Good morning, ladies and gentlemen, and welcome to the Henry Schein Fourth Quarter and Full-Year 2016 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Carolynne Borders, Henry Schein Vice President of Investor Relations. Please go ahead, Carolynne.

Thank you, Robin, and thanks to each of you for joining us to discuss Henry Schein's results for the fourth quarter and full-year 2016. With me on the call today are Stanley Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein; and Steven Paladino, Executive Vice President and Chief Financial Officer. Before we begin, I would like to state that certain comments made during this call will include information that is forward-looking. As you know, risks and uncertainties involved in the company's business may affect the matters referred to in forward-looking statements. As a result, the company's performance may materially differ from those expressed in or indicated by such forward-looking statements. These forward-looking statements are qualified in their entirety by the cautionary statements contained in Henry Schein's filings with the Securities and Exchange Commission. In addition, all comments about the markets we serve, including growth rates and market share, are based upon the company's internal analysis and estimates. The contents of this conference call contain time-sensitive information that is accurate only as of the date of the live broadcast, February 21, 2017. Henry Schein undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. I ask that during the Q&A portion of today's call, you limit yourself to a single question and a follow-up before returning to the queue. This will provide the opportunity for as many listeners as possible to ask a question within the one hour that we have allotted for this call. With that said, I would like to turn the call over to Stanley Bergman.

Thank you, Carolynne, and good morning, everyone, and thank you for joining us. We are indeed pleased to report record financial performance for the 2016 fourth quarter and, of course, for the full year. For the quarter, our sales increased by 9.5% with internal sales in local currencies excluding the estimated impact of the extra week – that's the extra selling week of what we estimate to be 4.2%. And on the bottom line, we delivered strong year-over-year diluted EPS growth for the quarter of 10.9% on a GAAP basis and, on a non-GAAP basis, 12.6%. For the year, net sales of $11.6 billion were up 8.9% compared to 2015 with 6.7% internal growth in local currencies excluding the estimated impact of the extra week. While diluted EPS growth was 8.8% on a GAAP basis or 10.9% on a non-GAAP basis. Coming off a successful year, we are affirming guidance for 2017. Diluted EPS that represents growth of 16% to 18% compared to 2016 GAAP diluted EPS or growth of 8% to 10% compared to 2016 non-GAAP diluted EPS. I believe the message you will hear today is that the end markets we serve are experiencing consistent growth and we are focused on continued execution in delivery on our financial objectives. Of course, we did have a slight slowdown in the growth, in the middle of last year, in the middle of the summer – the early part of summer of last year, which we still cannot explain. But we believe that at this point in time, the end markets we serve are, in fact, experiencing consistent growth. In a moment, I'll provide some additional commentary on our recent business performance and accomplishments. But first, Steve will review our financial results in a bit more detail. So, Steve, over to you.

Okay. Thank you, Stanley, and good morning to all. As we begin, I'd like to point out that our 2016 fourth quarter results include restructuring costs of $16.1 million pre-tax or $0.15 per diluted share. And our 2015 fourth quarter results include restructuring costs of $12.4 million pre-tax or $0.11 per diluted share. For the full-year, our full-year 2016 results also include restructuring costs. Those restructuring costs are $45.9 million pre-tax or $0.42 per diluted share and full-year 2015 results include restructuring costs of $34.9 million pre-tax or $0.32 per diluted share, as well as a one-time income tax benefit, net of non-controlling interest of $3.8 million or $0.05 per diluted shares. When I discuss our results as reported on a GAAP basis and also on a non-GAAP basis, the non-GAAP basis will exclude the restructuring costs and the one-time tax benefit in the prior year. We believe that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparisons of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes, and should not be regarded as a replacement for the corresponding GAAP measures. You can see Exhibit B in this morning's earnings release that has a complete reconciliation of those non-GAAP adjustments. Okay, let me also point out that the fourth quarter of 2016 included one additional selling week compared with the fourth quarter of 2015. This week is the holiday week between Christmas and New Year's. We report on what's called a 52/53 week fiscal year ending always on the last Saturday in December. So, the next time our…

Thank you, Steven. Let me begin my remarks with a few highlights of what we believe was a successful, actually, we believe quite a successful 2016. We achieved net sales of $11.6 billion in 2016, up 8.9% from the prior year. Internal sales in local currencies grew by 6.7% when you exclude the estimated impact of the extra week. Diluted EPS growth was 8.8% on a GAAP basis or a 10.9% growth on a non-GAAP basis. Operating cash flow for the year was $615.5 million and exceeded GAAP net income by more than $108 million. We announced seven strategic acquisitions in 2016 with a total investment of approximately $229 million as we continue to expand our geographic presence and enhance our product offering. These acquisitions has combined trailing 12-month revenue of approximately $270 million. The acquisition included dental market expansion into Poland, Japan, and Canada where we're already very strong, as well as an expanded presence in Australia, New Zealand, the UK, and the Netherlands for our practice management solutions offerings. To sum it up, we believe that 2016 was quite a solid year. Now, let me review our full business group starting with Dental. We believe the North American dental consumable merchandise market is improving as we saw particularly strong growth in December and January. We also continued to see increased capital equipment investment in dental practices, which drove strong U.S. and, actually, North American equipment sales in December. January is typically not a strong month for equipment sales, following year-end tax incentives here in the United States, such as Section 179. On the whole, we believe we continue to gain market share in our Global Dental business. We're looking forward to the biennial International Dental Show, known as the IDS, in Germany next month, as we expect the…

And your first question come from the line of Jon Block from Stifel. Ethan Roth - Stifel, Nicolaus & Co., Inc.: Hi. Thanks. This is Ethan on for Jon. Going to be a quick question and then follow-up. A lot of focus has been on the North American dental market recently, but I'm hoping you can comment on what you're seeing in the international consumable side. You grew 2.5% in 4Q and the growth has been about in the 2% to 3% range for the past few years. How does that 2% to 3% compare with the underlying market and what is the right long-term growth rate you'd expect from international dental consumables?

Sure. I would say similar comments internationally. Markets are stable, they're consistently growing. Historically, we've always seen the international markets grow a little bit slower than the U.S. market. They're a little bit more comparable at the current time. We absolutely believe we're gaining market share in international dental. So, I would say that steady-as-she-goes and I think that the consistency in the market should continue going forward. Now, of course, that the consumable comment, you know we do have lumpiness related to equipment and the IDS show that we talked about. So, IDS, typically people delay purchases in this current quarter to see new models and new show specials for equipment later in the quarter and that turns into sales in Q2 and Q3. So, we'll see some lumpiness there on international dental equipment sales.

We remain quite optimistic with our international business. I think to reiterate what Steven said, if you leave aside the lumpiness on European, and particularly Germans – German and the DACH region sales, I think we're expecting a decent year in both international merchandise and equipment. Ethan Roth - Stifel, Nicolaus & Co., Inc.: Got it. And then Steven, you kept the guidance range unchanged. Would it be fair to say that the buyback in 4Q may have given you a few cents benefit relative to when you initially guided, but this was largely offset by some incremental FX headwinds since the November guidance?

Yeah. I think that's exactly right. We weren't expecting to buy back as much as we bought back. In hindsight, it turns out to be even a good – a very good short-term decision. But longer term, we expect it to be even a better decision because we do have high confidence in the business. The foreign exchange has been a headwind. It has been a headwind for 2016. It's still a headwind for 2017. And because of the unpredictability of foreign exchange, those two kind of counteract each other. Ethan Roth - Stifel, Nicolaus & Co., Inc.: Got it. Thank you.

Okay.

Your next question is from the line of Steve Valiquette with Bank of America.

Thanks. Good morning, Stan and Steve. So, I guess for – just kind of looking at the strength you mentioned in the December and January dental consumable, that's obviously encouraging. Just curious if there's any more color on that, whether you can break that down into DSOs as well as individual practitioners or maybe more on one side versus the other? Or is it just really across the board? Just curious for more color on the trends you're seeing there. Thanks.

Yeah. So, I would say there's no significant variance that I've seen between large DSOs and middle market. It seems to be more across the board, although we personally are seeing stronger growth in our middle market. That's an area that we have keen focus on. But I think the overall market is relatively consistent. As you know, Steve, we've seen periods of time, so we're optimistic where December and January will continue, but there's no certainty in that. We've seen times where – again, lumpiness in sales. But right now, things seem to be pointing to a slight acceleration in the U.S. dental market. And remember just one other thing, Steve...

Yeah. That's great.

...that's consumable comment. Equipment, on the other hand, because of the strong December that we had and because of Section 179, which typically pulls sales forward from Q1 into Q4, you have to expect that Q1, you'll see lighter equipment sales because of that tax benefit that pulled forward. And that's a bit of a timing thing that should occur each year now going forward given that the Section 179 is now permanent.

Yeah. Got it. Okay. Great. Thanks.

And your next question is from the line of Jeff Johnson with Robert Baird. Jeff D. Johnson - Robert W. Baird & Co., Inc.: Thanks, guys. Good morning. Just a couple of quick ones here. So, Steve, I guess, as you're starting to see these December and January improvements in the North American consumables side, anything now you can look backwards and say, the change seems to be coming here and maybe the slowdown from June through November, anyway, was caused by something. Any better ideas or thoughts on what caused the slowdown to begin with?

We're still a little bit perplexed as to why it occurred. And Stanley, actually, I think, in his comments said something similar to that. There's really no additional data points that we've seen that give us any greater clarity as to why it happened. We just know it did. And again, hopefully, the long-term prospects of the dental market will continue to be favorable. The demographics are still on our favor, people taking better care of their oral healthcare, aging population, all of that. So, I wish, Jeff, I had a better answer but we really don't have more clarity on that. Jeff D. Johnson - Robert W. Baird & Co., Inc.: Yeah. No. Understood. And I apologize, I've been jumping between calls here so, I might have missed Stanley's comments. But Stanley, just on the Medical side – and I'm going to show my age here – but I think about 10 years ago or so, you guys kind of dipped your toe into some specialty areas. I don't remember why oncology and dermatology ring a bell, but maybe it was other areas. But then you saw that there was a big pharma component, some other things that you didn't like as much maybe and kind of got out of those areas. It sounds like now kind of going down the specialty route again in Medical. So, can you compare and contrast maybe what you learned a decade ago in that and how this time it might be different?

Yeah. That's a good question. So, the two areas we exited were low margin cancer oncological pharmaceuticals. That's more in line with what the big pharma or the big drug wholesalers do. They deal with high volume products, lower margins than what we do. There's not much we could have added to those kinds of practices through our field sales consulting methodology. Likewise, we exited the specialty pharma area, again, a low margin part of the pharma business. The areas we have been doing well in are areas such as dermatology, also quite a bit of a private practice arena, the aesthetics area, the obstetrics and gynecology area, the areas that have of course pharmaceuticals, but have a nice componentry from our point of view of disposables and equipment, and those are the areas we will focus on. I don't want to give you an impression that we were not focused on those areas because, actually, they have contributed nicely to our growth over the last six years or so, and have been quite profitable. But we anticipate advancing our investment in those areas in the years to come, in particular into devices rather than low margin pharmaceuticals. Jeff D. Johnson - Robert W. Baird & Co., Inc.: Understood. Thank you.

And your next question is from the line of Robert Jones with Goldman Sachs. Nathan Rich - Goldman Sachs & Co.: Thanks. This is Nathan Rich on for Bob this morning. Stan, just going back to your comments on the dental equipment business, you talked about broadening the offering here and, obviously, there's the change coming with how Cerner will be distributed in the U.S. At this point, have you guys seen this have any impact at the practice level? I'm just wondering if maybe we could see some dentists either delaying decision-making or maybe your sales force doesn't push as hard if they're expecting to have a broader offering to sell later this year.

Well, that's a good question. I don't know whether we will carry one particular manufacturer's product or another, whether we will expand, whether we'll not. What I do know is that there is a desire to acquire more digital equipment in the office, both in terms of digital imaging and digital prosthetics, chairside, and also I might add on the digital prosthetics in the lab arena. We have an extensive offering of equipment in the digital imaging space and the digital prosthetics space. So, we are well-positioned and had been well-positioned to grow our market share as we have executed well in these areas, and have also executed well in these areas. So, I don't think we're as much dependent on a particular product. We would like to have as wide offering as possible, but we are committed to open architecture and have done well with the offerings that we actually have, whether it has been in the digital space or, I might add, in the traditional operatory, the chairs, the units, the lights, the compressors, et cetera. So, we believe we are well-positioned to continue to grow our market share. I don't believe there has been any holdback. I think we had a very good fourth quarter. I might just remind you that in the fourth quarter of – in the first quarter of 2016, we did have exceptional equipment growth, I think the number was something like 13.5%. So, you need to take that into account when you look at the first quarter of 2017. It's not going to be possible I think to have those kinds of double-digit growth, and I'm talking about the North American market. But having said that and excluding the quarterly lumpiness, I think we are well-positioned with our offering, not dependent on…

Sure. Yeah. So, you're correct in – for Q4, the extra week was a little bit negative. I haven't calculated the exact amount, but was a little bit negative to overall Q4 operating margins. Again, the main reason is it's a light week for sales. And with two-thirds of our expenses being compensation and compensation-related, you get a full week of compensation. So, margins were a little bit lower there. On full year 2017, yes, our guidance does assume at least 20 basis points of operating margin expansion and it's correct to note that's on what we like to call same-store basis, meaning it excludes the impact, if any, of any acquisitions that could be positive or negative to that number. But we do believe that there's still room for margin expansion going forward. Nathan Rich - Goldman Sachs & Co.: Okay. Great. Thanks for the questions.

Okay.

Your next question is from the line of Lisa Gill from JPMorgan.

Thanks. It's actually Mike Minchak in for Lisa. You guys talked about the strong growth in the U.S. dental consumables in December and January. Did you also see that momentum continue into February? And then, can you remind us what you factored into your 2017 guidance? Are you assuming an ongoing recovery in U.S. dental consumables market? Just trying to understand the degree to which you've built some conservatism into the guidance?

Sure. We'll start with the last part first. The 2017 guidance really only assumed a very modest improvement in end market conditions, not just for Dental, but for all of our markets. So, it was more consistent, but with some slight improvement. February, we didn't comment on because when you start segmenting months and looking at it in a particular week-by-week basis, you really couldn't get misleading results. But we don't think – we wouldn't have said December and January unless we believed that there was potential for it to continue. But looking at the specific weeks, it's too short a period to really draw conclusions from.

Got it. And then just wondering if you could talk a little bit about the competitive landscape in Dental, especially as it relates to large versus smaller customers. Have you seen any changes in the competitive dynamics in either of those segments recently?

This is probably the most asked question from analysts other than how's the market doing. And I just want to reemphasize what we've been saying for years, the dental market is competitive. It's a market that is driven by a combination of price and service offered. In other words, value. I don't think anything has changed. We have a good market share in the large practices. We have, we believe, the most outstanding offering with tremendous experience in that area. And, yes, every now and again, a competitor will go in with prices below ours and we will not match those prices because we believe our offering is of high value and we cannot and will not dilute the value that is ascribed to our offering. So, I would be understanding that Henry Schein is competitive in the space – highly competitive in the space, has always been competitive. There has always been competition. The competition hasn't increased at all, it's the same competition we've had for decades. Sometimes words are said, sometimes there are announcements about a particular account won. Henry Schein does not announce each one of our accounts that we win. We don't discuss our strategy precisely. We talk to our customers about that, and that's our job. Our job is to provide value to our customers. I believe we continue to do a good job in that area, and there is no more competition today than there was 10 years ago. The competition wants our business and we want our competition's business. It's a fiercely competitive market. Henry Schein will continue to provide great value to our customers, and we will continue to increase the value-added that we deliver to our customers each day. So, it's a pretty stable market, highly competitive as it has always been, and there's no time at all to sit back and relax – there never has been a time to sit back and relax. And we are committed to growing our market share in all areas in the industry. We have a good track record in that regard, and we anticipate that, that track record will continue.

Got it. I appreciate the comments.

And we have time for one more question. And the question is from the line of Michael Cherny with UBS.

Hey. This is Allen in for Mike. Thanks for taking the question. In the Medical segment, can you talk about what is driving the share gains in large group practices? Are you still seeing the benefit from the agreement with Cardinal or is there something else happening there?

So, I'm not sure how share gains have ever had anything to do with any particular supplier relationship. Yes, we did acquire a book of business from Cardinal. That was a one-time step-up as result of that acquisition, excluded from internal growth numbers. And we have been executing for the past, I think it's now seven years on a strategy to gain market share amongst large group practices. It was about increasing our capabilities through both additional management and focus and through additional value-added services, very similar, I might add to what we did in the Dental arena when we started our special markets group 21 years ago. So, it's about focus. It's about management. And it's about the value-added services and, actually, the product offering. That has resulted in our market share growth in the space. We do well, we are well-positioned, and we anticipate doing well, but I would not say that it's because of any one supplier. We have a very good supplier relationship with Cardinal today, they're very helpful. But they also supply our competitors with products. So, I don't think it's any one way or another related to any specific manufacturer.

Got it. Thank you.

Robin?

And you have any closing remarks?

Okay. Yes. Let me – thank you, Robin. Thank you, Carolynne, and Steven, and everyone, for calling in. Again, we are very excited about where we are at Henry Schein, our plans for the future, our four major business units, each one have great business plans for this year: our Global Dental Group; our Global Animal Health Group; our Global Medical; and of course, our practice solutions, and financial services, our Value-Added Services group. We are in the process of looking on our 2018, 2019, and 2020 strategic plan. I don't expect any major directional change. I do expect additional focus in certain areas, a movement of resources, but this was all anticipated through the restructuring we went through at the end of 2015 and through 2016. So, as I said right at the beginning of the remarks, our management team is excited, the morale in the company is great, and we have so many opportunities to expand the business both through internal growth and through acquisition growth. Obviously, acquisitions happen when they happen, they are lumpy. But our pipeline remains decent and we anticipate advancing on the acquisition side without any commitment as for specific dates, for any specific amounts of capital. We will use our capital as we have now for quite a while to continue to buy back some shares, make some acquisitions and, of course, invest in the business. We are well capitalized. We have cash that we need to execute and, again, very excited about the future. So, thank you for calling in, and we'll be back in about 60 days after I think – at which time, we'll be able to report on the Chicago Midwinter Meeting, the IDS Meeting will have just occurred. And likewise, I think we'll be able to give you a better temperature on the animal health market and on our Medical business. So, thank you very much. If you have, by the way, any questions, please feel free to call Carolynne Borders in our Investor Relations Department at 631-390-8105. Thank you.

This does conclude today's conference. You may now disconnect.