Brian Roberts – CFO Duane DeSisto – President and CEO

Bill Plovanic – Canaccord Genuity, Inc. Ben Andrew – William Blair & Company Kim Gailun – JPMorgan Danielle Antalffy- Leerink Swan Partners Danielle Antalffy – Leerink Swan Tom Gunderson – Piper Jaffray Mimi Pham – ABR Healthco Jayson Bedford – Raymond James Erica Layon – Benchmark Company

Good afternoon, my name is Laura and I will be your conference operator today. At this time I would like to welcome everyone to the Q4 2013 Insulet Corporation Earnings Conference Call. Al lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session, at that time if you would like to ask a question, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I’ll now turn the call over to Brian Roberts, Chief Financial Officer, please go ahead.

Thank you. Good afternoon everyone, thank you for joining us for our Fourth quarter and full year 2013 conference call. I’m Brian Roberts, Chief Financial Officer of Insulet and joining me on the call today is Duane DeSisto, our Chief Executive Officer. Before we get started, I’d like to remind everyone that our discussion today may include forward-looking statements as defined under the Securities Laws. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making these statements for purposes of complying with those Safe Harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects which are based on the information currently available to us and on assumptions we have made. There are risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Information concerning the company’s potential risks and uncertainties is highlighted in the company’s press release issued earlier today and in the Risk Factors section of the company’s SEC filings including the company’s annual report on Form 10-K for the year ended December 31, 2012. These risk factors apply to our oral and written comments. We assume no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. I’d also like to remind you that the guidance we are offering today represents a point-in-time estimate of our future performance. You will find a link to the webcast of this call, as well as to today’s press release at myOmniPod.com in the Investors section. And now, I’ll turn the call over to Duane.

Thanks Brian, good afternoon everyone and thank you for joining us today. 2013 was a monumental year for Insulet, a strong revenue growth and expanding margins resulted in our first step recorder of operating profitability. These outstanding financial accomplishments were driven by the launch of the smaller and lighter OmniPod in the United States and of course Europe. The upgrade of all existing customers through new pod platform and the capacity to produce approximately 1 million OmniPods per month. OmniPod revenue grew by nearly 30% year-over-year as the launch of the new OmniPod in March was met with a level of enthusiasm exceeding our expectations. We finished the year with new patient additions growing at a rate north of 40% year-over-year as our easy to be used design appealed to customers especially key demographics such as children. An initial shipments to kids under the age of 18 increased by 60% in 2013 while new patient starts for those under the age of 10 more than double. The new OmniPod has also made tremendous drives with healthcare professionals. Besides the change in size, the new OmniPod features an updated insulin on-board calculator designed to mirror the preferred approach in most HCPs. Many practices that were unwilling to support the old version of the OmniPod are now becoming key prescribers. Since the launch, over 30% of practices, writing prescriptions for the new – for the OmniPod are new. These practices account for more than 20% of our total initial shipments and more importantly these practices are coming back with additional prescriptions. Approximately two-thirds of practices that wrote their first prescription in the second and third quarters of 2013 started at least one new patient on the OmniPod in the fourth quarter. This is clear indication that both new doctors and patients are happy with the performance of the new pod. We know that a critical components to our long-term growth strategy is predicated on this expanding base of prescribers. With over 70% of our initial patients starts coming from people who have never used an insulin pump before, the healthcare professional is a key influencer of a patient’s decision to utilize pump therapy. As the only [indiscernible] insulin pump available in the market, we are well positioned to take share in these practices and build upon the excitement of the launch of the new OmniPod. To maximize this opportunity, we are making important investments into our commercial team to ensure that we can continue to provide all healthcare professionals, both new and existing with a highest level of service possible from our sales force. As we speak, we’re in the process of hiring approximately 20 new resources to our field sales team increasing our selling headcount to approximately 130 people. We are also making investments into our marketing, inside sales and reimbursement teams to ensure that we are able to handle higher and higher levels of demand. We believe we will a quick return on these activities as we expect the rate of initial shipments to remain strong growing 25% year-over-year into 2014 While much of our focus has been on the domestic business, we have also been thrilled with the performance of the OmniPod internationally. Ypsomed in Europe had seen exceptional growth in key markets such as Germany, the U.K. and in the Netherlands. Despite the latest offering of two pumps in Europe, Ypsomed customer base more than doubled in 2013 as capacities constraints on the new OmniPod were eliminated. With this excellent performance Ypsomed achieved performance incentives that provided for a one year extension to our agreement which will now terminate in 2017. GlaxoSmithKline in Canada also continues to see demand exceeding expectations. We jointly renewed our agreement in 2013 with GSK and are pleased to support them as they transition their customer base to the new OmniPod here in early 2014. This robust revenue growth is only possible if we have the manufacturing capacity to support the business. In the fourth quarter, we took a giant strive forward in meeting our increasing demand as production levels increased over 2.5 million OmniPods produced in the quarter, an increase of nearly 50% over Q3. The team managed through electronic shutdown in Chinese New Year and is now building at a rate approaching 1 million pods per month. Inventory levels rebounded as we ended the year with approximately a quarter of a million OmniPods on hand, a huge improvement over September. The overall decrease in our production cost related to the new OmniPod was a key driver as gross margins improved on more than 300 basis points and we reached operating profitability this past quarter. Yields are increasing and [indiscernible] are dropping as we continue to gain efficiencies and production. With the transition of our customer base now complete, we expect to see additional gross margin expansion throughout 2014. With manufacturing operations on solid footing as we entered 2014, we now have the opportunity to increase our efforts on the many products we have in our pipeline. We are pleased to note that last week, we filed for a five 10-K clearance of our personal diabetes manager that integrates a LifeScan OneTouch Verio Blood Glucose Meter. We are excited about our partnership with LifeScan and believe that this new PDM offering will provide customers with a new option into the marketplace. Further, we have commenced work on the new more modern PDM which we hope to have submitted for approval in 2015. In addition, last [indiscernible] we’ve called that we announced our partnership with Eli Lily and Company to modify our OmniPod system to be used with Humulin U-500 Insulin, a concentrated form of insulin used primarily by people with highly insulin resistant Type 2 diabetes. The potential market for this product is large, but more than 20 million people in the U.S. are living with Type 2 diabetes. Of this population, we estimate that up to 10% could potentially benefit from an insulin pump that delivers U-500 insulin. We believe that the powerful combination of a product as simple as the OmniPod along with its ability to deliver U-500 addresses the needs to patients and doctors alike. For the patient, the ECU system can improve adherence to therapy. For the doctor, it’s new tool to help patients manage their diabetes and improve outcomes. In the coming months, we will focus our efforts on finalizing the software modifications and performing human factory testing for an expected five 10-K submissions to the FDA late 2014. As we noted at the JPMorgan Healthcare Conference in January, we are pleased to report significant progress on our efforts to work towards an OmniPod integrated with continuous glucose monitoring technology. In recent months, we’ve identified a clear path forward towards eliminating sterilization challenges that had delayed our development efforts in 2013. With slight changes to the chemistry, we believe the Insulet [ph] will be able to survive the ETO sterilization process. We continue to test additional sensors to further validate and refine sterilization protocol we use for our product. Overcoming this hurdle is a significant milestone and visibility process allowing us to move forward with more specific pain and deployment studies and prototype bills. We remain convinced that a combined device will change the game in diabetes management as it allows the patient the benefits of CGM sensing and pump therapy in a simple, easy to use package where the patient only needs one handheld and it has to wear only one item on the body. Outside of diabetes, we remain active in identifying opportunities to use our OmniPod technology under non-influence space. In December, we were thrilled to announce the [indiscernible] our newest partner with the signing of the commercial agreement to use a slightly modified version of our device to deliver one of the approved pharmaceuticals. While unlikely to impact our 2014 numbers, we are excited about this opportunity for 2015 and beyond. Further we continue to expand our relationship with Ferring Pharmaceuticals as we support their efforts to bring the OmniPod delivered fertility drug Lutrol F [ph] to North America with filings in both the United States and Canada. To eliminate language barriers to Ferring partnership leverages an icon driven handheld along with the new OmniPod to create a system which has had great success in helping women overcome fertility challenges. But the Ferring partnership and the MGN [ph] announcement, we have seen increased activity in our drug delivery business and expect to move forward several additional large and small partners over the coming year in category such as obesity, pulmonary hypertension, oncology and Parkinsons to name a few. When we entered 2013, we set a goal to become operating profitable by the end of the year. I’m pleased to report that we’ve achieved that goal as we afforded an operating profit for the fourth quarter. We’re very proud of this milestone. We believe that one of our top priorities as the management team is to run this business to maximize shareholder value and to us that means generating strong top line growth while also striving for profitability. And looking at our Q4 results as compared to last year, approximately $0.60 of each incremental dollar of revenue fell to the bottom line. This proves that the investments we have made are paying off and positions us well to be operating profitable for all of 2014. Let me also take a moment to welcome Patrick Ryan as our new Chief Operating Officer. Pat has the strong background especially as an expert in global supply chain management and is the perfect person to take over our manufacturing operation on R&D efforts. Pat started a few weeks back and is spending this week with Charlie Liamos to gain knowledge on the OmniPod manufacturing process at Flextronics in China. I also want to thank Charlie for all of his efforts over the past three years in a row as COO. Charlie was kind enough to step in full time to manage the manufacturing transition to new OmniPod and was instrumental in getting us to the solid ground that we are today. Charlie will stay on full time to the next couple of months to ensure a smooth transition and then move into a part time capacity while remaining on the Board. In summary, I think it’s obvious why we’re so excited about the success of 2013 and the opportunity we see for 2014. We navigated a new product launch, a major scale up in manufacturing and a customer base transition while continuing to also move forward on projects and initiatives that will carry us into the future of diabetes management and drug delivery. The success that we feel now was challenging at times, but our Insulet team pulled together and achieved major accomplishments throughout the year. As we look forward to 2014, we believe we have a significant opportunity to drive strong profitable growth. We are making the investments necessary to drive the business even to higher levels as OmniPod revenues should accelerate the levels of 30% or greater year-over-year. We are self-funding these investments as gross margins continue to expand and we continue to gain operating leverage from our R&D and G&A teams. Further we have filed for five 10 clearance of our PDM integrated LifeScan and expect to make significant progress with both our Eli Lily and MGN [ph] partnerships in 2014. With that, I’ll turn the call over to Brian.

Thanks, Duane. Consolidated revenue increased by 19% year-over-year and by more than 12% sequentially to $68.5 million in the fourth quarter of 2013. As a reminder, our fourth quarter results included a reduction of approximately $4 million in neighborhood diabetes revenue related to the impact of Medicare competitive bidding which took effect on July 1. Adjusting for the impact of competitive bidding, year-over-year revenue growth in the quarter would have been more than 25%. We had another strong quarter of OmniPod revenue growth with improved by approximately 30% over Q4 2012. And the completion of the customer upgrade process to the new OmniPod in the quarter, we saw our reorder utilization normalized back at historical levels. Consolidated revenue for the year ended December 31, 2013 was $247.1 million compared to $211.4 million for the year end in December 31, 2012, an increase of approximately 17% year-over-year. Gross profit increased by 30% in the third quarter to $33 million as compared to gross profit of $25.3 million in the fourth quarter of last year. With the transition of the customer base is complete, we are starting to realize the gross margin benefit of the new OmniPod. Gross margins improved to over 48% in Q4, an increase of over 300 basis points as compared to the third quarter of 2013 and over 400 basis points as compared to the fourth quarter of 2012. We expect the gross margins will continue to expand throughout 2014 as it continue to gain efficiencies in the manufacturing process. Gross margins on our U.S. OmniPod business are business are expected to be in the low to mid 60s by the second quarter translating to a consolidated gross margin in the low 50s reflecting the impact of the neighborhood business as well as our accelerating international business both of which have lowered gross margin profiles. Gross profit for the full year of 2013 was $112.4 million, an increase of $20.1 million or 22% as compared to $92.3 million for the full year of 2012. Operating expenses increased by $1.4 million or 4% year-over-year to $32.8 million in the fourth quarter of 2013 from $31.4 million in the fourth quarter of 2012. This increase is primarily a result of increased customer service cost required to serve our over 60,000 customers. Sequentially, operating expenses decreased by nearly $12 million as certain non-recurring charges primarily related to our patent litigation settlement with Medtronic and new product launch cost did not repeat. As a reminder, we paid the settlement cost from a Medtronic litigation in early October. Operating expenses were $141.5 million for the full year of 2013 and $128.3 million for the full year of 2012. Excluding the one-time charges in the third quarter operating expenses increased by less than 1% year-over-year. As we look towards 2014, we expect full year operating expenses of approximately $33 million to $34 million in the first quarter increasing to approximately $36 million to $38 million per quarter over the remainder of the year. The increase reflects the investments expected in our sales and marketing functions, cost of living increases in our R&D and G&A and an expected uptick in stock compensation expense. We are extremely pleased to have achieved operating profitability to find that earnings before interest and taxes in the fourth quarter as it reported an operating profit of $0.2 million. This represents a $6.3 million improvement over an operating loss of $6.1 million in the fourth quarter of 2012. As Duane noted, approximately $0.60 cents of each incremental dollar of revenue in Q4 of 2013 sold to the bottom line. Operating loss for the full year of 2013 was $29.1 million compared to $36 million for the full year of 2012. We expect to be operating profitable for the full year of 2014. Interest and other expense was $2.9 million in the fourth quarter of 2013 and $4 million in the fourth quarter of 2013. Approximately $1.3 million of this expense was non-cash. Net interest in other expense is approximately $15.7 million for both years. Our net loss decreased by more than 75% for the fourth quarter of 2013 to $2.5 million or $0.4 per share as compared to a net loss of $10.2 million or $0.21 per share for the fourth quarter of last year. Net loss for the year ended December 31, 2013 was $45 million or $0.83 per share compared to $51.9 million or a $1.8 per share for the year ended December 31, 2012. Our cash and cash equivalence balance is $149.7 million at December 31 compared to $57.3 million last year. We’ve sold approximately $4.7 million in January of 2013 generating net proceeds to us of approximately $92.8 million. Excluding these proceeds, our net spend was less than $0.5 million during the year. Excluding the one-time litigation and settlement cost incurred in the third quarter, we generated approximately $10 million in cash in 2013. We would expect to generate cash and be cash flow positive each quarter of 2014. As of December 31, we’ve approximately $64.9 million common shares outstanding. As Duane noted, we’re very excited as 2014 begins to take shape. The new OmniPod continues to generate the buzz we need to reach another year of 30% of buzz growth on the core OmniPod business. On a consolidated basis, we’re estimating that revenue will be in the range of $295 million to $315 million. As typical in the first quarter due to the resetting of insurance deductibles and the skipping of a reorder cycle for those patients who deferred training into this year, we anticipate that first quarter revenues will be sequentially flat with the fourth quarter of 2013. As such, we expect first quarter revenue to be in the range of $67 million to $71 million. As always, our highest degree of confidence is to the midpoint of these guidance ranges. With that let me turn the call back over to Duane.

Thanks, Brian. 2013 was a tremendous year in Insulet history. We navigated through all aspects of the new OmniPod launch and we’re now full speed ahead towards an exciting 2014. The question that each potential pump user first decides is tubes or tubeless? The answer is simple. More and more people are choosing to be tubeless as compare to wearing a conventional insulin pump without the 40 inches of cumbersome tubing. The smaller, lighter OmniPod is the only tube we choose for those customer segments such as active men and women and children who wants something discreet and unobtrusive in their lifestyle. No cutting holes and pants pockets, no taking your pump off when showering in the morning, no worrying about your blood sugars when you disconnect from your pump. And all of these everyday situations that the OmniPod continues to provide these users with the insulin they need to maintain and control over their diabetes. We’re excited to see what the next year will bring and we look forward to providing you with future upgrades. And with that, operator, please open the call for questions.

(Operator Instructions) Your first question comes from the line of Bill Plovanic from Canaccord. Your line is open. Bill Plovanic – Canaccord Genuity, Inc.: Hi, great. Thanks. Good evening. Can you hear me okay?

Yes. How are you? Bill Plovanic – Canaccord Genuity, Inc.: Thanks for a lot of detail in the commentary. You’ve turned operating profit. You give the guidance we need to force through the model, but gave us the spending as you go forward. But is this going – the increases is that mostly in sales and marketing or R&D? Can you characterize where you expect that spending?

Absolutely. I think we’ve said it previously, I mean we’re looking to cut the living type of increases, so I characterized those as around your 4% or so in the categories of R&D and G&A, maybe a little bit higher than planned originally around stock compensation expense, obviously non-cash in nature but that spreads across all the groups. And then the rest of the investment would all be within the sales and marketing functions. It’s safe to say, if you look at our total overall sales and marketing spend in 2013, then we expect to add somewhere in the neighborhood or probably 12%, 13% to that total, give or take in investment here in 2014. We’re starting that hiring process now and therefore it should kick in and ramp up fully in the back three quarters of the year. Bill Plovanic – Canaccord Genuity, Inc.: Okay, thank you. And the gross margins, I think you gave us some pretty good clarity on that as well. I think just to make sure I have it right though, you’re talking about for all the second quarter or sometime in the second quarter, we’ll see overall gross margins for the business get to the mid 50% range.

Look, and again, I think it will be for all of the second quarter. I’d only characterize that for the consolidated number, it will probably be in that low to mid 60s range and that really comes down to a question of what’s the level of international contribution into the overall mix. So you have received the international business as we’ve talked about doubling in 2013 and with an expectation that it’s going to double again in 2014. Certainly that’s outpacing the U.S. a little bit, so that will pressure the gross margin a little bit. But, again, that’s a profitable business so that’s a good problem for us to have. Bill Plovanic – Canaccord Genuity, Inc.: Okay. And the last question is you did give us some clarity also around the NDI business. I think you’re basically saying that that business was down probably, if it was a standalone probably about $4 million year-over-year, is that fair to say?

Yes. I think the year-over-year basis is probably between $4 million and $5 million year-over-year from where we were. It’s been a consistent run rate effectively with where we were in the third quarter of 2013 and it’s safe to say that most of our investment is pushing towards the OmniPod side, so we’re expecting that business to remain relatively at that run rate throughout 2014. Bill Plovanic – Canaccord Genuity, Inc.: Great. Thanks for taking my questions. Congratulations on the profit.

Thank you too.

Your next question comes from the line of Ben Andrew with William Blair & Company. Your line is open. Ben Andrew – William Blair & Company: Hi. Good afternoon, guys. A couple of questions for me, I guess. Can you give us a sense of what the average revenues were in the quarter once you have (inaudible) for guidance in ‘14 or how that make shift over to J&J eventually when you get that approval?

Yes. Average revenues at this point are pretty immaterial, so given that the initial contract has expired in March of 2013 are really – it went into non-exclusive at that point, effectively it’s pretty small. Certainly, the expectation depending on the life spend PDM is approved is that it would give us an opportunity to think about moving our customers over to that new PDM later in the year. And we’ll kind of see what I did. We did not bake into the model. A real expectation for much revenue there just given – not wanting to bank on a five 10-K clearance. Ben Andrew – William Blair & Company: And then thinking more broadly about the guidance for ‘14, as you look at kind of the opportunity with the OmniPod and the additional sales, the people that you’re bringing on board, obviously you’ve given us some sense of Q1 in the full year. Are these more seasoned people that you’re adding and we can expect productivity quickly from these guys or are you being super conservative relative to how rapidly you expect these new reps to ramp?

Ben, this is Duane. I think the mix of that group is a little bit different than traditionally. What we’re not talking about doing is taking 20 people and creating 10 new territories, sales (inaudible). I think we got a couple of key account people that we’re going to hire, so a couple of these bigger institutions, we’re getting a lot of business out of it and there’s a lot more to be (inaudible). But it really is – it’s a little bit different sale. Now, you’re not selling the doctors, you’re going to sell the institutions. We have a little of that. Some of the other territories that we’ve become very successful in with the success and the doctor prescribing more, their expectation is we spend more time in the office with them. So as a result what we’re doing is we’re taking kind of a hunter sales person, we’re bringing in someone that will be a little more junior but more of a farmer that’s going to spend plenty of time in these offices assisting with what the offices require and then we’re going to free the hunter up. So it’s kind of a mix batch. I think what we are excited about is what we’re doing is and what we continue to find is as we strengthen these relationships, more business comes So what you see in this model and what we’re trying to figure out how to leverage the relationship we have and then how to continue to expand beyond that. So like I said, it is a – in the 20 people, it’s a mix bag of the type of people that we’re hiring. Ben Andrew – William Blair & Company: Okay. And then what are the moving pieces around the international contribution? You talked about it doubling yet again obviously if some [indiscernible] and some great experiences. What can you do to accelerate that or what could cause that to come in and we could expect in the period?

I think we’re pretty comfortable with what they are doing. I think we were surprised that it came in weaker. I think the thing we’re trying to do that would accelerate it is, what we described to you is business really predominant and coming from three to four major countries there. We are still not shipping in France so we spent a lot of time working with them on the French market. We’re looking at the Italian market with them. So I think what we haven’t dialed in for the model because we don’t have the answer yet, but we think a couple of things that could continue to accelerate that is if we could break through reimbursement in France and get the Italian market going and we filed in China a while ago and we continue to move methodically through that process. So I think we’ve got a lot of interesting upside. The downside obviously is what it is anywhere. It’s quality, it’s performance, it’s having the product, sales people, only that’s always – it’s execution I think in those countries. But we do think there’s potential upside. We just – I couldn’t even being to gauge the time on a couple of these countries because there’s no clear path. You got to go through the process and you got to keep pounding on the door until you get any answer. Ben Andrew – William Blair & Company: Okay. And last one for us, I guess, can you talk a little bit about how patient retention is going, number one. And number two, how the kind of quality and manufacturing [indiscernible] failure is trending? Is that still consistent with what you’ve seen? Had there been any change there? Thanks.

Yes, terrific. I think in terms of retention, I think our retention rate is probably around 8%. And hopefully we think if we could continue we’ll get below that. I think in terms of the quality of the product, I think it continues to improve out in the field. A part of that was education. It’s a new product. So in that regard, we’re seeing improvement in all the numbers that we track.

Your next question comes from the line of Kim Gailun from JPMorgan. Please go ahead. Kim Gailun – JPMorgan: Hi, good evening. Thanks for taking the question. So I guess on just a question on the manufacturing front and as it pertains to, I guess both the core OmniPod opportunity but more so to some of these partnerships which I think are going to come in with much greater focus over the next kind of 12 and 24 months. How are you thinking about planning for your manufacturing expansions relative to these partnership agreements? And are you thinking about potentially diversifying the allocation of your manufacturing as you expand?

Sure, great question. So I think when you look at it, we got our fourth line going up. It will be in the back half of this year. I think what that would give us the opportunity is the first line which is probably the most manual line that we have there. That is probably the line that we start looking to some of these – the other drug opportunities, that’s probably where we’ve focused because it’s the easiest to convert back and forth. None of these other drug opportunities are so big. I mean we may have talked about converting that line for a couple of days for a weak quarter as opposed to where we are. I think the other thing that we are doing and part of Pat’s marching orders here in conjunction with the groundwork Charlie’s already laid is where should line five and six go? And should we be looking at it? The good news is by working with Flextronics, they have places in Mexico. They have places in Malaysia, all around the globe. But there is no question I think lines five and six. What we didn’t want to do is with line four, we’re gaining this momentum on the margin and we want to continue to drive that. Obviously if you have a whole another facility, you take a short step back with that, but we’d like to have the volumes at a certain level that the math would make that a very temporary kick off. So that’s kind of how we’re looking at it. Kim Gailun – JPMorgan: Okay, great. And just on a follow up on Ypsomed relationship. So you disclosed that you had extended that relationship out another year. And how are you thinking about the level of sales as it goes with that relationship kind of through 2017?

So if you look at the way the program is with Ypsomed, there are certain minimums that they require to meet and that hasn’t been a problem for them. And then there’s significant levels above those minimums that they do. If they do achieve that, they get an extra year. So the extension we have with Ypsomed, is not like we said, "This is going great. We’ll give you another year." They earned it. So that is built right into the contract here. And they have the ability, if this year goes really well, they can get one more year I believe is what’s in the contract. So technically that agreement could go out to 2018. And then after that, it would be everybody sitting in a room negotiating how you want to go forward with it.

And I think from a sales perspective, and again, I think we’ve been very happy with, especially how well they have done since the launch of the OmniPod. I mean we’ve talked about it in the previous quarters. We were frankly a little on the manufacturing constrained side throughout the last probably a year and a half, two years both with the old Pod and then transitioning to the new Pod. And with the production level hitting 2.5 million pods in the fourth quarter and realistically doing that number or even a little bit better here in the first quarter of 2014, that constraints really come off the business. And I think we’re seeing them flourish. So they’re adding patients at a very rapid rate and they double their business in 2013 as we’ve talked about I think the expectation is to double again here in ‘14. And then we’ll look at those future years out. But I’d expect that their growth rate will continue to exceed what we’re doing domestically for some kind of to come especially if some of these other markets that Duane mentioned can come on line be it this year or in the following years. Kim Gailun – JPMorgan: Okay great. Thank you.

Your next question comes from the line of Danielle Antalffy with Leerink Partners. Your line is open. Danielle Antalffy– Leerink Swan Partners: Good afternoon, guys. Thanks so much for taking the question. Brian, just thinking about the U.S. how a great quarter you beat expectation. So how do we think about what could happen as far as if you continue to beat expectations from the top line, will you reinvest or will you let that drop to the bottom line potentially achieving profitability sooner. How do we think about that?

Well I’d just frame it a little bit differently which is again the guidance that we gave today really we’re most confident with that midpoint of our range. And I think one of the things that we pride ourselves on is that we have high level of visibility into the business. And just to characterize it for folks, if you go back in the year and you look at the original guidance that we gave for 2013, we gave a range of 240 to 255 which would put the midpoint of that number right around 247 to 248 and that’s exactly where we came out for the calendar year. So I think certainly with that reorder base, it gives us a big leg up and visibility. So I think that’s the way we’ve structured the guidance for ‘14 and we’re very comfortable with that. On the whole – obviously we still have debt on our balance sheet and some other things and so as we continue to progress forward and we can see how quickly the businesses are accelerating and growing and it certainly gives us an opportunity to make these investments here in ‘14 and effectively sell [indiscernible] and then determine do we want to accelerate some of that rate of investment as well as you wear [ph] that cash balance still. So we continue just kind of an open question for us. And we’ll see where we head as the year progresses. Danielle Antalffy– Leerink Swan Partners: Okay, great. And I just wanted an update on the competitive front. So obviously Medtronic has been rolling out their 532 of the low glucose [ph] so I’m wondering if you’re seeing anything from that. And also Cellnovo got approval for something similar to a patch comp in Europe, so I’m wondering what your thoughts are there.

Danielle, this is Duane. Look I think I’ll go back to the same thing, I think the interesting thing for us is where we compete with all these companies is for mind share, the doctor’s office. Where we don’t compete for is the patients, I mean when the patient walks into the office, if a doctor presents all the options, the first thing that we have in the prepared remarks, which is the business, do you want tubing or do you not want to do tubing. If you don’t want tubing, we’re in great shape. If you want CGM accompanies with no tubing, then we’d recommend that you go to [indiscernible] and that combination we would argue is probably the best pump and the best answer at the moment on the planet. So we feel really good about that. And I think that’s – the key for us is to just to make sure that at the doctor’s office we’re getting that opportunity, I think with the Cellnovo and all these other companies and only time will tell. We’ll see where they all go. We feel pretty good. We really feel pretty good about our foreign factory. We feel really good about what we have in the pipeline and we feel really good about the opportunity. And I think in 2013 kind of hammered that home. I mean we – like I said, we really kind of put some structure into the sales force, Pete [ph] did a great job, the sales force, they focus. We got through on newbie transitions, 60,000 people in six months. So, we feel good about this opportunity and also the competition, the competition will be always be out there but I think we have the right solution for the patients and like I said I’d been saying enough or I don’t know, we – the first product we shipped was in ‘05, so I’ve been on – sold products for a while. I would admit that all takes longer than you ever think it does but I do think we have the right answer for what people really want. Danielle Antalffy – Leerink Swan: Okay, thank you so much.

Your next question comes from the line of Tom Gunderson with Piper Jaffray, your line is open. Tom Gunderson – Piper Jaffray: Good evening, so maybe a little bit of a similar question but – to Danielle’s on market dynamic and competition but, Q4 was – there were a lot of things going on, on the tube side, the Animus reorg is settling in, Tandem went public and Medtronic stated somewhat surprisingly that they gained 400 – or they measured that they gained 400 basis points or market share – pump share on a sequential basis and Duane, I’m just wondering, in two parts to this question, number one is are you sensing on anything out there that would have shifted the dynamic on pumps overall to go back to tubes, I don’t think you are but I just want to hear you reaction to the Medtronic’s statement. And number two, is there any shift in what’s going on from the current tubed pump patients does insurance comes up. I know most of your sales come from the new guys but I’m just wondering if you could add anything from the existing pump users.

Sure, great questions. So I think from our standpoint and far be it for me to comment on what Medtronic is saying but I think Medtronic is doing – they have pent up demand in their installed base and I’m sure they’re probably turning that base. They are what they are, they are a tube pump with the five – their 530G. I would argue and I got to be very careful but I mean, it’s meant to know in head to head with the 630G, we see – in his version and they double it – and Ypsomed is doubling the business. I’m not – look, do I worry about it? Yes, of course worry about a multi-billion company, I mean, I’d be stupid not to. I don’t think they have the right – I just don’t think that form – factor a long term as to readiness or I think if you fast forward five years from now it’s going to be all in one and like I said, I think we have the right platform. So granted that I am probably the most biased person on the planet in that regard but I will tell you that Ypsomed’s seen all their new products and they are doing just fine, thank you very much, as we pointed out they doubled their business, going head to head with that. So I feel comfortable that they can do, we certainly can do it. I think in terms of people switching back to tube, I mean, we just don’t – I mean, we don’t say it. Look, I think this is an interesting dynamic, Animus kind of did their whole restructure I think, there was an opportunity out there; Medtronic was kind of on hold for some period of time while they were waiting for the 530G to get approved. So I think there’s been a lot of stuff going on. I think our focus still remains on the patients that’s on MVI injections and have we picked up? Yes I think we picked up roughly a year ago, probably 75% of our customers never been on pump before, now we’re about 7%. So we’re picking now some share, I think, Tom, the thing you have to understand is how that decision is made though, right? If it’s patient-driven, we will get the patient, if their warranty expires on a traditional pump and it’s working for him, the doctor typically will not recommend that they change anything because this work, but the doctors really care so bad as the outcome and where people – they want – these are – and how well they’re doing. So, if they have a formed factor that worked, the doctors will know, are we to switch them. Having said that, we picked up some switchers and like I said, the mix has changed a little bit although it is still predominantly – and our focus is how do we accelerate people going off shots to a better therapy which is CSIF, and that really is what we are focused in driving the business.

And Tom, this is Brian, I just want to add thing to what Duane said which I think is a pretty important metric that people should take away from this call which is – as Duane pointed out earlier, really it is a lot of time, it’s about the mindshare of the doctor and what’s crystal clear is that the new OmniPod is taking a lot of that mindshare of practices. Again, almost a third of our doctors prescribing the new OmniPod in 2013 were brand new doctors for us. And of those doctors, two-thirds are the ones that had written their first prescriptions in Q2 and Q3, wrote again in Q4 and as hard as it gets there is a third that didn’t; a lot of them were people that probably started in the later part of the third quarter. So, you have – the sales team, seems to be doing a very, very good job of getting these doctors to take a look at the product, prescribe the product, watch the patient for a period of time or patients for a period of time and then they’re getting more which tells me that the new OmniPod is really resonating in the marketplace and we’re seeing it as we move forward here in the first quarter with levels of referrals and shipments that provide us the comfort to be able to say although we had a new – a very strong year last year of new patient adds, that we’re going to see that number grow by at least 25% more here in 2014. So regardless, it’s a big market, I’m sure that there’s some share for everybody out there but on the whole, I think we’re doing pretty well. Tom Gunderson – Piper Jaffray: Thanks, mine was a part question, so I’m just going to leave it at that and thank you for the detail on that answer.

Thanks Tom.

Your next question comes from the line of Mimi Pham from ABR Healthco, please go ahead. Mimi Pham – ABR Healthco: Hi, good afternoon. Just regarding your guidance for new adds growing over 25% this year, just to make sure the math is ballpark, are you implying that new adds will grow from about 20,000 last year to north of 25,000 this year?

Mimi, I’m just going to leave the metric guys to – I’ll let you guys do the actual amounts for everybody’s models but we’ve mentioned that we’re over 60,000 customers now and the expectation is 25%, that patient add – or 25% patient adds in 2014. Mimi Pham – ABR Healthco: And what percentage of the 60,000 is in the U.S.?

We’re not going to break it up specifically but again, we’re over 60,000 patients now. Mimi Pham – ABR Healthco: Okay, and then in terms of the all in one pod in CGM, did you say, you still expect to complete animal studies this year and when do you think you’ll provide the street with a lot more concrete details about the design and partner?

I think that next big step for us that we alluded to in the prepared remarks is we are now focused on the mechanical aspects of this particular device and how you deliver the insulin and the sensor into the body, so I think once we get through some of that, we have a bunch of IPs that we’re filing also, so, we want to get all that in place before we kind of talked too much in detail about where we’re going and what we’re doing. So hopefully in the back half of this year, we’ll have done enough work and filed enough paper here on the IP front that we feel comfortable highlighting them a little further. Mimi Pham – ABR Healthco: And then last, just regarding the type two products of Lilly, given the Laritof’s [ph] expanding footprint last year, are you hearing just more from your prescriber base requesting that you modify the second genomic [ph] products or type two products?

Haven’t heard a lot about that, what we really are focused on is we think to be successful in that space, you’re really going to have to drive outcomes. So the great part about working with a company like Lilly, there’s clinical work, there’s a lot of stuff going on and I think – so, I think that the doctors will embrace this. I think a lot of doctors are using u500 now out of the marketplace in all kind of various forms. There’s been clinical work done, there’s been two or three clinical studies now done using the u500 product, this is all being done off label and we kind of find out about that when we read the clinical results that are being published. But – so, I think it’s the right answer for a subset of the type two market. Mimi Pham – ABR Healthco: Okay, thank you very much.

Your next question comes from the line of Jayson Bedford with Raymond James, please go ahead. Jayson Bedford – Raymond James: Hi, good afternoon guys. A few housekeeping questions here to start, you mentioned new patient adds growing 40%, I wasn’t sure if that was for the full year or for the fourth quarter as well.

Both. Again, since the launch which was effectively very beginning of March – end of February, very beginning of March. Jayson Bedford – Raymond James: Okay. And then I think, if I recall, you exited the third quarter with 4 million in – kind of an unfulfilled inventory, did you exhaust this level in the fourth quarter and kind of what does it look like, I guess as you enter to the first quarter?

We still have some backlogs that we’re working with Herman as we have talked about, we – because of the Chinese New Year, we made the decision at the end of December to hold on to some inventory versus kind of shipping every last pod we had. We left the calendar year with approximately 200,000 to 250,000 pods available to us to really kind of position us through the Chinese New Year, which thankfully, went very smoothly for us. So effectively, the rest of that backlog is – should be eliminated here in the first quarter or by the very beginning of the second quarter. Jayson Bedford – Raymond James: Okay. And then last one for me, you kind of wrote [ph] that the user of the new PDM, not to change anyone but when do you plan on filing in ‘15, can you maybe talk about some of the features and potential benefits of the device?

Yes, I’ll tell you what, we think we have an interesting way of going about it which is a little different than the stuff that’s out there. So we are also filing a bunch of IP on that, so if Tony were here, even maybe he’ll gag me, so I’ll keep them from tackling when we hear and where does this whole go, I’ll find that when we get all the stuff filed. Jayson Bedford – Raymond James: Okay. I’ll get back on queue, thanks.

Thank you.

Next, we have a question from the line of Jan Wald with Benchmark Company, your line is open. Erica Layon – Benchmark Company: Hello, this is Erica Layon in for Jan. I just have a few questions here. One of them, with all these partnerships that are filling up their pipelines so nicely, is this something we are looking to maybe in for – of rate in R&D because some of these cost are going to be borne by your partners?

Yes, what’s key to all of these different partnerships that we’re looking at is we’re certainly trying to leverage the new pods for all of them. So the big tenet calling card, if you will, that works well for us and works well for these partners is that you’re able to take – to leverage this manufacturing where we’re producing effectively a million OmniPods per month today and that number could be a 1.5 million by the end of the calendar year. So, unlike the others who are kind of thinking about these stage or so or kind of a prototype stage, the big competitive advantage we have is that we’ve made over 25 million of these things today. There’s a tremendous amount of learning that comes with the manufacturing of every one of those. So we don’t expect a tremendous amount of R&D as we go through some of these different partnerships, the Engine [ph] one for example, kind of going forward and other things but as that happens, that is certainly depending on the opportunity we’re looking for our partners to potentially take on that for you. Erica Layon – Benchmark Company: Okay, that makes a lot of sense. And with that they’d also take on mark freight [ph] if – say they have a PDM versus this one by the engine [ph] that done their own PDM, that’s going to be distributed to your partners as well?

Yes, that’s right. So, for example, the Ferring pharmaceutical partnership we have, that one there has an icon-driven PDM, so in making changes to the PMD from a software side, I don’t want to minimize it, it’s all work and it all takes time but those are certainly easier changes to make than to do something with the OmniPod. Erica Layon – Benchmark Company: Okay, thank you. And just a couple of housekeeping questions here, you’re stating the full year operating profitable, you’re not talking about each quarter being operating profitable.

I think we’ll be operating profitable each quarter. Typically the first quarter is always the most challenging as we mention that revenues are kind of sequentially flattish and a little up, and you start to get some incremental expenses in the quarter, payroll taxes, restart all those things so Q1 will be the one that will be closest but beyond that I feel very good. Erica Layon – Benchmark Company: Okay, perfect, and then the last question, I heard the R&D growth, you are looking for about 4% – four percentage growth is that based on quarter-over-quarter, it’s not just [indiscernible] more as an average over the full year.

Yes, I think an average is fine to me, I you kind of think of it in the six to 6.5 – 6 million-ish kind of range, 6 million to 6.5 million range, that’s where it is. Erica Layon – Benchmark Company: Perfect, thank you so much.

Your next question comes from the line of Bill Plovanic from Canaccord, please go ahead. Bill Plovanic – Canaccord Genuity, Inc.: Great, thanks; actually a clarification question. Just – Brian is a – you did comment on this, just in regards to filling the disposables that are out there and some of the backlog but if I work it kind of – try to do math and utilization metrics, would you say that Q4 was normal or would those metrics still be a little low because you still have some back sale and when would you expect kind of utilization metrics to be normalized.

I think our utilization normalize during the fourth quarter, I mean, we pretty much finished the transition of the customer base by around Veteran’s Day so certainly the second half of the quarter was much more like what we’ve typically seen as compared to the first half. Q1 is normal from what we’ve always historically seen, it’s just that you have a group of people who took products in the fourth quarter, started on the OmniPod in the fourth quarter and then defer their trainings to February, as we’ve talked about in the past, people don’t want to necessarily learn a new way to manage their diabetes over the holidays, those people skipped their reorder in Q1 and their first re-order doesn’t really happen until Q2 and then there’s some people just go – their managing their cash flow with deductibles and such may try to skip it in Q1 and take it early in Q2. So there’s always a little bit of that construction in Q1 but beyond those normal patterns, I think we’re back to where we historically have been. Bill Plovanic – Canaccord Genuity, Inc.: And then you haven’t provided this but any help or direction in kind of year-over-year growth in disposable revenues in Q4 or full year?

It’s not really kind of how we look at the business or track it so, kind of going where we are but obviously the fact that we’re producing nearly a million OmniPods per month, that great majority of the business is driven by disposables. Bill Plovanic – Canaccord Genuity, Inc.: Okay, and then as you look at your strep [ph] plans just what – how much free cash flow do you think you’ll generate in 2014 because I would assume most of the CapEx is behind you, you’re turning operating profits, as I look at all this, just what type of cash flow from operations and then how much free cash flow would you expect to generate?

I mean, typically, EBITDA has been a decent proxy for cash flow for us. We will still continue to be investing in some CapEx throughout ‘14, two major things, one is obviously we’re putting in a fourth line in China this year, in the back half of the third quarter, so that’s one. The second is, we are relocating our corporate headquarters at the Rodemier or two [ph] as our lease is expiring here and we need a bigger facility. So, there will be a little bit of capital that will be extended and just making sure we can facilitate that move as smoothly as possible. Bill Plovanic – Canaccord Genuity, Inc.: And how much does a new line cost you these days and same question on relocating the headquarters and in ballpark.

Headquarters, few million, 6 million to 7 million on the new line. Bill Plovanic – Canaccord Genuity, Inc.: Great. Thank you very much.

Yes.

There are no further questions at this time, I turn the call back to the presenters.

Thanks again everyone for joining us and we look forward to updating you throughout 2014. Have a good night.

This concludes today’s conference call, you may now disconnect.