CareFusion Exec Insights: Why Lower Guidance?
Lennox Ketner – Bank of America Merrill Lynch: So, I guess the first question is just in light of how strong the quarter was I think a lot of people are wondering why the lower guidance for the full year. It seems to imply at least on the margin front, you’re expecting margins to be down sequentially. I’m wondering if you could maybe just talk to what would drive that the sequential margin deceleration and kind of why the decision to lower guidance rather than maintain or revisit?
A Closer Look: CareFusion Earnings Cheat Sheet>>
Kieran Gallahue – Chairman and CEO: Well, so a great question. Thanks, Lennox. The short answer is that we mentioned in our remarks that the team pushed extra hard in the third quarter. We had a stronger third quarter than we expected. A lot better and stronger than we’ve seen in the past, the general level of seasonality in this Company is to have a very large hockey stick in the fourth quarter, and so we’re tempering that a little bit because we did have a very strong third quarter. In addition, your assumptions about margins coming down a bit in the fourth quarter are correct, as we sort of closed out the year, and we look at our forecast for the back half of the year we are certainly seeing a change in mix that will be driving margins come down a little bit for our full year expectations and into the fourth quarter. So you sort of add all those things up and you get to a slightly narrowing of the range that is sort of slightly below where the range had been before but not a significant change.
Cardinal TSA Agreement
David Lewis – Morgan Stanley: Jim, maybe a quick question – just a quick question for Jim and then maybe one for Kieran. Jim I wonder if you could comment on the final component of the TSA agreement with Cardinal, specifically I wonder if the transition to OMI has become sort of EBIT positive and if not when do you see that can happen and is it something we should look forward to in fiscal ‘13? And now what do you think is for the revised target for when those synergies could potentially be?
Jim Hinrichs – CFO: It is a little hard to hear you David. The final component of the Cardinal TSA you are speaking of is the global trade. Is that the one you are asking about?
David Lewis – Morgan Stanley: That’s correct.
Jim Hinrichs – CFO: I mean we have – and so just to set the context, we have one TSA with Cardinal Health left. It is around global trade which is a system that we use to make you are not selling to inappropriate customers around the world. That thing rolls off in a year and a half and there – in which shouldn’t be any significant improvements in – it’s a relatively small TSA, so we wouldn’t see any major improvements in that part – in that expense line because of the coming off of that TSA. Is there something else you wanted?
David Lewis – Morgan Stanley: Jim I’m sorry if you can’t, my connection is bad. I was trying to ask specifically about the Owens & Minor, the OMI transition and what expected savings from OMI and where we are with that and are we doubly profitable?
Jim Hinrichs – CFO: So that was one of the things we talked about – we have been talking about. We have had kind of our (indiscernible) transition to OMI we did see some customer disruption last year. We have seen some increased operating expenses that’s correct. Things have stabilized there we’ve had now two quarters in a row of a green service dash boards we have seen a reduction in overall expenses on a run rate basis we are still spending more than we initially planned, but we are now seeing improvements fairly regularly and fairly steady improvements and certainly this customer service has improved dramatically and the cost is now starting to improve, not as dramatically but still improving. So I think it’s safe to say that from our lowest point where we were at our worst run rate we have improved from that and we continue to see improvements and should see improvements next year. It’s hard to quantify that precisely right now but certainly it’s been the millions of dollars that we’ll see improvements in that relationship next year from an operating expense standpoint.