Good day everyone and welcome to the TriNet Group Incorporated Second Quarter 2014 Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions). After today’s presentation there will be an opportunity to ask questions. (Operator Instructions). Please also note that today's event is being recorded. At this time I'd like to turn the conference call over to Jimmy Franzone, Vice President, Corporate Development and Head of Investor Relations. Sir, you may begin.

Thank you, Jenny. Good afternoon everyone and welcome to TriNet second quarter conference call. Joining me today are Burton M. Goldfield, President and CEO; and Bill Porter our Chief Financial Officer. Burton will begin with an overview of our operating and financial performance during the quarter. Bill will then review our financial results in more detail as well as provide an update on our guidance of the full year. Bill, Burton and I will then open up the call for the Q&A session. Before I hand the call to Burton, please note that we may make forward-looking statement during today’s call that are subject to risks, uncertainties, and assumptions. In addition some of our discussions may include non-GAAP financial measures, for a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward looking statements and reconciliations of non-GAAP financial measures, please see the Company’s public filings including the Form 8-K filed today all available our Web site. With that I will turn the call over to Burton for his openings remarks.

Thank you, Jimmy. The strong market demand we saw in the first quarter continued into the second quarter. I’m excited that in Q2 we met or exceeded our targets for sales and operational excellence. Our results reflected the robust demand for TriNet’s three differentiated bundled solutions each targeting specific vertical market opportunities with dedicated sales channels. Growing HR complexity, spacing small and medium size businesses continue unabated. These include the Affordable Care Act, wage and hour issues in a variety of additional federal, state and local compliance requirements. And in fact we are seeing that the ACA’s ever evolving rules and uncertain implementation timelines continue to raise awareness for the need to seek a solution by TriNet, that deliver a full range of HR requirements. We are winning new business by adding clients who are previously trying to stitch together their HR function through insurance brokers, software and limited internal capabilities, what we term an unbundled solution. In fact, similar to last quarter approximately 75% of our new clients added during Q2 did not previously use a bundled solution. Our verticalized sales force is building deep relationships within each of our target market segments. They do so by offering a detailed understanding of the HR issues facing that business and their specific industries. Our relationships and most importantly the building of trust began from the very first meeting with these entrepreneurs. These relationships paired with our bundled products create a winning formula that takes the pain away from customers and dealing HR, so they can focus on growing their businesses. Our knowledge of their industry provides creditability in strategizing around HR. For example when we sell through a Green Tech CEO and can intelligently discuss the triple bottom line people profit and planets, we are helping them to build their…

Thanks, Burton. As Burton noted we reported strong second quarter financial and operating results, as we executed on our strategy and continued to drive growth across all of the key metrics used to measure the financial and operating health of our business. Our net service revenues increased 32% during the second quarter to $124.8 million as we leveraged our growing sales force to drive further penetration of our multiple product offerings across our national footprint. On an organic basis second quarter net services revenue growth was 20%. Our total WSE count was 258,985 employees up 31% from 197,458 worksite employees at the end of the second quarter of 2013. On an organic basis WSE growth was 23%. Our professional services revenues which represent approximately two-thirds of our net service revenue in Q2 increased 35% to $82.3 million, while our net insurance service revenues which represent the remaining one-third of our net service revenue increased 28% to $42.5 million during the second quarter. On an organic basis for Q2, professional services revenues grew 24% and net insurance services revenue grew 15% year-over-year. Total adjusted EBITDA increased 38% to $39.4 million during the second quarter compared to prior period year, representing an adjusted EBITDA margin of 31.6%. For the first six months our adjusted EBITDA margin was 33.2%, we are well on track in pursuing our target margin level of 33% to 34%. Our GAAP effective tax rate was 44.2% for the second quarter. As I indicated in Q1 we expect our long-term effective rate will be approximately 39.5%. Adjusted net income increased 44% to $17.3 million or $0.24 per share compared to $12.1 million or $0.18 per share in the prior year primarily due to increased operating income. We also generated $19.7 million in cash free flow during the second quarter,…

Thanks Bill. In summary we generated strong growth during the second quarter and first half of the year. We are executing our strategic plan as we focus on effectively addressing the many complexities small, medium sized businesses phased today in delivering HR services to their employees. Our unique focus, knowledge base and scale provides a level of expertise and service that simply cannot be replicated by stitching together multiple solutions through various sources. We’re the only company successfully addressing this large underpenetrated market with three distinct bundled solutions targeted to specific industries. We believe this differentiation is what is driving our strong results. Our momentum have continued into the second half of the year and we’re confident we can generate robust growth in 2014. In addition our success in ramping up the sales force positions us well for 2015. That concludes our formal remarks and now I would like to turn it back to the operator for the Q&A session.

Ladies and gentlemen, we’ll now begin the question-and-answer session. (Operator Instructions). And our first question comes from Tien-Tsin Huang from JP Morgan. Please go ahead with your question.

I want to ask Burton you feel pretty bullish I thought on the quality of the people you’re getting, you mentioned he was best class, et cetera. So how can we, I guess test that or measure that with all said and done. Is this simply just higher productivity? I know with growth we’ll watch but is there a way that we can watch productivity to test that thesis?

So good question Tien-Tsin and thanks it really was a great quarter. And as I said on the earlier calls that my focus was ramping up that sales organization. You along with a lot of people understand the complexity around ramping up the sales force 25% a year. So we have reached out into key verticals and well known companies to pull reps. We have ramped up our training program and actually adjusted it significantly because many of these people have never sold or bundled solution before. So I would get out ahead yourself on the productivity, but the fact is I expect that we maintain a productivity as I ramp up 25% per year over the next couple of years the sales force to go after the market penetration plan. There is a lot of variabilities that go along with that productivity as you point out, I think the fact is we’re getting some senior people. I won’t know why till they’re onboard six months. But I am pretty optimistic about their ability go out there and tear-off chunks of these verticals. I just got back from what we call triumph which is our sales kick off, we had almost 600 people there in Arizona that was all last week. So we have now undertaken the lion share of the training of these new reps, and having the 388 onboard was key. Now we got to them in the tranches making phone calls first calls, I am measuring it by activity at this point Tien-tsin, how many meetings can they schedule. And then how many quotes can they generate. There is no magic here but the fact is that it is a fairly robust plan and a lot of moving parts to ramp up the sales force at this rate. As you know we have 388 reps, but there is the whole management infrastructure, the marketing infrastructure, the lead generation, the training programs and all types of other factors that go along with getting 388 frontline, quota carrying, non-duplicative reps up to speed.

So we’ll monitor that I guess as we go on into 2015. As my follow-up I’ll just ask on the client retention or attrition front. Any noticeable trends there and it looks like the guidance is quite good, just wanted to make sure there wasn’t anything plus or minus on attrition front?

Tien-tsin this is Bill. No, there's nothing notable to speak up, things are going well. We are spending a lot of effort to maintain the service levels and as a result we’re having attrition that is trending better than our expectations below the 20% target that we have.

Our next question comes from Smitti Srethapramote from Morgan Stanley. Please go ahead with your question.

It sounds like you guys saw nice growth across the three products line that we’re just wondering if there is anything to call regarding any meaningful difference in growth rates and Ambrose versus Passport versus SOI in Q2?

So I’ll start Bill you might want to jump in. Absolutely not, I am thrilled with all three products, we’re ramping up the reps across the three products and are all doing well.

And Smitti this is Bill. As you know and as we’ve mentioned we’re pretty ambivalent on how all of those products grow because we get similar margin profiles out of each. So we really try to make sure we’re investing where the market seems to be hot and we just like the growth that we’re seeing across three products at this stage.

And may be from my thoughts just wondering if you guys can talk about the pricing environment overall, and whether you’re seeing any rationale pricing at all in the marketplace?

So Smitti, I’ll take this. No, the short answer is no, the competitive environment, the pricing pressure has not increased at all. It becomes very much a value sale on a trust sale as we talked about in the past. So we are not seeing pricing compression on any of our three product lines.

And Smitti, as you’ll note down on quarterly basis our service fee per average worksite employees up about 1%, when you look out on pro forma basis. So it’s very stable pricing environment and we think that should continue.

Our next question comes from Paul Ginocchio from Deutsche Bank. Please go ahead with your question.

Just real quickly on change in existing seems like the NFIB optimism index has picked up, I think small businesses hired to eight months or nine month straight which hasn’t happened since '06. Have you seen an acceleration of hiring within your existing client base? And has that been part of the reason to accelerate? And then I have one quick follow-up.

I’d say that the environment has been really steady, I think there is probably slight improvement in the CIE, but it’s a little different across our product lines Paul as you know. We see better growth and change in existing in our faster growing verticals. Such as technology we see slower growth and more the mainstream products. And let’s say a little bit more also slow growth in the high-end financial services. But it’s pretty consistent, maybe just a slight bit of uptick but nothing meaningful.

And then just the mix impact that you said 20% organic and 23% worksite employee growth. Can you just talk about the difference between those 20% and 23%?

Sure, in general there will be a little bit of movement because it’s not completely correlated depending on the time of the quarter when you bring you bring your worksite employees on. So you’ll see swing of a couple of percentage points generally. But it’s in the right direction, and I think we’re very pleased with both the WSE growth and as I mentioned and the pricing is pretty stable.

We’re not picking up any as you said no differential in pricing and no differential in growth rate between the brands?

No, not all.

Our next question comes from David Grossman from Stifel Financial. Please go ahead with your question.

So as I said in my opening comments that it is about the uncertainty, it is about the complexity. And the fact that it’s extended frankly its greatness for us, because there was a lot of awareness raised at the beginning and March timeframe. Now the pressure is a little bit off and it will come back on again as the changes occur and the deadlines come near. So the extension and evolution of both the requirements meeting the size and the complexity and what the laws are going to be as well as the timeline. In my mind is all good news, but I want to make clear this is not all about the Affordable Care Act. It’s about the complexity of running a business in a multi-state environment. It’s about the very complex laws in California as they vary from New York to Boston and other places, and it’s the changing environment about what’s considered overtime and what is considered regular time, which does change by city. So the Affordable Care Act is great and I am sure that’s going to continue to evolve. But that’s not the main driver for the business, it’s about hand raisers with the Affordable Care Act, but in general it’s about the real business problems where people want to offload the complexity of HR and essentially outsource that function to a company this large, has the scale to service them in 50 states and give incredible service to their employees.

And just as a follow up, I was wondering if it’s possible for you to provide us, give us an idea of how much of the contribution from 20% organic revenue growth or some new sales versus same store-sales within the current installed client base?

Irvin this is Bill, we generally will give an estimate on an annual basis. We’re not going to give that level of detail quarterly. But generally I’d say as most of the increase you’re going to see is really coming from new sales growth based on what we look at our annual model and I would expect that in Q2 it was the same.

Our next question comes from Tim McHugh from William Blair & Company. Please go ahead with your question. Tim McHugh - William Blair & Company: I guess first it sounded like you had some success with kind of larger sales this quarter. And I know that’s always been a little bit of mix but was there a shift towards that at all? And are you seeing more success with, I guess you said chains of restaurants or multi-state employers than even I guess before?

So Tim good question, we are having success with larger employers. On average I don’t I think it’s changed, because we have so many deals as we grow bigger. But it is true that some of the larger employers are becoming more interested in the solution, some of that is being driven by the multi-state complexity and some of it’s being driven by the verticalization where now we are focused on restaurants as a vertical. So for instance I visited a large restaurant chain in New York City, and they had no idea that we were also currently servicing one of the largest chains out of LA. So they wanted to get together with those folks. We are starting to build the management infrastructure on top of that vertical. So I believe that will help us to penetrate more of those large accounts. It’s all about focus and I believe there is a huge opportunity in those larger multi-state restaurant chains, but that’s an example of where all of those are going to be over 200 to 300 employees. At the same time, there is a robust demand in the startup world. We got into six different incubators in the last couple of months to do with biotech, to give you an example. And we are able by sponsoring those incubators to get virtually everyone of these companies as they are being formed as opposed to wait for their formation and identification. So each of the verticals in a different stage of maturity, but that gives you two ends of the spectrum where those small biotech firms have three, four, five employees.

Tim this is Bill, I don’t think you are going to see a meaningful move in the average number of worksite employees per client. And so I think you’ve got some examples of good high profile wins. But I think across the board it’s resonating, I think both from small and into larger clients but you are not going to see a shift in the metrics in any significant way. Tim McHugh - William Blair & Company: And then just on a numbers question, the implied guidance, I know you’re not doing specifically to Q4, but it implies a more or less my math, rough math is correct right now kind of more or like the low double-digit or low teens growth rate in Q4. Can you remind us something about the comp for Q4 or at least some of the top line growth north of something else that you would expect that seems pretty conservative given the WSE growth?

I understand and I don’t think anything’s wrong with your math. But as we look towards the end of the year, there is a lot of moving pieces that we are working with and we would just like to be able to get through. We’ve got a lot we’re building, both on the WSE service level as well as on the sales level. So I think we just want to make sure that we are not getting ahead of our skis. Tim McHugh - William Blair & Company: And then one last one I could slip in. You had a new program announced about partners a new partner program I guess this quarter and other PDLs talk about seeing a closer relationship with partner distribution channels. Is that becoming increasingly important? And I guess maybe just talk about what you are doing there?

So I am trying to turn all the dials around sales productivity. As I add so many new reps the question is, how do you get them productive quicker? How do you allow them to make quota and ultimately go to club. So we have historically not done a lot with partners. We have started the partner program, there is a historic program, they came through SOI around brokers and we’re trying to exploit that program. So ultimately I would expect over the next year for that to bear some fruit. But it’s all about how can I bring in these new reps and get them productive very quickly. The ability to go in hand-in-hand with the partner with already established creditability is very important and ultimately could play a significant role in how we build the channel. My focus right now is entirely on 2015.

And our final question comes from Jason Kupferberg from Jefferies LLC. Please go ahead with your question. Amit Singh – Jefferies LLC: This is Amit Singh for Jason. Just quickly on the sales force growth. Now that you guys have already grown more than 25% at the target that you guys have for the year. So how should we look at growth going forward for the year? Should we expect, I mean no more addition for the rest of the year?

So as we’ve guided we’ll grow the sales force at 25% each and every year for the next three years. We need to bring these folks in and train them up so they can be productive early in January. So my expectation is that we will not exceed the 25% growth plus or minus a few percent for 2014 as we’ve guided, and I would expect the same thing next year.

And then you give good guidance on the top line and the EPS. But how should we think about your free cash flow going forward? I mean is it safe to assume that, I mean free cash flow should start trending towards the adjusted EBITDA levels?

Sure. Amit this is Bill. So yes, free cash flow should continue to migrate towards EBITDA levels overtime. And again you just have to build in the consideration of where we are with our debt repayments, because that obviously is not incorporated into EBITDA.

And ladies and gentlemen, we’ve reached the end of the allotted time for today’s question-and-answer session. We will now end the conference call. We do thank you for attending. You may now disconnect your telephone lines.