Welcome to the Q4 Fiscal Year 2016 ResMed Inc. Earnings Conference Call. My name is Laurel and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Agnes Lee, Senior Director of Investor Relations. Agnes, you may begin.

Thank you, Laurel and thank you for attending ResMed’s live webcast. Joining me on the call today are Mick Farrell, our CEO and Brett Sandercock, our CFO. Other members of the management team will also be available during the Q&A portion of the call. If you have not had a chance to review the earnings release, it can be found on our website at investors.resmed.com. I want to remind our listeners that our discussion today may include forward-looking statements, including but not limited to statements about future expectations, plans and prospects for the company, corporate strategy, integration of acquisitions and performance. We believe these statements are based on reasonable assumptions, but actual results may differ materially from those indicated. Important factors which could cause actual results to differ materially from those in the forward-looking statements are detailed in filings made by ResMed with the Securities and Exchange Commission. I will now hand the call over to Mick Farrell.

Thanks, Agnes and thank you to all of our shareholders joining us today as we summarize our results for the fourth quarter of fiscal year 2016. We delivered solid global growth this quarter led by strong double-digit growth in the Americas region and high single-digit growth in our combined EMEA and APAC regions. We closed the Brightree acquisition April 4. So, this is our first quarter that includes revenue and profit contribution from the Brightree suite of software-as-a-service offerings. For the call today, I will first review our high level financial results, I will then outline some regional highlights from our business, and then finally, I will discuss progress towards our ResMed 2020 strategic goals. After that, I will hand the call over to Brett to walk you through our financial results in greater detail. Throughout fiscal year 2016, I have talked about ResMed’s growing global leadership in digital health and connected care for respiratory medicine. This leadership has been a catalyst for strong overall revenue growth and market beating organic revenue growth these last 12 months. We produced robust double-digit growth in the Americas region. These results were fueled by the ongoing success of organic masks and devices growth augmented by new software-as-a-service revenue from Brightree. We achieved above market growth in our combined EMEA and APAC regions with the highlight being double-digit growth of our flow generators in the combined EMEA and APAC group. At the bottom line, our diluted earnings per share, was $0.74 on a non-GAAP basis, which represents 9% year-on-year growth. In terms of non-GAAP net operating profit, we grew our bottom line at 20% in Q4 on a year-on-year basis. We continue to balance strong revenue growth with ongoing investments in R&D and our global focus on operating excellence. We achieved positive operating leverage…

Great. Thanks Mick. In my remarks today, I will provide an overview of our results for the fourth quarter with more detailed commentary around revenue, given our acquisition this fiscal year. As Mick noted, we had a solid finish to the year. Group revenue for the June quarter was $518.6 million, an increase of 14% over the prior year quarter. In constant currency terms, revenue increased by 15%. Excluding the acquisition of Brightree, revenue increased by 8% over the prior year quarter and excluding all acquisitions, organic revenue increased by 6% over the prior year quarter. Taking a closer look at the geographic level and excluding revenue from our Brightree acquisition, our sales in the Americas were $295.6 million, an increase of 8% over the prior year quarter. Sales in combined EMEA and Asia Pac totaled $194.1 million, an increase of 8% over the prior year quarter. In constant currency terms, sales in combined EMEA and Asia-Pacific also increased by 8% over the prior year quarter. Breaking out revenue between product segments, Americas device sales were $161 million, an increase of 6% over the prior year quarter. Masks and other sales were $134.6 million, an increase of 10% over the prior year quarter. The revenue in combined EMEA and Asia Pac, device sales were $133.6 million, an increase of 10% over the prior year quarter or in constant currency terms, an increase of 11%. Masks and other sales were $60.5 million, an increase of 4% over the prior year quarter or in constant currency terms, also an increase of 4%. Globally in constant currency terms, device sales increased by 8%, while masks and other increased by 9% over the prior year quarter. I would now like to provide some additional information about the Brightree revenue contribution. Brightree revenue for the…

Thanks Brett. We will now turn to Q&A. And we ask everyone to limit themselves to one question and one follow-up question. If you have additional questions after that please get back into the queue. Laurel, we are now ready for the Q&A portion of the call.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Andrew Goodsall from UBS is online with a question.

Thanks very much for taking my question. I was just wondering if you are willing to tell us something about your new mask range, we have seen the 510(k) there and perhaps if you are not willing go into too much detail whether you are willing to talk about the opportunity to evolve the business model with the AirSense 10 and the connectivity piece?

Thanks for the question, Andrew. You are right in your caveat around the question, but we – for competitive reasons, we don’t think it benefits shareholder value to go into the details of product timing and product launches. But as you noted, there is some activity there in 510(k)s and we do plan to launch at least one new mask before the end of the calendar year and that’s all the information I will give on that. But in terms of your second part of your question, which was about connectivity and how we can use the fantastic ecosystem of connectivity that we have and the installed base of 2 million cloud-connected medical devices to interact with patients and the myAir application, where patients are connected directly to the cloud, we think it’s great to liberate these data and then to provide actionable information to patients. We think patients should know how long they have had their mask and when it’s time to replace their mask and we are seeing patients really engage in that. So we do think there is a strong link to that. And I think if you look at this quarter, where we saw 11% growth in masks and accessories in the Americas, clearly we have patients engaging on that front, more to come on new products and more to come on engaging patients over fiscal year ‘17.

Thanks very much.

Thanks Andrew.

Next online, we have Joanne Wuensch from BMO Capital Markets. Your line is open.

Thank you very much for taking the questions. A couple of things, Australian dollar has been up and down a little bit, but mostly down, how do we think about that impact for next year’s gross margins?

I will hand that question over to Brett Sandercock, our CFO.

Yes. Thanks Joanne. Yes. If you looked at it sort of year-on-year sort of Q4, we did see some, a little bit of benefit from FX in particular the Aussie. Going forward into FY ‘17, we have seen more recently, I guess that’s sort of bit of an up-tick in Australian dollar, it strengthened a little bit against the U.S. dollar. So in that context if you look at it sequentially into Q1, that’s probably around a 50 basis point headwind for us on the gross margin there, at least in this kind of the near-term. Longer term I guess, it depends where the Aussie dollar goes, but short-term, probably a little bit of a headwind, but you would have to think longer term, it should be still be beneficial for us with the Aussie, but it has strengthened recently and we really don’t know where that’s going to go.

Okay. And can you just take a bigger step back and talk about the sleep apnea landscape, how it may be changing competitively, one of your comments talked about some pressure on average selling prices, so anything as it relates to pricing or products would be appreciated? Thank you.

Yes. Thanks Joanne. Well, the whole sleep industry landscape has changed fundamentally, I would say in these last 18 months since we launched, 18-plus months since we launched, approaching 24 months since we launched Air Solutions. And the basis of competition in the space is now changed to be not only do the devices have to be quieter, smaller, more comfortable, but they also have to be more connected. And we think that connectivity has really changed the space. It’s meant that we are able to take waste out to increase adherence of patients and to remove some of the inefficient steps in the value chain and therefore extract some value for our partners our HME partners, our patient partners, our physician partners and also ourselves out of that. And so there is some mitigation of some of the historic price impacts. We don’t go into details on that, but at a high level, I think that shift to value from price discussions has been a really beneficial one for us and our partners and the whole industry in general.

Your next question comes from the line of Anthony Petrone with Jefferies. Your line is open.

Great. My first one will be for Brett, just some of the moving parts on the tax line and maybe can you walk us through the benefit of the ASU, but also the additional tax expense that you incurred from the repatriation of foreign cash and just how much foreign cash was repatriated in the quarter?

Yes, I will give you a sense. So we did adopt that standard and what we did, I guess is we took that opportunity to increase cash repatriation and the tax expense associated with that largely offset that benefit. So you saw in our full year tax rate, it was pretty consistent with what we saw last year. To give you an idea on the repatriation, if you look at – we basically repatriated an additional $60 million this year compared to what we did last year, so quite significant for us. So we felt that, that was the best thing to do and just take the opportunity, I guess that would be implementation of the standard. So overall, if you kind of looked at our overall full year tax rate and tax rates going forward, I think it will continue to be pretty consistent.

Okay, great, that’s helpful. And maybe my follow-up would just be back on pricing a bit and maybe just a little bit more details on underlying pricing in sleep, specifically it relates to the competitive landscape, we did some checks earlier in the quarter and our understanding is Respironics came in with more of a price discount since the beginning of the year and additionally, we are hearing 3B Medical is sort of out there with more aggressive pricing, so any comments there would be helpful? Thanks.

Thanks for the question, Anthony. We don’t go into particular details about competitor A or competitor B. I will reiterate what I said before a little bit and I will maybe give to Jim Hollingshead, our President, Americas, to give a little more color and detail around the U.S. environment. But at a high level, I think the shift to value and the shift to talk about how much data you are extracting from devices, how you are getting that data into my customer, who for our customer, their customer is either the hospital or the physician or even the payer. And by providing those data, we are extracting value for their customer and their customers’ customer. So you are sort of changing the conversation from a pure price one to a value one. And if your box is X dollars cheaper, but the value provided is X plus, then the discussion goes back to the value side of it. But with that as a prelude, Jim any further comments on pricing?

Sure. I think everybody is aware that the big driver of pricing in the U.S. market has been ongoing Medicare changes to reimbursement and that’s pressure that the market has been under for several months through the competitive bidding process. I think our results in Q4 show that our Air Solutions offers or our AirSense and AirCurve devices coupled with our software platforms create a lot of value. So we – our revenue grew against a huge Q4 comp last year precisely because we have really shifted, as Mick said just earlier, we have really shifted the nature of what we are doing with our HME customers to allow them to create more value out of their business. So our offerings allow them to increase their revenue and cut their operating costs and that’s why our offerings have held up so well over the course of the year and continue to maintain share and volume growth.

Thank you.

Thanks Anthony.

Next, we have Sean Laaman from Morgan Stanley. Please go ahead.

Thank you, operator. Good morning everybody and thanks for taking my question. Just a question on Brightree, you have owned it for one quarter now, I don’t know Mick, if you could give us a sense on the retention of existing customers and the uptake of new ones, just some commentary around there to give us something to work with would be fantastic?

Sure Sean. Thanks for the question. Yes. So we are 90-days plus into the close of Brightree and beyond that from the announcement. And I can tell you these first three months or four months have been a really smooth transition. We have seen great contributions from Dave Cormack, the CEO, in this transition and the new appointment of Matt Mellott as the CEO. And apart of the – directly after the announcement, which was four months or five months ago that we announced the acquisition, there was a series of phone calls and I might hand it over to Jim to talk a little bit about the details. But Jim Hollingshead, who runs our Americas, and Raj Sodhi, who runs our global – is the President of our global business unit for healthcare informatics, along with Dave Cormack called all the top customers and individually spoke to them both in our core HME space and in the Brightree space and had really good discussions with them about what we were trying to do with this acquisition, which is help them and reinvest with them to take costs and waste out and to improve patient adherence and have better flow of data through the industry and extract value for all the partners. The conversations I had, which were with a small subset of those customers were very positive and we have seen very good customer retention. In fact no significant change in customer retention pre or post the announcement or the close of the acquisition on both the core business and on Brightree. But Jim, you were involved in a lot more of those calls, do you want to provide some more color for Sean?

Sure. Thanks Mick. Sean, we have had by and large, very favorable responses from customers, whether they were individual customers on both sides, whether ResMed customer or Brightree customer or whether they were shared customers and there are several hundred shared customers out in the world. Initially, we had terrific conversations with customers and I think that the response has held up over time. We have maintained virtually all of our customer relationships with both businesses and any concerns that customers had about how the two units work together have been, I think have been effectively addressed both by the fact that we have kept Brightree operating as a separate commercial unit, separate sales force, etcetera and just in conversations that we have had. If I just go back quickly to one of the rationales for the acquisition was we were already working together out in the world making our customers business process is more streamlined. So we had data connections that were allowing an HME – so for example, in sleep, if you set up a patient on a ResMed flow gen, you could import all of the same data into the Brightree application and will go straight into our compliance applications with the click of a button. That kind of labor savings made a big difference. And I think customers see what we are trying to do, which is to extend our health informatics offering from the therapy into their back-office operations and just continue to add value by taking out costs and streamlining their business. And I think the customer response has by and large been very, very favorable.

Great. Thank you, Jim. And just one quick follow-up, is there any reason for perhaps seasonality in the revenue for Brightree?

Why don’t I hand that over to Brett?

Yes. Thanks Mick. Yes. Sean, that – I mean, it’s very much a subscription model. So you would certainly, from that perspective, you certainly get much less seasonality. So it’s less of an impact than it would be, for example, for our kind of core existing business, so less seasonality due to the subscription model.

As I hope, Brett. Thank you. And thank you Mick. And that’s all the questions I have.

Thanks a lot Sean.

Your next question comes from the line of Ben Andrew with William Blair. Your line is open.

Good afternoon. I guess maybe a question for Brett to try to be direct, can you give us a sense of what the tax hit was for the $60 million of extra repatriation and because you keep saying largely offset, but can you be more precise?

Yes. I mean well, to that extent it did largely offset that side, so a slightly smaller number, but not – it’s around that number.

So very close to the actual incremental...

It’s around that sort of $9 million, $10 million mark on the repatriation.

Okay. Thank you for that. That’s very helpful, Brett. And I guess the second question for me, as we look at the Brightree revenues, the $32.2 million, is – what growth rate does that represent year-over-year and how do you think about the sustainability of that growth rate or what should we be looking for, for the business in the next balance of the fiscal year?

Yes. Thanks Ben. It’s Mick here. One of the beauties of recurring software-as-a-service business model that Brightree has established over these last 7 years, 8 years, 9 years since they have been in business is that it’s 80, 90-plus percent recurring revenue. And so you see a really steady flow, to Sean’s question, proves a really steady flow, not much seasonality and sort of building up of per customer, per user, per member, per month, if you like, per user per month type of revenue models and they build up over time. We have seen really solid double-digit growth in Brightree year-on-year to get to where they are now and we expect to continue to do that. We really like the Brightree model. We really like what value it provides in the core business, which is its HME channel and partnership business. One of the upsides I alluded to in the prepared remarks, but I think related to your question there about growth and future growth is home nursing, home health and hospice channels, these two – as our population ages in the West and it’s particularly focused on the U.S. market for this, there are some really exciting software-as-a-service revenue models, including iPad applications for home nurses directly entering data in the home that goes directly to the cloud, efficiency savings that are well ahead of the competition and really value that we can help extract for us and from new channel partners. And there is an upside for us and that there may be a large chunk of undiagnosed sleep apnea and COPD and untreated sleep apnea and COPD amongst those two channels. So there is sort two levels of upside. One is the core business is software-as-a-service and Brightree revenue in those two new channels, but secondly identifying patients for our core business in sleep apnea and our growing business in COPD.

Great. And just to be again direct Mick, is that mid-teens growth for Brightree or is it lower than that, higher than that? Thanks.

Yes. It’s going to be around that mid-teens number. Brett, you want to go into any further detail on that or are we good with that?

No, that’s right, Mick. It’s definitely tracking along mid-teens.

Thanks guys.

Thanks a lot Ben.

[Operator Instructions] The next question comes from the line of Saul Hadassin with Credit Suisse. Your line is open.

Thanks very much. Good morning guys. Mick, maybe just one question, I wonder if you could talk to what you see as an industry growth rate, you have mentioned this in the past on previous quarters, where you think the industry is growing maybe in the U.S. and then rest of the world, just in a sense are you going ahead of markets, what do you – where do you see industry growth rates across the two key regions that you participate in? Thanks.

Yes. Look – thanks for the question, Saul. We think the market growth rate for the markets that we play in is in that mid to high single-digits revenue range globally. And so we think hitting that 8% constant currency growth in EMEA and APAC we are slightly ahead of market growth there. We think we took some share in that sort of combined sleep and respiratory care space. And if you look at excluding Brightree, the core Americas business, excluding Brightree grew at 8% as well. And so again, I would say we are taking some share there, not a huge amount of share, but taking some share and against a very tough comparable from Q4 last year. We think that’s a pretty good performance. And as we look forward, that’s our goal, right. We don’t accept market growth. We like to drive market growth. We like to have innovations that create opportunities for us to grow ahead of the curve and so we don’t give guidance as you know, but we see the market growing in that mid to high single-digits and we like to meet or beat on a regular basis.

Alright. Thank you.

Thanks Saul.

Your next question comes from the line of Ian Abbott with Goldman Sachs. Please go ahead.

Hi guys. Good morning. One thing, when you speak to DMEs, one of their focuses is on re-supply and they are focusing on trying to ship more accessories with masks and I am just wondering, from your perspective, how far do you think there is to go on this. And secondly, with your solutions with connectivity, how is that helping them?

So good question Ian, I will do the first part and then hand over to Jim for some further details on the Americas and what we are doing in re-supply. As a personal user of an AirSense 10 device and an AirFit P10 mask, I like to change my mask on a regular sort of three monthly basis. Any patient who puts a piece of plastic on their face every day and wears it for six hour, seven hours I think would find that a hygienic and an appropriate thing to do. The numbers out there in the industry are far below that, well below that sort of 4x replacement per year. In fact I think there was some data from some governments showing around 1.8, 1.9 masks per year, which would mean lasting 6.5 months. Personally, I think there is a lot of runway as patients get more engaged with high deductible health plans and health savings accounts in the U.S. and take more control of their own healthcare, but they will invest the co-pay dollars or even full cash pay to receive that dot com type payments to get themselves involved in this as the deductibles go up and so on. But I am just talking from a personal patient experience. Jim, why don’t you give sort of the broader U.S. market thought on that?

Thanks Mick and thanks for the question, Ian. The first thing I would say is, just as Mick is relating his own experience, it’s really important to remember that we have a very firm belief that re-supply is very good for patients. The experience of therapy for patients is always made better by fresh equipment. Equipment does wear out, it gets old, etcetera. And so when the experience with therapy is better it leads to better adherence and just better long-term health for the patient. So – and that’s one of the reasons I think both ResMed and our customers seek to drive re-supply. It also happens to be good obviously for our customers business. We have been working with customers for years to help them to understand how to efficiently re-supply patients. And with the advent of our Air Solutions offering, we have been able to provide some software platforms that help to automate that process. And as a reminder, we actually have two platforms now with the acquisition of Brightree. We have a platform called ResMed ReSupply, which is a platform we built out of the acquisitions of CareTouch and Jaysec previously. And that’s an automated re-supply platform that has both a software component and a call center live call and automated call component. And then Brightree has a platform called Connect, which is also an automated re-supply platform. Both of them create a lot of value for our HME customers because it allows them to re-supply in a very cost efficient, cost effective way. And we have seen very good growth, both in terms of number of customers joining these platforms and grow the re-supply through them over the course of the year and that’s an ongoing phenomenon for us. So our customers are enjoying the benefits of it. It has helped our re-supply numbers obviously, so our accessory sales. And it helps patients. Patients love getting fresh equipment on an appropriate basis because it improves their quality of therapy, their quality of life.

Alright. Thank you.

Thanks Ian.

Your next question comes from the line of Matt Taylor with Barclays. Your line is open.

Thanks for taking the question. Can you hear me, okay.

Yes.

So I just wanted to cover one thing with the gross margin, previously you had said that Brightree was going to add about 70 bps to 100 bps, is that about what you saw in the quarter and is that what we should think about as kind of the contribution for the next year?

Yes. Hi Matt. The Q4, it came pretty much in middle levels – it was 80 basis points that it contributed. And then look going forward I think I would stick with that range around that sort of 70 basis points to 100 basis points.

Okay. And I guess with the moving parts that you alluded to before the Aussie dollars you talked about but also euro is going down, how does that factor into your guidance for GMs for next year, so what are you assuming?

Alright. Matt, I apologize. I missed the first half of that question.

Yes. I am just asking with the euro as well, euro is a little bit weaker in recent weeks, how are you thinking about those two major currencies for gross margin next year?

Yes. I mean that plays into I think – we talked about that a little earlier on. Just for – it does, I mean obviously, a weaker euro, a weaker pound or whatever it might be doesn’t impact us there. If I looked at it just at least in this sort of near-term into Q1 with that sort of strengthening of Aussie and probably some weakening in some of the European currencies, we – I think all up probably at the moment, estimates probably a 50 basis point headwind for us going into Q1 and now it’s just a question of, I guess then if currencies stay where they are from thereon in that you wouldn’t see any further impact on a sequential basis. We might see a little bit on a year-on-year basis, but pretty volatile at the moment. So it’s hard to say on that, but near-term, I would say it’s about 50 basis points and of course that can change depending on what currencies do. But at the moment, I will put it around that kind of number.

Great. And then can you just give us a sense of how to model the interest and other expense for next year, since you have the debt from Brightree, I think due to modeling some income, you had some expense this quarter, any parameters you can give us around the interest rate or the – your cadence of the debt pay-down to help with that number?

Matt, the interest rate for us would be around – is rough number around that 2% mark in terms of funding costs on the interest – if you use that. Had Brightree basically the acquisition from close to the beginning of the quarter and I think we finished with kind of this net interest expense for the quarter around $2.4 million. So it’s probably kind of a reasonable go forward number going into FY ‘17.

Okay. Thank you.

Your next question comes from the line of Steve Wheen with Evans & Partners. Please go ahead.

Yes. Hi guys. Just a quick question on that GPO announcement that you made, are there any milestones in terms of volumes that are required and is there any sort of color you can give around how that will contribute going forward. And then just if we could Brett, go sort of talk on the gross margin outlook for FY ‘17 you have mentioned FX and you have mentioned Brightree, but just any other sort of moving parts that we should be mindful of? Thanks very much.

Thanks for the questions. Steve I will answer the first one and as you indicated, I will hand it to Brett for the second. The GPO announcement was really as an example of us executing on that channel strategy and you may or may not see further press releases from us about other GPO and government contracts that we have over time, but we don’t give details of any particular customer and milestones associated with them on a sort of milestone basis. Essentially these GPO contracts are hunting licenses and then you are allowed to go in hospital-by-hospital and move forward on it, but it’s an upfront negotiated air cover for the sales folks to go in there and work with those 3,600 hospitals and 120,000 other providers and push forward on our respiratory care growth within the channel. So I said in my prepared remarks, more to come on that front. There will be a lot more to come. We might not put press releases out on all of them. It was really just an indicator of where we are moving on that front. Brett, do you wanted to take the second question about gross margin?

Sure. Yes. Steve, on the outlook there on gross margin, I guess as you know, there is a lot of moving parts on that. We have mentioned on FX if I look at certainly from a product mix perspective, it’s definitely that sort of unfavorable mix is certainly moderated for us. It’s far more consistent to the extent and Mick mentioned earlier in terms of new mask introduction and so on, you could probably expect that would be supportive on a product mix front as we get through FY ‘17. We have done – the team has been doing some really good work around the manufacturing procurement and so on. We have seen some of that come through. So I am quite positive on that. And then you have got, obviously the Brightree is now kind of built into that Q4 margin, but that will continue to be supportive as well. I mean you have the usual ASP declines and things like that coming through. But overall, in the mix I think some of the big unfavorable items are certainly moderating and potentially could have – as masks are introduced and so on, that should be beneficial. So overall, we have got – it’s probably a near-term currency headwind that’s a bit unhelpful. But overall, pretty comfortable with that 57% to 60% range and we are kind of more or less just about right in the midpoint of that range at the moment. So that’s kind of how I would characterize the moving pieces.

Great. Thanks very much.

Thanks for the questions Steve.

Next we have a question from the line of Chris Kallos with Morningstar. Your line is open.

Thank you. Thank you for taking my question. Just a quick follow-up on the cardiology trial Mick, from the sound of your – of the CAT-HF numbers, they are neutral to positive, does that now maybe reboot your efforts in cardiology and are you planning any more sponsoring of clinical trials in that space?

Thanks for the question, Chris. That allows us to talk to our sort of third horizon portfolio if you like. And we are absolutely dedicated to cardio-respiratory care since it’s almost – I am not sure it’s a medical term out there in the formal literature, it’s something that we are really leading the market on and I would define it as sleep disordered breathing amongst atrial fibrillation, sleep disordered breathing amongst heart failure with preserved ejection fraction. And I would also include some play in hypertension and some other cardiovascular diseases. But clearly, the data from CAT-HF were incredibly exciting. I don’t know if you had a look at the detail that was presented there at ESC or the Heart Failure Congress at ESC. But as you start to look at those clinical data and the level of clinical and statistical significance from a relatively small group of patients, it certainly indicates to us and if you talk to Chris O’Connor, who is the primary investigator who was formerly at Duke and is still the PI on the trial, clearly our investigators in all the hospitals and all the clinicians involved want to do some follow-on work in the heart failure with preserved ejection fraction space. So it certainly gives me more excitement in the space. The clinicians are very excited about it, the nurses, the doctors and we would like to continue to invest in the space. And so we won’t go into details about what an investment will look like large multi-year clinical trials or a lot of market development work or some combination of the above. But you will hear a lot more from us regarding that Horizon 3 growth opportunity, including the CAT-HF trial and follow-up in the coming quarters.

Mick, just on that, is the data strong enough to incorporate into marketing to cardiologists and also these initiatives, are they in the next 2 years in terms of next steps, is that the sort of timeframe we are talking about?

So the data are not strong enough for an indication for use or IFU to start marketing to cardiologists. So no, it would require a lot further work on that front. What you might see is some work with – we talked about that trial with Kaiser Permanente, where we did some work on U-Sleep. We might work with payer providers, who are looking at these clinical data saying that’s exciting, we would like to work on that in some sort of IRB or other controlled environment. But yes, I don’t want to go into sort of real details here on the final question of our Q&A about what that part of Horizon 3 will look like at this point, but what I will say Chris is you will hear more from us over the coming quarters as to what we are doing in the cardio-respiratory care space, but it’s pretty exciting data from CAT-HF. I am glad you noticed that.

Great. Thanks Mick.

Thanks Chris. May be one last question?

Yes, of course. Your next question comes from the line of Will Dunlop with Merrill Lynch. Please go ahead.

Hi guys. Thanks for taking my question. Just wondering if you could please give more detail on your rest of the world flow gens growth and what countries perhaps and what products are driving good 11% growth there? Please.

So I will hand over to Rob Douglas, our President and COO to talk about EMEA and APAC.

Yes. Will, thanks for that question. We – as you saw, we reported pretty good results through there. We are not going to break it up by country, but we saw good continued take-up of the AirSense platform. We had previously talked about the value proposition really came on very strong, but it’s been a little more work to get that value proposition going in some of the other countries. And we are very pleased with the progress going through there. And so we are really seeing good take-up across the board with that. So it’s really been a good result.

Okay. Thank you.

Thanks a lot for your question, Will.

We are now at the one hour mark, so I will now turn the call back over to Mick Farrell.

So in closing, I would like to thank the now more than 5,000 strong ResMed team from around the world for their commitment to changing the lives of millions of patients with every breath. I am really proud of what the team accomplished, not just here in Q4, but throughout the whole fiscal 2016 to establish ResMed really as the world’s leading tech-driven medical device company. Through clinical research, new features that expand our products and solutions and our acquisitions, we are transforming how healthcare is delivered and shaping a new frontier in connected care in respiratory medicine. We remain focused on our long-term goal of improving 20 million lives by 2020. Thanks for your time. And we will talk to you again in 90 days. I will hand back to Agnes.

Thank you, everyone, again for joining us today. If there are any additional questions, please feel free to contact me. The webcast replay will be available on our website in about two hours at investors.resmed.com. Laurel, you may now close the call.

Thank you. This concludes ResMed’s fourth quarter of fiscal year 2016 earnings live webcast. You may now disconnect.