Consulting Margin Guidance
Dan Farrell – Sterne, Agee: Just on the guidance on the consulting margin, you’ve laid out the case for how it improves through this year and next, but the guidance on the margin is clearly better than it was previously. Can you give a little more detail on what change in the outlook, if it’s revenue driven or if there is less investment than you previously thought you had and may be put more in this quarter and then I just have a follow-up.
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Christa Davies – EVP and CFO: That’s absolutely right, Dan. The guidance for HR Solutions margin in the second half of 2012 has improved from our previous guidance. So, previously we said we were down in Q3 and now we think we will be flat year-over-year in Q3 and previously we said we would be flat in Q4 and now we think we will up modestly in Q4. There are three things really driving that difference; one is less investment spend; two is less deferred costs; and three is improved restructuring savings. So, they are sort of the three things that are just leading to that improvement from previous guidance.
Dan Farrell – Sterne, Agee: Can you talk a little bit more about the level of ramp in revenue that we can see from these investments because, obviously, that’s a key driver to getting in these businesses ultimately to a normalized margin. And then can you talk a little bit about how long you think it takes to get to that level where these are operating in a normal margin?
Christa Davies – EVP and CFO: Yeah, so one other things we would point out is that as you look at organic revenue growth in the HR Solutions segment in the first half of the year, it’s the highest it has been several years. So, we are starting to see growth in these investments already. What I would observe as you look at the margin impact is as these investments sort of ramp you are getting revenue growth which is slightly lower margin until the investments really scale and so as the revenue growth continues to come through and the investment scale you will see that become higher margin revenue growth if that make sense.
Gregory C. Case – President and CEO: And I would just say, and to add to that the one investment we have called out over the last couple of quarters is that on the healthcare exchanges which we are very positive about feel like we made great progress in the context of that. As that comes online it is going to take the next two to three years before you really start to see the full impact that can bring to us both on the retirement side and on the employee side. We are hopeful by the way, in the fourth quarter we are going to be able to launch the first employee exchange, the (indiscernible) what we do on the retirement side, but it’s going to take two to three years to really get those fully ramped up.
Dan Farrell – Sterne, Agee: In this quarter, how much of $23 million is the healthcare exchanges, and correct me if I am wrong, but there is zero revenue right now on those investments correct?
Christa Davies – EVP and CFO: It’s just (limited) for the majority of the investment at healthcare exchanges.
Gregory C. Case – President and CEO: We are generating revenue on the retirement exchange, it’s modest, but it is, we do have clients, it’s up and running, it’s working very well and progressing just as we had hoped it would.
Keith Walsh – Citi: First question just on the brokerage margins. If we adjust for the lease termination costs in 2Q ’11, it seems margins were flattish (as we had) 4% revenue growth. Can you just talk to, is there an implied 4% expense run rate in the business going forward and I’ve got a couple of follow-ups?
Christa Davies – EVP and CFO: Keith, I think one of the things we really highlighted on Risk Solutions margin, for the first half of the year and we expect that to sort of to continue slightly into Q3 is, we really are investing significantly in the GRIP platform, and in talent in Latin America and Asia. So, what we’re really seeing is that organic revenue growth is offsetting substantial investment spend. And what we did say in Risk Solutions is that, margin is going to be up significantly in Q4 and therefore up for the full year. So, we’re going to see a return on that significant investment in that GRIP platform and that talent within the year.
Gregory C. Case – President and CEO: So we talked about this quite substantially in the last call, Keith from the standpoint of the investment particularly on the GRIP rollout is significant, but it’s also an investment unlike investment in classic investment and talent, which takes a year or two to really come online. We see how the GRIP investments are going to actually pay back and that’s why we talked about improved margin in the year even with the investment we’re making.
Keith Walsh – Citi: Then question on HR a couple. Just want to clarify something on the guidance for 2012. It seems like has anything changed for your view of 2012, it just seems like maybe the investment has been front loaded a little bit, but overall you view 2012 differently then you did what you told us last quarter?
Christa Davies – EVP and CFO: I think that’s fair Keith. I think that’s exactly right.
Gregory C. Case – President and CEO: We are just seeing positive momentum, it continues to develop and we are just trying to reflect that.
Keith Walsh – Citi: So no change there. Then if you could just talk a little bit to the unfavorable – you mentioned Christa in your comments, unfavorable revenue mix. Can you just help me understand that a little bit better? Is that more a seasonality issue or is it a maybe some of the more profitable businesses of Hewitt declining since the deal has been done. Can you just talk to that a little bit?
Christa Davies – EVP and CFO: So what we would say is, there is some unfavorable revenue mix in both benefits administration and in core retirement consulting, as those high margin businesses declines slightly. It’s a very, minor decline in revenue and we love the business and are continuing to invest in it long-term.
Gregory C. Case – President and CEO: We are just seeing really growth in some of the areas in HR BPO in particularly, in exchanges, which is ramping up very, very well and that really is the mix issue. We love this portfolio overall, see lots of promise in terms of sort of where it’s going to go, in fact, more I would say even then when we actually brought on when we brought the two firms together Keith. That’s why we made the investments and we are just seeing ramped up – we are seeing a greater ramp up in some of the areas that are improving in margin on our HR BPO and the exchanges which are driving the revenue mix issues that Christa talked about.