Good afternoon. And welcome to the TriNet Group Fourth Quarter Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note today's event is being recorded. With that, I'd like to turn the conference over to Alex Bauer. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to TriNet's 2017 fourth quarter conference call. Joining me today are Burton M. Goldfield, our President and CEO; and Richard Beckert, our Chief Financial Officer. Our prepared remarks were prerecorded. Burton will begin with an overview of our fourth quarter operating and financial performance. Richard will then review our financial results in more detail. We will then open up the call for the Q&A session. Before we begin, please note that today's discussion will include our 2017 first quarter guidance and other statements that are not historical in nature, are predictive in nature, or depend upon or refer to future events or conditions, such as our expectations, estimates, predictions, strategy, beliefs, or other statements that might be considered forward-looking. These forward-looking statements are based on management's current expectations and assumptions and are inherently subject to uncertainties, risks and changes in circumstance that are difficult to predict and that may cause actual results to differ materially from statements being made today or in the future. Except as may be required by law, we do not undertake to update any of these statements in light of new information, future events or otherwise. We encourage you to review our most recent public filings with the SEC, including our 10-K and 10-Q filings. For a more detailed discussion of these risks and uncertainties that may affect our future results or the market price of our stock. In addition, our discussion today will include non-GAAP financial measures, including our forward outlook for non-GAAP Net Service Revenues, adjusted EBITDA, and adjusted net income per share. For a reconciliations of our non-GAAP financial measures to our GAAP financial results, please see the company's earnings release available on our website or through the SEC website. A reconciliation of our non-GAAP forward outlook to the most directly comparable GAAP measures is available on our website. With that, I will turn the call over to Burton for his opening remarks.

Thank you, Alex. I am very pleased with our fourth quarter and full year financial results. We delivered this strong financial performance while positioning the company for our next phase of growth. During the fourth quarter, we grew total revenues 5% year-over-year to $848 million and we grew our Net Service Revenues by 18% year-over-year to $204 million. Professional service revenues grew 2% percent year-over-year to $117 million. Professional service revenues benefited from our vertical sales strategy, which highlights our unique value proposition. We are targeting the right customers with the right products and the right services at the right price. While we grew insurance service revenues by 5% year-over-year to $731 million, Net Insurance Service revenues grew 48% year-over-year to $87 million. Net Insurance Service revenues in the quarter benefited from administrative cost savings due to the change in contract terms with one of our insurance carriers from a guaranteed cost plan to a risk based plan. Our Q4 GAAP earnings per share grew 188% year-over-year to $0.92 per share and our Q4 adjusted net income per share grew 21% to $0.46 per share. For the full year, we grew GAAP total revenues 7% year-over-year to $3.3 billion and we grew Net Service Revenues 25% year-over-year to $809 million. We increased GAAP earnings per share by 190% year-over-year to $2.49 per share and we grew adjusted net income per share by 62% year-over-year to a $1.99 per share. In addition to our strong financial performance and central to our business strategy, we made significant progress in 2017 to support our next phase of growth. I am happy to report that we have migrated nearly all of our active clients from the SOI platform. TriNet is now servicing over 14,000 clients on a single platform with a single payroll engine.…

Thank you, Burton. As we review the financials I will focus on the GAAP and non-GAAP numbers where appropriate. During the fourth quarter, GAAP total revenue increased 5% year-over-year to $848 million. Net Service Revenue increased 18% year-over-year to $204 million. We finished the fourth quarter with over 325,000 worksite employees, down 4% year-over-year. Our average WSE count for the fourth quarter was over 322,000, down 3% year-over-year. As discussed in our previous quarter, our average WSE count in the fourth quarter was again impacted by increased attrition largely attributable to our SOI migration. We expect this specific attrition trend to conclude during the first half of 2018 as we complete the SOI migration. Professional service revenue for the fourth quarter increased 2% year-over-year to $117 million, when compared to the same quarter last year, professional service revenue benefited from the improved pricing and a slight mix shift away from blue and gray verticals. Professional service revenue growth was negatively impacted by our lower average WSEs. Insurance service revenue for the fourth quarter increased 5% year-over-year to $731 million. And Net Insurance Service Revenue increased 48% year-over-year to $87 million. Net Insurance Service Revenue benefited from positive realized health experience, which came in below our guided incremental 2% insurance cost growth, continued reduction of administrative costs and an increased enrollment beyond our forecast. One enrollment trend we've seen over the last few quarters has been an uptick in high deductible health plans. We believe this uptick reflects WSE efforts to mitigate the cumulative effect from health premium inflation. Net Insurance Service Revenue was negatively impacted by our 2017 fee credit. The 2017 fee credit was a contra revenue item where we shared some of our administrative cost savings with a portion of our clients. Adjusted EBITDA for the fourth quarter…

Thank you, Richard. I am very pleased with our 2017 financial performance and I am excited about the year ahead. We've entered 2018 as a stronger organization, better position to deliver value to our clients and our shareholders. As we continue to strengthen our consolidated platform, complete the SOI migration and strategically invest in our sales force, I am confident that we can return to sequential volume growth in the second half of 2018 with the benefit of increased operating leverage in our model. I look forward to keeping you updated on our progress in the year ahead. Operator?

We'll now begin the question-and-answer session. Our first question today is from David Grossman with Stifel Financial. Please go ahead. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Hi. Good afternoon.

Hey, David. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: So I wonder if we just start with just a little bit more detail on the insurance business. I know you had the fee credit in the fourth quarter, can you give us a sense of maybe how much of an impact that has on the insurance margin in the fourth quarter and maybe how to think about – how that got factored into your guidance for next year?

Sure. So this is Rich, and how are you David? It was about 0.5% of revenue full year is what the impact of that was, we received most of that in Q4. There's a slight effect of a few months' work in Q1 of fiscal year 2018. It's all been factored into both guidance we gave prior and the guidance we just gave now for fiscal year 2018. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Right. So if we look at that and I guess we also look at the declining admin fees as well as anything else that may be affecting the insurance margin, would it be reasonable to think that with kind of the I guess the adoption of the minimum premium plan for that cohort to clients in 4Q, that we would see relatively flat margins, insurance margins next year or would you expect them to be modestly down or modestly up, how should we factor and all these different moving pieces?

Great. So in Q4, we saw our net margin at about 11.9%; full year was about 12.5% and for 2018, the range is 11% to 13%. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: I'm sorry, you said 11% to 13%?

Correct. Right. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Got it. Okay. And then, Burton, perhaps for you, I think you've made some comments about the maturation (00:23:16) of the sales force, given you had a kind of a year that just kind of pivot the business a little bit, and just think longer term about how you want it to go on that? And I'm just wondering because it's hard to figure it out what the core business is growing given this re-platforming effort, so perhaps you could just spend a minute about what the non-SOI business, how that's been growing or what it grew in 2017 and maybe a little bit about what your – how you're thinking about the sales force and sales force productivity in 2018?

Great question, David. So I'm really excited about the new leadership in the sales organization. As I mentioned in my opening comments, sales rep attrition has come down, which allows us to mature the sales force to become more productive. There's momentum on the sales force under the new leader which is as you realize is handling both net new sales and upsell, cross-sell and client retention. The core verticals are performing well as expected. And frankly, we have 300,000 people on the same platform now. So there's a focus on the future and there's a focus on improving retention as well as net new sales and look 2017 was a transition year and to have that behind us is really excited. So that's why I expect to return to sequential volume growth in the second half of the year and I believe there's an opportunity for us to really make sure that sales force, grow the verticals in this large untapped market. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Right. So just two quick things. One, your (00:25:14) worksite employees, call it around 10%. Is that a reasonable proxy to use for the non-SOI business in 2017. And then in terms of the sequential growth in WSEs, it sounds like the re-platforming is largely complete. So it's just the mechanics of the business that most people if they (00:25:39) are going to make a change, are going to make a change at year-end, so the biggest attrition we should expect at the end of the March quarter is that at least theoretically the way to think about the attrition in the first half of this year?

This is Rich. So, as you know we don't give out the vertical, the different piece parts. But yes, it performed as we had anticipated last year, when you back out Main Street and the SOI migration. The SOI migration, there was a lot of transition in Q4. And remember people who have received already their last bill for the year, they can decide that they want to re-up or not re-up and that will happen in the month of April. And at that point, then you really transition beyond. So to give you an idea, David, so you have January the heavy month and then you again have April. And then, beyond that, it's for the most part, as Burton said, we'll be able to grow. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Right. So which one is usually the heavier month January or April?

When you're specifically talking about total company, it would be January, when you're talking about SOI as a split. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Okay. Great. Thanks. And just one last question, if I can. Just Rich, can you help us out with the non-GAAP adjustments for 2018, the stock-based comp, depreciation and amortization?

Sure. We'll take it offline when we get back on. You'll be able to see it if you want to look at the different piece parts in the supplemental. David Michael Grossman - Stifel, Nicolaus & Co., Inc.: Got it. All right, guys. Thanks very much.

Hey, thanks very much, David.

Our next question is from Tim McHugh with William Blair. Please go ahead. Trevor Romeo - William Blair & Co. LLC: Hi. Thank you. This is actually Trevor Romeo in for Tim today. Thanks for taking our questions. First of all, I guess just with WSEs being kind of flattish sequentially and down again year-over-year. Obviously, I know there was an impact from the SOI migration, but just wondering if you could give us maybe an update on the broader competitive PEO landscape if you're seeing any competitive pressures or share shifts or do you think those WSE trends are just mostly related to the re-platforming?

As Rich was saying, it was related to the re-platforming, I'm not seeing a material change in the competitive landscape. As I've stated before, over 75% of every quote issued by TriNet to a prospect is to a greenfield opportunity, meaning it is not competitive against another PEO. This is a large and untapped market that we're going after and this isn't about taking share away from other PEOs, it's about taking this construct and leveraging it across very specific verticals with the value proposition that TriNet offers. Having said that, the focus in 2017 to migrate virtually every one of our worksite employees to a single platform and to move to the construct associated with that, took up a tremendous amount of resources and focus. As we move forward, we will be focusing on retaining and attracting clients to the core verticals that we believe we can serve as incredibly well. Trevor Romeo - William Blair & Co. LLC: Okay. Great. And then I was just curious to see if you guys have seen any impact from the bad flu season on insurance claims. It doesn't seem like insurance costs were up much in the fourth quarter, but curious maybe if you saw any either late in the year or early into this part of this year?

Sure. This is Rich again. There's really no impact in the Q4 performance, so far what we're seeing is about 0.5 point for the year and we think that's in line with what we're hearing from our carriers who said somewhere between 0.5 and 1 point. Trevor Romeo - William Blair & Co. LLC: Okay. Great. Thank you very much.

Thank you.

Our next question comes from Tien-Tsin Huang with JPMorgan.

Burton, I was curious, 2017 you talked about transition year, this year I'm curious that how M&A is higher on the priority list for you, I know Paychex has done a deal on the PEO side once you do with the re-platforming, I'm wondering if that's a higher priority for you this year.

Yeah, absolutely, Tien-Tsin, thanks for the question. And we are getting more and more confident about our ability in the migrations. They got better as time went on. There was seven different migrations associated with the SOI platform, with the last major one being done last Friday night. So I'm resting a lot easier today. And the ability to transition clients from one platform to the other would be a core part of many of the acquisition strategies, and I feel that we now have a very good idea and some muscle memory around doing those as they come available. So there will be more focus as you know, all hands on deck were to get to the one platform. And what's important to understand, it's not only one platform from an operational payroll standpoint, but we also got to one platform from a problem reporting system and one platform from a backend reporting system. So there was a bunch of ancillary processes, which had to be consolidated the same time. But I'm pretty excited about 2018.

And I'm curious maybe just as a macro type of question, just sort of the appetite to outsource given where we are sort of in terms of regulatory environment, obviously on the macro side with all the tax cuts whatnot, I don't know if you're starting to see a little bit better end market activity, but is there sort of a catch all answer to how you see sort of demand today versus this time last year?

Yeah. Great question. These are exciting times for the SMB market, as I've said many times, change is always good for our business. Obviously, the tax reform is positive, not only for our corporation TriNet, but for the SMBs. Retaining the R&D tax credit lowers the cost for small businesses, particularly in tech and life sciences, so we're seeing some energy around that. And I would say in general, there is a propensity to outsource and SMBs are looking at having a pretty big effect on the overall economy and solving some of the interesting problems that need to be solved in the world today. So I would say net positive for SMBs and for outsourcing the HR function net positive based on the amount of changes. And then what I'll follow up with is that there is a continued diversion from the federal state and local levels, so that adds another layer of complexity when we see companies that are contemplating going out of a single state, it is a true driver for us to make sure we're there articulating the value and supporting them in a multi-state location.

Understood. Thanks for your insight. Appreciate it.

Thank you.

At this time, there does not appear to be any more questions, so I'd like to turn the conference back over to Burton Goldfield for any closing remarks.

Thank you very much, operator, and thank you to all that joined us on the call today. Again, I'm very pleased with 2017 performance. I'm excited about 2018. I believe as we continue to strengthen the consolidated platform, complete the SOI migration, invest in the sales force that we will return to sequential growth in the second half of 2018 and benefit from increased operating leverage on our platform. We've entered 2018 as a strong organization. We're more focused and positioned to continue to deliver value to our clients and our shareholders. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.