Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the FactSet Second Quarter Earnings Call. All lines have been placed on mute to avoid any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. Rima Hyder, Vice President of Investor Relations, you may begin your conference.

Thank you, Stephanie, and good morning, everyone. Welcome to FactSet’s second quarter 2018 earnings conference call. Before we begin, I would like to point out that the slides we will reference during the course of this presentation can be accessed via the Web site on the Investor Relations section of our Web site at factset.com. These slides will be posted on our Web site at the conclusion of this call. A replay of today’s call will be available via phone and on our Web site. This conference call is being transcribed in real-time by FactSet’s CallStreet Service and is being broadcast live at FactSet.com. After our prepared remarks, we will open the call to questions from investors. To be fair to everyone, please limit yourself to one plus a follow-up. Before we discuss our results, I encourage all listeners to review the legal notice on Slide 2, which explains the risks of forward-looking statements and the use of non-GAAP financial measures. Additionally, please refer to our forms 10-K and 10-Q for a discussion of risk factors that could cause actual results to differ materially from these forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most directly comparably GAAP measures are in the appendix to the presentation and in our earnings release issued this morning. This non-GAAP information should be considered supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these GAAP financial measures may not be the same as similarly entitled measures reported by other companies. Joining me today are Phil Snow, Chief Executive Officer; and Maurizio Nicolelli, Chief Financial Officer. Now, I'd like to turn the discussion over to Phil.

Thank you, Rima. Good morning, everyone, and thanks for joining us on the call today. This past quarter, we executed well on our product and growth strategy. And while we’re pleased with the results, we continue to be aware of the difficult market and the cost pressures our clients face. We remain focused on executing on our plans for fiscal year '18 and expect to end the year within our ASV guidance range. Turning to second quarter results, we saw new wins across our product portfolio in the U.S., Europe and Asia. We grew organic revenues and organic ASV at 6% year-over-year. Adjusted diluted EPS increased 17% to $2.12 boosted by the U.S. tax reform. While the tax reform increased our tax rate this quarter due to one-time items, overall, we expect additional cash savings for the rest of the fiscal year and we continue to evaluate our plans to utilize the additional cash in fiscal year '18 and beyond. In our press release this morning, we announced our plans to increase our share repurchase program by $300 million taking advantage of the $100 million in cash that we plan to repatriate from overseas. We also plan to invest a portion of cash savings into both our product and sales efforts. This will have an impact on our full year adjusted operating margin and we believe we will end the year closer to the middle of our guidance range for adjusted operating margin. This quarter, our adjusted operating margin was 31.4%, slightly lower than our first quarter and last year as it was impacted by higher FX costs which Maurizio will go into, into more detail. Now let’s get into the drivers of ASV. The increase in ASV this quarter was primarily driven by analytics, CTS and portfolio management and…

Thank you, Phil, and good morning to everyone on the call. As you saw in our press release this morning, we changed our EPS and tax guidance as a result of the U.S. tax reform. We also increased our share repurchase program by 300 million as we plan to bring back 100 million in cash from overseas. I will go through these in more detail in a few minutes. Let’s now go through the second quarter results. GAAP revenues in the second quarter increased 14% to 335 million, and 6% to 310 million on an organic basis versus the second quarter of 2017. Looking at our segment revenue, U.S. revenues grew 5% organically and international revenues increased 7% on an organic basis with strong performance from the Asia Pac region. This growth comes primarily as a result of higher sales from our analytics and data feeds products. ASV increased to 1.35 billion at the end of our second quarter. Organic ASV increased 6% year-over-year and over 25 million at the end of our first quarter. This increase was primarily driven by higher cross sales and new business, partially offset by cancellations. Additionally, this quarter we also implemented our annual Americas price increase which added about 10 million to ASV. This was slightly higher than our price increase last year. Let’s now take a look at our operating expenses. Operating expenses for the second quarter totaled 240 million, an increase of 18% year-over-year, primarily driven by the acquisitions of BISAM and FDSG which were purchased in the third quarter of fiscal 2017. Our GAAP operating margin decreased 270 basis points year-over-year to 28.5% primarily due to the previously mentioned higher acquisition costs and a negative impact from foreign currency. Adjusted operating margin of 31.4% was lower than last year’s margin of…

[Operator Instructions]. Your first question comes from Bill Warmington with Wells Fargo. Please go ahead.

Good morning, everyone.

Good morning.

So in your opening remarks you talked about a number of wins and I wanted to know if you could talk a little bit about the acceleration that you saw on the buy-side ASV specifically and how much of that is being driven by the lower buy-side churn versus Q1 and how much is actually being driven by new product sales or something else?

Yes. Hi, Bill. It’s Phil Snow. It’s a combination of both. I think the most exciting thing for us really is the continued adoption of our value-added product suite. So as I mentioned in my opening remarks, the analytics suite added well over a half of this quarter’s incremental ASV and that product suite contributed to the specific win that I mentioned in Canada and a whole host of other wins. A lot of that is fueled by the fact that in the first quarter, we released three risk models. So we put a lot of work into that and that is definitely helping along with all the other great products that are within analytics. And when we look at cancellations from last year within the existing client base, there were a lot less of them than there were last year. So that definitely helped with sort of $10 million increase that you saw in this Q2 versus the same quarter a year ago.

And for a follow up, I wanted to ask about the competitive landscape. There have been a number of developments over the past few months and I want to see if you were having – if you were seeing any impact from Blackstone's investment in Thomson Reuters, Capital IQ SNL's enterprise pricing strategy? And then kind of throwing this one in there in terms of S&P’s acquisition of Kensho in the sense that they’re trying to accelerate the A.I. use across the business lines including the Capital IQ and SNL?

Yes. So I would say the competitive landscape for us really haven’t changed that much from previous quarters and Blackstone's acquisition of TR is recent. I’m not even sure the transaction’s completed yet. And I don’t think that’s going to really affect sort of how we operate in the market on our success and taking market share from all of our competitors.

All right. And then the final one on the Kensho purchase in terms of the increased use of A.I. and whether that is something --

So I’m not sure what their plans are there. Obviously that’s an important theme in the marketplace. We have our own strategy there internally. We spent a lot of time focused on machine learning and A.I. Gene Fernandez who just joined us as CTO from JPMorgan four months ago, this is an area that he is very well versed and then we have some of our own plans essentially to use those sort of techniques as well as data science to really look at the workflows of our clients and continue to improve our product suite.

Your next question comes from Peter Heckmann with Davidson. Please go ahead.

Good morning, everyone. Thanks for taking the question. I just wanted to confirm on the offset from the lower tax rate, it appears that the net increase in your guidance is less than what we would have calculated purely from the 300 basis point reduction to the tax rate. And so it sounds as if the offset is increased investments that are pressuring margins down to more the middle end of the range of your non-GAAP operating margin guidance for the year, so more like 31.5 to 32. Is that the primary offset?

Peter, it’s Maurizio. Let me walk you through exactly that calculation. So the benefit to FactSet on an annualized basis from the lower tax rate is approximately $0.40 to adjusted EPS. Because we’re really getting a three quarter benefit for the year, that drops to $0.30. And what you see in the guidance is an uptick on both sides of the range by $0.10. So that $0.20 difference is really broken down proportionally, fairly equally to three categories. One is the incremental investment that we’ve made in the product and sales that Phil alluded to earlier. Two, it’s the stronger pound and euro versus the dollar that we’re experiencing right now in our P&L. And then three is a higher weighted average share count because the stock price has risen significantly making prior option grants that much more dilutive overall to our weighted average shares calculation.

That’s helpful. And then as a follow up, within your guidance, are you including the stated 325 to 375 of share repurchases over the next two quarters?

So that is our spend on share repurchase for the next 12 months. So a piece of that is in our guidance going forward but not the full amount.

Okay, that’s helpful. I’ll get back in the queue.

Your next question comes from George Tong with Goldman Sachs. Please go ahead.

Hi. Thanks. Good morning. ASV growth organically accelerated to 5.8% in the quarter. Can you elaborate on how cross selling activity, new business and cancellations performed relative to expectations and whether you expect organic growth in ASV to accelerate over the next two quarters?

So we’re very pleased with what we did in Q2. I think we have already sort of laid out in our opening remarks what drove that. And we’re expecting to come in the range of what we said for annual guidance for ASV which was $65 million to $85 million for the entire year.

Got it. And as you looked at the trajectory throughout the quarter, do you see a path of acceleration over the next several quarters similar to the pace of acceleration you saw going from fiscal 1Q to fiscal 2Q?

So we gave you the range there. It is hard to predict. As I mentioned in my opening remarks, it’s still a tough market out there. So we’ve – us accelerating is going to require executing well, getting some key wins like we did in Q2. But what I can tell you is our pipeline on a growth basis is the biggest its ever been, but we are dealing with a challenging market.

Got it. I’ll jump back in the queue. Thank you.

Thanks.

Your next question comes from Joseph Foresi with Cantor Fitzgerald. Please go ahead.

Hi. I was wondering how should we think about the trajectory of margins for the rest of the year and long term. And what’s the biggest swing factor there?

Joe, it’s Phil Snow. So we’re expecting to come in, in the middle of the range between what we guided for the year which was 31% to 32.5%. We have decided to invest a little bit more back in the product just given what happened with tax reform. And so our longest term guidance that we gave I would expect that to get pushed out a little bit, but we’re going to talk more about that at Investor Day next month.

Got it, okay. And then on the demand for analytics, is that more cross-selling or is that a mix of new clients and cross-sell? Maybe you could just dig into that a little bit more because I wanted to just try to weigh that versus sort of your earlier comments around the demand backdrop. Thanks.

So a lot of it is cross-selling. A lot of our growth really does come from up-selling the existing client base and the acquisitions that we’ve done, a lot of which were in the analytics space have helped there. So the deal that we did up with AIMCo in Canada was a direct result of getting the acquisition of Cognity combined with our own multi-asset class product. But that particular sale was a new client. So that was a significant win versus the cross selling that we see within the existing client base. So it’s a nice combination of both.

Thank you.

Sure.

Your next question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Good morning. Thank you for taking my questions. Phil, can you – I know it’s not a big quarter in terms of adding users but it was an interesting dynamic where you had your client count increase more than your user count and I was wondering if you could just comment a little bit about the market dynamics there? And then I have another question after that.

Sure. So the client counts – the majority of the clients are going to be smaller clients. Our user count now includes both FactSet Workstation as well as StreetAccount users. And I think just decomposing that a little bit, there were a couple of hundred or more FactSet Workstation adds this quarter versus some losses in the StreetAccount. So that’s sort of what – how that broke out. But I guess what I’ll go back to is what we’ve been talking about now for at least a year which is the shift from Workstation to workflow. So when we’re out there in the market and we’re providing solutions to clients, Workstation is one KPI but I think it’s one that should not be focused on as much historically from an analysis standpoint and I think that’s clear from this quarter’s results. We added at least $25 million in ASV but you’re seeing just a small number of workstations there. So it’s the solutions and the workflows that we’re selling to our clients that are accelerating our growth.

Got it. That’s fair. Are you going to talk more on the Analyst Day about how much of the business is no longer Workstation related, kind of give us a sense of that?

So you’ll have to show up to find out. I know you’ll be there. But we are definitely going to be providing more transparency on the different pieces of our business and give you a little bit more guidance there in terms of how to think about the different groups.

Thank you. If you don’t mind my just squeezing in, what are you investing in particularly? You talked about product and the margin is going to not be necessarily as high but it looks like you see an opportunity right now in a timely basis to be investing in the products. Can you give us just a little bit more detail on that? And after that, I’ll get back in the queue.

Yes, sure. So we’re just pouring more gas on the things that are growing faster, so analytics is one example and CTS which is our data feeds business, we’re making a big investment and building out the next generation of that.

Thank you.

Sure.

Your next question comes from Glenn Greene with Oppenheimer. Please go ahead.

Thanks. Good morning. Just a couple of questions. I was wondering, Phil, if you could just give us an update on what you’ve seen as it relates to MiFID? Obviously, it won’t affect anyone. It doesn’t seem to have a huge impact on your business but maybe just a little bit of color on what you’re seeing in the market?

So my comments really haven’t changed from last quarter. The European business did better this Q2 than it did in Q2 of FY '17, so we’re showing positive momentum there and we’re continuing to build out more solutions with our regulatory group to address MiFID and other regulatory solutions.

Okay. And then just on the – for Maurizio, the margins decelerated a bit in the quarter. I think last quarter you had talked about them sequentially increasing throughout the year. Maybe you took the opportunity late in the quarter to invest but maybe just some commentary on why the margins sort of went back the wrong way?

So our adjusted margin was 31.7% in Q1. It dipped to 31.4%. That 30 basis point reduction was really FX generated. And if you look at Q3 that effect is less than what we saw in Q2. But that’s what really drove the margin to 31.4. And as Phil alluded to, it’s our projection that the margin will come in somewhere within the middle of the range that we gave out for guidance.

Okay, so nothing unusual other than the FX and you didn’t do – you didn’t take the opportunity to incrementally invest late in the quarter at this point?

No. The majority of what Phil is talking about is really – is coming up in Q3 and Q4.

Okay. Thank you.

Your next question comes from Toni Kaplan with Morgan Stanley. Please go ahead.

…be on the block soon. Would that type of asset be complementary to your portfolio and --?

Toni, we didn’t hear the beginning of your question. You were cut off.

Sure. Recently news reports mention that Tradeweb might be on the block soon. And so would that type of asset be complementary to your portfolio? And putting that one aside, what type of acquisitions are most attractive to you right now?

So we’re not going to talk about specific acquisitions on this call, but our strategy for M&A hasn’t changed. We continue to evaluate interesting workflow and content tuck-in acquisitions. And as both Maurizio and I have said, we have the capacity on our balance sheet to do something bigger if the right asset presents itself.

Okay, great. And then your employee count was up about 9% in the quarter and if I just sort of take a step back, your organic ASV is sort of in the mid-single digits. It is growing but is that also pressuring margins basically like when we think further out, should we – is it that you’re hiring in low-cost locations, is it the additions from the acquisitions and employee count or how should we think about sort of a sustainable employee count growth rate versus top line? Thanks.

Hi, Toni. It’s Maurizio. So the employee count grew 9% on a year-over-year basis but that includes employees from the acquisitions of both BISAM and FDSG. If you strip that out, our employee count grew just north of 4% and a large part of that are employees that are in India and in the Philippines which are at a lower cost inherently. So that’s not a significant pressure on us today from a higher headcount number.

Your next question comes from Manav Patnaik with Barclays. Please go ahead.

Thank you. Maybe just another question on your comment around workstations versus workflow KPIs, maybe can you just help explain why client retention keeps dropping but you sound like the market is pretty good to you guys. So what’s the disconnect there?

So the client retention I think – the majority of our ASV really is bundled into the existing clients and the larger clients that we’ve had for a long time and that we’re cross-selling. So I think it’s really just a function of us losing on a net basis much smaller clients on the tail.

Okay.

But again when you look at – sorry, so when you look at each of our quarters essentially and you think about sort of what’s shifting the ASV, the vast majority of it is really always a function of the existing clients. It’s not heavily influenced by – typically by lost clients.

Okay. And then just on your enterprise selling efforts, I was just wondering like so when you go to your client I guess, is this an enterprise-wide agreement or do you still – and just maybe a little bit more color basically on how that contract is structured now with the added services that you’ve collected over the years?

We’ve had long-term agreements with our clients for a very long time. If you’re a smaller client – you’re a small hedge fund or a family office, you might come on with a one year contract that renews every year. But for a lot of our larger clients now we’re negotiating longer-term agreements with them which could be three to five years in length that could include a whole range of different services.

Got it. Thanks, guys.

Sure.

[Operator Instructions]. Your next question comes from Hamzah Mazari with Macquarie. Please go ahead.

Hi. This is Kayvon Rahbar filling in for Hamzah. Can you give us a sense on your sales force productivity, how is it trending? Is there any room for improvement?

So that’s not something we track in terms of the metric that we could sort of talk about on this call. We’ve got a large, very talented sales force that has a wide set of capabilities. And historically the cost of the sales force as a percentage of our revenues has remained fairly constant.

Okay. Thank you.

Yes.

Your next question comes from Peter Appert with Piper Jaffray. Please go ahead.

Thank you. So Phil or Maurizio, is there any structural difference between the workstation and the feeds business in terms of the profitability dynamic? I’m thinking that maybe there’s some efficiencies in selling feeds in terms of bigger sales that could make that a more profitable business if I move the needle in terms of margin. Is that accurate?

Yes, so the feeds business is a great business. A lot of our success has been it because it’s a byproduct of the content that we collect ourselves and we’re becoming more and more efficient at selling feeds. The CTS team has done a tremendous job standardizing a lot of the feeds that we have. So that I think is partly why you’re seeing such a great adoption of our feeds business is that it’s become standardized. We’re marketing it more effectively and our sales force is becoming more expert in selling it just in general. But you raise a good point there. It’s a high margin business and it’s one that we continue to think is going to be a revenue driver for us.

Are the feeds users – what’s the overlap between feeds clients and workstation clients?

It’s low but it depends on the shop. So they may be – we may be servicing a large shop with both a feeds and a workstation. We sell a lot of feeds to quants. So a lot of FactSet’s feeds business goes to quantitative investors who will take our content and put it into their own internal quant systems. But those same quant users might also be using FactSet’s really excellent suite of quant products to do another piece of their process. And in some cases, they’ll just be using one or the other.

Got it. But is there an expectation and as the feeds business grows as a percent of revenue, if that can be a driver of higher margin or is that not a realistic expectation?

I think it’s not a bad thesis. If it became a bigger piece of FactSet, today’s its 10% and growing nicely. But as it gets larger I think that it definitely could help our margin.

Your next question comes from Kevin McVeigh with Deutsche Bank. Please go ahead.

Great. Thank you. I wonder if you could give us a sense, it sounds like the incremental boost in the buyback is a result of the repatriation. Is there any way to think about the structural benefit from the tax reform and what incremental cash flow associated with that, will that be deployed to buyback or acquisitions or how should we think about that longer term?

So our capital allocation process really has not changed. We’re still very opportunistic on the M&A front. If we’re not doing M&A, then we’re reinvesting back to shareholders in the dividend and stock repurchase. The dividend has been growing very nicely on a year-over-year basis, but we don’t see any significant change to that in terms of growth to the dividend. So it’s really at the large majority of our free cash flow, we’re not doing M&A. Right now it’s most accretive for us to go buy back stock. And so that’s why you’re seeing that incremental 100 million from being able to bring back cash from overseas that we’re earning interest on at a very low basis point returning.

Great. And then just as a follow up, is there any way to think about – it sounds like a third of that reinvestment is designed to boost the organic growth. Any thoughts on what it could mean incrementally for the organic growth in terms of the margin reinvestment that you outlined?

So when we think about that additional investment, we’re really trying to push forward ASV growth and maintain or grow within our guidance. It’s really pushing our ASV growth within our guidance and we’re really – our growth right now for this year is really within that guidance number.

Thank you.

Your next question comes from David Chu with Bank of America. Please go ahead.

Great. Thank you. So similar to last quarter, can you just provide an update on ASV that has been booked to-date in the current quarter?

Can you repeat the question?

Just wanted to see if we can get an update on ASV that has been booked to-date in the current quarter.

No. We don’t disclose that.

Okay. Oh, no. Just you provided that level of color last quarter, so I just wanted to see if we can get that. So on margins – so, Maurizio, when do you think we can get back to legacy levels at this point, so maybe the 33% to 34% range.

Yes, I guess I would go back to what Phil said earlier. I think the timeframe has pushed out a little bit. And we’re still focused on it, but it has been pushed out a little bit longer than what we had initially thought. And we’re going to give a little bit more guidance at Investor Day in a few weeks.

Okay, got it. And then just lastly wanted to confirm, you’re unhedged to all currencies but the rupee at this point?

We are unhedged to all currencies ex-rupee and Philippines peso.

All right. Okay. Thank you.

Your next question comes from Tim McHugh with William Blair. Please go ahead.

Thanks. Just on the FX impact on margins, did you say that the impact is less I guess going into the third quarter now? And just trying to understand given currency trends, what type of impact you expect at this point for the full year and relative to prior expectations, and then 3Q versus 2Q?

Yes. So if you look at Q3 versus Q2; in Q2, we had a – it affected our margin by about 30 basis points. When we look at current rates and our exposure in Q3, that negative has come down somewhat. So it’s less of an effect in Q3 versus Q2. If you look at it on a full year basis, it will be a negative effect just overall for the full fiscal year.

Okay. And so the reinvestment to – I guess given the numbers you gave, it seems like that’s like 20 basis points to the full year number if it’s kind of one third of the $0.20. Is that in the right ballpark for that number?

Approximately. Between 20 and 30 basis points. Correct.

Okay. And then last question. Just another numbers one. The analytics business driving roughly half of the incremental ASV. Can you – since we don’t know the size of that business, I guess how does that compare? Has that been true or close to true the last couple of quarters? Is that significantly different than you’ve been seeing?

Well, the first quarter’s always a very small quarter. I think the right thing to do is to show up at Investor Day and we’ll be providing some more color at that time.

Okay. Thanks.

Yes.

Your next question comes from Keith Housum with Northcoast Research. Please go ahead.

Good morning, guys. As we think about the analytics business, it sounds like you obviously had a good quarter. Is there a feeling regards momentum at your back here in that segment, it sounds like this is an area that’s done better for you over the past year or so. And just to talk about just the current environment and the pipeline in the segment, how you’re thinking about that?

So the analytics business has been a growth driver of FactSet’s business for the last two decades, honestly. It’s beginning with portfolio analysis equity product. So this is really – it’s evolved now to sort of have seven or eight business lines within it as well as all of the acquisitions that we’ve done. Not all of them, but BISAM, Vermilion, and so on. So it’s a great business. It’s one of our stickiest products. And very often, it drives a lot of our sales and brings other products with it. So this is not a new trend. We’re just beginning to talk about it in a little bit more of a granular way than we have historically.

All right. Thank you. And then Maurizio, can you remind us about your thought process regarding your debt levels in a rising interest rate environment?

Yes, so currently we have 575 million in debt. Our cost of capital is just right around 300 basis points. At that level, it’s still very accretive for us to continue to invest our free cash flow to buy back stock. As the Fed increases interest rates, we continue to reevaluate it. But as of right now, it’s still very accretive for us to still go buy back stock and lower our share count.

Great. And then do you guys have any derivatives to protect the interest rates where it’s at now or no?

Currently, we don’t have hedges on the interest rate. No.

Great. Thank you.

Your last question comes from Alex Kramm with UBS. Please go ahead.

Yes. Hi. Good morning. Just a couple of cleanups here. First of all, on Portware, I think historically, you’ve talked about the fact that there’s some parts of the business that is trading, volume related. And clearly year-to-date, we’ve seen spike in volume. So just curious how much that added in the quarter? And then also, Maurizio, how does it impact ASV, because February in particular was very strong and that’s when your quarter ends? So how do you use that variable component there in your ASV number?

So this is Phil. I’ll answer the first part of the question, which is we historically have not broken out the transaction revenue part of Portware.

And so Alex – it’s Maurizio. So in our ASV calculation, we look at transaction revenues over the last 12 months and that’s what we include in ASV. So we’ll look at the last 12 months activity and that’s our ASV number for the client for transactional revenue for ASV.

All right. So one month doesn’t really drive anything up in a big way. Okay, good. And then just secondly, just coming back to the tax rate in a minute. I think I got it now. But you gave a lot of different numbers here. If I think about the next fiscal year, I know that’s still a couple of quarters away, but it sounds like your tax rate going forward, if we assume the same kind of stock base comp levels should be around like 17%, 17.5%. Did I hear that correctly, like on a go-forward basis?

Yes. So this year is a blended year because we really only get eight months out of the 12 months of benefit. But if you look at fiscal '19, you would see an incremental – approximately 200 basis points decline in the existing tax rate going forward for the full year benefit in 2019.

Yes. Excellent. And maybe since I’m the last one, just very quickly since somebody brought up MiFID II as well. When we talk to clients over there, we’re hearing that increasingly, companies are taking this as an opportunity to review their budgets and look at their spend more holistically. Are you seeing any of that already out of Europe, or still something that we should be looking for as people kind of think about their total spend?

Yes, so we’ve not seen any impact yet. Obviously, we check in with our business leaders over there. And I think so far, the trends for us in Europe remain the same as they have been. So we’re hopefully anticipating that in the second half we’ll have a stronger Q3 and Q4 in Europe as we did in Q2.

Excellent. Thank you very much.

Thank you. So thanks everyone for joining us on the call today. As we noted in our press release, we are hosting an Investor Day on April 17th in New York City. Details on how to register for this event are in our earnings release and on our Web site. We hope to see many of you at the event. And if you have additional questions, please call Rima Hyder. We look forward to talking to you next quarter. Operator, that ends today’s call.

Thank you. This concludes today’s conference call. You may now disconnect.