Good day, everyone, and welcome to the CSC First Quarter 2016 Earnings Call. Today's call is being recorded. For opening remarks and introductions, I would like to turn the call over to Mr. George Price. Please go ahead, sir.

Thank you, Travis, and good afternoon, everyone. I'm pleased you've joined us for CSC's first 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. Finally, I'd like to remind our listeners that CSC assumes no obligation to update the information presented on the call except of course as required by law. And now, I'd like to introduce CSC's CEO, Mike Lawrie. Mike? John Michael Lawrie - President, Chief Executive Officer & Director: Okay. Thank you. Good afternoon, everyone. Again, thank you for your time. As is my practice, I've got five or six key messages which I will summarize upfront and then go into a little more detail on each of those points and then turn the call…

Thank you. We'll take our first question from Tien-tsin Huang with JPMorgan.

Great. Good afternoon. I wanted to ask you just on the revenue side. I was a little surprised that we didn't see a better performance there given your book-to-bill trends. Even if we look at it on a trailing 12 month basis, is there a revenue realization or duration issue or change that we should be aware of? Was there a burn rate, maybe up a little bit on the existing book? Just trying to understand a little bit better. John Michael Lawrie - President, Chief Executive Officer & Director: Let me take a shot at that. No, there's no difference that we've discerned on any realization. Again, the fundamental issue is the same that we have been talking about for many, many quarters now, which is the gap between the restructuring contracts, particularly in GIS, some of the large ERP implementations that have concluded in our GBS business and the uptake in our new next-generation offerings. So the trend that we have talked about is exactly the same as we – that we observed this quarter, is exactly the same that we've talked about before. The only difference is we are seeing a modest acceleration in the uptake of some of these next-generation offerings and many of the newer contracts that we're now signing in the book-to-bills have a higher content of next-generation offerings. So, we've made a lot of investments in these offerings, we're beginning to see the uptake there, we're encouraged by that, and it just takes some time to offset some of the headwinds we have, particularly in the GIS business. And I think as we get into the second half of the year, those comparisons will begin to look a little better.

Great. That's helpful, Mike. I did catch the next-gen booking number. That was good, so I just wanted to make sure. Thanks. Just on the, I guess as my follow-up, just on the HCL joint venture, I'm curious on the core banking side, what does HCL bring to the table there that's unique to go-to-market? That was my follow-up, thanks. John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. Well, HCL brings a number of things to the table. One, we have an asset, Hogan, which is a core banking platform that continues to run and delivers a lot of functionality and a lot of capability to still a significant number of big banks around the world. And we were struggling being able to make the investment ourselves in modernizing that platform. We have chosen to take our development dollars and spend those in some of these new GIS offerings that we talked about, like our network offerings in MyWorkStyle, in Cloud, in Agility, and so on and so forth, as well as modernizing our healthcare platforms, our Lorenzo platform and some of our key insurance platforms, like Integral, which we spent a lot of money on modernizing for other markets, most notably the Asian market. So, we've created this joint venture. We're contributing the intellectual property by licensing Hogan to HCL. And HCL is putting money, capital, into the joint venture so that we can help modernize that platform. More importantly, jointly provide the engineering and the integration skills so that we can help the install base begin to migrate to this next generation platform. So, it's really a combination of their capital, their engineering prowess coupled with our industry expertise and our client relationships.

Got it. Thanks.

We'll take our next question from Jason Kupferberg with Jefferies.

Hey, guys. Good afternoon. Just wanted to start with a question on the full-year outlook for revenue. I know you're maintaining the constant currency growth guidance here. Obviously, you're starting out the year in a pretty big hole, so does the acceleration just come from the easier comps now that you've obviously lapped the headwind of having the extra week in last year's Q1? I'm just trying to gauge the overall confidence level in kind of the flat to down range. John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. That is, that's absolutely true. One, some of those natural headwinds around the extra week that goes away, obviously, in all candor, the comparisons get easier in the second half of the year. That coupled with the backlog and the pipelines that we see, we also expect some of the acquisitions that we announced today, assuming we get those closed in the September/October timeframe, which is the current schedule. We also expect those to contribute modestly to that second half revenue outlook. So that's what gives us the confidence.

Does it feel like the award in funding conditions in the federal space have pretty well stabilized at this point because your metrics seem to have flattened out if not even improved in some cases the past couple of quarters? John Michael Lawrie - President, Chief Executive Officer & Director: Yes. I think they have flattened out.

Okay. Thank you.

We'll take our next question from Jim Schneider with Goldman Sachs. James Schneider - Goldman Sachs & Co.: Good afternoon. Thanks for taking my question. I was wondering if you could maybe talk about, once you spin off NPS, GS whether you think there is a significant opportunity for acquisition once that unit is independent? Maybe you can kind of talk about the landscape you see out there with some of the defense prime looking maybe shed some of their services offerings? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. I think once we separate the business, obviously, it's a publicly traded company, so it's going to take advantage of opportunities both as an acquirer or as an acquiree. Now having said that, I do see consolidation in that industry as we look out over the next year or so. We've seen some moves made here and some other discussions about properties that might be available. So I think our focus is to try to get prepared for the separation. We're creating a strong balance sheet, well-capitalized company that can take advantage of the opportunities that are out there. But I do think the general landscape in the federal government business will be consolidation over time. James Schneider - Goldman Sachs & Co.: That's helpful. Thanks. And then regarding the offshoring percentage, I know you talked about previously, at the end of last fiscal year I think you were in the high 30%s in terms of the offshore percentage in the commercial business. How should we think about the bogey as we exit fiscal 2016? Could that be as much as the high 40s or mid 40s or how should we think about that? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Yeah. I…

We'll take our next question from Edward Caso with Wells Fargo Securities.

Hi. Good afternoon. Congratulations on the process here. Just wanted to confirm that the two acquisitions, the intent to acquire announcements today are now been added to the guidance for the year and that I think I heard you say it would help the comparison in the back half? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. They are in the targets that we outlined. Again, depending on when they close but I – this will be a modest revenue contribution in the second half of the year, again, depending on when they close. But, yes, that is in the target that we talked about.

And the margins on that business and the expectation of whether they'd be accretive in year one? John Michael Lawrie - President, Chief Executive Officer & Director: Most likely they will not be accretive in year one but they will be accretive in year two and we'll provide more details on that when we do the Investor Day presentation.

And I was wondering if Paul could just articulate for us when we work the numbers in your Form 10, there's a slight difference between the NPS history and the new company history. Could you just detail what's not moving from NPS over to the new company? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Yeah. Actually when you look at the – what we have filed the Form 10, it is really more a historical. It does not include any of the pension benefit that usually accretes to NPS. The next filing that we'll make of the Form 10 will include the pro forma for that unit and you will see actually that the business actually is going to do even better than what you have seen in previously because we would be moving the entire U.S. pension plan, the majority of it to NPS.

Great. Thank you.

We'll take our next question from Steve Schneiderman with BMO Capital Markets.

Hi. I'm pinch hitting for Keith Bachman tonight so thank you for taking my questions. John Michael Lawrie - President, Chief Executive Officer & Director: Could you speak up a little bit, please?

Hi. Is that better? John Michael Lawrie - President, Chief Executive Officer & Director: Not really. It'll depend on the question and we'll tell you whether we can hear you or not.

Fair enough. John Michael Lawrie - President, Chief Executive Officer & Director: There you go.

Oh, technology and headsets. Just looking at your NPS business, how sustainable is the 14% margins over the long-term? Given some of where your competitors are coming out at around the 9% or less range, especially if you look at CACI or some of the other comparables there? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. Listen, there's a lot of factors at work here. One is the mix of our business, the fact that we have a fair amount of fixed price contracts. And then the second part is the execution within those fixed price contracts. And the thing that we have done very well the last couple of years is we have executed very well against those contracts and that has expanded the margins. The second thing is we have moved to a lower labor cost basis. That's why we set Bossier City up and we continued to move workload and move skills to that center. And we have a very high portion of our portfolio that is pure IT. So 20% of our NPS portfolio is what I call mission work and 80% of it is pure IT and that gives us an opportunity to execute and see that execution translated into expanded margins. So that's the long-winded explanation to say, yes, we can maintain higher margins in that business as we go forward, assuming we continue with the discipline that we've installed post-separation.

Okay, great. Thank you. And one more question for me. Looking at the booking pipeline, especially looking at commercial, do you think you can grow bookings over the next few quarters? You talked a little bit about how NPS is doing, especially in the next-generation business, but just looking broadly at the commercial side as well, too. How do you see that shaping up over the next couple of quarters? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah, the bookings are taking on a different composition as well. One, we have a lot of new logos. This is really important that we establish these new logos. But these new logos, I don't know, I think the average size of the bookings don't hold me to this. This is probably somewhere between 500,000 and 1 million, somewhere in there. So these are fairly small starts. And then they typically expand over time and we're seeing more and more evidence of – if we deliver against the first, let's say, 500,000 opportunities to be able to expand our portfolio. That gives us, in this quarter alone, 85 new clients to work with. So that's one fairly significant shift in the bookings. The other thing is that we are not booking big capital-intensive deals. In the old days, we'd buy data centers and we'd buy this and we'd buy that, and all that stuff would show up in the bookings. The only problem was we couldn't return the cost of capital. So we are not doing, we're not doing those big deals and putting that capital on our books which has then a tendency to deflate, if you will, the bookings. But the bookings are a better indication in my opinion of the value-add. I mean, we don't add any value by buying somebody's capital assets and billing them back. There is no margin in it, there's not a return of capital in it, and it just tends to inflate and distort the pipeline number. So I think we're getting to a much clearer, purer view of the actual value add that CSC deliveries, and that's what you're seeing in the bookings.

Great. Thank you.

We'll take our next question from David Grossman with Stifel. David M. Grossman - Stifel, Nicolaus & Co., Inc.: Thank you. Mike, on that last question, the GIS business seems to be the one, at least for me, to assess what a business like that looks like after it's transformed and after you've completed all the different things that you're trying to do there. So is there anything you can share with us about, I guess, first of all, the visibility you have within the portfolio where you think a lot of the headwinds start diminishing? And anything you can share with us about what this business should look like in equilibrium in terms of the growth and the margin, and really the free cash flow conversion rate on net income? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. It's a little hard, but I think as we continue to gain traction with our new workplace offerings, our network Storage as a Service, cloud, cyber, I mean there's no reason why this business can't begin to grow. And as these headwinds moderate – so as every year goes through here, there's less contracts to be restructured, discontinuances, completed work, all those things begin to moderate. And it takes a long time for a contract that is terminated or is being completed and to work through the system, because the transitions on a lot of these contracts are measured in years, not weeks or quarters. So when you transition a large account, it may take a year, so you have revenue decline, but it's not fully through the system for – in some cases a year, 18 months. That is as we look out over the next year or so that does begin to moderate. And the gap,…

We'll take our next question from Darrin Peller with Barclays.

Thanks, guys. Look, I just want to, sort of as a follow-up to that question ask about the next-gen solutions in the growth areas. Mike, you called out, well, I mean the growth rates of some of your areas, whether it's cloud or cyber, but I really since your Investor Day or since you – a couple of years back, I haven't heard an actual number around how big they are or a percentage of the mix of revenues. And as analysts, I think we – it would serve us well to be able to size that just so we know what part of your business has truly grown well versus the part that's potentially being downsized. John Michael Lawrie - President, Chief Executive Officer & Director: Yeah, what I'd like to do when we get to the Investor Day is to share some of the glide path that we see this thing on. Not next quarter or two quarters down the road, but over the next couple of years, what is that glide path on what I'll call the traditional business, the classic business versus these new offerings? And I can't overemphasize this enough where – these businesses that we bought today are what I'd classify them as tuck-ins. These aren't huge acquisitions by any stretch of the imagination. But they're examples of new offerings that we think can grow fairly rapidly over this period of time and help shrink that gap between our traditional business and these new businesses. And we're going to continue to look for these opportunities as long as they're consistent with our strategy around these new offerings and our industry orientation. So all of this, the message we're sending here is, we're beginning to really position the commercial business post separation. And we think the business can grow. We think it can provide a good cash flow, a good return on capital and good operating margins. But it needs to be, continued to be transformed. And that's exactly what we're doing every quarter. And today with these acquisitions, it's just another installment of that plan that we've been articulating for the last couple of years.

Yeah. I mean, are these next-gen solutions collectively big enough to more than offset the area that you're declining, let's call it even in the next 12 months to 18 months? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Oh, yes. I think they are starting to show growth. The decline in the traditional business is not as pronounced as it used to be. And those other businesses – when you take cloud, cyber, the enterprise management or network or workplace, services are now starting to just get the growth to begin to offset basically the other decline. So we would expect that those lines to cross. At our Investor Day, our intent is just to not only give you a greater insight into each one of those businesses, but also give you our view, our best view, as to when these two lines will cross, the traditional ITO business leveling off as our next generation services start to just really overcome that and just ultimately show growth in our GIS business. John Michael Lawrie - President, Chief Executive Officer & Director: Guys, these are fairly significant shifts in the industry, and you're seeing this in a lot of traditional people's results. And those that had a fairly high exposure to the traditional IOT (sic) [ITO] or the outsourcing market are experiencing these. And those that had a high exposure to a lot of the big ERP implementations of years past, those implementations are not there, these big ERP implementations. So you've got a fundamental shift in the composition of the industry. And it's new offerings, like Workday and ServiceNow and Salesforce.com and others that are the new generation of enterprise class applications, and then the cloud platforms, the hybrid cloud platforms, do support those. So you just have to go through that transition and continue to make the investment so that you can participate in those segments of the market that are growing. But they start out smaller and they grow over time as opposed to very large deals that you manage over a five or ten year period of time. So the whole composition and the financials and the capital requirements of the business are shifting. I happen to think they're shifting to a better model, a more sustainable model, but that shift is still underway.

All right. Makes sense, guys. Thank you.

Travis, let's go ahead and take our last question.

Our last question comes from Rod Bourgeois with DeepDive Equity Research.

Hey, guys. John Michael Lawrie - President, Chief Executive Officer & Director: Rod, how are you doing?

Hey. Doing fine. Good to be back in touch here. Hey, so just to talk about the acquisition scenarios here. We clearly have watched takeover speculation around CSC going back since before 2005 and we've clearly had another year of some pronounced takeover speculation in the last year. It's noteworthy to see you doing some tuck-in acquisitions here, particularly along the lines of the next-generation offerings. Are you prone to do more acquisitions in the next year to beef up those offerings or are these just kind of one-offs that you'll do and then move on to something else? John Michael Lawrie - President, Chief Executive Officer & Director: No. These are investments that we are making in the commercial business that are very targeted around our strategy. It also gives us an infusion of skills that we don't have and would take us years to build. So the time-to-market, if you will, is accelerated. But the key point here guys is, the speculation is what the speculation is and we're a public company. So, if someone wants to approach us, they can approach us. But we're not sitting around waiting for that. We are managing the commercial business as if it is going to be a standalone business and we're continuing to make the investments and the acquisitions to strengthen the profile of that business. That means more and more industry orientation around the industries that we carved out as very important, continued focus on intellectual property and the skills to support that intellectual property. So yes, you'll see us do that, continue, Rod, to do some of those tuck-ins. But they're not the easiest things to buy either. These are usually pretty fast growing businesses. You've got to pick them off at the right time, if you will, before they become so valued that it's impossible to afford them. So we have a pretty active pipeline of opportunities that we're going to continue to look at. But it's all about strengthening the commercial business and getting it prepared so it can fully participate in the market as we go forward. And by the way, we're doing the same thing with NPS, same thing.

If I hear you right, your appetite for tuck-in acquisitions is higher today than it was a year-ago? Is that right? John Michael Lawrie - President, Chief Executive Officer & Director: Yeah. I think the appetite is the same. We're seeing better opportunities this year than we saw last year.

Okay. John Michael Lawrie - President, Chief Executive Officer & Director: And I think a lot of that has to do with the cycle that we're in. Rod, you know this. Depending on where you see yourself in the cycle, there's been a lot of acquisitions this year, there's been a lot of activity in this part of the market. So it is not surprising that we have seen more good opportunities this year than last year. But to answer your question, yes, we have an appetite for those tuck-ins and we got a balance sheet and we've got a free cash flow that will support that continued investment as we go forward.

Got it. And then let me just close on a quick housekeeping item. IT looks like your definition of free cash flow may have changed, but let me just clarify, is your definition... John Michael Lawrie - President, Chief Executive Officer & Director: No. Hang on. I don't think it's changed. Paul, go ahead.

Well, it looks like you're now excluding cash outflows related to restructuring and severance, which would be a departure I guess from the past definition, is that correct? Paul N. Saleh - Chief Financial Officer & Executive Vice President: No. Actually it is not. The only reason we are excluding it is we took a major restructuring in the fourth quarter of $245 million and it was, if you recall, enabled in a sense by some of the valuation allowance that we recognized as a result of our improved profitability in the UK. So, the $245 million was just an accelerated investment that we made to right shore and to also fix the pyramid, particularly as Mike indicated in the high cost markets of Europe. So, with that in mind we felt they would be distorting our free cash flow in this year, so we just really said that free cash flow will exclude that, just that restructuring, the costs associated, or the cash flow associated with that restructuring our fiscal 2016. The other thing that we removed was just any separation costs because again when we saw that those are one-time item that are not reflective of the strength of the core business.

But your past free cash flow included restructuring payments and your future free cash flow definition will exclude those? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Yeah, I think just for this year for the extra because of the $245 million, but if you look at last year for example, we had very, very small amount of restructuring. John Michael Lawrie - President, Chief Executive Officer & Director: What he's talking about is right. Rod, we had talked about like $40 million or $30 million a quarter or something like that, two or three years-ago. Is that what you're referring to? And we did run that through the P&L. What we did here is we took advantage of this tax valuation allowance we have in the UK. so we took that charge last year. And the cash flow associated with that you're not including in the free cash flow? Paul N. Saleh - Chief Financial Officer & Executive Vice President: Right, right. Just for that – for this year.

Okay. All right, guys. Thank you very much. Paul N. Saleh - Chief Financial Officer & Executive Vice President: Thank you. John Michael Lawrie - President, Chief Executive Officer & Director: All right, Rod. Thank you. John Michael Lawrie - President, Chief Executive Officer & Director: Thank you, everyone, for your interest, and look forward to catching up sometime this fall.