Good day, ladies and gentlemen, and welcome to the Laboratory Corporation of America Second Quarter 2016 Holdings Earnings 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 conference call is being recorded. I would now like to turn the conference over to Paul Surdez, Vice President of Investor Relations. Please begin.

Good morning and welcome to LabCorp's second quarter 2016 conference call. As detailed in today's press release, there will be a replay of this conference call available via telephone and Internet. With me today are Dave King, Chairman and Chief Executive Officer; Glenn Eisenberg, Executive Vice President and Chief Financial Officer; and Deborah Keller, CEO of Covance Drug Development. In addition to our press release, we also filed a Form 8-K this morning that includes additional financial information. Both are available in the Investor Relations section of our website at www.labcorp.com and include a reconciliation of non-GAAP financial measures discussed during today's call to GAAP. Finally, we're making forward-looking statements during today's call. These forward-looking statements include, among others, statements about our expected financial results, the implementation of our business strategy and the ongoing benefits from acquisitions. These statements are based upon current expectations and are subject to change based upon various factors that could affect our financial results. Some of these factors are set forth in detail in our 2015 10K. We have no obligation to provide any updates to these forward-looking statements, even if our expectations change. Now, I'll turn the call over to Dave King.

Thank you, Paul, and good morning everyone. It's an exciting day at LabCorp today as we continue to establish ourselves as the world's leading health care diagnostics company. Operationally, we reported another strong quarter, led by organic growth in LabCorp Diagnostics and Covance Drug Development. We delivered year-over-year revenue growth of 7%, continued margin expansion, and another quarter of double-digit adjusted EPS growth. Our continued business momentum is attributable to our commitment to improve health and improve lives around the globe, driven by our focus on our three strategic priorities: Delivering world class diagnostic solutions, bringing innovative medicines to patients faster, and using information to change the way care is provided. I'll now update you on our key activities during the quarter, and our progress on each of these objectives. First to be the world's leading provider of diagnostic solutions we continue to expand our test menu, innovate in science, and complement our internal efforts with strategic acquisitions. This morning is exciting, as I said, because we announced another important acquisition. We will acquire Sequenom, a market leader in non-invasive prenatal testing and reproductive health. Sequenom is the first company to offer a clinically validated non-invasive prenatal test, and the more than 500,000 tests that it has performed to-date give it the largest clinical evidence base in the industry. This is a highly strategic acquisition, as Sequenom's best-in-class offerings and strong R&D pipeline perfectly complement LabCorp's extensive women's health test menu. We will now offer patients and physicians one source for the full range of women's health reproductive genetics and NIPT testing. Furthermore Sequenom expands our geographic reach, both domestically with New York licensure and internationally through licensing and commercial partnerships with emphasis on the European Union and the Asia-Pacific region. The transaction also meets our financial criteria, making it,…

Thank you, Dave. I'm going to start my comments with a review of our second quarter results, followed by a discussion of our LabCorp Diagnostics and Covance Drug Development segments and conclude with an update on our 2016 guidance. Revenue for the quarter was $2.4 billion, an increase of 7.4% over last year, primarily due to strong organic growth in both segments and tuck-in acquisitions, partially offset by currency. Organic revenue growth in the quarter on a constant currency basis was 6.4%. Gross profit for the quarter was $827 million or 34.7% of revenue compared to $773 million or 34.8% last year. The increase in gross profit was due primarily to strong revenue growth, partially offset by personnel costs. The decline in gross margin was due to the mix impact from faster growth in Covance Drug Development, which has a lower gross margin than the company's average. Excluding the mix impact, gross margin would have improved 10 basis points. SG&A for the quarter was $408 million, or 17.1% of revenue, compared to $391 million, or 17.6% last year. Special charges in the quarter were $8 million, primarily related to the integration of Covance, and our LaunchPad initiative compared to $9 million a year ago. Excluding special charges, SG&A in the quarter was $400 million or 16.8% of revenue compared to $382 million, or 17.2%. The increase in adjusted SG&A was primarily due to acquisitions and personnel costs. The improvement in the SG&A rate was due to continued expense control and the mix impact from faster growth in Covance Drug Development, which has a lower SG&A rate than the company's average. Excluding the mix impact, the SG&A rate would have improved 20 basis points. During the quarter, we recorded $7 million of restructuring charges, primarily relating to severance and the closure…

Thank you. Yes, sir. The first question is from Robert Willoughby of Credit Suisse. Your line is open. Robert Willoughby - Credit Suisse Securities (USA) LLC: Hey, Dave and Glenn, it looks like with EPS guidance what's the gating factor to raising the cash flow guidance? And then maybe on the Sequenom deal it hasn't really worked as a public equity. Can you review what some of the challenges have been and what you can do to reverse some operating losses there?

Sure, this is Glenn. I'll take the first part and Dave can do the other. With regard to the cash flows, as we look to the guidance and to your point we did increase the midpoint for the revenue and the earnings guidance that we provided. We elected to hold the cash flow guidance where it was again at record levels. Given that, from a cash standpoint, we generate the majority of our free cash flow in the second half of the year, so from our perspective we decided to wait till the third quarter is completed, when there's one quarter left in which case we'd look to modify that cash guidance, as well. Robert Willoughby - Credit Suisse Securities (USA) LLC: Okay.

And, Robert, it's Dave. So, I think the major challenges for Sequenom as a stand-alone entity have been – have related to breadth of test menu and scale. I think under Dirk van den Boom's leadership in the last nine months, Sequenom has made significant improvements in technology and operations. But the reality is, there still is a need for the comprehensive women's health portfolio. There still is a need for broader reach into the OB/GYN offers. There's a need for reach in terms of convenience of being able to order NIPT testing on one requisition form, with the same orders as other women's health-related testing, so I think from an operational perspective, we think about several opportunities to make this a success, and we strongly believe it will be a success. Number one is just improving the laboratory operation and the efficiency of that operation, which as you know is something that we excel at. Number two is expanding the reach of their sales force, which we think of very highly, and extending that into the primary care and the OB/GYN market and number three is the comprehensiveness of the test menu and the opportunity to create one point where physicians can order all of what they need in women's health and reproductive genetics. Robert Willoughby - Credit Suisse Securities (USA) LLC: Do you expect it to be accretive year one, Dave, or...?

We do expect it to be accretive. It's not going to be materially accretive in year one. But it will be accretive in year one and we expect, longer term, that it will be a significant contributor to earnings growth. Robert Willoughby - Credit Suisse Securities (USA) LLC: Thank you.

Thank you. And the next question is from Bill Bonello of Craig-Hallum. Your line is open.

Hey. Good morning. I wanted to follow up also with some questions on Sequenom. So, the logic of how you can improve their business makes all the sense in the world to me. What I guess I would like to understand is sort of what they bring to you in terms of the advantages of owning this asset versus maintaining a contractual relationship with them and offering the breadth in the other tests on your own.

Yeah, Bill, it's Dave, good morning. So, it's just more complicated to maintain the send-out relationship when you're talking about the high-end reproductive genetic testing, and it's more complicated, obviously, for somebody like Sequenom, because they're not offering the full test menu, they're – you're dealing with organizing logistics, you're dealing with routing blood from one place to another, routing samples from one place to another. And you're dealing with delays in turnaround time as a result of the logistics. So, although a send-out relationship in concept sounds attractive, it actually leads to more complexity. And as we think about how to be successful in the business generally and in this aspect of the business in particular, what the physicians and the patients want is more simplicity. So they want to be able to order on one req form, they want to be able to have one courier pick it up, they want to be able to have it go to one place where the logistics are handled by LabCorp instead of being handled by two different entities. They want to get the results back on one report form, and they want to have one place to go for interpretation, if genetic counseling, for example, is required. So from my perspective what we're doing is we're taking the opportunity to integrate a best-in-class NIPT test into a best-in-class women's health portfolio and that, in my mind, leads to enormous opportunity to grow in that market, which is one of the fastest growing parts of the Diagnostics industry in which we think, over the long term, as the technology improves and the test menu improves around not only non-invasive prenatal testing but all sorts of non-invasive testing that's now done through more invasive methods that we'll be extremely well positioned to succeed.

Just as a follow-up on that, just two things on that. One, is it your opinion as part of the reason, the timing on this now, that indeed we're going to see an expansion into the average risk market from the high-risk market? I assume so, given all your comments about OB/GYNs but then more importantly, are there things that you see in their pipeline or tests that you imagine you can develop based on their technology that are part of what's driving this?

Yeah, so we are seeing significant progress in payer coverage for non-invasive prenatal testing for average risk patients. So the opportunity there obviously grows the market significantly, because it provides at least the potential to reach a couple of hundred million covered lives as opposed to what we'd characterize as merely the high risk market and you're seeing payer acceptance of it because the technology is sound, the clinical results are well validated. And again, with Sequenom, you have over 500,000 tests performed and you have the largest clinical database to support the expansion of the market. In terms of expansion of the testing, obviously Sequenom has been at the forefront in terms of offering fetal fractionation, micro deletions, now the genome aspect of NIPT to expand upon the original MaterniT21 test, so yes, we think there will continue to be opportunities there, and then I would just also parenthetically as mentioned in the talking points, Bill, point to the international opportunity that this provides us should not be underestimated, because Sequenom has focused on Europe and Asia-Pacific, and that those are markets where I think there's still plenty of opportunity for adoption of non-invasive prenatal testing.

Excellent. Thank you very much.

Thank you.

Thank you. The next question is from Amanda Murphy of William Blair. Your line is open. Amanda L. Murphy - William Blair & Co. LLC: Hi, good morning. I actually had some questions, as well, on Sequenom. If I recall correctly, you had spent quite a bit of effort towards NIPT testing yourselves so I'm just wondering how this will integrate into the existing business. And you mentioned kind of managed care contracts. Are you going to be able to leverage any of Sequenom's contracts or will they be sucked into your broader contracts?

Amanda, it's Dave. Obviously, there are-- and I think these comments were made on Illumina's call. People had been moving toward performing these tests in-house. We like Sequenom's technology. We like the breadth of the test menu. Obviously, the New York licensure is quite important, so this will integrate well into what we've already done in non-invasive prenatal testing. And again, the number of tests that they've performed and the clinical evidence and support will really help in terms of the average, the demonstration that this test makes sense for the average-risk population. In terms of the managed care contracts, typically the managed care relationships fall under our contracts post-acquisition. We've carefully examined, to the extent we're able to do so, obviously, as part of the diligence process, our managed care contracts versus their managed care contracts and we don't see material difference there, so that's another positive in terms of how we think about being able to put these businesses together. Amanda L. Murphy - William Blair & Co. LLC: Got it. And I know this may be too early to answer, but do you have a sense yet of how this might affect the patent pool that share with Illumina and royalties that are paid in that context?

I think it probably is too early to answer but again we don't expect it to have any material impact. Amanda L. Murphy - William Blair & Co. LLC: Got it. Okay, thanks very much.

Thank you. And the next question is from Lisa Gill of JP Morgan. Your line is open.

Great, thanks very much and thanks for all the commentary. Dave, I guess just two questions from me. The first would be CMS came out the other day talking about bundling cardiovascular. Obviously, you have a suite of products on that side. I know over the years we've talked about as we move in this direction getting some of these tests into lower cost settings. Do you think that there will be an impact to LabCorp, as we start to really start to see those shift to fee for value in specific categories?

Good morning, Lisa. Yes. As you know, CMS started out with the idea of the bundled demonstration, or the bundled payment for the joint replacements. Now they've proposed bundled payments for cardiovascular. Obviously, it's going to take some time to see how that really plays out. But I would say that particularly when you move away from the inpatient setting, so let's distinguish between the inpatient and the outpatient setting. In the inpatient setting, I continue to believe that these types of bundled structures, structures will encourage hospitals to look at how they can reduce the costs of the components of the bundle, and on the laboratory and the diagnostics side, that obviously puts us in a very strong competitive position. On the outpatient side, as you look at bundled payments for total care, again, physicians who are treating patients as – who are owned or affiliated with health systems, are going to be looking at: How do I get each component of what I need to treat this patient at the highest quality and the most effective price point? And we're going to be extremely well-positioned, and with cardiovascular in particular as you think about cardiovascular risk, because of LipoScience and the NMR Profile and because of our comprehensive suite of cardiovascular services and risk assessment services, I think we're going to be extremely well positioned to be a valuable ally to the hospitals as they think about how to make the most of any sort of cardiovascular bundling.

And is it too early for you to already have those conversations with the hospital entities? As we think about this, 2018 is not all that far away, so I'm just curious at this point, are you starting to have those conversations and starting to think about how the contracting will come about in the next couple of years?

Yeah, I think that's a really important point to make, which is, we spend a lot of time focused on the hospital relationships and we think about the importance of our engagement with health systems as broad partnerships, so we don't spend a lot of time talking specifically about lab management, for example. We have plenty of lab management deals, but we try to frame them in the context of an overall partnering relationship around pathology, around reference testing, around lab management, and we certainly are having these conversations about – and every hospital executive I talk to, it's about: How do we continue to provide the highest quality care to our patients, and continue to reduce the cost side of the equation? And those conversations are under way, and we're optimistic about the opportunity to help the health systems in dealing with some of these changes in reimbursement. Because I agree with you, 2018 is not far off at all when it comes to the type of structural change we're seeing.

And then just one follow-up question for Glenn. Glenn, just looking at the leverage at 3.3 times, when we think about the acquisition will you use cash? I know there's no share repurchase in your guidance, but I think there was some thought that without an acquisition you would move back towards purchasing some shares in the back half of the year. How should we think about that?

Yeah, Lisa, to your point we're leveraged at 3.3 times now, but again the bulk of the free cash flow we generate is in the second half so obviously our leverage is going to come down. We will use cash to acquire Sequenom by the end of the year, which will take the leverage up obviously from where we would have been otherwise, but still it will be lower than where we are currently. So we continue to not provide our guidance that would include share repurchases, but we'll continue to consider the possibility of repurchasing shares later this year, or clearly, given the cash flows of the business, not too far thereafter, but for right now, again, an all-cash transaction with strong leverage – strong balance sheet by the end of the year.

Okay, great. Congratulations on a great quarter. Thanks very much.

Thank you.

Thank you. And, ladies and gentlemen, as a reminder, please limit yourself to one question. And the next question will come from Jack Meehan of Barclays. Your line is open.

Hi, thanks. Good morning, guys. I had two questions on Covance. Dave, could you give us an update on the integrated offering and just traction with incremental bookings in the market? And then maybe for Glenn as you look at the back half of the year, the guide now at least by my math implies about five points of organic growth. Obviously the comps get tougher but just how would you characterize the guidance at this point?

Good morning, Jack. I'm going to ask Deb to give you an update on kind of the business and the integrated offering and then Glenn will answer your question on the back half.

Good morning, Jack. This is Deb Keller. So, I think as we look at the business and the integrated offering, I think there's two parts to it. The first is that clients have really been able to see and understand the value proposition of the combined companies. We are differentiated, and they see that, and as we look at the orders, since we've made the announcement, we've recorded over $200 million in clinical orders, where the LabCorp data actually played a key role in the win. In recent quarter, we actually added a large oncology study, where we had an integrated offering, as well as what we did in the rare and orphan disease. We had a win in that category, as well. I think when we look at the central labs specifically, that business has taken market share for many years, and continues to do so, and now with the acquisition of LabCorp, we have even more offerings that we can provide to clients, whether it's anatomical pathology or genomics around the globe, so I would say that we've been very successful with our integration efforts both commercially and then operationally.

And I would say, Jack, it's Dave, just a couple follow-ons to that. I mean, my perception is that my conversations and probably Deb's, as well, are at a different level with prior conversations. We're talking to senior people about broad collaboration across multiple areas of interest for the drug companies, as opposed to a procurement fight about: How much am I going to pay for this? Or how much am I going to pay for that? There's a much greater emphasis in drug development now on quality and speed, and the combination of our capabilities really plays right into that. Also, if you just look at the performance of companion diagnostics, which we highlighted as one of the three key priorities, our companion diagnostics businesses combined have done tremendously well. And the launch of the Roche assay that I mentioned in the talking points but I also highlighted immuno-oncology, one of the fastest growing therapeutic areas. Everybody is working on immuno oncology and we clearly are the market leader in developing and launching these tests with three tests and four applications in the last year. So I think we're doing an excellent job on the integration and Covance has done a terrific job on early development solutions. It's about having an extensive menu that customers can choose what they need from and then delivering the value. And with that I'll turn it over to Glenn for the financial question.

Yeah, Jack, to your point, the implied growth rate in the second half for Covance is lower than the first half. We're looking based upon a midpoint – call it around 4% year-over-year growth in the second half. When you look at the impact from currency of a little over 1%, you look at the impact from the Sanofi site support agreement, which is a little over 2%, it kind of gets you to call it a little bit over 7% growth rate in the second half year-over-year off of a very strong second half of a year that we had last year. So again, consistent with kind of the historical growth rates of Covance, but we believe it's still a very strong performance expectation for the second half of the year.

Thanks, that's great. And I appreciate all the detail. If I can squeeze in one more just on gross margins, Glenn. You overlapped some optical headwinds this quarter. Any color you can provide just on traction from here would be great. Thanks.

Yeah, again, the company overall performs – is performing well. Obviously a big focus on our gross margin, which obviously is helped by demand, helped by our LaunchPad initiative. Again, we're pleased to see that gross margin effectively improved year-over-year, when you take out just the mix impact, but frankly, as well as our SG&A side, where we got good leverage, as well, taking out mix. So, pleased with the performance at the top line and how we're leveraging it.

Thank you. And again we ask you that you ask one question and re-queue for questions. The next question is from Ross Muken of Evercore ISI. Your line is open.

Good morning. So I just want to dig in a little bit more on Covance. It seemed like the net order growth rate continues to be strong, and then you highlighted some of the cross-sell. Could you just give us a little bit of color? The implied book-to-bill sort of suggests that the early phase business continues to trend well and maybe some of the others that have shorter turnaround time are kind of elevated. So help us just understand from a mix basis, in the core of revenue, how the three key segments are kind of operating and how you expect them to trend over the back half of the year.

Okay, hi, Ross, this is Deb. So thanks for the question. As you said, the net orders did increase 11% year-on-year and we had a solid order quarter, and the book-to-bill obviously is impacted by our very strong revenue growth, which was double digits in all of the different service lines that we have. And as you said, you can remember that we have three business lines in Covance, which is not apples to apples to our competitors. And so our book-to-bill is an average of all of those areas. We've seen – continue to see strong orders in early development. That's a really good marketplace right now. There's good market demand there, and we're winning. And so we're very happy and pleased with the performance from that group. Central Labs, as I said earlier, continues to take market share and has had good orders, as well. Clinical, we've had good orders in our early clinical, very strong orders. We have seen more and more emerging clients from that segment come into that. Into our business there so we've seen a little bit more in cancellations and delays. And then our Phase II/IV, we've had some good order quarters. You do see the volatility as you look at some of our competitors and you look at their Q2 earnings versus – their Q2 book-to-bill versus their Q1, so you do see some volatility there. We recently added a sales leader for our Phase II/IV business and added some additional salespeople. And so we're starting to bear fruit from some of those investments.

Great. And just maybe quickly, Glenn, just as a cleanup, what was the M&A contribution on the rev per req side?

We normally don't break that level out from a volume standpoint. We do comment that it was, or I guess around 90 basis points. We do say obviously, it's a good component of the rev per req. I think on average, if there is such you can say it's in the ballpark of around a third of it, which is – I guess our M&A overall had a nice impact on the quarter. Some of that is annualizing from deals that we would have done in the prior year, so going forward, the impact would be more in line with what our traditional growth rate for M&A is at around 1%.

Great. Thanks.

Thank you. The next question is from Steven Valiquette of Bank of America. Your line is open.

Thanks. Good morning. So he just touched on the question I was going to ask on the rev per req but also let me just on pricing, maybe you can just remind us again your latest thoughts on whether or not there may be any material clinical lab fee schedule adjustments by CMS for 2017 in place of the delay of the PAMA related changes. Curious to get your latest thoughts on that. Thanks.

It's Dave. Because PAMA very clearly set out how the clinical lab fee schedule is to be adjusted over time, we don't expect that there will be any 2017 adjustments, other than the potential CPI update that's built in. So generally, I would think about the clinical lab fee schedule for 2017 as flat, and in terms of overall pricing, just want to be clear that the revenue per requisition increase that you're seeing is driven largely by mix, not by unit price, so we think of the pricing environment as stable, and we expect it to be so out through the balance of this year and 2017.

Okay. That's helpful. Okay. Thanks.

Thank you. The next question is from Ricky Goldwasser of Morgan Stanley. Your line is open. Ricky R. Goldwasser - Morgan Stanley & Co. LLC: Yeah, good morning. A couple of questions here. First of all, on organic volumes at 1.2%, trend seems to be stable compared to the first quarter. Dave, do you think that this is the new normal for the industry? And is this going to affect the steady state on an organic volume that we should think about as we build our model going forward?

Yeah, Ricky, I think that's reasonable. Obviously, when we talk about that organic volume, I mean, that's really just the growth in the business that comes from essentially more tests from the same customers. And I think 1.5%, in that range, is very realistic to think about over time. Again, just given the demographics of the population, the increasing number of insured lives, the potential for some-- for incremental Medicaid expansion, so I do think that that's the right way to think about it, and obviously it doesn't take into account things like contract wins or acquisitions, which we tend to call out separately. Ricky R. Goldwasser - Morgan Stanley & Co. LLC: Okay. And then a question on PAMA, and the visibility that you have into 2018. Is it fair to say that given your scale and your reimbursement, it's going to be weighted by size, and the fact that you're a low-cost provider, provides you with some fairly good visibility into what at least the floor reimbursement could be? And if that's the case, any thoughts about your ability to offset the changes to price with additional cost reductions in 2018.

So I think in terms of visibility, part of the challenge is that, although we're pleased with the expansion of the applicable labs in the rule that CMS issued, we still don't know what that really means in terms of capturing the hospital outreach business, and I just want to say that I think CMS-- I'm pleased that CMS has been willing to consider the industry's comments. I think ACLA has done a terrific job, and the hospital associations as well, in bringing these issues to CMS's attention. I continue to be disappointed that the data show that 50% of lab revenue is still going through the hospitals, even though the volume is lower, considerably lower, than what goes through the independent labs. That means hospital pricing has to be way higher, and we all know it is. So to say that we're doing a market survey and essentially take into account only a very limited slice of that market, to me does not do what Congress asked CMS to do. Now, having said that, our visibility into what the impact, or the floor, will be is still limited until we go through the process of understanding how many more labs are captured, and what the survey looks like. In terms of offsetting the financial impact, I think it's important that people think of LaunchPad as a long-term initiative for our business, not as specific projects, and so what we've said about LaunchPad is that we're going to get the savings over a three-year period, but what we've also said is LaunchPad has now transitioned into organizational and structural activities, as opposed to things like our supply chain, and a lot of the things that we're doing around LaunchPad, particularly now focusing on that front-end engagement with the patient, are going to help us to offset the impact of whatever the PAMA and clinical lab fee schedule reductions in 2018 turn out to be. Ricky R. Goldwasser - Morgan Stanley & Co. LLC: Okay, thank you.

Thank you. The next question is from Nick Jansen of Raymond James. Your line is open. Nicholas M. Jansen - Raymond James & Associates, Inc.: Hi, guys. I just wanted to dig a little bit deeper into Beacon LBS and what you're doing with United in Florida and the potential for that to be broadened at some point in time. I know the United contract has an expiration date end of next year. I just wanted to get your thoughts on how that program could be rejiggered thinking about a more broader rollout at some point in time. Thanks.

Sure, I think, one thing to remember is when we think about Beacon LBS is, Beacon LBS is something that the Beacon LBS team invented from scratch and built. So it's a pretty significant accomplishment that that team took an idea and a concept and really built it into a business that's now generating a pretty significant amount of revenue. The results from Beacon LBS, when you look at the things that the team set out to achieve, the out-of-network lab spend in Florida has declined. The test selection based on evidence-based guidelines has improved. The use of the lab network has increased, which leads to lower consumer out-of-pocket costs. So these are all, I think, positives for what Beacon LBS can accomplish. Are there things that we want to do to make it better? Absolutely. We want to make it more attractive to providers in helping them to select the right tests, so that it becomes a positive tool for choosing the right diagnostic testing. We want to expand the scope of it to increase the utility. Again, you look at the surveys, and physicians say 30% of the time they're not sure what test to order, particularly when it comes to molecular testing. So we have the opportunity to make Beacon LBS something that becomes a positive in the provider office, and helps them get the right test and interpret it correctly. Those enhancements are in process, and obviously there are also competitive tools in the marketplace, and we want to be better than the competitive tools. As we enhance Beacon LBS, as we extend its capabilities, as it becomes more and more integrated into EMR systems, I think we will move to new markets, and I think my perception is that United sees it as a valued tool to help them with correct lab test selection and management of their out-of-network spend. And we're both anxious to see it grow and expand into new markets. Nicholas M. Jansen - Raymond James & Associates, Inc.: I'll keep my questions to one. Thanks, guys, nice quarter.

Thank you.

Thank you. The next question is from Bill Quirk of Piper Jaffray. Your line is open. William R. Quirk - Piper Jaffray & Co.: Great. Thanks. Good morning everyone. First off, I guess, going back to Sequenom deal makes sense given your channel presence, particularly in the OB/GYN side of things. But, Dave, help us think a little bit about some of the implications here for some of the partner relationships. Are you assuming that some of the deals may potentially move to alternative NIPT providers?

Say again, Bill? I'm sorry, I didn't quite follow. Some of which deals may move to alternative... William R. Quirk - Piper Jaffray & Co.: Yeah. I am just thinking about some of the partners that Sequenom brought into the pool are competitors of yours in the reference lab side of the business. And just trying to get a sense as to presumably you guys took a look at this and feel pretty comfortable, but just want to get some additional color there.

Yeah, we do feel comfortable. Obviously when we – we have a limited visibility when we're doing diligence into an acquired company's customer list. So we don't have a perfect idea, but we always assume there's going to be some attrition. One of the nice things about this test, though, is we really do feel that it's best-in-class, and so I think the likelihood that there's going to be significant attrition is not the same as it would be in a typical, we're acquiring another – just acquiring another laboratory. I think the other reality is as you get into highly specialized testing that's really dependent on capabilities and methodology and the clinical database, that there is less appetite for switching than there is if you're just using one reference lab, and now it's acquired by another reference lab. So, we feel good about the ability to retain the key customers, and again, are counting on and looking forward to working with the Sequenom team to make that the case. William R. Quirk - Piper Jaffray & Co.: Got it. And then just I guess staying on the topic for a follow-up question. Most of the comments concern their NIPT product, they have – I guess I'd be curious to hear about your plans for the liquid biopsy program. They have talked about this, but candidly have kind of down-played it in recent quarters and talked about partnering that out.

Yeah, thank you for mentioning that. The liquid biopsy pipeline at Sequenom is something that has been there for a while, and as you say candidly, I think from a resource perspective, they've not been able to focus on it as much as they would like. They really like the liquid biopsy opportunity and our scientists from their evaluation think there's real potential there. So that's probably a part of the deal that is going to take a little longer to materialize, but at the same time, we like that as a long-term opportunity. We like it as complementary to our oncology business, and we'll have the resources to support that and integrate it with the work that we're doing on liquid biopsy and on oncology test development generally, which I think will be a strong positive for their program and ultimately for the market. William R. Quirk - Piper Jaffray & Co.: Okay, got it. Appreciate the color. Thanks, guys.

Thank you. The next question is from Gary Lieberman of Wells Fargo. Your line is open.

Thanks. Good morning. This is Ryan Halsted on for Gary. Just one broad question, so now that PAMA has been finalized and is capturing the hospital outreach labs, how are you weighing the opportunity to allocate your capital to expanding of the Diagnostics business going forward, compared with Covance?

Well, it's Dave. I think the fact that we announced an acquisition this morning in the Diagnostics space should tell you that we're looking to be opportunistic in acquiring the assets that we think are going to bring the highest value for our business and the best return for shareholders. And we'll continue to do that, and continue to look at the business needs, and evaluate where we should deploy capital.

I mean, is there an opportunity for you to buy hospital outreach labs, do you think?

Certainly there may be. I mean, I think the history of hospital outreach acquisitions is mixed, because you worry about significant attrition, and you worry about now that the lab is not owned by the hospital anymore the ability to retain the work. Again, we look at the hospital and health system relationships as we want to be broad partners around the in-house laboratory, the outreach business, the reference business, the pathology, the patient management, the population health, so I wouldn't focus so much on how we deploy capital toward hospital outreach as I would on how do we deploy capital to meet our stated criteria, accretive in year one, meet our financial metrics and provide value to shareholders over time.

All right, great. Thank you very much.

Thank you. And the final question is from Isaac Ro of Goldman Sachs. Your line is open. Isaac Ro - Goldman Sachs & Co.: Good morning. Thanks for fitting me in. Just a question on capital allocation, and really specifically M&A. On the Sequenom side, just hoping you could give us a couple of the key swing factors that we should consider when thinking about how EPS accretion will play out over time. And secondly, just looking forward, what your criteria are for future deals if we consider the pro forma capital structure you'll have after Sequenom. Thank you.

Sure. Isaac it's Dave. So, as I mentioned earlier, from an accretion perspective, it will be accretive in year one but not materially. So in the out years, the combination of the top-line revenue growth opportunity and bringing some greater efficiency to their laboratory operation, we think, will give us the opportunity for the acquisition to be materially accretive. In terms of what we look for in acquisitions, we've always talked about expanding our capabilities, we've talked about geographic footprint, we've talked about test menu. Two very important criteria for this transaction. And we've talked about strategic fit with the business, whether it's the Diagnostics business or the Drug Development business. And in terms of the financial criteria, we look at many multiples. Obviously we look at multiples of EBITDA, pre-and post. We look at DCF, but the fundamental premise is accretive in year one, and meets our cost of capital sort of by year three to year four, and again, this transaction falls squarely within those metrics. And our aspiration is that every transaction that we do when we deploy capital would fall squarely within those metrics. Isaac Ro - Goldman Sachs & Co.: Got it. Thanks very much.

Thank you. There are no further questions in the queue. I'll turn the call back over for closing remarks.

Well, as I said, it's an exciting day at LabCorp's today. We appreciate everybody's time and participation on the call. We thank you and hope you have a great day.

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect. Good day.