Ladies and gentlemen, thank you for standing by. Welcome to the Fourth Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, the conference is being recorded. I’ll now turn the meeting over to our host, CFO, Mr. Ed Pierce. Please go ahead sir.

Thank you. Good afternoon and thank you for joining us today. Before we get started, I would like to remind everyone that our presentation contains certain forward-looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties and our actual results could differ materially from those statements. Certain of the risks and uncertainties are described in today’s press release and in our SEC filings. We do not assume the obligation to update statements made on this call. For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website. Please note that on this call we will be referencing certain non-GAAP measures, such as adjusted EBITDA and adjusted net income. These non-GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between the GAAP and non-GAAP measures are included in today’s press release. I will now turn the call over to Peter Dameris, our CEO.

Thank you, Ed. Welcome to the On Assignment 2017 fourth quarter earnings conference call. With Ed and me today are Ted Hanson, President of On Assignment and Rand Blazer, President of Apex Systems. During our call today, I will comment on the markets we serve, our financial highlights, the ECS Federal acquisition and our name change. I will then turn the call over to Ted and Rand to discuss the performance of our operating segments and then over to Ed for a more detailed review and discussion of our fourth quarter results and our estimates for the first quarter of 2018. We will then open the call up for questions. Now, on to the fourth quarter results. Our results for the fourth quarter exceeded the high-end of our previously announced financial estimates for revenues, gross profits, earnings per share, adjusted net income and adjusted EBITDA were within the range of our estimates for gross margin. Revenues for the quarter were $169.1 million, up 9.4% year-over-year. This marked the 16th consecutive quarter that our company grew above the IT staffing industry’s projected annual growth rate. Our growth rate reflected, among other things, the continued deepening of many large new customer relationships that we have established over the last four years, the continuing increase in the rate of adoption of our delivery model, an improvement of the operating performance of Oxford and CyberCoders and the continued expansion of our statement of work business. Adjusted EBITDA for the quarter was $82.9 million, up 17.3% from $70.7 million in the fourth quarter of 2016. Cash generation continues to be at or above our expectations and since the closing the Creative Circle acquisition we have repaid $287 million of our debt. Our leverage ratio was 1.89 times trailing 12 months adjusted EBITDA as of December…

Thanks, Peter. Revenues from our Apex and Oxford Segments grew 9.4% year-over-year for the fourth quarter and 7.6% for the full year 2017. Both segments performed better than we expected coming into the quarter. Apex Systems, our largest division, continued to achieve growth rates above the market growth rate and led the performance of their segment, which Rand will discuss in a few minutes. Demand in the end markets we serve, IT, Creative/Digital/Marketing, Engineering and Life Sciences remains steady. Now onto the results of the Oxford segment, which is comprised of Oxford Core, CyberCoders, our permanent placement business, and Life Sciences Europe. Oxford Core and CyberCoders performed better than our expectations coming into the quarter, with Life Sciences Europe performing slightly better – slightly below initial expectations. For the fourth quarter of 2017, Oxford segment revenues were $144.4 million, down 0.3% year-over-year. Revenues decreased 3.5% for the segment on a sequential basis but increased 0.9% based on a same billable day basis. There were 2.7 fewer billable days in the fourth quarter of 2017 versus the third quarter of 2017. Segment revenues for the year were $588.8 million, down 2.5% over 2016. Oxford Core revenues, which account for 75% of the segment revenues, were down 3.2% year-over-year, but, as mentioned above, better than our initial forecast. The decline in revenue is attributable to the successful completion of a large project in the fourth quarter of last year, which had a $4.2 million impact on revenues. Despite the difficulty in growing over this significant project on a year-over-year basis, Oxford Core revenues grew 1.9% sequentially on an adjusted per billable day basis. We continue our hard work in this unit to improve growth rates and profitability levels. CyberCoders, our permanent placement service offering, which accounts for 95.7% of the segment’s permanent placement revenues, led segment growth up low-double digits year-over-year. CyberCoders momentum was positive throughout the quarter. Our Life Science offerings in Europe, the smallest contributor to total segment revenue, was up year-over-year low-single digits. Demand for our life sciences skill sets in the Benelux geographic markets remains strong. Gross margin for the segment was 41.8%, up 190 basis points year-over-year. Improvement in gross margin was primarily driven by a higher contribution of revenue from CyberCoders and improving pay to bill margin within the Oxford Core business. Based on the above, and better expense management within the Oxford Core unit specifically, the segment’s adjusted EBITDA results exceeded both our expectations and the prior year. Much of the hard work pointed at improving lost EBITDA margin at Oxford Core continues to show itself in the quarter’s results. I will now turn the call over to Rand Blazer. Rand?

Great. Thanks, Ted. The Apex segment, which consists of Apex Systems, Apex Life Sciences and Creative Circle business units, reported solid results for the quarter and finished the year strong. Apex Systems had another very strong quarter exceeding our expectations, Creative Circle performed slightly better than our initial expectations and Apex Life Sciences performed slightly below our initial expectations. Revenues for the segment in the fourth quarter were $534.7 million, up 12.3% year-over-year on a reported basis. Revenues for the full year for 2017 were $2 billion, up 10.9% on a year-over-year basis. Apex Systems, which accounts for 75.5% of the segment’s revenues, once again reported double-digit revenue growth. Our Creative Circle unit was up mid-single digits, and the Life Sciences’ unit, including the impact of the Stratacuity acquisition, was up mid-single digits in the fourth quarter. Gross Margin for the segment was higher year-over-year on a reported basis due to an out-of-period adjustment of $5.6 million to cost of services in the fourth quarter of last year. Excluding this adjustment, gross margin for the segment was down slightly year-over-year as a result of lower permanent placement revenues and higher volume discounts. However, the core bill rate and pay rate differentials across our business remained stable and we’re slightly up for Apex Systems reflecting a stable pricing environment for our services. Our segment’s EBITDA contribution continues to reflect high conversion of gross profit to EBITDA. This performance is driven by continued strong productivity of our sales, delivery…

Sorry, we lost Rand.

Excuse the interruption. This is the operator, yes. Mr. Rand, dropped, just a moment I’ll give him right back on the call, one moment please.

I’ll finish for him, operator. The continued high growth in our accounts in six of the seven industry verticals we service, with double-digit revenue growth in: Aerospace and Defense, Technology, Consumer Industrial, Healthcare, Telecommunications, and Financial Services Industry accounts. Business Services, the seventh industry vertical, also exhibited positive mid-single digit growth year-over-year. Also notable was the acceleration of the growth rates in the fourth quarter in five of the seven industry verticals we service, with the rate of change increasing across those industries in excess of 500 basis points from the third quarter of 2017. Growth was also balanced between top accounts and retail accounts with both achieving double-digit year-over-year growth rates. Our bookings for SOW type work remain strong in the quarter and has been reported in previous quarters continues to exceed our expectations. And finally, as mentioned, field and back office productivity continued strong in the quarter supporting Apex Systems’ EBITDA performance. Ed will now give us the financial results.

Thanks Peter. Revenues for the quarter were up 9.4% year-over-year, and up 8.6% excluding the $4.5 million contribution from Stratacuity, which we acquired in August 2017. The year-over-year changes in foreign exchange rates and the differences in the number of "Billable Days" did not have, on a net basis, a material effect on our revenue growth rate. Assignment revenues for the quarter were $647.5 million, up 9.4% year-over-year and permanent placement revenues were $31.6 million, up 9.2%. Gross margin for the quarter was 32.5%, which was in line with our previously-announced financial estimates. SG&A expenses were $151.4 million, or 22.3% of revenues. And after adjusting for $0.9 million in acquisition, integration and strategic planning expenses, which we do not include in our financial estimates, our SG&A expenses were in line with our financial estimates. Interest expense for the quarter was $6.0 million, down from $7 million in the fourth quarter of 2016. Interest expense for the quarter was comprised of $5.1 million of interest on our credit facilities and $0.9 million of amortization of deferred loan costs. The year-over-year decrease in interest expense reflected a lower debt balance and a lower interest rate as a result of the amendments to our credit facility. During the quarter, we reported an income tax benefit of $12.6 million. This benefit included a one-time, non-cash benefit of $31.4 million related to the recently enacted Tax Cuts and Jobs Act. Excluding this one-time benefit, our income tax provision for the quarter was approximately $18.8 million, an effective tax rate of 34.3%, which included approximately $2.5 million in excess tax benefits from stock-based compensation. Net Income for the quarter was $67.3 million, or $1.28 per diluted share, up from $24 million, or $0.45 per diluted share in the fourth quarter of last year. As Peter mentioned,…

Thank you. We continue to believe our scale, size and breadth of services has us well positioned to take advantage of what we believe will be historic secular growth for the industry and dynamic changes in the technology world. While the entire On Assignment team is very proud of our performance, we remain focused on continuing to profitably grow our business and increase our rate of growth. We would like to once again, thank our many loyal, dedicated and talented employees whose efforts have allowed us to progress to where we are today. I would like to now open the call up to participants for questions. Operator?

Thank you. [Operator Instructions] We’ll go to Kevin McVeigh with Deutsche Bank. Please go ahead.

Great. Thank you very much. Ed, I think just want to make sure in the Q1 guidance, you are including the diligence costs and ECS deals, is that right? So in that EBITDA, there is – the cost of the diligence is in those numbers, is that right?

Well, we included Ed’s prepared remarks that was $10 million and expenses related to the acquisition.

Those expenses are added back in the determination of adjusted EBITDA.

Got it, okay. So in the EPS – okay, I just want to make sure I was kind of thinking about that right. And Peter, again, you kind of really continued outpaced the market pretty handily. As you think, about kind of staffing levels internally and kind of the sales and the sourcing side, are you where you need to be? Or given how take supply? You’re starting to shift any kind of production into sourcing? Or how should we think about that as we walk away to 2018?

I will turn it over to Ted, and then Ted and Rand to make any comments, just go ahead. But look, I think the rate of adoption of our delivery model continues to gain traction with our customers and because of our size and scale and our investments that we’ve consistently made over the last four years, we are well positioned to take advantage of that demand today, not six months from now, today. So with that, Ted, I want to – I do want to brag on Rand and Ted because the performance was rate accelerated. And because of the performance we had in our business – in our core business, we were able to dedicate a lot of time and attention to getting the ECS transaction signed up and proven up in a very quickly – quick fashion. So Ted want you make a couple of comments about where we are on internal staffing levels.

Thanks, Peter. So Kevin, we keep increasing headcounts in every unit ratably. I would characterize this study, we are not pushing or surging, if you will, but we are also not standing still and that’s having both on the sales side as well as the recruiting and delivery side as well as within our statement of work unit, our industries, top accounts. So it’s across-the-board, and I would characterize it as steady.

Yes, Ted. And Kevin, were you asking about our internal stuff and also the contract employer community?

More of the internal, just in terms of – again, it’s just the numbers you just putting up a tremendous numbers and the ability to source given where the suppliers just continues to be really, really impressive.

Yes. I think Ted answered it, right.

Yes. Appreciate and then Peter, just real quick. Any thoughts on kind of where perm has been trending?

Yes. It’s been solid, and we hope to continue to increase the rate of growth over previous years.

Awesome, great job, great job.

Thank you. And let’s go next to Gary Bisbee with RBC Capital Markets. Please go ahead.

Hey guys, good afternoon. I guess, a question first on the Oxford core business. So now that you’ve – it sounds like you basically lapped that client that wound down big project a year ago. Any reason we wouldn’t expect that to return to growth in the next couple of quarters? And just maybe an update on demand and what else is going on within Oxford core. Thank you.

Ted you want to address that.

Sure. So that’s correct. I mean, we would lab that big project now coming out of the first quarter, there is a little bit of residue, but certainly, not a significant size that we did dealing with over the last four quarters. We – our rate of shrinking revenues, that’s the way to put that has been narrowing every quarter. And I think now we’re seeing increases in both billable headcount hours and revenues on a week-to-week, month-to-month basis in a pretty steady fashion. So I think if you play those numbers out, we’re not giving exact guidance at the Oxford level in terms of revenues, but you can see that we are getting to a point where hopefully we will be returning to growth here very soon.

And anymore color within the portfolio there, anything particularly, strong, weak, still a drag, any sort of high-level commentary?

If you think about that, that Oxford core business its heavy in IT, it’s heavy in healthcare IT, software and hardware engineering and Life Sciences. I think in all those areas, it has great end markets to be in. Healthcare IT continues to be a really solid marketplace to play in. The engineering has certainly been good. Lots going on with the Internet of Things and other unit comparable technologies within our software, hardware units. So I would say across the board, that Oxford core businesses is in the right markets. We just need to continue to push these initiatives forward on a sales strategy so that we can show the growth that I think exists in the markets for Oxford core.

Great. And then just two quick cleanup ones for Ed. The cash tax savings that you’ve – not in your adjusted earnings, but you call out from the legacy deals, those need to be marked down effectively for saving you less under the current lower tax rates related to tax reform, is that right?

That’s right. So if you look at Footnote 1 to our Q1 estimates, you can see what the new tax savings numbers will be on a go-forward basis.

Excellent. Got it, thanks. And then have you calculated or can you share if you have the billable days for the rest of the quarters of 2018? The release I saw gave it for Q1?

In fact, it’s included in our supplemental materials that you can find on our website.

Okay. All right, excellent. Thank you.

The $9 million number that Ed gave you preliminarily for ECS on the cash tax savings is a annual straight-line five year, and it does take into effect the new tax rate.

Yes.

Right. Five year for that or 15-year, like the other one?

15.

Okay, all right. Great.

But you need to add the two together, the deferred note and then that post-closing.

Perfect. Thanks for clarifying that.

We’ll go to Tim McHugh with William Blair & Company. Please go ahead.

Thanks. Can you just elaborate on Creative Circle? I think you mentioned kind of improving when you described at one point, but you also said mid-single-digit growth, which is what you had been talking about the prior quarter?

Right. So I’ll go first and then pass it on to Rand. I’d just point out, if you saw Interpublic numbers today, they were better. And I think the overall market is better and some of the steps that Rand and the team have done to kind of get refocused has delivered or started to deliver. Rand, you want to kind of get the current momentum and trend?

Yes – no, I think we initially thought they might not be as high as mid-single digits. And we came – they come on very strong at the end of the quarter. So that’s why we gave it that characterization.

Okay. Just want to comment about you didn’t think they might even be mid-single digits. I kind of – I may be mistaken. But I thought on the last call, you had seen some signs of improvement. So was there kind of up and down that we’re seeing still?

I think he was referring to the third quarter, and June was bad. And then we saw improvement in July and August. But just normal seasonality. We didn’t see a softness and the momentum continued.

Okay. And then Apex, if I kind of look at the core Apex, the growth really seemed to pick up there. I guess, is there any – there’s always project work here, I guess. But there’s – is there any particularly large projects that, I guess, create a tough comp later on? Anything unusual that drove the growth in terms of – go ahead.

No more than the normal seasonality we have for certain work in the fourth quarter that you’ve seen in 2015, 2016 and 2017 now.

And the comment about higher volume discounts tied to that, is that just growing within certain customers? Just want to separate that from your comment that the bill pace for Ed was stable.

Yes.

Yes.

Okay. All right, thank you.

We have a question from Jeff Silber with BMO Capital Markets. Please go ahead.

Thank you so much. Forgive me, I’m actually out of the office, this is kind of the back of envelope calculation. But looking at your guidance for the first quarter, it doesn’t look like you’re looking for a lot of SG&A leverage, the year-over-year increase imply for both gross margins and adjusted EBITDA are about the same. What if I’m wrong, forgive me, but if I’m not, are you just being overly conservative? Or is there something else going on? Thanks.

Look, it’s the start of the year. We don’t have budgets end up getting released and spend. There is the annual reset of payroll taxes, et cetera. So I think what I would look at, Jeff, is what the first two weeks in the performance were and what the gross margin percentage guidance we gave you, and we will figure the EBITDA out along the way.

Okay, fair enough. And then, sorry, just one more numbers questions. What kind of capital expense numbers should we expect for the year?

Probably, roughly – excluding ECS, but roughly $29 million.

Are there any big projects, excluding ECS, coming along?

No.

Okay, great. Thank you so much.

And we’ll go to Tobey Sommer with SunTrust. Please go ahead.

Thanks. Could you comment on the bill pay spread at Oxford? And is there any kind of emerging skill sets that are helping drive that higher?

Ted?

Tobey, I wouldn’t say, new emerging skill sets, I mean, Certainly, I wouldn’t say that’s underneath, and I think it’s just good. I would characterize, it is good pay to bill, management of the rates. Obviously, remember that in a market like this, because Oxford is not dealing with large customers, so dealing with small and midsize customers predominantly that they are creating their rate on the spot every day. And so when there is a high demand skill set, which is what they deal in then there – and there is a lot of competition in the marketplace, then they’re able to get a better mark. So I think I would attribute most of it to that, and I think it’s about it.

Thanks, Ted. In the revenue trend that you gave us for the most recent two weeks compared to year ago, anything noteworthy in that comparison? Or is that – as far as you can tell pretty clean comparison?

Pretty clean number.

Okay. Peter, is there anything that you plan on doing or could do to differentiate the company more in the statement of work space, either accelerate some internal investments to achieve that or acquire your way to further differentiation?

Tobey, we’re doing quite nicely there. We’re building the team out. We’re really focusing on it organically. We do look at whether there is a smaller acquisition that may have some replicable frameworks that might accelerate, but the bar is pretty high and Rand’s team has done a great job of building the capabilities organically and bringing some people in from prior consulting. We’re all experienced to augment the great team we have. So it’s steady as she goes.

Just two other questions for me. In the association meeting on Capitol Hill with respect to H-1B visas, are you – is the association experiencing bipartisan support? Or how would you characterize the receptiveness?

Yes. So I would tell you, the – you can – it’s public information. It cleared out of the committee on a voice vote and it was 100% bipartisan, 100% consensus. And so it’s – we’re seeing the benefits of kind of the greater scrutiny on the award of H-1B visas without even any legislation having been amended or voted in. But we fully expect, once they get to some sort of immigration bill, that this will be kind of tagged on, because it’s not controversial.

Okay. And then the last question from me, what’s the outlook at the firm for growth in staffing consultants in the Oxford and Apex units?

Ed?

I would say, same as it’s been in this year, Tobey, if you were just trying to get a relative data point. I mean, we’ll grow our headcount, and it depends on where we see the most opportunity, but typically, a little bit less than the rate of the growth in the business. So we expect to pick up a little productivity. And also, we want to support our client opportunities by putting the feet on The Street and new recruiters in the chair. So a little bit less than the rate of growth of the business.

Okay, thank you very much.

And we’ll go next to Mark Marcon with RW Baird. [Operator Instructions] Again, we’ll go now to Mark Marcon. Please go ahead.

Good afternoon. Thanks for taking my questions. Just wondering, as you’re looking at the first quarter and even thinking about the year, how you’re thinking about bill rate increases going through? And specifically on the Apex side, how would you anticipate that those are going to flow?

Well, we don’t think we’re going to see margin compression, because we can’t pass along bill rate expansion because of the need to pay the temp more. I mean, we have those conversations appropriately in real time, when appropriate, with the customers. And they’re seeing it in their full time staff. So I think that you’ll see us continue. Mark, we’re not a onesie-twosie business where you try to gauge the customer by telling them this is – to get a higher margin from the customer before you pass on a pay rate increase. I mean, people who are using our services are doing it for very thoughtful strategic reasons. And so the conversation about increasing pay rate is more – is a lot more real and thoughtful and optically clear. So I think you should continue to see the trends. I don’t think you should see margins expand like you might see in somebody who runs a onesie-twosie retail business. But you should see us being able to pass the expense along to the customer if we’re having to pay the temp more. Does that answer your question?

It does. I was just trying to also get a sense for like what was embedded in terms of your guidance, because obviously, it’s continuing to grow really well. And looking through the slide deck on the average bill rate on Apex side, it’s up 1.6% year-over-year. So I was just trying to – excuse me, just trying to figure out if you’re assuming that we’d have a similar sort of rate of increase and then backing into the hours, et cetera?

Yes. I don’t want to predict what the rate of wage growth will be. But what I can tell you is what’s driving our revenue is really not so much wage growth as it is number of consultants on billing.

Okay, great. And then – I mean, the gross profit per staffing consultant continues to increase at a dramatic rate. As you increase the number of permanent folks at a slower rate than revenue, I’m assuming that you would expect that, that gross profit per staffing consultant would continue to increase?

Yes. A couple of things that I would alert you to. That number gets a little bit buzzy if you’re looking at it on a consolidated basis because of where we are in enhancing the business model at Oxford or at CyberCoders. And I’m looking, but do we give it on a – we give it on a consolidated basis, guys, right?

Segment.

Segment. So we would – our whole e-deck is that we want to have operating leverage. And now that Ted’s team through a lot of hard work in 2017, there is still a little work to do, we’d hope that, that could continue.

Great. And then two more. Just you mentioned the H-1B legislation looks like it’s going to go through. When it comes through, what sort of incremental bump do you think that could potentially lead to over the ensuing six months? And then secondly, what’s the reaction been internally in terms of the ECS acquisition?

So, a couple of things. With regard H-1B visa, no kind of increased incremental growth targets hasn’t to say anything that puts a focus – a greater focus on domestic labor versus foreign labor increases demand for our services. And rate of adoption of our delivery model and focus on domestic labor as this is very well positioned, because as you know almost 99% of our workforces is W2 domestic labor. As it relates to ECS, it’s gone incredibly well. You know that the first question we asked is the business acquirable, not as at accretive, and this is a great company. The reason Ted, Rand and I are now on the same call as we all just came back from our annual awards trip, and we had some of the senior leadership from ECS attended, so they could start to build relationships directly with people who might help them and who they may help, and it’s great. Our thesis is that we can really help that – they have a great position, they have great contract vehicles, and the biggest inhibitor to growth for the entire federal prime contractor space is cleared personnel. And we are really good at human capital, recruitment and attraction and we got to figure out how we help them in that area conversely our customers on a commercial side are quite concerned about cyber security. And so the work that they are doing is interesting and thoughtful and timely for some of our financial service customers. And the final thing is, because we’re really not in that space as a prime contractor, the company ECS continue to thrive and build out their vision and their management team and excel and reap the shared benefit of performing as our previous companies Apex and Creative and Oxford have. And it’s a much different acquisition than if one of the larger prime contractors acquired them just for their contract vehicles and for their billable staff and did anybody else. So it’s an incredibly positive feeling right now, and I think that will continue based on our past experience and looking at the right companies, and if they harmoniously exist with us and not have sales channel or cultural conflicts. So we feel good about it.

Appreciate the answers of great job.

Thank you.

[Operator Instructions] We’ll go to Edward Caso with Wells Fargo. Your line is open.

Good evening. Congrats here. Given the upcoming addition of ECS and the government business is really not a gross margin, but it’s a EBITDA margin business. How do you plan the present the data, because you’ve always given a sort of gross margin guidance historically. Is that going to drop off?

No. Ed, it’s a great question. We’re debating that and welcome your input, but we are debating that as we speak. We’re probably – ECS is going to be a separate reporting segment. And so what we’ll probably do is maybe give you guidance for gross margins at least for the core business, since you’re used to it and then maybe guide you to what EBITDA margins are for the federal prime space and not focus so much on the gross margin there.

Is there any goal for permanent placement fees as a percent of revenue both on a – either on a pre-ECS or post-ECS basis?

Not really. I mean, just because of our sheer size and the way we keep our people focused on their daily revenue-generating activity, it’s hard to believe that it could get substantially above 5.5%, 6% and I think this quarter it was 4.9%, 5%.

4.7%.

4.7%. So I think our peak was 5.1%.

6.1% on a pro forma basis.

6.1% on a pro forma basis, but that was many years ago. And so I really think getting north of 5.5%, 6% would be highly unusual.

Last question. Any thoughts on Investor Analyst Day and your willingness to give multiyear guidance at that point?

Yes. We are working on that. It’s just as you know, we’ve been busy, and we’re scheduled to close and we will the ECS acquisition on April 2, the funding we had the bank meetings, the underwriting and the subscription of that is going well. But we are looking later May. And when we have confirmed what we’re going to do, we will put our press release. But it is our intention to try to do something late May and layout both our strategic and financial goals.

Great. Thank you.

And we go back to Tobey Sommer with SunTrust. Your line is open.

Just had a numbers question maybe for Ed in terms of the tax rate. Is the 26.5% for ECS a pre-amortization orders that post-amortization?

That is a – that includes – that is a financial GAAP tax rate. It’s our effective tax rate. And it does not include the benefit of the tax amortization of goodwill in terms – now let me clarify something. It’s – that is an add on, okay, and it’s $9 million a year, okay? And so if you look at this on a cash tax basis, okay, not a GAAP basis, but cash tax basis. And we calculate the cash tax rate, I think, on a consolidated basis, we are going to be somewhere around 19%.

Okay, that’s helpful. Thank you.

Thank you. And we’ll go to Mark Marcon with RW Baird. Please go ahead.

Just one more tax question. After this year for the non-ECS businesses, what’s the cash tax savings going to be end up being from the amortization of the goodwill?

So Mark, if you look at the Footnote 1 of the estimates, we give that on a quarterly basis. All you got to do with the [ph] license.

I meant for beyond this year?

It’s going to be the same.

Okay. There is no job.

Straight line.

Great. Thank you.

And I’ll turn it back to our speakers for any closing remarks.

We appreciate your attention and we look forward to discussing our first results with you. Thank you very much.

Ladies and gentlemen, this will conclude our teleconference for today. Thank you for your participation and for using AT&T Executive Tele Conference service. And you may now disconnect.