Sean McMillan - Stericycle, Inc. Charles A. Alutto - Stericycle, Inc. Daniel V. Ginnetti - Stericycle, Inc. Brent Arnold - Stericycle, Inc.

Ryan S. Daniels - William Blair & Co. LLC Sean Dodge - Jefferies LLC Kevin Mark Steinke - Barrington Research Associates, Inc. Hamzah Mazari - Macquarie Capital (USA), Inc. Barbara Noverini - Morningstar, Inc. (Research) Michael E. Hoffman - Stifel, Nicolaus & Co., Inc. Jason A. Rodgers - Great Lakes Review Al Kaschalk - Wedbush Securities, Inc. Joel Harrison Kaufman - Goldman Sachs & Co. Lawrence Keusch - Raymond James & Associates, Inc.

Good afternoon. My name is Devon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Stericycle Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Sean McMillan, Vice President of Corporate Finance, you may begin your conference. Sean McMillan - Stericycle, Inc.: Welcome to Stericycle's Fourth Quarter 2016 Conference Call. I will now read the Safe Harbor statement. This conference call may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control, for example, general economic and market conditions. Our actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include changes in or level of enforcement of governmental regulation of the collection, transportation, treatment, and disposal of regulated waste or the proper handling and protection of personal and confidential information; compliance with existing and future legal and regulatory requirements; increases in transportation and other operating costs; our obligation to service our substantial indebtedness and to comply with the covenants and restrictions contained in our private placement notes, term loan credit facility, and revolving credit facility; our ability to execute our acquisition strategy and to integrate acquired businesses; competition and demand for services in the regulated waste and secure information destruction industries; political, economic, and currency risks related to our foreign operations; impairments of goodwill or other indefinite-lived intangibles; variability in the demand for services we provide on a project or non-recurring basis; exposure to environmental liabilities; fluctuations in the price we receive for the sale of paper; disruptions in or attacks on our information technology systems; as well as other factors described in our filings with the U.S. Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K. As a result, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate future results or trends. We make no commitments to disclose any subsequent revisions to forward-looking statements. I will now turn it over to Charlie Alutto, CEO. Charles A. Alutto - Stericycle, Inc.: Thank you, Sean. Hello, everybody. Thank you for joining us on today's call. Overall, we were very pleased with our fourth quarter operational performance. Additionally, our recall team delivered a record breaking quarter, which enhanced our results. We continue to make great strides in the integration of the Secure Information Destruction business and related acquisitions. Finally, we completed our initial evaluation of certain assets for potential divestiture. We have sold one hazardous waste asset in the UK and we have designated our patient transport business and an additional hazardous waste business in the UK as assets held for sale. Joining me on today's call will be Dan Ginnetti, CFO; and Brent Arnold, COO. I'll now turn it over to Dan. Daniel V. Ginnetti - Stericycle, Inc.: Thank you, Charlie. Before I give the numbers, I would like to highlight a change to our reportable and operating segments. In our Q4 press release and going forward, our financial results for Canada will be included along with our domestic business. Our new reportable segments are; Domestic and Canada, Regulated Waste and Compliance Services and International Regulated Waste and Compliance Services. Our new operating segments are Domestic and Canada Regulated Waste and Compliance Services, Domestic, Communication and Related Services and International Regulated Waste and Compliance Services. These changes will not impact the four service lines reported on the revenue table in the press release. And going forward, we will continue to provide that revenue table. As you're aware, on January 26, we issued an 8-K, that included adjustments to both GAAP and non-GAAP earnings. When providing the Q4 2016 numbers, I will provide results both including and excluding the items from the 8-K that affected revenues and expenses. The results for the fourth quarter are as follows. Global revenues were $906.4 million, up 2% from $888.3 million in Q4 2015. And internal growth, excluding the impact of foreign exchange, acquisitions, divestitures and manufacturing industrial services was up 5.2%. Domestic and Canada revenues were $725.3 million, and excluding the impact of acquisitions and foreign exchange, internal growth was 4.4%. For consistency of your 2016 models, we're providing the following information. Please note that for 2017 results, we will no longer provide this breakout. Domestic only revenues were $686.6 million, of which $633.6 million was Regulated Waste and Compliance Services revenue, and $53 million was recall. Domestic internal growth, excluding recall revenues and adjusted for 8-K items was SQ, up 1% and LQ, up 1%. As anticipated, growth rates were impacted by SG pricing pressure, and lower hazardous waste volume from our industrial customers. International revenues, including Canada, were $219.8 million or 6% internal growth when adjusted for foreign exchange impact, acquisitions, divestitures and 8-K items. And as anticipated, international growth rates were impacted by exiting of certain patient transportation contracts. Acquisitions contributed $5 million to growth in the quarter and divestitures unfavorably impacted revenues by $0.2 million. Gross profit was $380.2 million, or 42% of revenues. When adjusted for 8-K items, gross profit was $388.8 million, or 42.6%. SG&A excluding amortization was $211.5 million, or 23.3% of revenues, and when adjusted for the 8-K items, SG&A was $188.5 million, or 20.7% of revenue. Adjusted income from operations or EBITDA was $168.7 million, or 18.6% of revenues and when adjusted for the 8-K items, EBITDA was $200.3 million, or 22%. Net interest expense was $24.6 million. The as reported tax rate for the quarter was 56.1%. When adjusted for the 8-K and other adjusting items, the tax rate was 37%. Net income attributable to Stericycle was $12.3 million or $0.14 per share on an as reported basis and $1 when adjusted for acquisitions-related expenses and other adjustments. When taking into account the impact of the 8-K of $0.23, the adjusted EPS would have been $1.23 for the quarter. Now for the balance sheet. Our covenant debt to EBITDA ratio was 3.42 at the end of the quarter. The unused portion of the revolver at the end of the quarter was approximately $655 million. In the quarter, we repurchased 105,000 shares of mandatory preferred convertible on the open market in the amount of $6.6 million. At the end of the quarter, we have authorization to purchase 3.1 million shares. Our CapEx was $35.2 million or 3.9% of revenues. Our DSO was 64 days. Year-to-date, as reported cash from operations was $547.4 million and when adjusted for recall reimbursement and other items, cash from operations was $612.4 million. I will now turn it over to Brent. Brent Arnold - Stericycle, Inc.: Thanks, Dan. This quarter we closed nine tuck-in acquisitions. The nine acquisitions were five domestic and four international with total revenues in the quarter of approximately $1.1 million and annualized of approximately $12.4 million. Our worldwide acquisition pool remains robust with well over $100 million annualized revenues in multiple geographies and lines of business. This quarter we also divested a UK-based hazardous waste asset that unfavorably impacted revenues in the quarter by approximately $0.2 million, and has an annualized impact of $3 million. In the quarter, we saw strong performance from our recall team, progress on our Shred-it integration and continued implementation of our SQ strategic investments. Focusing on the recall team, the combination of our call center expertise, reverse logistics capabilities and the dedication of our team produced a record-breaking performance in the fourth quarter. While some of the success was driven by the team's ability to quickly scale up to handle multiple consumer electronic events, we also saw continued success in the automotive and medical verticals. This commitment to our customers demonstrates why we are the market leader and why global brands trust Stericycle for executing a product recall. Our Shred-it synergies remain on track with a number of key projects making significant strides over the past several months. This quarter, we completed the integration of our inside sales and customer service teams. By investing in call center automation and intelligent work distribution systems, inbound calls and service requests can now be handled consistently across all our U.S. branches. On the field operation side, the team has established standard best practices, and we plan to have these rolled out by the end of Q1. By leveraging standard procedures, our team members consistently meet the needs of the customer, while enabling ongoing incremental improvements to the process. And finally, our cross-selling efforts produced several sizeable wins in both our national and hospital accounts base. In our SQ business, we continue to see competitive pricing pressure. While in the quarter, the team made good progress implementing the strategic initiatives discussed at our Investor Day. These initiatives will take time, and we will continue to provide updates on future calls. In closing, I would like to thank all of our worldwide team members for their continued commitment to our customers, our shareholders, and our core values. I will now turn it over to Charlie. Charles A. Alutto - Stericycle, Inc.: Thanks, Brent. I would now like to provide insight on our current guidance for 2017. Please keep in mind that these are forward-looking statements, and our guidance does not include future acquisitions, divestitures, integration and acquisition-related expenses, and other adjusted items. For 2017, we believe EPS estimates will be in the range of $4.54 to $4.74, using a share count of approximately 91 million. This includes an unfavorable impact from foreign exchange, partially offset by acquisitions completed in the quarter. We believe the revenues for 2017 will be in the range of $3.51 billion to $3.64 billion, depending on assumptions of foreign exchange and internal growth rates. The worldwide revenue guidance for each of our service lines is as follows. Regulated Waste and Compliance Services will be in the range of $2.01 billion to $2.06 billion. Secure Information Destruction Services will be in the range of $785 million to $815 million. Communication and Related Services will be in the range of $340 million to $370 million, depending on recall revenues. Manufacturing and Industrial Services will be in the range of $375 million to $395 million. This includes the full year impact of the UK divested M&I asset. We have estimates for free cash flow in 2017 between $450 million to $470 million. 2017 CapEx is anticipated to be between $125 million to $150 million. We expect the 2017 full year as reported tax rate to be approximately 36.5%. We are very pleased with our results in the fourth quarter, and we're confident in the long-term outlook for our business. Thank you for your time today. We'll now answer any questions. Devon, you can open the queue.

Your first question comes from the line of a participant whose information was unable to be gathered. Please state your first and last name and company. Your line is open. Ryan S. Daniels - William Blair & Co. LLC: Hey, guys, can you hear me? Charles A. Alutto - Stericycle, Inc.: We can hear you. Is this Ryan? Ryan S. Daniels - William Blair & Co. LLC: Yeah. It's Ryan Daniels from William Blair. I apologize for that. I did put my info in. Thanks for the color thus far. I wanted to ask one on the guidance for 2017. I appreciate that it excludes the hazardous waste asset that you already sold, but does your current revenue and cash EPS guidance include the assets held for sale? And then if it does, if those are sold, can you talk about the potential impact to sales and EPS when that occurs? Daniel V. Ginnetti - Stericycle, Inc.: Yeah, Ryan. The guidance for both revenue and EPS excludes the asset that was sold. The revenue and EPS associated with the assets held for sale are still in the numbers. Should those ultimately come to sale at some point during the year, we would make an adjustment at that point. When we do, you should expect that it's more of a revenue adjustment and would have minimal, if any, impact to EPS for the year. Ryan S. Daniels - William Blair & Co. LLC: Okay. Thank you for that. And then, Charlie, you mentioned, it sounds like you completed the initial analysis on some of the non-core operations. I don't know if that's just internationally, which led to these decisions, but I'm curious if you've completed it domestically as well and decided to maintain the full M&I assets et cetera in the domestic operations? Charles A. Alutto - Stericycle, Inc.: Sure, Ryan. As I said in the opening statements, we did make the determination on what assets were sold and, what are our determinant held for sale in the UK. We did, however, also make a decision on the U.S. business. We've decided to keep our M&I hazardous waste assets in the U.S. at this point. Ryan S. Daniels - William Blair & Co. LLC: Okay. And then final one, I'll get out of the queue. Just any more color on the pricing pressure, I'm curious if it's accelerated, decelerated, stayed the same, just any color there would be helpful. Thanks. Charles A. Alutto - Stericycle, Inc.: Yeah. We continue to experience pricing pressure, obviously, from local and regional competitors. Basically Q4 came in as expected, so there is no change to the assumptions that we made on SQ pricing as we discussed on our Investor Day. Ryan S. Daniels - William Blair & Co. LLC: Okay. Perfect. Thank you.

And your next question comes from the line of Sean Dodge with Jefferies. Your line is open. Sean Dodge - Jefferies LLC: Yeah, thanks. Brent, I think, you said the sales force reorganization has now been completed, it doesn't seem like much of a stretch to imagine that that process weighed on sales productivity during the course of it. Do you think that's the case that organic growth was negatively impacted by the reorganization last couple of quarters? And if so, could you put some bookends around how big you think the impact might have been? Brent Arnold - Stericycle, Inc.: Well, overall, Sean, we've got a number of sales forces, and so, I don't know overall the results were affected. We've had actually quite a bit of success with cross-selling. We've been successful at selling – cross-selling at both hospitals, large retailers, pharma. As a matter of fact just this quarter we have a really large retailer that was using our hazardous waste service, who now is going to use us for Secure Information Destruction. So I would tell you, from that perspective, things have gone well. But with the customer service as well as the inside sales integrations that were happening in Q4, we did notice a little bit of lost purged volume, but the good news is we're back on track and we're seeing that, we're expecting now. Sean Dodge - Jefferies LLC: Okay. Thanks. And then, Charlie, the decision to keep the U.S. M&I business, can you give us a little bit more maybe background on what went into that decision. Are you seeing something changing in the market that makes you a little bit more encouraged now than perhaps you would have been before? Charles A. Alutto - Stericycle, Inc.: Sure, Sean. We looked that as a few things that played – a few factors that played in our decision, I mean, certainly, we didn't feel we'd get maximum value for the sale of this business at this time. The business has stabilized, and I think you see that in the table on the M&I line, so we feel that that business has stabilized. And there are improvements that we think we can make to the business, and we think, we feel that the U.S. industrial market does have a potential for a rebound especially in the United States, also we looked at these operational assets, they fit really well and support our growing retail, our healthcare haz and our Rx waste services. So in the end, we believe that this is a great, this business is – it has great potential for Stericycle, so we've decided not to sell that asset. Sean Dodge - Jefferies LLC: Got it. Thanks again and congratulations on the quarter. Charles A. Alutto - Stericycle, Inc.: Thanks, Sean.

And your next question comes from the line of Kevin Steinke with Barrington Research. Your line is open. Kevin Mark Steinke - Barrington Research Associates, Inc.: Good afternoon. So you talked about some success in cross-selling Secure Information Destruction, and actually you bumped up your revenue guidance for that business line by, I think, $5 million for 2017. So can you just talk about what's going well there. I mean I think you talked a couple of quarters ago about you're still working on some sales pilots there. Have you gotten to the point where you actually are starting to roll out some of those sales pilots more aggressively, or what's contributed to that performance, and the outlook for 2017 in Secure Information Destruction? Brent Arnold - Stericycle, Inc.: Hey, Kevin, this is Brent. I'll take that one. We've already mentioned cross-selling is going very well. We've had a number of pilots also kind of go into full implementation both on the SQ side or telesales side, and also in our hospital sales groups. We now have a dedicated team of specialists selling it into our hospital customers. And as you know, we've had a lot of success selling additional services to our hospital customers. I would tell you that the biggest success though really has come from the team's ability to convert the unbin (20:54) market. We've often mentioned the unbin (20:57) market is as big as $2.5 billion in opportunity, and the sales executives associated with Shred-it have had a great deal of success closing that business, and as we continue to improve our service and grow that business again we feel optimistic about the growth potentials for our Secure Information business. Kevin Mark Steinke - Barrington Research Associates, Inc.: Okay. Great. And then, I think at the Investor Day you talked about within your communication solutions looking to roll out, I think, the LiveAnswer platform in 2017, and then becoming more aggressive on customer acquisition at that space. So just wondering, where you stand in that process? And how you feel about the outlook for the communication solutions as we go throughout the remainder of the year? Charles A. Alutto - Stericycle, Inc.: Yeah. Kevin, I'll take that one. As you know, Ruth did a great job of presenting communication related services and our LiveAnswer platform. An update there is a development of that enterprise wide platform continues, in the LiveAnswer cloud-based architecture, again that's what Ruth had talked about the initiative was in Q4 and Q1. We are actively onboarding customers to the new platform, and the focus remains integrating our live voice capabilities, with our automated products, which is a differentiated product in the offering. And if you remember, our automated products are LiveAnswer, they are online scheduling and automated appointment reminders, certainly it provides us a differentiated servicing offering in the marketplace. Kevin Mark Steinke - Barrington Research Associates, Inc.: All right. Perfect. Well, thanks for taking my questions. Charles A. Alutto - Stericycle, Inc.: Thanks, Kevin.

And your next question comes from the line of Hamzah Mazari with Macquarie Capital. Your line is open. Hamzah Mazari - Macquarie Capital (USA), Inc.: Good afternoon. Thank you. Just had a question around just the SG&A run rate. Could you give us a sense both short-term, what you're thinking in terms of trying to chase lot more volume, and what the SG&A will do short-term? And then longer-term, do you guys have a plan to integrate your IT systems, so that SG&A can get to a more normalized run rate longer-term? Just any thoughts around that. Daniel V. Ginnetti - Stericycle, Inc.: Yeah, Hamzah, I think, as you saw in the quarter, one of the numbers we shared is after the 8-K adjustments, we came in at about $20.7 million. Thinking about that going forward into 2017, and as we talked about on the Investor Day, we should expect that number to come up first, and part of that is making investments into systems that will enable us in the longer-term to be able to get the leverage and the scale that you're suggesting. So I think it's a sequence of events. You first have to make investments in the business. That will manifest itself in a little bit of an increase in SG&A. It's built into the guidance numbers that we gave. And I think over the long-term, you'll be able to see us, be able to put that system to work for us both in supporting SG&A as well as growth drivers in the business. Charles A. Alutto - Stericycle, Inc.: And Hamzah, I think in the longer-term, obviously, we want to leverage SG&A. When you say normalized SG&A, I think it's always been difficult to find a period at Stericycle. If you look at up against, I don't think a traditional solid waste company is a good peer. We obviously have a higher SG&A run rate than they do, but then if you look at us vis-à-vis some business service organizations and companies, we actually have a more favorable SG&A as a percentage of revenue. But obviously, the long-term plan is to leverage all of our assets, get the right systems in place to bring SG&A down over time. Hamzah Mazari - Macquarie Capital (USA), Inc.: Okay. And then just on the Shred-it business, what mix are you running right now in terms of off-site versus on-site shredding? And is that going according to plan, or are you seeing pushback from customers in sort of conversion? I know last year you guys had said that the timing was too aggressive to convert some customers. I'm just curious what the update there is? Daniel V. Ginnetti - Stericycle, Inc.: Yes. As you recall, when we first acquired Shred-it, the mix was about 60% on-site and 40% off-site, with a goal of flipping that and getting to the point where we have 60% off-site and 40% on-site. So far the team continues to make really good progress. I would say, we're about halfway home there, and that's one of the many things contributing to the fact that we are able to hit our synergy targets through the end of the year. Hamzah Mazari - Macquarie Capital (USA), Inc.: Great. Just last question, I'll turn it over. So your guidance looks like it's coming down by $0.03 on a net basis, just the – both sides, low and high end. And I know you mentioned this a bit, is there any change to the underlying operating guidance? Is this just the divestiture coming out and FX being a little more negative, and then maybe being offset by better SOP pricing, or just underlying operationally is anything changing? Daniel V. Ginnetti - Stericycle, Inc.: No. Nothing operationally is changing from the guidance that we gave. And the divestiture did not have an impact to EPS. The change is really for two things. Foreign exchange, we've continued to see the dollar strengthen and with the Trump administration, we've also heard that we expect that to continue. That's about $0.04 to $0.05 of impact next year. That's partially offset with the acquisitions that we completed and that will contribute about $0.01 or $0.02. Those are the only adjustments we have. So what that does is, it nets to a guidance going forward of $4.54 to $4.74. I also think it's really important on how we pace ourselves for the year on that. You know the Q1s over the last couple of years have historic seasonality in it for our environmental solutions business. So I think you're best to start the year in the range of about $1.02 and $1.08. And then, you'll ratchet it up from the last three quarters of the year. Hamzah Mazari - Macquarie Capital (USA), Inc.: Got it. Thank you. Daniel V. Ginnetti - Stericycle, Inc.: Thank you.

Your next question comes from the line of Barbara Noverini. Your line is open. Barbara Noverini - Morningstar, Inc. (Research): Hey, good afternoon, everybody. Charles A. Alutto - Stericycle, Inc.: Hey, Barb. Daniel V. Ginnetti - Stericycle, Inc.: Hey, Barb. Barbara Noverini - Morningstar, Inc. (Research): Hey, so the nine tuck-in acquisitions in the quarter, what lines of business were they in? Brent Arnold - Stericycle, Inc.: Barbara, I'll take that. We did nine, five of them domestically, four of them were secure information destruction, one regulated waste, and the four that we did internationally were all in secure information destruction. Barbara Noverini - Morningstar, Inc. (Research): Okay, great. Thanks. And then if you were to pull the recalls out of the business, what would be the underlying growth rate of communication solutions year-over-year? Charles A. Alutto - Stericycle, Inc.: I think from a communication solutions standpoint, Barb, I don't have the number directly in front of me. I think it generally runs around 3%. Daniel V. Ginnetti - Stericycle, Inc.: Yeah. Charles A. Alutto - Stericycle, Inc.: So I think if you pulled out recalls and returns, recalls of $53 million, it's around 3% growth. Barbara Noverini - Morningstar, Inc. (Research): Around 3%, okay. And then just one more. Last quarter you guys talked about having some good success on the LQ side of things and in Sharps Management selling. Did that continue into the quarter? Are you still seeing good success there, or is that something unique to last quarter in terms of some of the business that you had been pursuing? Daniel V. Ginnetti - Stericycle, Inc.: No, Barb, we continue to see ongoing adoption of both our Sharps Management program and our Rx waste program. So continued kind of steady as she goes. Barbara Noverini - Morningstar, Inc. (Research): Okay. All right, great. Thanks, guys. Charles A. Alutto - Stericycle, Inc.: Thank you. Daniel V. Ginnetti - Stericycle, Inc.: Thank you, Barb.

Your next question comes from the line of Michael Hoffman from Stifel. Your line is open. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Thank you very much. Hi, Charlie, Dan, Brent. How are you doing? Charles A. Alutto - Stericycle, Inc.: Hey, Michael. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: So the $450 million to $470 million of free cash that's guided for 2017, what's that compared to in 2016? Charles A. Alutto - Stericycle, Inc.: Michael, you're garbled up a little bit, Michael. Can you repeat the question, I am sorry. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: The $450 million to $470 million of free cash in 2017, what's that compared to, to 2016? Daniel V. Ginnetti - Stericycle, Inc.: Yeah. The adjusted free cash flow that we ended for 2016 came in at $476 million. So that's first look at it with the adjustments that we have of FX, I think, is right in line with where we are. The EPS is relatively flat. We did bring it a little bit down just from the things we talked about FX and acquisition, so generally in line with last year. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. So that's a different display than when we saw at the Analyst Day. At the Analyst Day, you were showing us a guidance of about $400 million compared to the $450 million for 2017 on the bottom-end. So I... Daniel V. Ginnetti - Stericycle, Inc.: From what I can see, Michael, I believe our cash flow guidance, free cash flow of $450 million to $470 million is unchanged. Charles A. Alutto - Stericycle, Inc.: I think the confusion on the Investor Day, wasn't that like a year-to-date number, and not a full-year number. I thought that was it, but the guidance has not changed on free cash flow, it was $450 million to $470 million at the Investor Day. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Yeah. I get that. But at the Investor Day, I just want to be clear, I mean, at the Investor Day, we all walked out of there thinking you were going to grow free cash in 2017 on a like-to-like basis to what the 2017 number was versus how you done in 2016. Now, what I'm hearing is the free cash is actually down on a like-to-like basis? Charles A. Alutto - Stericycle, Inc.: Was it 2016 (30:47) Daniel V. Ginnetti - Stericycle, Inc.: You know what, Michael, I think that the challenge there is that I believe in the Investor Day, you may have seen the as reported number. Just to be clear, our as reported free cash flow for 2016 is $411 million. That translates to an adjusted of $476 million. The guidance that we gave from an adjusted is $450 million to $470 million. So, I think, maybe that will help from an apples-to-apples. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. So, what are the – what's the assumption of adjustments in the $450 million to $470 million? Daniel V. Ginnetti - Stericycle, Inc.: I would expect we're in a run. The adjusted items and again those will get taxed different. Usually I think and I have that – I would assume that going forward, the adjusted EPS is going to be in the range of about $0.40 to $0.45 per quarter of adjustments at an EPS, the dollar associated with it. I don't have that exact breakout, but you can probably back into the number on that. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. So, 0.425, times 91 million, times four is what you're telling me? Daniel V. Ginnetti - Stericycle, Inc.: Yeah. That's about the average, right around – between $0.40 and $0.45 per quarter of adjusting items. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then you've given – in the last two quarters you've done a look forward more than just the EPS, so a little bit of thought around your free cash and as well as even an EBITDA and adjusted EBITDA number, what's your thoughts about 1Q in the context of this ability to look forward 90 days and say, it's what we think our business can do? Charles A. Alutto - Stericycle, Inc.: I think from an EBITDA percentage, I think from a Q1 21.5% is what we feel would be at the start of the year, Michael, from an EBITDA perspective. Daniel V. Ginnetti - Stericycle, Inc.: That's going to ramp up. From an EBITDA, Michael, as in Q1, you're looking at about 19%, and then you should go to about 21% for the full year. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. So, fiscal 2017 is 21%, but 1Q is 19%? Daniel V. Ginnetti - Stericycle, Inc.: 19%. And again that factors into the seasonality as well as in the front half of the year, you have additional fringe that comes in the beginning of the year, and then you would be able to ramp up from that. It also takes into consideration the investments that we talked about. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And so, on a apples-to-apples basis, what that percentage in Q4. Daniel V. Ginnetti - Stericycle, Inc.: Why don't I bridge you Q4 going to Q1 on how they would shape out. You are going to expect a normalization of the expert business. And to the midpoint, that's about $20 million. In addition, you've got the normal ease of seasonality that will bring it down some and then you have higher fringe, higher corporate. So you're going to really take the adjusted Q4 EBITDA at about $22 million and it will come down to about $19 million, and then begin to ramp up from there. If you look at it, it's the same effect that you'd have, that you see on the EPS in prior years too. It definitely steps down due to the same factors. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then do we have a little steeper year-over-year comparative on M&I, because you still declined in the 2Q from 1Q in 2016. So is this maybe even a little deeper cut because of that M&I comparison? Charles A. Alutto - Stericycle, Inc.: No. When you look at our guidance, we just gave, Michael, compared to the guidance we gave last quarter, it's roughly down $5 million, but that really is more to do with the divested asset and foreign exchange. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then on M&I, I get selling a business at the bottom of the cycle doesn't make a lot of sense. And so I'm not hearing this is taken off the table entirely, but you're not going to sit here and put yourself in a position and trying to negotiate out of a position of weakness. So at some future date, this could be revisited? Charles A. Alutto - Stericycle, Inc.: We revisit all of our assets and we look at it by country, by service line, but right now we don't anticipate selling this asset anytime in the future. We think it has potential and a long-term fit with Stericycle. Thank you.

Your next question comes from the line of Jason Rodgers with Great Lakes Review. Your line is open. Jason A. Rodgers - Great Lakes Review: Yes. A question on the success you've had with the Shred-it cross-selling, the services there. Are you bundling that with the waste management? And if so, are you giving discounts on the waste management side for those contracts? Brent Arnold - Stericycle, Inc.: Yeah. I would tell you Jason that most of the cross-sell success has been built off of relationships. So we've got a strong relationship with a national customer or a system or a hospital and with that credibility, we bring in our counterpart, and it just puts them in a good light with regard to credibility that we deliver on what we say we're going to do. So, most of the success so far has been around those relationships. Jason A. Rodgers - Great Lakes Review: And then, looking at the amount of synergies from Shred-it, how much was realized in 2016 and is $20 million still the target for 2017? Brent Arnold - Stericycle, Inc.: Yes. I'm happy to report that in 2016 we were able to achieve the $31 million, that we've discussed previously, and our goal is to obviously hit the $20 million in 2017, that we talked about. Jason A. Rodgers - Great Lakes Review: And just a question on the income statement in the fourth quarter. That $7.1 million in other expense, what is that and was that excluded from the adjusted results? Daniel V. Ginnetti - Stericycle, Inc.: There was a small part of the 8-K that did affect other income and expense as well as, there was entry due to the settlement of a note between the UK about $2.5 million of that due to the 8-K and the rest was the settlement of a note and about a $1.5 million of that was FX. Jason A. Rodgers - Great Lakes Review: But the dollar that you reported, does that include the $7.1 million? Daniel V. Ginnetti - Stericycle, Inc.: It does. It does. Jason A. Rodgers - Great Lakes Review: Okay. Thank you. Daniel V. Ginnetti - Stericycle, Inc.: You're welcome.

Your next question comes from the line of Al Kaschalk from Wedbush Securities. Your line is open. Al Kaschalk - Wedbush Securities, Inc.: Good afternoon, guys. Charles A. Alutto - Stericycle, Inc.: Hey, Al. Al Kaschalk - Wedbush Securities, Inc.: I wanted to focus on two areas, most of the questions have been fired at. On the international front, the organic growth of 4.5%, could you talk about the components there of what drove what seems to be a fairly healthy number? Charles A. Alutto - Stericycle, Inc.: Yeah, we did. We had a good result from the international. It also had some headwinds from the patient transport exit that we talked about previously. Really what drove international were international recall revenue. So we reported $53 million, obviously, that's the U.S. recall but some of those events were global events, so that really drove that 4.5% rounded 5% with the recall. I think if you take that out, Al, it had probably a 2% impact, so we would have came in around 3% growth if you extract the international recall revenues. Al Kaschalk - Wedbush Securities, Inc.: Okay. And then just the follow-on, is that business – the international recall or I mean let me ask you differently, was the profitability better on the organic business or was it influenced by the recall business, which has I think a good cash flow business, but I'm not sure about the margin profile? Brent Arnold - Stericycle, Inc.: No. The profitability was about consistent on all the other underlying businesses. Obviously, with the recall event like that, it flowed through a little bit better than company average and little bit better than the international average. The recall would have been partially responsible for the uptick of that, rest of the business operated relatively consistent from what we've seen. Al Kaschalk - Wedbush Securities, Inc.: Okay. And then, like domestically have we seen any change on the pricing environment, on the international front, I know the 8-K addressed part of that, but I'm surprised that the growth rates maybe implied by the guidance. We wouldn't have had some impact on the revenue side there. Charles A. Alutto - Stericycle, Inc.: No. I mean, we've talked about SQ pricing, which was the third part of your question. That doesn't have anything to do with the international. We continue to grow our international businesses, obviously different countries at different stages, some drive growth through new med waste services, some drive growth through additional services. So I think that came in as we expected and guided for in the last call. Again, the uptick in international had to do with the international recall revenues. Al Kaschalk - Wedbush Securities, Inc.: Okay. And then just a clarification. The pricing that you are assuming in the Security Information business, particularly sorted office papers, had a fairly good run, or maybe tonnage that you're assuming in 2017? Daniel V. Ginnetti - Stericycle, Inc.: Yeah. The pricing has gone up. It's slightly above the range that we had, when we gave you guidance. Our range was anywhere from $147 to $167 a ton with $157 being the midpoint. What was the other half of your question, Al? Al Kaschalk - Wedbush Securities, Inc.: The assumption. Charles A. Alutto - Stericycle, Inc.: The assumption, Al, midpoint of the guidance is $157, and there has been no changes to the volume in that. Daniel V. Ginnetti - Stericycle, Inc.: And the volume, as we shared at the Investor Day, is anywhere worldwide, between 700,000 tons and 800,000 tons. Al Kaschalk - Wedbush Securities, Inc.: Okay. All right. I'll follow-up. Thank you. Charles A. Alutto - Stericycle, Inc.: Thanks, Al.

Your next question comes from the line of Joel Kaufman with Goldman Sachs. Your line is open. Joel Harrison Kaufman - Goldman Sachs & Co.: Hi, guys. Thanks for taking the questions. Just any update on what the incremental margin profile of the recalls business actually looks like today, and just trying to understand what the normalized EBIT margin would have been this quarter ex sort of the recalls, be ex the write down? Daniel V. Ginnetti - Stericycle, Inc.: Yeah. The incremental contribution to EBITDA, if you looked at our guidance, we gave guidance of about 21.5%, it came in on an as reported of 18.6%. We were unfavorably impacted by the 8-K that was about 340 basis points, the remainder is about 50 basis points of improvement that came from a combination of things, that would be the higher recall, foreign exchange, it actually helps EBITDA a little bit because you have lower margin business coming out, and then, the higher paper prices contributed as well. So, a combination of all of those when normalized for the 8-K was about 50 basis points of improvement. Joel Harrison Kaufman - Goldman Sachs & Co.: Great. And then, just to clarify on the paper shredding business. To what extent did price on the recycle paper side contribute to any of the organic growth this quarter? Daniel V. Ginnetti - Stericycle, Inc.: It's about $2 million – it contributed about $2 million to growth, and that's spread over both domestic and international. Joel Harrison Kaufman - Goldman Sachs & Co.: Great. And then the last one from me. Just on capital allocation, looking back to comments you guys made at the time of the Shred-it acquisition, you guys discussed rapidly delevering to sort of pre-transaction levels by 2017. Obviously, not pacing towards that. And in light of the headwinds that you guys have seen over the past year and a half, just trying to understand two things. One, if deleveraging is still a priority, and two, any framework to think about leverage targets over the next several years? Daniel V. Ginnetti - Stericycle, Inc.: Yeah. I think unfortunately sometimes good success gets lost in the numbers. We did come in at 3.42. Part of the reason that we went back on that is the adjustment to EBITDA due to the 8-K. And the unfortunate thing is that offset really over $200 million that we have paid down in debt. So when you've adjusted the EBITDA on the calculation it's taken it away. We did start a pretty good progress of delevering, but our allocation strategy hasn't changed and it doesn't change from what we gave you at the Investor Day for 2017 and that's really the majority of our cash is going to go to debt reduction. We will contribute anywhere in the range of about $110 million to $130 million towards acquisitions, but I would say that our strategy hasn't changed. I think you'll see strong delevering. We've had an incredible cash flow as we just shared on Michael's question that from a free cash flow standpoint with a 2016 range of $450 million to $470 million, we were above that. So we're continuing to put that cash to work for us. We will make progress on our delevering. Joel Harrison Kaufman - Goldman Sachs & Co.: Great. Thanks, guys.

There are no further questions at this time. I will turn the call back – oh, pardon me, your next question comes from the line of Michael Hoffman with Stifel. Your line is open. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Just one quick follow-up, if I may. Charles A. Alutto - Stericycle, Inc.: Sure. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: At the Analyst Day, you had $0.19 for investing back into the business offset by a positive $0.17 for repurchasing the convertible, is that still in the model? Daniel V. Ginnetti - Stericycle, Inc.: Yeah, Michael. Nothing has changed from that strategy. So you didn't see – we did not make any changes operationally, whether it'd be for mandatory or for the investments that we're going to make, the underlying business remains the same the – it did contribute to the Q1 jump off point of $1.02 to $1.08, and that's really where you're beginning to see that $0.19 kick in. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then lastly, what was the per share impact of the repurchase in 4Q, because we can't, you've got to figure out what that premium... Daniel V. Ginnetti - Stericycle, Inc.: Yes, the simple math on that, Michael, is it comes to $0.04 of EPS... Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: $0.04 Daniel V. Ginnetti - Stericycle, Inc.: From the mandatory preferred. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. Great. Charles A. Alutto - Stericycle, Inc.: Thanks, Michael. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Thanks. Daniel V. Ginnetti - Stericycle, Inc.: You're welcome.

Your next question comes from the line of Scott Schneeberger with Oppenheimer. Your line is open.

Hi, guys. It's dial in (45:33) for Scott. Can you please elaborate a little bit on what you're seeing in the M&I segment, and how you would categorize the visibility now heading into 2017, and what you saw in the fourth quarter? Charles A. Alutto - Stericycle, Inc.: Yeah. I would say it's consistent over the last couple of quarters. We still have every single quarter about $15 million to $20 million of project work. We've got a good pipeline, and I think as I said earlier a couple of times in my comments, that business has stabilized. I think we have good visibility to it. There is still obviously every quarter project work that we have to fill, but that project work is down significantly from where it was 12 months to 18 months ago.

Okay. Thanks. And lastly, can you help us think about the gross margin progression as we go through 2017? Daniel V. Ginnetti - Stericycle, Inc.: Yeah. We're thinking about gross margin going forward, I'd start year-to-year at around 42%, slightly down from the 42.6%, and it has to do with the normalization of the recall that we had as well as the seasonality. From that 42%, I think you have a full year of about 43.5% gross margin.

Okay. Thank you.

Your next question comes from the line of Larry Keusch, with Raymond James. Your line is open. Lawrence Keusch - Raymond James & Associates, Inc.: Thanks. Good afternoon, guys. Charles A. Alutto - Stericycle, Inc.: Hey, Larry. Lawrence Keusch - Raymond James & Associates, Inc.: Hey, Charlie. I'm wondering if you could just spend a moment and provide some thoughts around the acquisition strategy for secure document destruction overseas. Obviously, you did a bunch this quarter. So, if you could talk about kind of geographically, where you are going or what markets you're kind of going after and maybe also talk a little bit about the margin profile of these acquisitions that you're going after. Charles A. Alutto - Stericycle, Inc.: Sure I think if you think about our international footprint, there are some markets where we have secure information only businesses today, and there are some markets where we're in that we don't have any secure information, but we have certainly operational platforms there for medical waste. So, one of the acquisitions we did internationally, actually was in Spain. So, we are able to acquire a leading secure information destruction business in Spain, and then take our operational assets and help that business from a leverage standpoint, where we park our trucks, using it now to sell secure information to the healthcare customers we have in that market. Very similar to the United States and the Shred-it acquisition. Certainly in markets where we currently have Shred-it assets, we add on acquisitions, where we think we can get either tuck-in, so we'll do tuck-in acquisitions to leverage the existing secure information businesses that we have in those markets, or it might be an expansion of the geography where we're not currently in. So that's really how we're looking at secure information. Margins vary by geography. For the most part, if you look at Shred-it margins globally, where our Shred-it margins in the U.S. and Canada they are very similar. Lawrence Keusch - Raymond James & Associates, Inc.: Okay. Perfect. And then, one other question. Just wanted to get your updated thoughts around the data analysis model that you were working on relative to assessing your SQ customers in the U.S. and trying to predict those that would require some revisions on pricing versus those that may not, and how you're thinking about again potentially accelerating contract renewals where applicable? Brent Arnold - Stericycle, Inc.: Hey, Larry, I'll take that one. This is Brent. Just to reiterate for everyone, the purpose of that investment was really to enable us to use big data in those powerful analytical tools to pinpoint specific areas of opportunity. A lot of work has been done in the quarter, the team put together the data, the tools are now in place. It is early in the process, and we continue to run a number of pilots to learn what works best, early indications are showing positive signs. Some examples would be we take data around people who attend webinars, people that sign into our website and create safety plans or respond to certain promotional e-mails. What we do is we use that data then to target customers for additional incremental sales and the goal and what we're showing is it improves our overall close rates, so we can be more productive as a sales organization. That's one of many, many different ways that we're using this data to help make us more effective as an organization. Lawrence Keusch - Raymond James & Associates, Inc.: Okay. Terrific. Thanks guys. Charles A. Alutto - Stericycle, Inc.: Thank you.

There are no more questions at this time. I'll turn the call back over to the presenters. Charles A. Alutto - Stericycle, Inc.: Thank you, Devon. Well, thank you again for joining. We look forward to seeing some of you at various conferences and road shows in the coming months ahead. Have a great evening. Thanks so much.

This concludes today's conference call. You may now disconnect.