Welcome and thank you for joining DaVita's Second Quarter Earnings Conference Call. Now, I'll turn the call over to your host, Mr. Jim Gustafson. Thank you. You may now begin.

Thank you, Vince, and welcome everyone to our second quarter conference call. We appreciate your continued interest in our company. I'm Jim Gustafson, Vice President of Investor Relations. And with me today are Kent Thiry, our CEO; Jim Hilger, our Interim CFO and Chief Accounting Officer; and LeAnne Zumwalt, Group Vice President. I'd like to start with our forward-looking disclosure statements. During this call, we may make forward-looking statements within the meaning of the federal securities laws. All of these statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For further details concerning these risks and uncertainties, please refer to our SEC filings, included in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Our forward-looking statements are based on information currently available to us and we do not intend and undertake no duty to update these statements for any reason. Additionally, we'd like to remind you that during this call, we will disclose some non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our Form 8-K submitted to the SEC and available on our website. I will now turn the call over to Kent Thiry, our Chief Executive Officer. Kent J. Thiry - Chairman & Chief Executive Officer: Thank you, Jim. Solid results in Q4 for both Kidney Care and HCP. We'll start by discussing our clinical outcomes first, as we always do. 176,000 dialysis patients in America, about 35% of the patients in America; 98% with a Kt/V of 1.2 or greater; 73% of patients with fistulas placed for access. And we'd like to talk a little bit about our VillageHealth metrics, where we're at the cutting-edge…

Thanks, Kent. Starting with Kidney Care, our Kidney Care operating profits increased $38 million sequentially, driven primarily by three main positive factors: number one, higher number of treatment days in the quarter; number two, improved revenue per treatment due to improved commercial mix and commercial rates; and three, lower payroll taxes. These positive factors were partially offset by higher dialysis pharmaceutical expenses, driven by higher average unit costs in the quarter and increased losses in our strategic initiatives in the international business. Our non-acquired dialysis treatment growth was 3.7% normalized in the quarter. This was the lowest in quite some time. While there was no single cause for this decline in our NAG, some of the reasons include higher mistreatments during the flu season earlier in the year and efforts to improve the profitability of our acute business. This has put – we have been putting a tighter screen on our new and existing relationships, and in some cases, exiting some hospital relationships where rates were too low to be sustainable. As an example, we recently lost a hospital chain acute service contract to a competitor, because we were not willing to accept the low rates the hospitals offered. These efforts have improved acute revenue per treatment and OI, but have had an adverse impact on our growth. Now moving to G&A, G&A in our dialysis business was down from Q1 by about $2 per treatment, driven by seasonal declines in payroll taxes and the more treatment days in the quarter, and also higher-levels of legal and consulting spend that occurred in the first quarter. Please note that due to this higher legal spend in the first half of the year, we anticipate dialysis G&A per treatment to be slightly above last year's levels. International losses were $15 million in…

Thank you. We will now begin the question-and-answer session. Our first question comes from Mr. Kevin Fischbeck. Your line is now open.

Hi, yes, this is Steve Baxter filling in for Kevin. I wanted to ask about the proposed managed care consolidation. I wanted to – the plans have largely talked about this enabling them to drive a shift towards value-based payment models. Do you think this could help move markets that are traditionally more fee-for-service kind of down the value chain? And I guess, how do you think about this as impacting HCP down the line? Kent J. Thiry - Chairman & Chief Executive Officer: Well, we hope what they're saying is true. But directionally, we think this kind of additional consolidation of market share is an unambiguous negative. Hopefully for us, because of where we sit with respect to our value proposition on both sides of the house, we can make some lemons out of – make some lemonade out of the lemon. But we worry a lot about what that combination or those combinations can mean for network adequacy and access for consumers as well as rates for consumers. So we have a lot of concern and we'll do the best we can. And hopefully there will be some opportunities created, particularly for us.

Okay. That makes sense. I definitely see how you could perceive it as a negative on the dialysis side, but do you see it that way for HCP as well? Kent J. Thiry - Chairman & Chief Executive Officer: Absolutely. In general, that kind of increased consolidation just leads to more market pricing power and leveraging rate power, which often then if successful doesn't flow through to the consumer, because of the market pricing power. So we hope that it will create market-specific opportunities for us, because we think some of those folks do want to move to a more value-based world. But the dominant, the dominant directional effect is one that is scary both from the rate to consumer side and the leverage over provider side.

Okay. Thanks.

Thank you. Our next question comes from Mr. Gary Lieberman. Your line is open.

Good afternoon, and thanks for taking the question. You'd mentioned that I guess the pharmaceutical costs being up in the quarter were one reason that impacted profitability. I guess going back to the Investor Day, you had made some fairly vocal comments in terms of I guess what your thoughts were in terms of pricing for Epogen as new competition came to the market. Fresenius discussed moving a number of patients to Mircera. And so I just wanted to get your updated thoughts on where you thought the pricing was headed and if you had any conversations that maybe you could share with us? Kent J. Thiry - Chairman & Chief Executive Officer: There haven't been any significant developments since the last call, Gary. We still have our hopes for how competitive market forces will unfold in that sphere. But there's been nothing noteworthy that's actually happened yet nor did we expect anything noteworthy to happen within this timeframe. But I don't know if Jim or LeAnne would want to add anything.

No, I think that's pretty much it, Gary.

Okay. So I guess the assumption that we should be working under would be that you would need to sort of see perhaps Hospira's drug come to market before there is enough of a dynamic in the market to bring down pricing? Kent J. Thiry - Chairman & Chief Executive Officer: Well certainly, I think my response would just be pretty generic. The more people that come to market, the better, and we'll do everything we can to encourage it as will other people. And at the same time, of course, we have a lot of respect for the clinical efficacy of what we use right now. But certainly the more the merrier, the sooner the better.

Okay. And then to follow up on the comments about the lost hospital business and I guess some competition on price, can you give us any more color on that? Was that a large national player that competed on price or a local provider? Kent J. Thiry - Chairman & Chief Executive Officer: On the spectrum, it was a lot closer to the large size than the small size. And it was a significant account and it went for a price that we would not agree to, and it wasn't that difficult a decision. So it's just important that shareholders know that there is some of those pressures out there, and so you can worry about them at the same time that we are.

Should we be more worried about them? I mean do you see that increasing or do you sort of see this as an aberration? Kent J. Thiry - Chairman & Chief Executive Officer: Don't know.

Okay, all right. Thanks very much. Kent J. Thiry - Chairman & Chief Executive Officer: All right. Thanks, Garry.

Thank you. Our next question comes from Margaret Kaczor, your line is open. Margaret M. Kaczor - William Blair & Co. LLC: Hi, good afternoon, everyone. Couple of questions from me. First, as we think about the non-acquired dialysis patient growth as we go over the next several quarters, is that 3.7% treatment growth similar to the patient growth? And then in terms of the lower growth, how can we attribute it between two buckets you had mentioned, the higher mistreatments versus the lower increase in the acute business? Kent J. Thiry - Chairman & Chief Executive Officer: Let me handle the second one first. We're not breaking it out, because it's just a single quarter and there is a fair amount of noise in the data, and so both factors are material. And there's some other stuff that play as well, only we didn't want to break it into four pieces, five pieces, six pieces. And so I think for the quarter, at least we'll just keep it at letting you know what a couple of the bigger drivers were, and that's as much as we can say now, and in each case, that effect may continue. As to the outlook going forward, we hope we can do better than how we did this quarter, but right now we can't guarantee that. Margaret M. Kaczor - William Blair & Co. LLC: Okay. And then, you guys had mentioned that the commercial mix had increased. As we look at your guidance, what do you include in terms of the commercial mix? Are you expecting that to continue to increase as we go on throughout the year or stay pretty stable with where you are today? Kent J. Thiry - Chairman & Chief Executive Officer: Unfortunately on that one, it's another…

Thank you. Our next question comes from Kevin Ellich. Your line is open. Kevin K. Ellich - Piper Jaffray & Co (Broker): Hey, Kent, thanks for taking the question. I jumped on late, so I apologize if I missed some of this. I just wanted to talk ESCOs, If you've covered it already, I can go back and check the transcript. But what's your thought – we've heard ESCOs being delayed. Is that something that you guys have considered? And I guess, what's your thoughts going forward with that program? Kent J. Thiry - Chairman & Chief Executive Officer: On ESCOs, a couple of things. Number one, they haven't started yet. Number two, we don't know when they will start. Number three, we're working very collaboratively with CMS to get the design buttoned up. And the good news is, we and a lot of other people in the community and a growing number of people in CMS are quite positive. But to go any further than that would just be speculating and not a good use of your time. Kevin K. Ellich - Piper Jaffray & Co (Broker): Okay. Thank you.

Thank you. At this time, we don't have any further questions on queue. Kent J. Thiry - Chairman & Chief Executive Officer: I will go ahead and add one other comment, operator. I'm sorry, I didn't catch your name at the top of the call. But I may have been a little bit off in one of my comments a moment ago. We're not quite expansive enough that we had provided guidance previously at our total treatment growth would be in the 4.5% to 6% range, and we're still comfortable with that expectation. Operator, are there other questions?

Yes sir. We have another question from Mr. Gary Lieberman. Your line is open.

Thanks for taking the follow-up. Didn't want you guys to get off that easy. Just wanted to maybe go back to some of your comments on HCP and the growth and kind of what you're seeing and what your expectations are for additional deals you might do this year? Kent J. Thiry - Chairman & Chief Executive Officer: And I'm sorry, I may have been talking over you at the beginning telling you that we're going to get revenge for your provoking the question period, but prolonging it.

I look forward to that. Kent J. Thiry - Chairman & Chief Executive Officer: But on HCP, we were in some high-potential promising conversations. Having said that, none of them are going to close quickly. If we succeed, it will be a very exciting beginning of our next chapter. But it's not going to happen in the next couple of months. And so I think there's nothing dramatic we can say about what will close or not close this year. All I can say is we are very substantively engaged with some groups that we really like.

Okay. That's helpful.

Thank you. Our next question comes from Lisa Clive. Your line is open.

Hi. Just a question on your VillageHealth program. You started your prepared remarks with some interesting statistics on that. Could you remind us how many patients you have within VillageHealth? And I'm assuming the vast majority or almost all of them are Medicare Advantage. Could you give us some idea of what proportion of your total Medicare Advantage patient population are currently going through VillageHealth? Kent J. Thiry - Chairman & Chief Executive Officer: The definition of VillageHealth that we're using now is a broad one, which is to say the number of patients where there's some form of value-based payment. And so using that broad definition, which in its most extreme form is global capitation, and we have a nice chunk of that both in the Kidney Care side and on the HealthCare Partners side. And then down to having some kind of performance bonuses, shared savings arrangements with individual payers or health systems. And so that total number of patients where we're in some form of value-based payment is about 20,000. So it's significantly higher than what it was a few years ago.

And is that – yeah, because I remember, I mean the last time I looked at the numbers, I thought it was more like 9,000. Is that largely because you've included those categories where it's not a sort of full capitation model and so could we assume that half of that 20,000, they're sort of less than full capitation? Kent J. Thiry - Chairman & Chief Executive Officer: Well, more than half. The, I don't know if we've disclosed the amount of globally capitated ESRD patients we have, but it's probably in the neighborhood of 1,800 or so, which is probably significantly more than anyone else, but that gives you a sense of the mix.

Okay. That's very helpful. Thanks.

Thank you. Kent J. Thiry - Chairman & Chief Executive Officer: Thank you, Lisa.

At this time we don't have any questions on the queue. Kent J. Thiry - Chairman & Chief Executive Officer: I'm sorry operator, what did you say?

At this time, we don't have any further questions on queue, sir. Kent J. Thiry - Chairman & Chief Executive Officer: We'll hold for about 10 seconds or so just to give folks a chance. This is perhaps the most uneventful quarterly call we've had in 16 years. And so we will work hard to hopefully make the next one just as uneventful and hopefully positive for everyone involved. Thank you very much for your interest in DaVita. Operator, are there any other ones?

No questions on queue, sir. Kent J. Thiry - Chairman & Chief Executive Officer: Okay. Thank you all very much.