Welcome to the CSC fiscal year 2010 second quarter earnings conference call. Today’s call is being recorded. For opening remarks and introductions I would like to turn the call over to Mr. Bryan Brady, Vice President of Investor Relations. Please go ahead, Sir.

Thank you operator. Good afternoon everyone. Welcome to CSC earnings call for the second quarter of fiscal year 2010. We hope you’ve had a chance to review our financial results which were issued to you earlier this afternoon. With me today are Mike Laphen, our Chairman and Chief Executive Officer and Mike Mancuso, our Chief Financial Officer. As usual, this call is being webcast at www.CSC.com and we have also posted slides to our website to accompany our discussion. On Slide Two there is a reminder that statements made during this call that are not historical facts may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties which could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the company’s filings with the SEC and copies of these filings are available from the SEC, from our website and from our investor relations department. Slide three acknowledges that CSC’s presentation includes certain non-GAAP financial measures. In accordance with SEC rules a reconciliation of these metrics to GAAP metrics is included in the tables of the earnings release and in the appendix to our slides. Both documents are available for your review at the investor relations section of the CSC website. Finally, I would like to remind our listeners that CSC assumes no obligation to update the information presented on this conference call except of course as required by law. If you would kindly move to slide four, I am pleased to turn the call over to Mike Laphen.

Thank you Bryan and good afternoon everyone. We are quite pleased with our second quarter business performance and financial results. We delivered significant EPS growth, expanded our operating margin and improved cash performance. We also achieved solid new business bookings and sequentially positive revenues across all three lines of our business and we continued to focus on delivering real results and value to our clients. Slide five provides a scorecard summarizing our operational and financial performance. Improving profitability has been a consistent objective of our management team. In the second quarter we delivered GAAP EPS of $1.40. This more than doubles our pro forma results of $0.68 for last year’s second quarter and is a 65% improvement over that of the first quarter. We continued to expand operating margin with improvement of 178 basis points over last year’s second quarter results. This margin expansion derives from improved operational performance, recurring benefits from our cost structure improvement program and continued proactive management of expenses. Quarter-over-quarter free cash flow improved by $263 million. We are particularly pleased to be $130 million ahead of last year’s first half results. This cash flow performance has enabled us to maintain a strong liquidity position and to strengthen our balance sheet. Top line stability continued in Q2. Our revenue performance of $4 billion was in line with our expectations and positive sequentially for all three of our business segments. We are anticipating that improving economic conditions and our new business bookings will lift revenues in the second half. For the NHS, several recent accomplishments are noteworthy. First, LORENZO continues to perform as a production system at our three early adopter sites. In September two additional trusts, Hereford and Five Burroughs went into production with this release as well. The lack of fanfare for these two go-live…

Thanks Mike and good afternoon or good evening to all. Again, I am especially pleased to share with you the highlights of what we believe to be another solid financial quarter for CSC. I will begin with chart 9 which reiterates the important financial accomplishments for this second quarter. New business awards in the quarter were $4.6 billion as Michael Laphen said. This puts us at $8.1 billion for the first six months, tracking towards our target of between $17-18 billion for the year. We are, in fact, off to a strong start in the third quarter and remain confident we will achieve our goal. Revenue in the quarter of $4 billion although down from last year did exceed our FY10 first quarter by $143 million, actually about a 4% increase. Again, this trend fortifies our belief the second half revenue will grow and wind up within the range of our guidance. Operating income also increased significantly year-over-year a result of our continuing focus on cost control and execution. The margin rate improvement emanates from this and keeps us on track for a 25-50 basis point gain for the year. EPS of $1.40 is just slightly above the second quarter guidance I gave you about three months ago. This is not only an important performance metric but another milestone on the road to continuously improve our consistency and predictability. Again, $1.40 is significantly above last year after adjusting out last year’s large tax settlement. Arguably the most important highlight could be our cash generation. We had a very strong quarter with free cash flow of $429 million, well above last year. Besides supporting realization of our annual guidance, this strong second quarter gives me comfort we can be successful over time in producing more evenly distributed or balanced cash flows…

Thank you Mike. We are now ready to begin the Q&A session. Operator could you please issue the instructions to our callers please?

(Operator Instructions) The first question comes from the line of Bryan Keane – Credit Suisse. Bryan Keane – Credit Suisse: I just want to ask about the operating margins. They are up about 115 basis points year-over-year for the first six months and you are guiding for 25-50 basis points. I guess backing into that tells us that margins are probably going to be down year-over-year in the second half of the year. I just want to make sure I understand why that would be considering a lot of the improvement in margins sound like cost control and execution and why doesn’t that continue?

I’m not sure the conclusion is correct that we are going to be down in the second half of the year. Last year we finished with a rate that was about 8.26% to 8.27% and we guided to a 25-50 basis point improvement this year so we would expect this year to come in somewhere between roughly 8.5% to 8.8%. Given that our first quarter was in the 6% range, I forget exactly what the number was, and 8.4% this quarter the second half of the year will be up and will need to be up obviously if we are going to achieve the guidance we have out there. So we see the second half margins improving again and bringing out the full year somewhere in the range of our guidance. Bryan Keane – Credit Suisse: I guess I was talking about the year-over-year improvement in the margins. This quarter for example was 8.44% which was quite a bit up over the 6.65 in the year-ago period. If you are only going to be up 25-50 then we are just not going to see anywhere that kind of margin improvement to get to that 25-50 window. It just doesn’t look like to us the operating improvement will continue at least at the same rate. Maybe there were some milestone payments or something else in there that makes up for the difference?

There are some obviously mix differences and other items in there. There were a number of non-recurring, if you will, client related or stressed client related charges in last year’s number that don’t repeat this year which has created the dramatic year-over-year swing. Bryan Keane – Credit Suisse: Any update on the next upcoming UK NHS milestones? Congratulations on hitting Bury and a solid quarter.

Thank you. As I said we went live November 3rd. We will continue with that process and the NHS will do a report on or about the end of November which we are optimistic about. The next major one then we move to Morgan Bay and that would be in the month of March.

The next question comes from the line of David Grossman – Thomas Weisel Partners. David Grossman – Thomas Weisel Partners: Just going back to your slide 7, you talk a little bit about what your expectations are in the second half of the fiscal year. I am just curious how much visibility do you have on some of this stuff happening? Is it based on pipeline or things that are visible today? Included in that, how much of that is also a function of easier comparisons as the growth rate in the second half of last year slowed down as well?

Let me talk about it a little bit by line of business because I think that is how we keep the visibility. In terms of NPS, the public sector business, we have pretty good visibility on that. The only possible effect on that from a downward side is any delay in some awards. As I announced here we won the TSA award. We just got turned back on today. It is under protest by two parties but we just got turned back on today to proceed on that. So hopefully that will stay in place. If it does then we will be feeling pretty good about the second half numbers. In terms of the outsourcing activity is pretty robust there as I said and the project work seems to be holding up pretty well there right now. I think the area we are probably watching most closely is the consulting area in our business solution services sector. We are seeing stability there. We did see some improvement the last quarter. We are seeing more activity at the client, as I said, as they are formulating their budgets we are getting indications budgets will be increasing in 2010 so we are very cautiously optimistic we are going to see the uptick in that part of the business segment in the fourth quarter. David Grossman – Thomas Weisel Partners: It just looks like the first half of the year results get you to the low end of your guidance. Are we just basically looking at what shades of grey we can get in between the 16-16.5 based on your first half results?

Yes, I think our guidance is still good. It is between 16-16.5 and I clearly think it depends on a couple of factors that I just laid out. We are pretty comfortable in that range of 16-16.5 and it is again just a question on whether we get held up on some protests on the federal business and whether there is a bit of a pickup in the discretionary project work. If there is then we will be at the upper end. If there is not then we will be at the lower end. At this point in time I think that is the best visibility we can give you. David Grossman – Thomas Weisel Partners: I know someone just asked the margin question, but what are the variables that really determine where you fall on that range of 25-50 bips? Is it revenue growth that determines the 25 bip spread or is there more to it than that?

Well there is revenue. There is [nicks]. We have talked about NHS, there are significant NHS milestones in the second half of the year. Some in March as Mike talked about answering the question about Marcum Bay. NHS has a respectable margin with it so that will have an impact on the margin improvement and generation in the second half of the year. So obviously it is a lot of factors. Mix would be one of them. David Grossman – Thomas Weisel Partners: On the NHS, you seem to be pretty positive about this most recent milestone as being a turning point for the contract in Bury. Can you give us an understanding of what the mechanics are and why you feel that way and what happens over the next six months that really puts this contract into more of a production mode than the kind of validation mode where we have been the last couple of years?

This was a major functionality release including patient care. We are basically installing the core system with this 1.9. You think of it as an SAP or ERP system that is probably the easiest way to think about this and we are installing the core system at this point in time. There will some additional functionality added as we go along but to my way of thinking this was absolutely critical in terms of moving forward and I think I have been pretty straight forward about that and I think the customer has been pretty straight forward with that. We are extremely pleased with this. We are getting good results. We are obviously getting some tickets that need to be closed out and we are working those aggressively so I am pleased with that. Now we move to the next environment which is the more complex hospital of Morgan Bay but having accomplished or having this functionality be live at this hospital is from our perspective really a turning point. David Grossman – Thomas Weisel Partners: Is that the major difference between Morgan and Bury? Just the complexity of the environment?

Yes, there is a bit more functionality but it is a larger, more complex hospital.

The next question comes from the line of George Price – Stifel Nicolaus & Co. George Price – Stifel Nicolaus & Co. : I think you talked about the revenue growth returning to year-over-year growth in the fiscal fourth quarter I guess implying we are going to be down year-over-year in the fiscal third quarter. Can you give us a little color on that and maybe quantify that to some extent?

I think sequentially the third quarter is going to be relatively flat as we see it now. So we are seeing a bigger uptick in the fourth quarter than we are in the third quarter. The fourth quarter is always a big quarter for us for a lot of reasons. There is greater utilization. More billing days in the fourth quarter. It is the quarter that licenses because it is our last quarter of the fiscal year that drives both revenue and by the way that drives profitability and the margins in a significant way as well. I think what you should anticipate is a relatively stable top line in the third quarter and then as some of our new business kicks in that we have booked we anticipate the uptick. Also we are expecting somewhat of an uptick as I mentioned earlier in the discretionary spend area.

Just to further elaborate a bit on what Michael Laphen said. This year third quarter looking back at last year’s third quarter, last year as the economy started to soften, our revenue started to actually decline if you will in the third quarter. This year’s third quarter albeit flat sequentially is probably up a little bit or will be up a little bit from what we saw in the third quarter of last. Again, we are looking for the growth as Mike pointed out in the fourth quarter but year-over-year looking at the third quarter and assuming we are going to be relatively flat in our third quarter sequentially, we will still be up a little bit over last year. George Price – Stifel Nicolaus & Co. : Is there anything else going on underlying the revenue that is atypical from seasonality? Any mix shift from third to fourth quarter or anything else going on?

Again, as Mike Laphen pointed out, it seems like at least in the federal business there is not a contract you can win that doesn’t get protested so that has given us some fits and starts but other than that there is no underlying other than what we have already talked about. George Price – Stifel Nicolaus & Co. : The EPS guidance if I do kind of keep the revenue flattish I think implies or could imply a quarter-over-quarter decline in margins. Is that the case and if so what is kind of the driver there?

Assuming you are talking about the third quarter? George Price – Stifel Nicolaus & Co. : Yes sir.

I don’t think we are going to see a year-over-year decline in margin. George Price – Stifel Nicolaus & Co. : Quarter-over-quarter decline, which is the typical seasonality that I think we usually see.

No, we don’t expect a quarter-over-quarter decline. The issues that we talked about are the ones of the timing of the revenue uptick and when it kicks in and any unusual things happening good or bad in the tax rate between third and fourth quarter. We are hedging our bets because there is a lot going on in the tax rate but you shouldn’t anticipate a margin decline in the third quarter. George Price – Stifel Nicolaus & Co. : Any update on the status of the REA litigation? Or the process overall?

We have successfully negotiated the resolution of one of the REA’s which we did put a public announcement out about that. We are very pleased to have that one behind us in a successful way. The second one is in litigation and we are probably at least a year and probably more away from commencing the court case itself. Obviously there is a lot of time between now and then and maybe we will come to a resolution between now and then. That is to be seen. We are very pleased to have one resolved.

. : Ashwin Shirvaikar – Citi: A question on free cash flow. Did your comment on having reasonably good cash flow apply to this year or was that a longer-term goal? In other words will cash flow sort of reflect the EPS trend that you laid out on page 16?

No, my comment really is a longer-term comment. We have a track record or a seasonality profile of our cash flow that shows us as a big user of cash in our first quarter. Somewhat achieving neutrality by the second quarter and a significant uptick in the fourth quarter. What we are trying to do is long term get more even distribution of cash flow but it will take time. It will require alterations in contract geometry, terms and conditions, setting of milestone dates, etc. So it is high on our priority list but the fruits of which will probably take a couple of three years to bear fruit. Ashwin Shirvaikar – Citi: A question on, you have good improvement here in operating margins it looks like. As you get better bookings in the commercial side of the business should we expect both margins and cash flow to take a step back initially?

No, I don’t think so. I think you will find it is our goal to continue to hopefully improve our margin rates. We are not willing to take business, if you will, in a general macro sense that would lend itself to eroding our overall goal to improving margins quarter-over-quarter and year-over-year. So we wouldn’t want you to think or look for a decline in margins. Quite the contrary. Ashwin Shirvaikar – Citi: Don’t you need to invest in new contracts as they ramp though? That is kind of what I am talking about. Then on clarification if there is a 3Q impact on billing days?

Let me answer the second one first. We hope to see an improvement in billing days will manifest itself again in the third quarter. I am not ready to go out on a limb and give you a number of days but needless to say it is a high priority and we are working feverishly to make that happen. As far as your question on investment in new contracts, other than capital expenditures on significant outsourcing contracts I don’t see us taking any kind of R&D type investments or development investments in new contracts that would have us starting low and going high. I don’t see that happening in terms of the way we are looking at the future.

The next question comes from the line of Karl Keirstead – Kaufman Bros. Karl Keirstead – Kaufman Bros.: I got a call about the government unit. The growth rate accelerated pretty markedly and yet as I am sure you are aware even some of your larger rivals like Lockheed and SEIC have been talking about funding shortfalls and you appear to have bucked that trend. I’m wondering if you can help explain to us how you are able to do that?

Well I believe we have been pleased with our success in the various areas. Again, our footprint is pretty extensive both in defense, Homeland Security and the civilian agencies. Now we had a bit of an uptick this quarter as a result of some of that REA settlement as well so not all of that was strictly the operational gain but nevertheless it was still a significant uptick in the revenue. On a consistent basis I think you should look to mid to upper single digits for the year and going forward. Karl Keirstead – Kaufman Bros.: Given how large the Zurich financial deal is, do you need that deal to close in the coming months and to ramp on any specific timetable for you to hit the revenue guidance?

No.

The next question comes from the line of Eric Boyer – Wells Fargo Securities. Eric Boyer – Wells Fargo Securities: In terms of the TSA protest can you read anything into the fact that you are again getting work on that deal? Is that deal included in your year-to-date signings number and the guidance you have out there?

I didn’t hear the first part of the question. Eric Boyer – Wells Fargo Securities: Just the fact that you are again doing work on that TSA deal. Do you read anything into that as far as how the protest is going?

No, I wouldn’t jump into that one. You really have to reach out to the customer. We just got notice today and we are delighted we got it but I really couldn’t give you any more insight in that frankly. Yes, it is included in the bookings. Eric Boyer – Wells Fargo Securities: On the bookings guidance again, looking at that roughly what percentage of that is new incremental revenue? How does that compare to prior years?

I don’t know if we have it broken out incrementally but over last year, year-to-date the 12.3 compares to 10.8 at this time last year. Eric Boyer – Wells Fargo Securities: Now, I was actually thinking about the amount of re-competes you might have in that number?

We will have to get back to you on that. We don’t have that all broken out that way. You can follow-up with Bryan Brady subsequent to the call if you like. Eric Boyer – Wells Fargo Securities: Any early read you are getting on calendar year 2010 IT budgets?

As I said there seems to be positive movement. We are anticipating uplift in 2010. We are expecting some good growth next year. I don’t want to predict it at this time because they are going through the budgets but I can tell you that it is feeling a lot better than it has for the last 12 months. Eric Boyer – Wells Fargo Securities: Sorry if I missed it but did you talk about Europe at all?

Not specifically. No. Eric Boyer – Wells Fargo Securities: Can you give us a little color on Europe compared to North America? How is it doing over there?

Well it is active. The outsourcing side is active for us. The project work boy that really varies country by country. I would probably say the softest region right now is Germany in terms of our larger locations. I think the other ones are doing pretty well but Germany is a bit weak.

The next question comes from the line of Tien-Tsin Huang – J.P. Morgan. Tien-Tsin Huang – J.P. Morgan: I also have a bookings question. The $4.2 billion in signings quarter to date, does that include all $2.4 billion for Zurich and what does the balance look like in terms of mix across the different lines of businesses?

Within the 12.3 it does include Zurich. I’m sorry, what was the second part of the question? Tien-Tsin Huang – J.P. Morgan: Through November, it sounds like it includes some Zurich work so I am curious of the $4.2 billion signings quarter to date how much of that is Zurich?

2.4 I believe. Yes, 2.4. Tien-Tsin Huang – J.P. Morgan: The whole 2.4. Anything else that is chunky? It sounds like TSA and some others…

I can’t comment on the other commercial ones. TSA is in there. Nothing else really chunky other than that. Raytheon was in there but I can’t really comment on it. I am not at liberty to discuss that number. It is rolled up in the total. Tien-Tsin Huang – J.P. Morgan: When do you expect to get the terms around Zurich finalized?

Hopefully this month. Tien-Tsin Huang – J.P. Morgan: Lastly, I was hoping to ask a higher level question on consolidation. Your thoughts on all the consolidation in the services space, the BPO space, etc. Does it change your thinking at all on M&A in general?

Not in general but that is probably a better question to be addressed at the Investor’s conference next week if you wouldn’t mind. Tien-Tsin Huang – J.P. Morgan: On free cash, some thoughts in the second half of the year for working capital, CapEx, just some of the key moving parts that drive free cash flow that would be helpful.

Obviously we expect cash flow to improve significantly in the second half of the year to achieve our guidance of 90-100% of net income. I think year-to-date we are just about even, just a tad above even in terms of free cash flow. CapEx will be there is no large slugs I can think of in any one place. There are replenishments across a number of contracts that are normal. Overall you should still see further improvement in receivables, etc. which will yield benefits. There is nothing I can really tell you about CapEx and some of the other moving parts other than overall with additional income and further working capital improvement we will generate a significant amount of cash in the second half of the year.

The next question comes from the line of Julio Quinteros – Goldman Sachs. Julio Quinteros – Goldman Sachs: On the margin improvement was there anything in there regarding the benefits plan in Europe being cancelled, or at least in the UK?

No there was not. That is something that is actively being worked, being discussed, etc. Year-to-date there is no improvement reflected in the margin rate for that assuming we reach agreement with our European workforce on altering the benefit scheme using the British term in the UK. We are optimistic we will be successful in reaching an agreement that satisfies the needs of all parties but I can’t predict for you the exact timing of that. Julio Quinteros – Goldman Sachs: On the commentary around the return to positive growth in the fourth quarter, is that on a constant currency basis or a reported basis?

On a reported basis. Julio Quinteros – Goldman Sachs: I don’t think I heard, but did you provide an assumption on what currency would be doing by then? Will this be helping or hurting your numbers, if you will.

If I had tomorrow’s newspaper, I would probably not be on this call. We are just making third and fourth quarter forecasting based on what we know today, not conjecture on what might happen. Julio Quinteros – Goldman Sachs: The acquisition comment, the contribution in the quarter and going forward for the Brazilian business that you mentioned, any numbers around that?

No but it is minor. Julio Quinteros – Goldman Sachs: On the CSC Google deal with the City of Los Angeles, that is a really nice, high profile win for you guys. I guess I am just wondering in the way the terms are structured, reading some of the different blogs and things are out there, it looks like you have the liabilities where Google doesn’t. How comfortable are you with that type of arrangement and just help us understand a little bit how the contract relationship would work versus what Google is doing and what you are doing there for the City of Los Angeles?

I am not going to get into the contractual structure. Very simply, if we weren’t comfortable with it we wouldn’t have signed it.

The next question comes from the line of Jason Kupferberg – UBS. Jason Kupferberg – UBS: Mike I guess you have been at CSC for about a year now. Based on what you have seen up to now as you start thinking beyond fiscal 2010, I know you talked earlier about continuous margin improvement as a general approach but how much margin headroom still remains beyond fiscal 2010? Just based on how the business model is constituted and maybe you could weave into that some commentary around how you see the organizational structure sized right now relative to the demand out there in the marketplace. What I am trying to get at is how much margin expansion is there potentially in the business beyond fiscal 2010? How much of that potentially comes from sort of restructuring your own business versus just getting some leverage off of better revenue growth, or changing your mix or initiatives such as that?

I will take a stab at it. First of all, let’s set the record straight, I have been here 11 months and 2 weeks of which I am quite happy about. I am very pleased and fortunate to be part of CSC. You kind of asked a question how high is up. We have an ongoing campaign which we have talked about to constantly and consistently continuing to improve margins. Not necessarily in the form of restructuring. We are restructuring every day in the form of introducing improvements in cost structure and innovative ways to be more efficient, etc. We are keenly paying attention to contracts and contract terms. We have got ourselves wrapped around execution so we maximize our performance on the existing contracts as well as new ones. We are cautious about the health of the potential clients we bid to, to make sure of their health. We are entering alliances and arrangements with credible partners like Xerox to enhance our market position and provide margin expansion opportunities. So it is some and all of everything. We are prepared to continue to strive and commit to 25-50 basis points improvement year-over-year. More obviously if possible but certainly to challenge ourselves in that regard and we are going to continue in that vein. We will keep “sweating the assets” or squeezing them until there is no more use left in it. I don’t know where that is but it won’t alter our fervor for improving and I think as I said there is room for improvement as we go forward.

I would just like to reemphasize one of the points Mike made there regarding restructuring. I made a commitment at least year’s Investment conference that any so called restructuring charges would not be below the line for us. They would be embedded in our P&L and they are. Like everybody else we have to make adjustments. As Mike says we are doing that all the time and we will continue to do that all the time. You see both the expense of that and the benefit of that in the full P&L. Jason Kupferberg – UBS: I know you mentioned Xerox as a partner and I think you have an outsourcing contract with them as well you had announced maybe six months ago. Any aspect of that relationship expected to be impacted by their planned acquisition of ACS?

No I don’t believe so. We have had follow-up discussions and I think everybody is planning to go forward as intended. I don’t see any significant change there. Jason Kupferberg – UBS: Can you give us an update on the percentage of your commercial workforce that are now located in low cost regions? Where would you expect that figure to potentially trend in the coming years just based on how you see client demand evolving?

I think of the non-government work I think it is about 30%. We are targeting 50% and see that as doable as we go forward and continue to win new business. Jason Kupferberg – UBS: Over what timeframe?

You know I don’t want to give a specific number here. We will give it at the Investor’s Conference next week.

The next question comes from the line of Rod Bourgeois – Sanford C. Bernstein. Rod Bourgeois – Sanford C. Bernstein: I first want to ask about the REA gain. How will the REA gain that you have achieved resolution on affect fiscal 2010 revenues and cash flow?

It will be in there but it will not be visible in terms of any significant spike. The resolution of the smaller claim resulted in an upfront cash payment of some $65 million. The balance of the claim will effectively be covered over the balance of the period of performance of the contract. So you will see the collaborational significant swing upward in any given time period relative to the recovery of the balance of the claim. Rod Bourgeois – Sanford C. Bernstein: Did that $65 million boost your operating profit in the quarter you just reported?

It improved cash. It did not affect profit. An insignificant profit effect in the quarter. Mostly cash. Rod Bourgeois – Sanford C. Bernstein: So the NPS margins were not affected by the REA?

They were not. Rod Bourgeois – Sanford C. Bernstein: I just want to talk a second about CapEx. Your CapEx run rate is down considerably certainly versus last year’s rate. I am wondering if the current run rate of CapEx is a sustainable rate or whether that needs to uptick some as bookings come back into place over time?

As an overall annual number or goal is to reduce our CapEx spending. We are looking for what I will say is clever ways, and I mean that in a positive sense, to find alternatives to large investments in IT infrastructure, etc. We are working with our customers to find more innovative ways of solving. There is a trend where outsourcing customers are not interested in having us buy their assets, if you will. So those kinds of CapEx spending are trending down. Customer flexibility, they would prefer to own their assets rather than lease them kind of thing. I think over time we are working to lower our capital expenditure, annual spend if you will. There might be quarters where it spikes for specific contracts but trend wise you should assume the line is going to trend down. I can’t necessarily quantify that for you year-over-year but think in terms of us working hard to lower the CapEx profile of our businesses. Rod Bourgeois – Sanford C. Bernstein: What is the latest on your DSO target for the end of the fiscal year? Are you still planning a decline of about five days?

At least. Rod Bourgeois – Sanford C. Bernstein: So it could be more than that. So your cash flow guidance assumes five plus?

Our cash flow guidance assumes we will get at least five days. Rod Bourgeois – Sanford C. Bernstein: On the long-term tax rate outlook I know there is a lot up in the air about long-term tax rates but if you assume current tax legislation remains in place is your normal tax rate closer to the 28 number or the 32% number?

At the risk of really sticking my neck out. We have benchmarked our peers. Their tax rate over time has averaged in the low 30’s. 31-32%. If you look at us historically with the exception of last year we have been up around 40% with an exception here or there. We are looking at everything we can do including restructuring our ownership and our jurisdictions to advantage ourselves as best we can of everything that the tax codes everywhere has to offer. Long winded way of saying I think longer term you should look for us to be in the low 30’s. If we can get below that we sure as hell are going to do it. We will be at least as good as our competition.

Operator, I think we are through all of the questions. If we could pass the call back to Mr. Laphen to close the call.

Before we close I would like to remind you we are hosting the Investor Conference where we will provide the update on our business strategy. As announced, the conference will be held in New York City on the 18th of November. Thank you for joining us this evening. I look forward to seeing you in person next week.

This does conclude our conference for today. We would like to thank you for your participation.