Please standby. Good day, everyone, and welcome to the CSC Second Quarter 2016 Earnings Call. Just a reminder that, this call is being recorded, and for opening remarks and introductions, it is my pleasure to turn the conference over to Mr. George Price. Please go ahead, sir.

Thank you, Lori, and good afternoon, everyone. I'm pleased you've joined us for CSC's second quarter 2016 earnings call and webcast. Our speakers on today's call will be Mike Lawrie, our Chief Executive Officer and Paul Saleh, our Chief Financial Officer. As usual, the call is being webcast at csc.com/investor_relations and we've posted some slides to our website which will accompany our discussion today. On slide 2, you'll see that certain comments we make on the call will be forward-looking. These statements are subject to known and unknown risks and uncertainties which could cause actual results to differ materially from those expressed on the call. A discussion of risks and uncertainties is included in our Form 10-K, Form 10-Q and other SEC filings. Slide 3 informs our participants that CSC's presentation includes certain non-GAAP financial measures and certain further adjustments to these measures, which we believe provide useful information to our investors. In accordance with SEC rules, we have provided a reconciliation of these measures to their respective and most directly comparable GAAP measures. These reconciliations can be found in the tables included in today's earnings release as well as in our supplemental slides. Both documents are available on the Investor Relations section of our website. Briefly, I'd like to note that Mike's prepared remarks addressing operating results will exclude special items that are discussed in more detail in the non-GAAP reconciliation in our second quarter 2016 earnings press release. In addition, I'd like to also introduce Neil DeSilva who is on the call with us today. Neil has joined CSC to lead both our commercial M&A and investor relations functions and I'll be working closely with Neil. Finally, I'd like to remind our listeners that CSC assumes no obligation to update the information presented on the call, except of…

Thank you, sir. Today's question-and-answer session will be conducted electronically And going first to Dan Perlin at RBC Capital Markets.

Thanks, good evening and looking forward to tomorrow. The question I have on GIS, Mike, I guess, is really this. When we look at all the kind of incremental growth opportunities, it sounds like you're creating a next generation offerings. Where are we in the process for that to start to overtake, what has otherwise been, some challenges in terms of renegotiating and restructuring these contracts? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. We're going to get into this in a little more detail tomorrow, but I think, let's put it like this, we see that crossover point certainly in sight. I wouldn't just narrow it down to GIS. I'd want to include all of our next generation offerings. So that'd include application, modernization and the improvements we're making in consulting. So, I think, when we add those all up, we see that coming sometime within the next year or so. And we'll go through that in much more detail tomorrow, when we see that crossover point and what makes up that crossover point.

Okay. That's great. And then one other one real quick. Just as we think about the kind of consulting business today, you talk a little bit about the European side of that – UK side of that growing – and then the Americas kind of flat. I'm just wondering if you could elaborate on some of the dynamics that you're seeing that are causing a some divergence or maybe even a large divergence? Thanks. John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. The primary differences, we began to implement this new approach to consulting in the UK first. And we made a big investment, we hired people, we got those people deployed. They've been able to build a pipeline and we're now converting that into revenue. So, we piloted this approach, and this approach is fundamentally about consulting around technology. So, going in and helping clients figure out how to make this transition from, what I'll refer to as traditional infrastructure, to next generation or cloud infrastructure. Go in and consult on how you begin to do a taxonomy of your application portfolio, what applications need to be retired, those that need to be modernized, et cetera, et cetera. And that was piloted first and we're now in the process of implementing that in the United States and we saw some improvement in the United States in the second quarter and are forecasting continued improvement in the second half. So that's the difference is we implemented that new model around technology consulting first in the UK and then second in the United States.

Okay. That's great. And then one last one. As your clients are all pivoting to digital and these other new agendas, where do you stand or, I guess, what is the strategy still in order to achieve and attract the kind of talent that's necessary to really implement all of those changes on behalf of your clients? And looking forward to tomorrow, thanks. John Michael Lawrie - President, Chief Executive Officer & Director: This is something we're going to cover in a little more detail tomorrow. But right now, we are hiring between 400 and 500 people a week in this company worldwide. Now most of those skills are targeted at certain technology areas, certain skill sets and most of those hiring are taking place in our lower cost locations like Vietnam and India and Lithuania, et cetera. And at the same time, through this workforce optimization, we've got several hundred people that are exiting the business on a global basis. So this is a huge transformation of the technical resources we have. In addition, we've also launched significant training of our existing population. So we've now instituted that through what we call the CSC University and many of our people are undergoing retraining, so that we can continue to add relevant skills to our clients and capabilities. And of course, we're also, with these acquisitions that we are making, we just talked about bringing in substantially new skills as well.

Excellent, thanks.

We'll go next to Jim Schneider at Goldman Sachs. James Edward Schneider - Goldman Sachs & Co.: Good afternoon. Thanks for taking my question. I was wondering if you can maybe talk about the kind of continued progress on the offshoring in the commercial business? Kind of give us an update on a percentage basis where you stand today, and again, maybe you'll cover that tomorrow in more detail, but where you think you're going to be say at the end of calendar 2016 or at some other point out in the future? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah, we're roughly at 45% now. So this has gone up a couple of points over the last several quarters, and our plan is to drive that over the next several years to at least 55%. So we've made progress. And again, with this rehiring, when you're talking about hiring 400, 500 people a week in these locations, that also helps you rebalance the workforce on a global basis. James Edward Schneider - Goldman Sachs & Co.: That's helpful. And then, maybe just on the bookings front, it could be you already covered this and pardon me if you did, but can you may be talk about the GBS bookings, and I understand they can be lumpy. But specifically, have you seen any kind of deceleration and if so, in what sub-segments or industrial segments within your base? John Michael Lawrie - President, Chief Executive Officer & Director: No, we haven't seen a deceleration. I mean, we had a fairly large BPS transaction that we had in the second quarter a year ago and we had another large one which we did not close in the second quarter. We expected to close it – we didn't – and now it's been closed. And some of these things are lumpy. We're not particularly in the game here of lowering the price at the end of a quarter just to get somebody to sign. I'd rather maintain the margin and sign it two weeks later. So, there's no deceleration, it was just a matter of timing. James Edward Schneider - Goldman Sachs & Co.: That's helpful. Thank you so much.

And we'll take our next question today from Jason Kupferberg at Jefferies. Sir?

Thanks guys. So, just to push on the full-year revenue a little bit and try and get some more visibility there. I mean, if you hit the Q3 guide that you gave for the two segments, I think you still need a pretty big hockey stick in Q4 to get to these full-year targets. And I can appreciate, especially in commercial, the year-over-year comps get a lot easier. But how much do some of the recent acquisitions maybe help you get there, and then on the NPS side, what would be the drivers? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. Well, on the NPS side, as I said, we had this contract which we expected to resolve in the second quarter; we didn't get it resolved. Frankly, we were surprised that it didn't resolve, but we're hopeful that that gets resolved as we go forward here. So that pretty much explains the difference in NPS. On the commercial side, we do see our application in GBS beginning to accelerate on a year-over-year comparison basis in the second half of the year, and we're beginning to see some moderation in the GIS business as we begin to wrap around and some of those contract restructurings that we've talked about, work their way through the cycle. In addition, we continue to see strong growth in the next generation offerings. The revenue there, I think I mentioned, was up 30-some percent in the second quarter. We continue to see that grow out through the second half. I think the bias here is probably the commercial revenue will be the low end of the range. But that's what makes up the projections. I don't know Paul, if you want to add anything to that. Paul N. Saleh - Chief Financial Officer & Executive Vice President: I just would – you had asked a question about Fruition and (41:12). John Michael Lawrie - President, Chief Executive Officer & Director: Oh, yeah, that's definitely is in. Yes. Paul N. Saleh - Chief Financial Officer & Executive Vice President: That's about maybe about $75 million to $80 million of incremental revenue into the second half.

Okay. That's really helpful. And just any update on cross-selling strategy. I think I remember in the past you had mentioned that only about 10% of your clients are being cross-sold. Has that number been inching up? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah, we're making more progress on that as we being to transition clients from a traditional infrastructure to next gen. We're going to detail a couple of these examples tomorrow to show what happens when you begin to transition a client. So, what do you lose? Because we've said before on these calls, there is some cannibalization here. And then...

Right. John Michael Lawrie - President, Chief Executive Officer & Director: ...what are the additional services that usually can get wrapped around those next generation offerings to make up for some of that cannibalization. So, we will go through a couple of real live examples where we're either have done it or we're in the process of doing it; I think that will shed a little more light.

Okay. And then just a quick clarification. How much revenue does the NPS contract resolution represent? John Michael Lawrie - President, Chief Executive Officer & Director: Probably somewhere in the neighborhood of $50 million to $60 million.

Terrific. Thank you, guys.

And we'll go next to Keith Bachman of BMO Capital Markets.

Many thanks. I also wanted to ask about the free cash flow for a second. Just so I'm clear, the $75 million to $80 million that's the guide for the year, that doesn't include one-time items such as the sale of the NPS accounts receivable? If you could just clarify that? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Yeah, first of all, it's $750 million to $800 million.

Yeah, sorry. I beg your pardon – we've had a lot of calls – $750 million to $800 million. Paul N. Saleh - Chief Financial Officer & Executive Vice President: And then secondly, you're absolutely right. We will – it does not include the sale of receivables to – through that special facility that we have. So we normalized for it. We exclude it in calculating our free cash flow.

Okay. Great. Thank you. And then, just a follow up on the margin side for the commercial sector. How are you thinking about, as you're ramping incremental low cost head count, if you will, getting up to maybe the 55% level versus the mix of the portfolio that you have in terms of bids in front of you and what not, how are you thinking about the operating margin structure as you look out over the next few quarters? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. Again, tomorrow what we're going to take you through is a roadmap that...

Okay. John Michael Lawrie - President, Chief Executive Officer & Director: ...details the margin expansion we think we can get by the continued shift in our mix of business. With some of these acquisitions that we've either made or some of the ones we are working on, plus the continued growth of our next generation offerings, this portfolio is beginning to remix. And as the portfolio remix, that drives higher margins and we're going to detail what our model is for the, think of this as the bps [basis points] growth with that offering remix.

Okay. John Michael Lawrie - President, Chief Executive Officer & Director: The other thing is we are beginning to introduce automation, particularly into our GIS and other delivery capabilities. That too will drive some margin expansion. And then, the recalibration, or the optimization of the workforce, including continuing to move to lower cost near-shore and offshore and continued work around re-pyramiding our workforce. What we'll do is we'll take you through what we think that will drive in terms of margin expansion over the next several years. But needless to say – just I don't want to anybody to lose sleep thinking about this tonight – there is a margin expansion opportunity as we remix, re-optimize and retrain our workforce, particularly our delivery workforce.

All right. Many thanks, Mike. We'll look forward to that tomorrow. John Michael Lawrie - President, Chief Executive Officer & Director: Okay.

And we'll go next to Rod Bourgeois at DeepDive Equity Research.

Hey, guys. Hey, I want to ask more about your GIS operating margin. It was encouraging to see that up 190 basis points year-to-year to 8.5%. We haven't seen that level in a while. Were there any lumpy contributions to the GIS margin in the quarter? And more importantly, I mean, you mentioned cost levers to continue to drive margin expansion. Do those cost levers also apply to a margin expansion plan from here in the GIS business as well? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. The latter – the answer to your second question is, yes. We do see continued margin expansion, largely driven by the optimization of the workforce and the introduction of automation. Those are the primary drivers in the GIS business. I'll let Paul talk about any lumpiness, but we did see some margin expansion in the quarter, due to the workforce optimization program that we announced. Remember we took that big...

Yeah. John Michael Lawrie - President, Chief Executive Officer & Director: ...restructuring charge in the fourth quarter and that is now beginning to work its way through the system, particularly in Europe. So.. Paul N. Saleh - Chief Financial Officer & Executive Vice President: Yeah. No, actually, Mike you just already touched on those items and I think tomorrow we'll be outlining them in actually more detail in each of those categories, but absolutely, the $245 million of investment that we took in the fourth quarter is starting to show in through – particularly in GIS – it was to the tune of close to $15 million to $20 million.

Great. And then, Paul, was there any lumpy contributions in the GIS margin in the quarter or was that all really coming from the workforce optimization? Paul N. Saleh - Chief Financial Officer & Executive Vice President: No, it's primarily for workforce optimization. Actually, the continued – also – work that the business is doing – going to what we – we have a number of initiatives underway to look at efficiencies. You're starting to see also the benefit of what we call our TOPS (47:45) program, where we just really make sure that we manage the transition of completed contracts and the like. Some of the contracts also that we lost were coming in – remember, we just – didn't just restructure contracts for the heck of it, we did it just with the intent of improving our margin. And some of the contracts that we restructured had low margins or where – were basically losing margin. So that you're starting to see some of that being reflected in the overall profitability of the business. John Michael Lawrie - President, Chief Executive Officer & Director: And Rod, there was one contract, that we know we're no longer involved with that had significant margin improvement, although we actually only got one month credit for that because it was resolved in, I think, the end of August or September. I don't want to mention any names here. So that was one of the things and then the one thing we haven't talked about is – and Steve Hilton will be at the Analyst Day tomorrow – we're making some real progress with our suppliers. So, we are taking a look at some of our agreements that we have in place as part of the separation and we're making some improvements from a supplier standpoint as well.

Got it. Okay. Hey, and just a clarification on the NPS contract dispute. If that contract dispute gets resolved in the way that you now expect, will this produce a one-time revenue contribution or will that be kind of the add back of a recurring revenue addition? Paul N. Saleh - Chief Financial Officer & Executive Vice President: No, it's a one-time.

Okay. Thanks guys.

Moving next to David Grossman at Stifel. David M. Grossman - Stifel, Nicolaus & Co., Inc.: Thank you. I wonder if we could just talk a minute about the gross margin. I know that's a line item you don't necessarily calculate on your P&L. But, just when you back out cost of sales, it looks like that gross margin calculation is down on a year-over-year basis, both in the first and the second quarter. So, if that's an accurate depiction of what's going on, could you help us understand what the primary drivers of that dynamic are, particularly given the scale of last year's rebalancing charge? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Yeah, I think it is a good question and what – there's a couple of things going on. Number one, and obviously there are certain category of costs that we're taking them out of as we centralize certain activities, certain costs, that come out of cost of sales for example and go – in our, in the – in what we would call the SG&A kind of activity and vice versa. So, as we were kind of refining our entire cost structures, we found that there were costs that were really in the wrong category. So we've been fixing that as we go. Second of all, you have to remember that our top line has come down in constant currency and we're still in the midst of changing the workforce to low cost market. And so, sometimes you're going to see the gross margins where they're reflecting that transition of work that's taking place. So, for example, when we're talking about hiring in offshore, we still have train these folks. We also have knowledge transfer that has to be taking place before, we…

Lori, let's go ahead and take the last question.

We'll go to Frank Atkins at SunTrust.

Thanks for taking my questions. Just want to ask on the GIS side, any changes in pricing there as you go forward? Have there been any changes on that commercial side? John Michael Lawrie - President, Chief Executive Officer & Director: No.

Okay. And then any incremental investments that you think will still need to be made as you adjust these two businesses? I guess, I'm sure that you'll talk about that's more of – incremental probably? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. I will talk a little bit about – more of that. Yes, we will continue to make investments and outline where those investments are, both in people, in retraining. The big investment is around people; there's investments that need to be made in tooling and automation. So, yes we will detail those tomorrow as well as some of the investments we're making with our partners in our offerings.

All right, great. Thank you. John Michael Lawrie - President, Chief Executive Officer & Director: Okay, guys. Thank you. See you tomorrow.

Thanks very much, everybody for joining us, and we look forward to seeing you tomorrow. Have a good evening.