well as an update on our 2015 guidance. As you know, we announced 2 acquisitions and issued $15 billion in long-term debt just since our last earnings call. And as a result, there are many different numbers circulating in the marketplace. It's my goal this morning to provide you with some additional clarity with regard to the pending acquisitions in order to help you with your modeling in both the short and the medium term. So as it relates to our capital allocation program, let's begin with our dividend payout. We paid $395 million in dividends in the second quarter and $794 million year-to-date. Our dividend payout ratio stands at 28.1% over the trailing 4 quarters after excluding the impact of nonrecurring items in both years. We remain well on track to achieve our target of 35% by 2018. The $2 billion accelerated share repurchase program that we entered into during the first quarter concluded during Q2. In addition to the 16.8 million shares we've received in January, we received 3.1 million shares in May to conclude the agreement. In total for the first half of the year, we repurchased approximately 28.9 million shares for approximately $2.9 billion or $101.33 per share. For the full year, as we have noted, we expect to complete $5 billion of share repurchases. This reflects an increase of approximately 25% versus 2014 despite the $1 billion acquisition-related reduction to our share repurchase plans for this year. So between dividends and share repurchases, we have returned more than $3.7 billion to our…

Okay, thanks, Dave. Well, I think you can hear that we're certainly pleased with our continued strong performance in the second quarter, the outlook that we have for the rest of the year and certainly, the opportunities the announced acquisitions will present for future growth. And with that, let's go ahead and open it up for your questions.

[Operator Instructions] Our first question comes from Lisa Gill with JPMorgan.

Obviously, another great PBM selling season. Larry, if you or Jon can maybe just talk about 2 things around that, the selling season. One, Larry, I think you characterized it as being fairly typical from what you've seen over the last few years, but you continue to win a lot of business. Can you talk about maybe what's helped you to win this year? And then secondly, just help us to understand how do we think about the setup going into 2016 as it pertains to plan design. Are we seeing more people adopt your formulary? Are we seeing more people adopt specialty? Like, how do we think about it as we're thinking about how that sets up for 2016?

Yes, Lisa, I'll take the first question and I'll ask Jon to comment in more specifics around your second question. But yes, Lisa, I think the success that we're continuing to see, it really reflects our integrated model. And I think as we've talked in the past, you got to be right on price, you got to be right on service, but once we get past that, we've got an awful lot of differentiation that is resonating for clients across all the sectors. And I mentioned in our prepared remarks that the success this particular selling season has been more skewed with the health plan segment, those -- the health plans probably represent around 80% of the gross business wins of the $12 billion. And obviously, we're pleased with those results. And I'll ask Jon to take a deeper dive in terms of more specifics.

Yes. So Lisa, if -- let me focus and start with health plans. They have multiple lines of business: They have commercial. They have Medicare. They have Managed Medicaid and exchanges. And we see different priorities based on the health plans business makeup of those 4 lines of business. And if you start with -- health plans want to be competitive in the marketplace. They want competitive pricing and high levels of service. And clearly, these are areas that we've consistently delivered in over last several years. We've been predictable, consistent and stable, and this is an important area as health plan clients evaluate their options in the market. Most health plans' biggest challenge is in the government space, and we bring a lot of expertise in both Medicaid and Medicare. And we provide advisory and consultative services that help them manage and build competitive government programs. So as an example, we provide programs to support their Star measures and we also help them design their formularies and benefit designs for Medicare. The other top priority for health plans is specialty, and we have the most comprehensive suite of solutions to help manage their spend and their specialty members across both the pharmacy and medical benefit. And we've talked in the past about Specialty Connect, Coram, Novologix, Accordant and MinuteClinic. And then we also offer many robust clinical programs that integrate into their clinical strategies and help overall medical costs. So we're able to provide value beyond just pharmacy cost management. We've also been very successful in the employer and state government space and these clients have embraced our integrated model and all the value we're able to bring them and their members. So we continue to be successful in the market and win new business because of the value…

Our next question comes from Scott Mushkin with Wolfe Research.

Lisa has -- kind of took the one I was going to ask. But I wanted to talk about Target, and this is really for Jon. When you think of bringing those pharmacies in and how it works with the PBM side of the business, can you talk us through kind of your thought process? And what that does for you as maybe you enter the '17 selling season?

Well, Scott, it's Larry. I think as we talked when we announced the Target acquisition, obviously, it expands our reach in new geographies: largely west of the Mississippi, certainly the Pacific Northwest. So I think from a PBM point of view, where we did not have good geographic representation, I think that certainly goes a long way to fill that void. And at the same time, it opens up another channel for consumers, and it opens up the different ways, in which we can offer our unique and integrated clinical programs, whether it's Pharmacy Advisor or -- Scott, you've heard us talk about the things that we've done that we've been able to demonstrate in improving access. We're also able to reduce overall costs. So we think it becomes an important solution to some of the challenges that our health care system faces today around access, quality and cost.

And then as -- maybe as a follow-up. The intercompany eliminations, I think, Dave, you talked about as being one of the reasons that drove the outperformance. It seemed like the revenue was really strong on that line, but the profitability isn't. And obviously, one of the successes of CVS is the integrated model. How are we supposed to think about the intercompany eliminations on the profit side being maybe a little bit less help profits? Is this a problem? Or is this just kind of the cadence of the business?

Scott, this is Dave. This is just the cadence of the business. This is just a -- we forecast that on a quarterly basis and quite frankly, just the mix of scripts and how they flow through the PBM and how they flow through retail, which is off just a tick. So there's no underlying concern there. No worries.

Should we key more in the revenue line given the changes that are taking place, especially with the specialty going over to the PBM?

Yes. I think you kind of -- actually, you have to look at both because just with inflation, you can get a false positive or negative based on -- we could have share capture that's disproportionate. But with the generic influx or generic cadence, it could affect that line a bit, so I'd look at both, quite frankly.

Our next question comes from Robert Jones with Goldman Sachs.

I guess, sticking with that theme, just going back to the net new number. Obviously, pretty big season even if we account for the Coventry contribution. I was just curious, Larry or Dave, any more insight you can share with where the business is coming from? I guess if we think about -- are these clients -- it sounds like more on the health plan side. Are they clients switching from other PBMs? Or are you seeing any other change in behavior, maybe more folks carving out the pharmacy benefit? Just trying to get a sense of where all the net new is coming from for you guys.

Bob, it's Larry. I mean, you're right. We said about 80% of the gross wins is coming out of the health plan segment. The vast majority of that is clients switching PBM. I think Jon touched on some of the key elements earlier, that when you look at the makeup of the health plan business, and you think about commercial, Medicare, Medicaid, exchange products, we can bring solutions in a very differentiated way for each of those segments within the health plan. And I think that's -- I think once again, it's the model resonating with those clients in terms of we can satisfy differentiated needs within that particular health plan's book of business.

I guess, as my quick follow-up then on the PBM. If I look at the profit from this quarter, up 9%, Dave, you mentioned in your remarks that you guys are guiding for gross profit growth in the 2% to 6% range, I believe, for 3Q. Just curious, what's driving that slowdown? Anything that was already kind of thought of in guidance as far as the cadence of profit growth from quarter-to-quarter?

Yes, really, there's a couple of things that happened. As you know, that our profits in the PBM has typically been a little lumpy quarter-over-quarter based on how we performed in Medicare. So you see the timing shift a bit based on where we hit the reinsurance levels, number one. And that's kind of common and it's hard to predict, number one. Number two, as we ramp into the back half of this year, we're overlapping the introduction of Hep C and overlapping the rebate performance in that category and other categories within specialty.

Our next question comes from Edward Kelly with Crédit Suisse.

So Larry, your success in the selling season obviously doesn't go unnoticed. I mean, have you seen any behavioral changes this season from competition that might be worth mentioning at all?

Ed, there's nothing that is top of mind when you ask that question. I mean, as we've talked for the last couple of years, the marketplace remains competitive. And as I just mentioned in response to Lisa's question, you got to be right on pricing services, the ticket to the game. And then, I think our differentiated model comes into play in a very healthy way after that.

All right. Then maybe just as a quick follow-up here. You've been fairly active on the M&A front recently. Larry, could you just maybe take a step back and kind of assess sort of like where you are today post the Omnicare and Target relative to -- really think relative to where you want to be, I guess, longer term in the evolving landscape? Are there still gaps or opportunities to sort of think about?

Well, Ed, I think that as we've talked about the strategy -- and again, Nancy touched on Analyst Day and we'll talk more about this in December. But we think that we have a unique opportunity with health care becoming more consumer directed. And you think about the fact that we've got broad capabilities today, whether you're talking about retail, PBM, specialty, infusion, medical claims management, MinuteClinic and soon, long-term care that we can manage the consumer, the patient through the continuum of their health care life cycle, if you will. So Ed, I think we feel pretty good about where we are today. And obviously, we'll look to continue to add to that list of ways in which we can serve the patient and connect the dots, so to speak.

Our next question comes from Eric Bosshard with Cleveland Research.

Curious on the reimbursement rate environment on the pharmacy side of the business, what trends you're seeing there. And as we look forward, what your outlook is on gross margin on the retail side.

Eric, this is Dave. Maybe I'll just talk about it a bit. I think that there's a couple of things that are occurring. I think not so much if you look at gross margin. As I said, in my prepared remarks, there's been a little bit of shift in the, I'll say, the availability of generic drugs into the marketplace that are in a break-open status, and so that has influenced a bit our gross margin and the gross margin performance, both the first half of the year and more importantly, the back half of the year. I do think if you look at the reimbursement trends in the marketplace, as we have said many times, there continues to be reimbursement pressure in the marketplace. We don't see that abating, and it continues to occur, and I think we expect that to continue to occur, not only this year, but as we look out into the future. And if you look at our -- if you step back a second and you look at our 5-year targets that we've established, we've always talked about the fact that revenue is going to grow faster than operating profit, implying margin compression. And part of that is due to the reimbursement intensity in the marketplace, and we think that's going to continue.

Great. And if I could have just one follow-up. You worked through the exit from tobacco pretty effectively to continue to do what you're doing with profits in that business with less sales. Curious if there's any plans as we move forward incrementally for what to do with that space? Or if there's anything else in the front end that you're aspiring to move towards as you move away from that or as you've moved away from that?

Sure, this is Helena. I think -- and you'll hear us talk more about it at Analyst Day, but we've been really focused on becoming the leading health and beauty destination. I think when we made that tobacco announcement, it really forced us to step back and say, "What do we want to be for the consumer? Where do we want to win?" And so we've developed a 5-part strategy. The first is around better health made easy and this relates to the healthy food section that Larry talked about. The second is around elevating beauty, and Larry mentioned that as well. The third is around customer-driven personalization. We have a leading head start, obviously, with ExtraCare, but we see a tremendous opportunity to be even more relevant and targeted in our go-forward strategy. The fourth of these is around what we call myCVS Health, and it's really tailoring our offering for the marketplace we're serving on a local basis. And so, for example, if you look at the acquisition of Navarro a year ago, we have done a lot to learn from that acquisition. We've, in fact, reset 12 stores -- CVS stores in Miami around that acquisition, and we're very encouraged. It's certainly too early to share results, but very encouraged by what we see as an opportunity with the Hispanic customer. And then the fifth component of it is all around digital innovation. So I think that the good news is the team really did a great job stepping back and thinking forward to where we want to be, how we want to win. And if you are able to get into these 275 stores where we've reset them with healthy foods, they're really a good example, I think, of what the future path is for us. You get a very different feeling in the front of our store around healthy food and the beauty experience is quite elevated.

Our next question comes from Steven Valiquette with UBS.

So one other question here just on the PBM selling season. Obviously, $12 billion gross wins' a pretty monster number. The WellCare group at their analyst meeting back in February, they disclosed their PBM spend was exceeding $6 billion and approaching $7 billion. And then the PBM on the other end of the Coventry book has suggested that Medicare piece is worth about $3 billion. So just curious whether you share those views or if you have different numbers. And then also, with your comment about the health plans being roughly 80%, or maybe over 80% of the total, just curious if you isolate just your results in the commercial market, just want to confirm whether or not your wins were net positive for 2016.

Steve, maybe I'll start here. We're not at liberty to talk about revenue per client, so I can't really confirm that at this point in time. But obviously, the bulk of our wins, as we cycle into '16, are within the health plan segment and our products and services continue to resonate there. On the commercial side, I guess, you're asking from a commercial standpoint if we have net wins versus net losses. Is that's the question?

Correct.

Is that in the employer segment, Steve, you're talking about?

Yes, just employer. You're correct, yes.

It's still early because we still are 60% through the renewal season, so we'll talk about that in December Analyst Day and talk about the makeup of our wins and losses. And then you'll be able to net it out at that point, yes.

But as we stand here today, just to be clear, as we stand here doing today, we are in a net win position within the employer/commercial market.

Okay. One other real quick one. Just the 2016 formulary was obviously just only announced. And I'm curious though, if you do go back several years ago, it did seem that formulary changes used to be viewed maybe with some mixed emotions by clients, maybe even a bit of negativity. But I'm just curious now, do you think clients are more receptive to these formulary exclusions today versus historically because perhaps, client are more conscious of the savings potential. Just kind of curious to get your thoughts on that. Now it seems like these are viewed more positively than negatively versus history.

And Steve, I think you're absolutely right, and keep in mind that we were first to market with the formulary strategy. And you're right, it was met with the mixed beliefs that you acknowledged. I think that over the past 4 years, we've demonstrated to clients and their members that not only is it a cost-savings opportunity, but at the same time, equally if not more important, we can manage their members in a seamless fashion. And none of this is disruptive to the continuity of care. So I think it is becoming -- it is getting more focused. And as there becomes more opportunities in the specialty space, that just adds to the dialogue.

Our next question comes from George Hill with Deutsche Bank.

And Larry, I wanted to talk a little bit more about Retail Pharmacy consolidation. You've seen managed care consolidate up around the industry pretty quick, and the PBM industry has consolidated up now basically into 3 large vendors. You guys made an interesting move with the Target transaction. I just -- I wanted to ask what you think is the capacity for further retail pharmacy consolidation. Can the market consolidate to a point where you get some type of competitive balance for the retailers versus the payers?

Well, George, when you look at the retail pharmacy landscape, keep in mind, there continues to be more than 60,000 pharmacies operating across the country. And that number has not changed in a significant way over the last couple of years to include the role that the independents play and the independents continue to grow. So I don't -- I think for us, the Target acquisition, as we talked earlier on the question, it became an exciting opportunity to increase our geographic presence in a very, very capital-efficient way. And we've got -- we're excited about the opportunities.

Okay, I guess, maybe then a quick follow-up would just be, do you expect more opportunities like Target to present themselves? And then, given what you guys know, if you look at the companies that compete in the pharmacy space outside of the big retail pharmacies, given that Target was losing money, can you imagine that any of these guys are making much money in pharmacy?

George, this is Dave. It's kind of hard to speculate on that. I would just say that our focus, first and foremost, is to execute against the pending acquisition, roll out our products and services in a way that puts our clinical programs into the hands of more members as they shop this new and exciting channel. And to work, as Larry said before, to reduce cost, to improve access and to improve the health outcomes of the patients that we serve. And that continues to be our focus right now.

Our next question comes from Robert Willoughby with Bank of America.

A specific one for Jon. We heard from a competitor last night who pointed to continuing opportunities in open specialty pharmacy networks. But with your $12 billion of gross PBM wins, have you noticed any interest in narrowing the specialty pharmacy networks, in particular?

Well, when you look at the employer wins, most of the employers actually come with us exclusively for specialty. And with health plans, they typically have multiple vendors, but we are seeing a move, even for health plans, to narrow it from say, 3 or 4 or 5 vendors down to somewhat less, and they get better pricing and better clinical program execution. And so we do have -- we do business with many health plans, where we're not the PBM, and stand-alone specialty. And that business for us continues to grow so -- and we'll continue to pursue it.

Okay. And just as it relates to the Cardinal relationship, what opportunities do you see to expand the areas in which you're working?

Well, Bob, it's Larry. As I've mentioned, I think the team has done an awful lot of work in a pretty short period of time in the first year. And certainly, we're always looking to work in terms of how we can create additional value for the business and our customers. And I don't know that there is anything on the horizon that we can talk about right now. But certainly, I think the Red Oak team will have an ongoing focus in terms of how they can create additional value.

Our next question comes from Charles Rhyee with Cowen.

Just maybe one just quick clarification from Dave. Just in the guidance, just to be clear, you're excluding the financing cost. But we are including just the incremental fixed expense from the new issuance on the debt, right?

No, I'm excluding both. I'm excluding both the bridge facility cost as well as the incremental debt that we took on in relation to financing the acquisitions. In effect, Slide 29 gives that nice little, I'll say, walk forward of all those components.

Our next question comes from Priya Ohri-Gupta with Barclays.

Dave, I think this is a question that I continue to get and it would be helpful if you could maybe give us a little bit more color in terms of how we should be thinking about a reasonable amount of time for you to get back to 2.7x. Should we be thinking about a sort of 2- to 3-year time frame? Or should we potentially be thinking about 3 to 5 years?

Great. That's a great question. I have not specified that time line specifically. And unfortunately, I'm not going to do that today. I do expect that -- obviously, we're at 3.2x. Our objective, obviously, is to get to 2.7x, and we're going to do that in a reasonable, modest fashion to get us back down into that zip code. And I -- but I haven't set a specific time line, and I don't really expect to do so. I will update the market as we continue to progress on this and make sure that there's clarity from that perspective on where we stand.

Our next question comes from John Heinbockel with Guggenheim.

So 2 things on the selling season. Number one, can you tell how much the ongoing consolidation in the PBM space may have helped you this selling season with the health plans? And if not, does that lie in front of us for next year? And then secondly, if you look at the first year margin right on the $11 billion and how that would compare to prior years, is it very similar? Or just because of the magnitude of some of these plans, maybe it's a bit lower than prior years.

Yes, John, it's Larry. Let me take the first part, then I'll ask Dave to comment on the second question in there a bit. John, I think as you look at the timing of the selling season, I think this particular '16 selling season was really unaffected by some of the M&A activities that occurred. So I think that, that opportunity is in front of us as we soon -- well, in some respects, we've already begun on '17 when you think about some of the health plan clients out there.

And then as it relates to, I guess, the profitability or the margin of those new clients, John, as typical, new clients when they come on as a new PBM book of business, they come on a very thin margin. And the objective that we have is, over time, is really twofold: is to sell in our programs and products that drive additional performance within the PBM; but probably as importantly, work to drive adherence programs into one of our dispensing channels to ultimately improve the outcomes of the patients and members that we serve. And so you'll see them come on thin. You'll see them grow over time, and that -- we expect that trend to continue as we cycle into this selling season, as we implement that into 2016.

All right. And then secondly, right, if you look at pharmacy traffic versus front end, right, so pharmacy, obviously, growing a bit faster. And I know you're doing things on the merchandising and marketing side. But when you think about conversion of pharmacy customers to front end and maybe even on that same trip, is there opportunity there, whether it's -- I don't know if it's operational or something else on that trip convert some more of that pharmacy traffic to front-end business? Or not really, right, because of drive-through and other factors.

Yes, I think there always is. I mean, look, when I said before that we're really focused on health and beauty, health is critical because when the consumer thinks about us, she's really thinking about all her health care needs. And so, in particular, we look at people who are chronic customers and think about all the ways that we can serve them in our stores. For example, the work that we're doing on store brands is really important to people who have a lot of health issues and are worried about how to maintain good health and save money with high-quality products. So I think a big part of our focus and effort is on how to make the front store an extension of the pharmacy experience. And obviously, the outcome of that is driving higher sales as it relates to serving those patients.

Our next question comes from Mark Wiltamuth with Jefferies.

Just want to get a little update on your thoughts on the generic wave into 2016. We've now had some of the wildcards on multi-source break opens resolved. And also, if you could give a little update on what you're seeing on generic cost inflation?

Well, maybe I'll talk a bit about the availability of generics. It's been a little lighter than we thought, and we're forecasting them to be a little lighter going forward over the next several periods. And that's really driven by the availability of break-open generics where there's multiple suppliers in the marketplace, which as you know, where there's multiple suppliers in the marketplace, that allows us to reduce our cost of goods sold. And we see that cycling both the back half of this year and potentially to 2016. We'll update you a lot more on Analyst Day as we'll have a better picture of what 2016 looks like. As far as generic inflation, I think it's -- the overall marketplace continues from a generic perspective to be deflationary in totality, and we -- that has been true throughout the year and we expect that to be true as we forecast out the balance of this year. I think just in general, generic inflation has been modest this year as we -- as it compared to, I'll say, last year at this point in time.

So you're saying on the availability break up is that it's a little softer now, and you're going to cycle out of that and a better outlook into 2016.

Yes, I don't know about 2016. I just -- it's unclear at this point in time how 2016 shapes up in the sense of how those new generics come to marketplace -- come into the market. So we'll have more to say about that when we get to Analyst Day, because we'll have a better view of the cadence of that.

The next question comes from David Larson with Leerink Partners.

Can you please talk about your relationship with Aetna and a potential Humana transaction, and sort of the incremental value you might be able to bring to the combined enterprise? And then just any thoughts on Humana's relationship with Walmart and their low-priced PDP plan.

David, it's Larry. Well, we certainly can't talk about Humana's relationship with Walmart, okay? That would be a question for them. But to your first question, I think as everyone's aware, we have a 12-year strategic agreement with Aetna. It runs through December 2022, and Aetna has termination rights beginning in January 2020, as has been disclosed. And we've got a very strong working relationship with Aetna. We work closely. We'll continue to work closely and I think we brought value to their business and their clients in a very differentiated way. And I think that the fact that we have a singular focus on pharmacy and for many of the reasons that we've been talking about on the call: the innovation that we bring, the scale that we have, we're the largest purchaser of generics, the integrated model that brings solutions to access quality and outcomes and the broad capabilities that we have, I think that it puts us in a very, very good position. I think there could -- there's the possibility that folks could be thinking about insourcing their PBM. But I think when you consider all of those factors, I think it creates a suboptimal situation for them.

Would you be able to create or maintain a unique network in -- the Walmart PDP remains in place?

Well, if you look at the makeup of the PBM network today, Walmart's an important provider in that space. So I wouldn't see any barrier to the role that Walmart plays as an important pharmacy provider. Thanks, everyone. And listen, I know this was a rather lengthy call today. Obviously, we had a lot to talk about. There are, as Dave outlined, there are a lot of moving parts, and we've done our very best on those slides to show you the variables that are in play. And obviously, if you have any follow-up questions, you can contact Nancy. So thanks, again, everybody.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and have a great day.