Good morning. My name is Ben and I will be your conference operator. At this time, I would like to welcome everyone to ADP’s First Quarter Fiscal 2016 Earnings Webcast. I would like to inform you that this conference is being recorded and all lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you. I will now turn the conference over to Ms. Sara Grilliot, Vice President, Investor Relations. Please go ahead.

Thank you. Good morning, everyone. This is Sara Grilliot, ADP’s Vice President, Investor Relations, and I am here today with Carlos Rodriguez, ADP’s President and Chief Executive Officer and Jan Siegmund, ADP’s Chief Financial Officer. Thank you for joining us for our first quarter fiscal 2016 earnings call and webcast. Before we begin, you may have noticed in this morning’s earnings release that we are now including a condensed statement of cash flows to assist you in updating your models ahead of our quarterly 10-Q filing. We will also discuss certain growth measures on a constant dollar basis, which adjusts for the impact of foreign currency. You will see similar comparisons in this morning’s earnings release and in our SEC filings. In addition with the introduction of long-term debt to our capital structure during the quarter, we are moving away from a discussion of pre-tax earnings and pre-tax margin and will instead discuss earnings before interest and taxes, or EBIT and EBIT margins. We believe this change best reflects the operating performance of our business. For ADP, EBIT includes interest income and expense associated with our client funds extended investment strategy, but excludes all other interest income and expense incurred such as interest income earned on corporate funds outside of the client fund strategy and interest expense incurred on long-term debt. Since the client funds extended investment strategy is a fundamental operating component of our business, we believe this approach best measures our operating performance. During our call today, we will reference these and certain other non-GAAP financial measures, which we believe to be useful to investors. A reconciliation of these non-GAAP financial measures to their comparable GAAP measures is included in our earnings release and in the supplemental slides on our Investor Relations website. To begin our call today, Carlos will start with some opening remarks and then you Jan will take you through the quarter’s results and an update on what to expect for fiscal 2016. I would like to remind everyone that today’s call will contain forward-looking statements that refer to future events and as such involve some risk. We encourage you to review our filings with the SEC for additional information on risk factors that could cause actual results to differ materially from our current expectations. With that, I will turn the call over to Carlos.

Thank you, Sara and good morning everyone. This morning, we reported our fiscal quarter – first fiscal quarter 2016 results with revenue up 6% or 9%, excluding the impacts of foreign currency translation. In addition to the solid revenue growth, we also continued to report very strong new business bookings performance, which grew 13% in the quarter. We are off to a good start. And as a result, we now anticipate full year new business bookings growth to be up at least 10% compared with our prior forecasted range of 8% to 10% growth. We have solid momentum as we delivered client-driven innovation that leverages our scale and deep HCM expertise to win in a competitive industry. Our ability to meet a wide range of client needs with leading solutions is unique in the industry and gets stronger everyday. I would like to give you a few examples. Last quarter, we told you about our introduction of ADP DataCloud, which leverages ADP’s unparalleled data to deliver workforce analytics that help boost productivity, develop talent, increase retention and identify potential flight risk. More than 1,200 ADP clients are already taking advantage of these analytical capabilities. Earlier this month, we reduced benchmarking capability to the DataCloud analytics platform. This new benchmarking solution provides users with unique insight from real and optimized up-to-date data. With many companies experiencing a word for talent, this new tool will provide HR teams with key industry workforce metrics for quickly identifying changing market trends. We believe that access to the right information at the right time will help companies create successful, engaging work environments. You have heard us talk about the breadth of our portfolio in terms of serving clients and their employees from hire to retire. On the front end of that continuum, I am proud…

Thank you very much, Carlos and good morning everyone. Before I begin, during the quarter, we sold our AdvancedMD business and realized a gain of $29 million. The results of this business, which historically were reported in the Employer Services segment are not reported as discontinued operation and have been moved to the other segment for comparative purposes both in the current period and all prior periods presented. The restated segment amounts can be found in the supplemental schedules on our Investor Relations website. My comments on the quarter’s results and our fiscal year 2016 outlook exclude the impact of the $29 million gain on the sale of this business. ADP revenues grew 6% in the quarter or 9% on a constant dollar basis. Earnings before tax – interest and taxes or EBIT grew 6% or 8% on a constant dollar basis. This growth is inclusive of investments we have made during the quarter to increase operational resources in support of product implementations. EBIT margin increased about 10 basis points compared to 17.5% in last year’s first quarter. Diluted earnings per share grew 10% to $0.68 or 11% on a constant dollar basis and benefited from a lower effective tax rate and fewer shares outstanding compared with a year ago. And as Carlos mentioned, our new business bookings started strong for the quarter with 13% growth. Overall, our results in the quarter were good, yielding solid revenue growth despite continued headwind from foreign currency translation. And as anticipated, earnings growth was slower in the quarter due to expected investments in the resources to implement HCM solutions that will add to our future recurring revenue growth. In our employer segment – in our Employer Services segment, revenues grew 3% in the quarter or 7% on a constant dollar basis. As Carlos…

Thank you. [Operator Instructions] We will take our first question from the line of David Togut of Evercore ISI. Your line is open. Please go ahead.

Hi, this is Anthony Cyganovich on for David. How do you think about balancing the above trend growth in global new business bookings with the expense associated with implementation?

I am sorry, the question is related to global – you mean to bookings outside of the U.S.?

No, overall bookings.

Yes, I mean, I think we have, I think for decades we have always taken the position that we will take as much business as we can get from a bookings standpoint. So, when you look at the lifetime value and the discounted – the present value of discounted cash flows of our clients given our retention rates, especially in the mid-market and the up-market, we basically have to take all the business we can. So, we have always been willing to sacrifice short-term profitability in the form of additional implementation and service expense in order to add additional – and implement new additional bookings and raise our revenue growth. And that’s really what has been happening over the last three or four years, so that we clearly have had greater tailwinds in the last few quarters than we have seen for a while. But just want to remind everyone, we have had double-digit sales growth on a compounded basis here now for four years and that’s what’s really helped create this – in our world, accelerating revenue growth, which is in 0.5 point to 1 point increments at a time per year. So, our revenue growth is kind of slowly inched up and when you look at it on a constant dollar basis, 9% growth through the quarter. And we believe that in the second half of the year we might be higher than that, because our guidance is very clear that we expect to be above the guidance range. Those are pretty strong revenue growth numbers for ADP and it’s driven by new business bookings that we have been able to generate over all these years and now we are in a situation where we have even stronger new business bookings and we are going to continue to do the same thing, which is we are going to take it all and we are going to implement it all.

Thanks. That’s helpful. Just a follow-up, can you talk about the pipeline of new products you intend to introduce in Employer Services and PEO over the next 1 to 3 years?

This probably is not the best forum to do that. From a competitive standpoint, I think we have – the things that I talked about in my introductory statements, I think probably give you a sense of kind of some of the direction that we are headed in which is really providing a lot more insight through data analytics for our clients in order to help them run their businesses better, hire the right people, retain the people, pay them the right amounts and there is all very, very powerful insights that can be gleaned from the data that ADP has. And I think we have known that this is a competitive advantage for us and a differentiator. And we spent the last two or three years really building, I think the products and I think DataCloud and some of the analytics that we are building on that platform, I think are going to provide those types of tools for our clients. So, we are working on a few other things that we are really not ready to talk about just yet, but we – if you look at our balance sheet and you look at our P&L and you look at our statements, I think you will be able to glean from them that we are investing a lot in R&D and in product development.

Great, thanks a lot.

Thank you. Our next question comes from the line of S.K. Prasad Borra of Goldman Sachs. Your line is open. Please go ahead.

Thanks for taking my question. Carlos, could you provide some color on the specific products and services which are driving this new bookings growth? And is it largely driven by ACA or would you say that some of your new platforms whether it’s the advantage or RUN they are also seeing some increased traction?

I think it’s a combination of both. I think that we are selling some standalone ACA solutions in our up-market space, but most of our ACA new bookings and sales are associated with either existing clients or new clients that have our broader HCM solutions. So, it’s probably safe to say that the ACA sales are being told by our HCM solutions and some of our HCM solution sales are being pulled by ACA. So, it’s probably a combination of the two. So, we had – I think just to reiterate, we said in the fourth quarter and for the year, we have really across the board strong new business bookings in all of our segments, in all of our strategic platforms without ACA included. I think in the first quarter, we came off of a very, very strong fourth quarter sales and I think we have – again, for several years, have been talking about how the way our incentives work from a sales standpoint, but it’s somewhat difficult to maintain the momentum into the first quarter when you have such a strong finish, yet we were able to do that. And I think it’s safe to say given the way Jan described it in his comments that ACA helped with that. Under normal circumstances, you probably would have expected in the first quarter and we would have expected kind of just by historical standards mid to low single-digit new bookings growth without kind of the extraordinary tailwinds that we got from ACA. And I think that’s probably a general – it gives you a general gist of our comments, but we are actually – in the context of what we know about how ADP behaves and how our sales force behaves and the incentives drive things, we are very pleased with our first quarter new bookings growth, excluding ACA and including ACA.

Okay. And just a follow-up, how should one think about the profitability of this increased sales related to ACA? Is it a combination of the PEO business or the low margin PEO business primarily or would you say that some of the more profitable segments like time and attendance and other solutions are also benefiting from this?

Yes. The – keep in mind we are selling these ACA solutions as a bundle and so assigning profitability is always a little bit tricky, but our business cases and our plan is to have the margins of the ACA modules to be right in line with our other good functioning products like that you mentioned. So, I would not see any meaningful impact on our overall margin characteristics from them. Other than they are right now growing and have to carry of course implementation and sales cost. But, the ongoing, if you would like the contributing margin of these products is right inline with what we have in our portfolio.

That’s great. Thanks Carlos. Thanks.

Thank you. Our next question comes from the line of Sara Gubins of Bank of America Merrill Lynch. Your line is open. Please go ahead.

Hi. This is Frank [indiscernible] calling in for Sara. Follow up on the strong new bookings, is there any way you can breakout how much was driven by the ACA compliance versus non-ACA solid work?

We don’t really breakout in detail, the product components that we have. It was a contributor to the 14%, but as Carlos said, on a typical quarter our internal plans for calling, we would expect after a strong fourth quarter kind of mid to high single digit sales growth in first quarter and we really accelerated across the board. So that’s kind of what we say. So it was not the majority of our sales growth quite the opposite actually our core strategic platforms sold well and had nice growth rates in the quarter, multinationals had a great success stories this quarter. So, it was a broad-based acceleration of – of new business bookings. And ACA had a trigger event to that, so it’s hard to separate it also analytically because, people that buy ACA also buy HCM solutions in order to make it all work. So it is kind of combination and not, I think that’s kind of honestly of what we can – really mostly analytically give you.

Okay, thanks. And then just as a follow up, did your guidance contemplate retention improving significantly through the rest of the year?

While the retention is, is as a quarterly measure fluctuates and I mean Carlos gave detailed comments on the retention development. So, the – we also, I’d like to mention in the first quarter prior year we had a large improvement, significant improvement in the quarter. So there was probably some catch-up in this quarter and a difficult compare and overall I think, we don’t guide to retention, but I think there would be a mistake to think retention would continue at these levels.

Okay, thank you.

Thank you. Our next question comes from the line of Gary Bisbee of RBC Capital Markets. Your line is open, please go ahead.

Hi. Just following up on that question retention, so Carlos, it sounded like in your commentary there were some, staffing issues or execution issues from the client service perspective. And I guess I just wanted to understand on the margin commentary for the company overall. Is that – is that basically just the on-boarding cost and sales commissions from the stronger bookings or is there also a component of, we need to fix something here to get this retention back on track. And specifically what type of cost would those be? Thanks.

So, as various stood observation and I would say that we are – we did feel some pressure in certain areas of our business, but frankly we have other parts of our business where retention improved and margins were up and all is good. It’s as usual it’s a portfolio and we have different situations in different parts of the – of the business in the company. But the one thing that is absolutely clear again decades and decades of experiences that, despite our desire to migrate or to upgrade and migrate our clients to our newest and best platforms. This retention figure is very, very important to us. We are very fortunate that we have very, very strong new business bookings, which is offsetting some of the retention weakness that we have. But generally speaking that puts pressure on us, because obviously those, even if we achieve the same revenue growth we’ve been accelerating our revenue growth, it comes with pressure on margin, because you have implantation cost and sales cost. And so, we’ve been very, very clear about desire to accelerate migrations and we did that, and we may be did it a little too effectively. And so, I think we’ve created some pressure in the system as a result of a significant increase in migrations year-over-year. At the same time when we were experiencing frankly, I would describe it as a not to overstated, but we were surprised by the volume of sales that we’ve gotten as a result in some part, as a result of ACA compliance solution demand. So, we have this combination of all those volumes that’s coming in, while at the same time we were creating pressure in our implementation and service organization around migrations. And I think we’ve, I think we took…

Thank you. I appreciate the commentary.

Thank you. Our next question comes from the line of David Grossman of Stifel Financial. Your line is open. Please go ahead.

Hi, great. Thank you. Sorry, just to follow-up on that last question and so if you look at the business than looking at the retention rate, it sounds like if you see all that the – the core issue is really one implantation complexity versus competitive losses that come with the churning if you will exposure that comes with the platform upgrade?

I think I said it’s both and we clearly, because we can see our retention rates by platform. We know where we have exposure and we have weakness and of course we have known that for years, which is why we’re doing what we’re doing, because that is really I think ADP’s vulnerability, I think to some of the comp which there is plenty of – there is plenty of competition out there. And I think that has been a vulnerability that we over the last three or fours have opted to try to close and I think I have used the analogy of kind of making sure that people are fishing in a smaller and smaller pond, when we create activity around migrations, particularly in the mid market and up market. A lot of fisherman comes even to a smaller pond and so, I think we’ve experienced that some of that over the – over the quarter. But I also want to be clear that, I – in my previous answer that the, in addition to that the overall increase in activity and volume as put strain on our implementation and service organization. And they have done an incredible job over the last two or three months to get, a lot of this business that is – that has been sold in the fourth quarter started. And they are doing that, and they are doing a tremendous job, but they are working very, very hard under tremendous strain which is why we’ve added additional resources to help them.

Okay. And just, follow up on Jan’s comment about, the not to assume that retention would stay at these levels, is that contemplating that the increased capacity that you put in would help kind of alleviate some of the stress on the system that you are experiencing with current quarter?

Yes. And I think what you see is the incremental resources are already doing their thing. So we see already these improvements coming through. So we obviously work very hard to retain every client that we can. And I gave you the typical compare, so the other factors in it we do not give guidance to revenue retention, but it would certainly be not our expectation to stay at this level.

Alright, very good. Thank you.

Thank you. Our next question comes from the line of Smitti Srethapramote of Morgan Stanley. Your line is open. Please go ahead.

Hi, Carlos and Jan. This is Daniel Hussein [ph] calling in for Smitti. Just want to pry in a little bit more into retention. So I appreciate that you gave a good amount of color already, but could you just provide a little bit more detail about which channel saw the most I guess attrition. And I know you guys look closely at where your customers are going, so did any competitor or type of competitors stand out or was it just the usual suspect?

It really as usual, I wish we had more exciting news to tell you because it would be easier for us to have one competitor. Theoretically it would be easier, but it is really not that kind of story like we really – by the way it fluctuates also from quarter-to-quarter. So we unfortunately don’t have any news to report on that front. We don’t have any specific competitor that is doing a lot better or a lot worse than last year and likewise, the same in the other direction. We usually have a very, very broad group of competitors. And remember, we compete against some competitors in the up-market, which are different from the ones that we compete in the mid-market, which are different from the ones we compete in the low end of the market. But again just to add, we have to be careful in terms of – we are not trying to help our competitors here on these calls. But I think we have given you a lot of information already. So when we say that we experienced a great deal of pressure in turnover as a result of migrations and we told you last quarter that we are done with our run migrations in the low end of the business, you could probably jump to the conclusion that we didn’t have a retention problem in SBS or that maybe it even improved. But we wouldn’t be able to tell you that because we don’t provide guidance by business unit. I think Jan also mentioned that once you get into the up-market, in the mid-market the comparisons do matter and we have a difficult compare versus last year’s first quarter. But we are also trying to be transparent and share with you the information that we are seeing, which is this churn in our legacy base combined with what was enormous pressure on our service and implementation organization as a result of a large surge in business that I think with the benefit of hindsight, needed to have had additional resources to handle and we have those resources now in place.

Maybe one last comment is, as you saw, we really left our revenue guidance intact and left it intact for Employer Services and just down ticked it for the divestiture of our AdvancedMD business, which tells you also that we are confident about achieving the revenue number in the framework that we are guiding to, which contemplates of course, client retention in the revenue model.

Got it. Thanks. And then maybe just a quick question on the debt issue. At this point, would you characterize $2 billion as testing the waters or is this sort of at this point what you think your capital structure should look like?

Yes. So we affirmed at our Investor Day and also during our debt IPO that we committed to our AA rating and solidly in it, as you know we have requirements that in our money movement and client fund operation that make a strong exceptionally strong credit rating very helpful. And so you should think of this as a one and a deal of $2 billion debt on our balance sheet.

Great. Thank you.

Thank you. Our next question comes from the line of Lisa Ellis from Bernstein. Your line is open. Please go ahead.

Hi, good morning guys. Can you give an idea of – given the dates associated with the ACA regulation, how long – like, what you are anticipating the elevated bookings outlook to look like, how this will play out over the next four, six, eight quarters?

I wish – this is all going to be somewhat speculative because we have never been through an ACA. As you know, this is a new law and its complex, and its been phased in over time and now there are some real pieces, if you will and real penalties and real requirements with forms and so forth that kick in on January 1. But we have never seen this before. And so it’s hard to imagine, but some of the things that we are looking at as an example is what percentage of our client base has purchased or has taken the ACA solutions that we are – that we are selling. And the answer is it’s less than half, significantly less than half. And so there probably is some additional upside. And I think there is two scenarios. One is on January 1, everyone stops working – worrying about ACA and our new bookings return to kind of our normal levels of 8% to 10% or somewhere in that range. The other scenario is that come January 1 or January 30 or the end of February, people worry more about ACA because all of a sudden, the reality has hit. And that continues to drive demand for our solutions but also the solutions of some of our competitors and other people out there. The truth is probably somewhere in the middle, it’s hard to believe that there will be no additional interest or demand for ACA compliance or HCM solutions that help with ACA compliance post-January 1. But we really would literally be speculating if and guessing as to what those levels would be. And you just saw what happened over the last six months which is that we kind of underestimated and under guessed the level of activity and demand for these products. And in theory, we should have known better and now we are going to be a little – probably a little bit more vigilant and make sure that we are prepared if we would have to continued demand at the levels that we are seeing today.

Terrific. And then on that to follow-up, can you give us a little bit of a temperature check on the PEO business, which continues to churn along very strongly, is primarily what you are seeing there are still Greenfield sales or are you sort of benefiting from some of the struggles with some of your competitors in that area?

Yes. Traditionally, ADP’s PEO has grown from two sources of leads from our own client base and Greenfield clients. And the mix of that has been balanced and it continues to be very balanced. And the execution in the PEO is extremely solid and is a very competitive product. So I think we are seeing just a continuation of a trend, nothing specifically to report relative to the competitive environment. We have been the market leader with a superior product for very long time and execution and I think we are benefiting from that strength and continued to do so.

Terrific. Thanks guys.

Thank you. Our next question comes from the line of Jason Kupferberg of Jefferies. Your line is open. Please go ahead.

Good morning. This is Ryan Cary calling in for Jason. Thanks for taking my questions. Just a quick question on pays per control, I know you reiterated the full year expectation to 2% to 3%. It seems like the 2%, 2.5% in the quarter is a little bit lower than we have see in sometime, anything to reenter there or is just it bouncing around quarter-to-quarter?

I think what we are seeing is a little bit of a maturing in the growth in labor market. In our case, I think we were kind of right in the middle of what we expected. So it has to do with the hiring situation of some of our clients. I think manufacturing energy slowed a little bit. So I wouldn’t read too much into it. I think this is more a general comment about what is your assessment about the overall economic growth in the labor market to be done and I think we had for many, many years strong, strong labor market. And it seems to be now a little bit maturing, still at a very good clip. So I am not too worried about it. I think it’s kind of right in line of where we thought it would be.

Okay, great. And I just wanted to touch on pricing with my second question. First, could you talk about some of the trends you have seen in the quarter and then we are looking at the continued strong new business bookings we have seen over the several quarters, do you see pricing is the driver for any of these deal wins?

Yes. So in pricing, I think we have to analytically always separate what’s happening in pricing in our base and what is happening in pricing on our new deals. And so I think with your question, you are targeting a little bit what is the pricing environment for new deals. And we monitor that very carefully and measure it as kind of at a relative discounting levels that we have in the business. And they do fluctuate as we also excise different sales strategies in different markets, but the overall mix and discounting levels stays the same. So, we do see a stable competitive environment relative to pricing. Relative to our base, we continue to execute a strategy that targets less than 8% of price increase in our base, which is consistent of what we communicated with you in our Investor Day earlier in spring and we are executing exactly along our plans.

Great, thanks for taking my questions.

Thank you. Our next question comes from the line of Jim MacDonald of First Analysis. Your line is open. Please go ahead.

Yes, good morning guys. I wanted to follow-up on Carlos’ point about migrations being done for small business, could you talk about how many migrations are left in the other businesses that could impact retention?

I think the guidance we have given in the past or I wouldn’t call it formal guidance, but we have been talking about trying to complete our migrations in our mid-market by the end of fiscal year ‘17 and we are still on track to do that and that will have all of our clients on our current version of Workforce Now. We have made really tremendous progress over the last year. And I think we talked about in the last call that we had put in incremental resources to accelerate migrations and we did that very effectively, which as I mentioned also happened to put some pressure on us execution wise. But we have really made great progress. There was a platform in the mid-market called PCPW, which we are now down to, I think, it’s 100 clients or less. So, it’s a very big accomplishment, because that was a fairly large base in our mid-market space. And so we are just kind of methodically going through the same process that we went through in our small business division. I think someone reminded me just a few days ago the process in SBS of first stopping sales on the older platforms and then beginning the process of migration took a total of 5 to 6 years. And so these are not overnight. This is a recurring revenue model. We value client retention and we value our clients. And we do have to get off of these platforms, but we will not do it on anybody’s timeline other than our own timeline when it’s the right time under the right circumstances. And I think we have a good plan that we have been executing in our mid-market and we are I think on track on that plan. In the up-market, we have said multiple times that it’s a bigger challenge given the size of the clients and the complexity and frankly, the number of platforms we have. But I think there too, we have taken steps and built into this year’s plan a good number of migrations over to our Vantage platform that we are starting to execute on some of that, whereas a couple of years ago, we had literally no migrations on Vantage, so then maybe we had a couple of year we have – I am not going to disclose exactly the number, but we have some number of migrations. By the way, these are all pool migrations for now, where the clients are lining up and want to be upgraded to Vantage. So, this is not a push or a forced migration at this point. And so I think it’s safe to say we are on track in terms of our plans in up-market as well.

Right. And as a follow-up, I hear you settle your spat with the benefits, but did that have any impact in the quarter or distraction?

We had a lot of distraction, no impact.

Okay.

Thank you. Our next question comes from the line of Tien-Tsin Huang of JPMorgan. Your line is now open. Please go ahead.

Great. Thanks as always for all the details. Just one question for me. Just also on price, but I will ask it in a different way, just in terms of playing defense I get that you are more disciplined on pricing in general, but did you have potential to pull the pricing lever to protect your book from leaving as part of some of these migrations and you chose not to. Just curious what your tactic there was to try and actually protect that book as they transitioned?

I think it’s a fair question. I think it’s – I think the truth is that this was not a pricing issue.

So, I guess this sounds means you don’t want to elaborate on that?

Well, I am sorry, what was the rest of the question?

Yes, I guess if it’s not pricing, was it just sort of the change in desire to move to different platform or do you use a new service provider, I am just trying to better understand that?

Well, I tend to choke on my words when I confess that we had execution channels, so if you could just let me off the hook.

Okay, fair enough. I am good. It makes sense. Thanks guys.

We have time for one more question.

Thank you. Our final question will come from the line of Rick Eskelsen of Wells Fargo. Your line is open. Please go ahead.

Good morning. Thank you for squeezing me in here. Carlos, I wondered if you can go back and talk about analytics, you talked about that in your upfront commentary. Just wondering how you guys are pricing it and viewing it for clients? And how much is built in versus being sold separately to clients? Is it something that helps you win a deal or is it something that you are looking to actively sort of monetize here?

I will answer on the pricing side. We have a number of modules that are incremental to our core HCM product. So, as you buy payroll, obviously and time and attendance benefits and others we have employee per month charges and incremental products like analytics is charged on an incremental basis also and comes in different flavors depending on how comprehensive you want to subscribe to the benefit – to the benchmarking and deep analytic services. So, yes, a short answer is it is an incremental per employee per month charge and we are planning to monetize it for the vast amount of our business.

And everything we do is to help us win more business. So, I think that last part of your question clearly we do think that it helps differentiate us and helps us win deals.

Thank you. Then just a quick follow-up. With your switch now to EBIT margins, are you going to be talking about the segments more in EBIT or still on sort of a pre-tax basis? Thank you.

It’s kind of the same really. There is no difference. We call it now segment margins, but those obviously do not include ES and PEO don’t include any interest charges on the long-term debt. So, they are really unchanged.

Thank you.

Thank you. That concludes our question-and-answer portion for today. I am pleased to hand the program over to Carlos Rodriguez for closing remarks.

Thank you all for joining us today. As you could probably tell from our tone, we are really excited about the strong start that we had to the year and we are really happy with our momentum, especially in our new business bookings. You also probably heard our tone that we definitely feel like we have some challenges in front of us in terms of implementing all this new business, so that we really deliver on our commitments to our clients to help them comply with the new and complex healthcare regulations, but I think I also want to take this time to really thank all of our associates from sales, implementation and service for all the hard work they have done. It’s been a very challenging 6 months and particularly, a challenging quarter in terms of workloads. And we appreciate everything they are doing and they are going to continue to do to build upon ADP’s past successes. Thank you, again for joining us and thank you for your interest in ADP.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may all disconnect. Have a great rest of your day.