Operator: Good day, ladies and gentlemen, and welcome to the Q1 2013 IHS Inc. Earnings Conference Call. My name is Sue, and I'll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder, this call is being recorded for replay purposes.
I would like to now turn the call over to hand over to Mr. Andy Schulz, Vice President of Investor Relations. Please proceed, Sir.
Andy Schulz - VP, IR: Thank you, Sue. Good morning and thank you for joining us for the IHS first quarter 2013 earnings conference call. We issued our earnings release earlier this morning. If you do not have a copy of this release, it is available on our website at ihs.com.
Some of our comments and discussions on the quarter are based on non-GAAP measures. Our non-GAAP or adjusted numbers exclude stock-based compensation and other non-cash charges and other items. Our earnings release includes both our GAAP-based income statement and statement of cash flows and the reconciliations to the non-GAAP measures discussed during this call. These reconciliation schedules can also be found on our website. The non-GAAP results are a supplement to the GAAP financial statements. IHS believes this non-GAAP presentation and the exclusion of these items is useful in order to focus on what we deem to be a more reliable indicator of ongoing operating performance.
As a reminder, this conference call is being recorded and webcast and is the copyrighted property of IHS. Any rebroadcast of this information in whole or in part without the prior written consent of IHS is prohibited.
Please keep in mind that this conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ and vary materially from expectations can be found in IHS' filings with the SEC and on the IHS website.
With that, it is my pleasure to turn the call over to Jerre Stead, IHS' Chairman and CEO. Jerre?
Jerre L. Stead - Chairman and CEO: Thank you, Andy. Good morning and welcome to all of our investors and to my IHS colleagues. It’s pleasure to be with you this morning to share our results from the first quarter.
Regarding the quarterly financial highlights, revenue was up 12% in the first quarter. Adjusted EBITDA increased by 14% and our adjusted EBITDA margin was 30.9%. Free cash flow was $112 million.
Q1 proved to be exactly what we thought it would be, solid and steady performance in the phase of continued uncertainty macroeconomic times. Therefore, we are reaffirming our guidance for 2013, reflecting revenue growth of 9%, adjusted EBITDA growth of 16% and adjusted EPS growth of 10% at the midpoint of our ranges.
Scott Key, our President and Chief Operating Officer; Rich Walker, our Executive VP of Global Finance; and Todd Hyatt, our Senior VP, Chief Financial and Officer and IT Officer will provide more detail shortly.
Nearly two years ago, we noted that we were about to embark on an eight quarter period of immense transformation impacting every aspect of our infrastructure. Since then, we’ve been deploying new systems, implementing new processes and putting in place the right teams and structures is the foundation for our future. The great work our team has been doing and continues to do today is all about two things – delighting customers and enabling our ability to deliver sustainable profitable growth well into the future. Today, we're less than one quarter away from completing the most intensive part of this process.
As we finished the first half of our year, we will see an increasing amount of our internal effort move away from infrastructure activities towards our promotional initiatives, including the initial phase of the rollout of our common workflow platform, and there will be far less change management internally.
With our new systems, we are leveraging the improved line of sight into our business and are seeing sales force and company-wide productivity increases. Throughout this period of significant investment and change, we've continued to drive meaningful margin expansion and strong free cash flow as reflected by our Q1 results. It's truly an exciting time to the IHS and best is yet to come.
My many thanks to my colleagues for their hard work, diligence and performance as we are investing at the highest levels in our history. Our largest infrastructure initiative is Vanguard, our platform to support business growth and to drive common global processes. This initiative is delivering value and delight to our customers, as well as improving productivity and effectiveness for our colleagues through global streamline processes.
On March 1, we reached another important milestone as we went live with the (Fifth) release, this one covering all of our Canadian operations. With this successful release, we are approximately 90% complete with our implementation plan for Vanguard.
In the midst of all this foundational infrastructure work, we kicked off our second quarter in style with the 32nd IHS CERAWeek in Houston. IHS CERAWeek is the leading gather of senior energy decision-makers and business leaders from around the world. It featured presentations from over 300 speakers, including senior industry executives, government officials and thought leaders. IHS CERAWeek 2013 was a timely gathering that delivered unparalleled insight, critical analysis and clarity on the future of energy in a changing world.
This year's conference focused on drivers of change and geopolitics markets in the new map of energy. The energy industry is an undergoing a profound transformation driven by new technologies, shift in global demand, regulatory uncertainties and the new realities of global supply.
At the same time, growing economic uncertainty with geopolitical pensions all posed new risk and new challenges as companies invest to meet future energy needs. Conference reinforce that IHS offerings are fundamental to our customer's core workflows and are used every day to help our customers advanced decisions that advance the world.
This year's conference, topics, attendance and discussion reflected the many connections our Company is making across the key capital-intensive industries that drive global supply chains and economies.
It highlighted the impact that IHS has as we bring information, analytics and expertise to customers' critical decisions. Signaling the business importance of this IHS event, media coverage and attendance surpassed all previous years with a record 254 registered journalists and more than 2,800 news articles, representing a significant increase over 2012.
IHS CERAWeek is a great example of the continued progress we’re making in elevating our position externally as the leader in each of the vertical markets where we continue to build scale and momentum. We are still rolling up the final results. However, this year's conference was a great success in building IHS presence and value for our customers in the key market.
IHS CERAWeek is not our only marquee industry event. In fact, the 2013, IHS World Petrochemical Conference is wrapping up this week in Houston. Now in its 28th year, we’ve had an outstanding gathering of executives across the global petrochemical industry. There has been a robust dialog focused on the rapidly changing landscape that is creating new challenges and opportunities. The industry is repositioning for an evolving global energy landscape and the resurgence of North American oil and gas production.
With that it is my pleasure to turn the call over to Scott.
Scott Key - President and COO: Thank Jerre. During the first quarter, we continued to deliver steady performance, well above market and economic growth rates. We grew 5% organically overall, in line with our expectations and consistent with our performance since uncertainty in the global economy late last summer.
This performance also provides a good start to 2013 and we are still early in our new product introduction process and still completing our transformational initiatives that will fully enable our sales force and maximize sales efficiency.
Importantly, we continued to deliver a steady 7% organic subscription growth during Q1. We benefited from some in-period items that helped us round up to 8% and it means we have sustained organic subscription growth at 7% or higher for almost three years, despite a turbulent economic and business environment over this period.
Looking at subscription organic growth, performance by region, all three regions performed well. Americas subscriptions grew organically at a solid 8% and EMEA organic subscription growth was a steady 6% for the quarter, which is really impressive performance in a region racked by recession.
APAC continued its strong organic subscription growth trend, growing 11% during Q1, reflecting the solid focus of our teams and impact of our expanded infrastructure and investment in the region over the past two years.
Non-subscription revenue continues to have its challenges in the current climate. Non-subscription revenues represented approximately 20% of total revenues for the quarter and declined 8% organically.
As context note that Q1 is traditionally our lowest quarter for non-subscription sales for Q4 is the highest. Our Q1 performance was similar to what we have seen the last two quarters. The 8% organic decline for non-subscription revenue represents a $5 million organic reduction versus the prior year and reflected a mix of some underperforming non-strategic assets and continued weakness in customers' discretionary spending globally. This is clearly not where we want to be and it is an area of focus for us, but let's realize this does not represent a large absolute dollar decline relative to our total business.
Furthermore, based on our current sales pipelines and product release schedules, our full year expectation for the non-subscription business is to see improvement as the year progresses and as we look for corporate discretionary spend to improve in the second half of 2013. Rich will provide further details on regional revenue growth in a moment.
Let me now briefly update you on our market and sector outlook. As we look at the economic and corporate growth environment around us, we continue to see weak economic growth trends globally and uncertainty and tight business spending patterns for the near-term. Despite the record highs being experienced by equity markets, the real world continues to struggle with corporations using more of their cash to repurchase shares than in making clear commitments to invest in growth. Our economists are still projecting relatively flat global growth for the full year 2013 against prior year levels and this has not changed despite some recent optimism for U.S. housing markets.
Fourth quarter 2012 corporate earnings growth continued to outpace sluggish revenue growth, signaling continued cost control and cost-cutting to improve earnings by corporations and our customers. Moreover, thus far for Q1 2013, negative earnings pre-announcements issued by S&P 500 corporations are outpacing positives by four to one, the highest level since 2001.
In the U.S., some mild signs of recovery are appearing as evidenced by an uptick in manufacturing and exports in recent months. However, this appears likely only to be offset negative impacts due to government indecision. With this sequester, we’ll potentially pull second quarter growth below 1% again. With a partial sequester extending through June, U.S. growth would slow to 1.8% for the full year 2013.
More specifically for IHS with respect to the sequester, we have seen a slowing in government agency spending decisions recently and we expect about $3 million in revenue and profit we’ll shift from the first half of 2013 to the second half as a result. This is grounded in our belief that sequester will not be rapidly resolved between now and June 1.
For the Eurozone, this situation has worsened and recession deepened. With the GDP drop of 0.6% in Q4, all major economies contracted, including Germany, (output) also fell 0.6%. All told, the Eurozone economy is expected to contract by 0.3% this year, with the manufacturing Purchasers' Managers Index at 47.9 in February. This marks the 19th consecutive month below the 50 point threshold between expansion and contraction in the Eurozone.
Japan returned to growth in the fourth quarter of 2012 where GDP rose 0.2% on an annualized basis compared to estimates of a 0.4% contraction as we exited 2012. Japan appears to be emerging from its third recession in three years, although an uptick in industrial production in recent months has not been matched in exports, which continued to decline slightly.
Regarding China, despite the recent uptick in Chinese exports, personal consumption and domestic demand continues to be weak, which will continue to negatively impact exports from the Eurozone and other Asian and emerging market economies.
Chinese industrial production decelerated in the recent months, continuing a slow decline since mid-2010 and the manufacturing PMI continued to hover around the 50 point threshold.
In summary, we are not seeing signs yet of renewed or improving (indiscernible) drivers for corporations and we now have new U.S. headwinds in government markets. We continue to look for concrete signs that would indicate an improving second half of 2013.
Fourth quarter 2012 earnings growth continued to struggle, but now let's turn to IHS performance in our key markets. Despite this continued challenging global business environment, we see solid growth in a number of our end markets along with weakness in others. Energy growth is robust worldwide with continued double-digit organic growth across our subscription offerings.
Chemicals, particularly subscriptions, continue to do well globally with strong organic growth as we continue to benefit from the integration of our broad capabilities following the launch of IHS Chemicals one year ago.
Transportation continues to perform well, as we increased market presence and market share globally and (others) performance is particularly strong with a positive market response to the common IHS Automotive platform launched in 2012..
Electronics growth remained weak in response to significant reduction in customer spending. Government, defense and security continue to challenged, as government spend remains under pressure globally and particularly in EMEA.
Turning to our commercial development activities; we continued to invest in our growth across our offerings and high-growth markets. As we complete the global infrastructure build-out that is a key lever to future growth and operating leverage, we are also integrating legacy products on the common workflow platforms across our five core customer workflows.
We expect these efforts will result in a continued high level of new product releases in 2013, 2014 and 2015 as well as the retirement of legacy systems and costs. We anticipate positive impacts to organic growth in up-sell, cross-sell, the new business generation, as we exit 2013 and realize a strong margin profile on this growth. We look forward to sharing more details at our upcoming 2013 Investor Day to be webcast April 10th, when we outlined a clear roadmap of new product and work flow platform deployment that will be a foundation or element of our organic growth through 2015 and beyond. We are also managing a solid M&A pipeline of high quality assets with clear strategic prioritization that should enhance our industry and work flow strategies and drive accretive growth in margins as we continue to build IHS scale and market presence globally.
In summary, we continue to see a slow economic and corporate spend environment and have not yet seen concrete signs that would lead to a second half improvement in the markets and growth. We see new headwinds in the U.S., in the near-term as Congress grapples which required tax and spend decisions and deadlines. We continue to invest in our business as we complete key infrastructure projects and develop our core commercial platforms and bring new capabilities to market. We are managing our costs base in a lower growth environment to ensure we balance investment for future growth with consistent expansion of margins towards our long-term goals.
Finally, we are delivering a high level of free cash flow that as a result of a strong subscription base business model, which also features solid margins and low capital requirements.
With that, I’ll turn the call over to Rich, who will take you through the details of our Q1 performance.
Richard G. Walker - EVP-Global Finance: Thank you, Scott. I’ll provide an overview of our results and a reaffirmation of our 2013 annual guidance. Let's start with revenue, first quarter 2013 revenue increased 12% to $383 million. The growth in revenue includes 5% organic growth and 7% growth from acquisitions. FX was negligible for the quarter. Although not material to the quarter, FX is something we will need to keep our eye on as we saw more pronounced impact as we exited the quarter.
Subscriptions represented 80% of revenue and grew organically 8% in the first quarter, representing our 11th consecutive quarter of 7% or higher organic subscription growth. Our non-subscription businesses declined 8% organically or approximately 5 million, as Scott outlined earlier.
Looking at regional performance, Americas' overall organic revenue growth was 3% and Americas’ subscriptions grew organically at a solid 8%.
EMEA’s overall organic revenue growth was 4%, with a 6% organic growth rate in subscriptions. Again, pretty terrific performance in a recessionary environment.
APAC’S overall organic growth was very strong at 15%, led by subscription organic growth of 11%.
Turning now to profit and margins; Q1 adjusted EBITDA totaled $118 million, up 14% versus a year ago. Our adjusted EBITDA margin improved as expected and was almost 31% in the first quarter. This is the 70 basis point increase over last year and solid expansion given the current lower growth environment in which we are exercising good cost discipline.
Moving down the P&L, adjusted EPS increased to $0.86 per diluted share in the first quarter, a $0.09 improvement over the prior year. Regarding segment probability, Americas' adjusted EBITDA increased 18% to $93.8 million; EMEA's adjusted EBITDA was down 4% to $24.1 million, due primarily to increased selling costs. APAC’s adjusted EBITDA grew 23% to $10.2 million. We were very pleased with the profit growth in APAC as we are realizing the benefit of our investments over the last two years.
The reported GAAP tax rate for the first quarter was 19.4%. Looking at the balance sheet, we ended the quarter with $319 million of cash and $1.05 billion of debt. Deferred revenue at the end of Q1 was $628 million, an increase of 10% on a year-over-year basis.
Turning to cash flow, we had a very strong quarter as expected. We generated $112 million in the first quarter improving our trailing 12-month conversion of adjusted EBITDA to free cash flow to 69%, in line with our past performance and annual expectations.
Also on a trailing 12-month basis, free cash flow per share was $5.14, the highest in our company's history. We continued to maintain our outlook and guidance range for 2013. Our guidance is on an all-in basis and assumes no further acquisitions, currency movements, pension and mark-to-market adjustments or unanticipated events.
For 2013, we are reaffirming our guidance and expect all-in revenue in a range of $1.64 billion to $1.71 billion including an overall organic growth rate expected to be between 5% to 7% at the midpoint. All-in adjusted EBITDA in a range of $540 million to $582 million and adjusted EPS between $4.23 and $4.43 per diluted share.
With that let me turn the call back over to Jerre.
Jerre L. Stead - Chairman and CEO: Thanks, Rich. We are off to a very solid start to what should prove to be a very good year for IHS. Please join us for our 2013 Investor Day to be webcast on April 10, during which we will map out our very exciting future. Scott, Rich, Todd and I are now ready to answer your questions, so let's start the Q&A.
In the interest of time please limit yourself to just one question. We are ready to go.
Operator: Peter Appert, Piper Jaffray.
Peter Appert - Piper Jaffray: I thought that Scott's tone sounded particularly cautious in terms of this commentary on those signs of recovery, the headwinds from the government and given essentially in line first quarter results, but sounded like more cautious commentary. You're reaffirming the guidance, so what has to happen to get to the numbers? Do we need to see some macro improvement to get there?
Jerre L. Stead - Chairman and CEO: It's a good question Peter. What's Scott is trying to do is reflect what are world's leading economists are telling everybody and actually we're giving you free guidance today which we would normally charge for with what's going on in the world. We reaffirmed guidance which I think is the world continues the 9% revenue growth, 16% EBITDA growth is going to look better and better compared to lot of the rest of the world. Our only point was that as you know we said at the beginning of when we gave guidance actually in December that we would expect to see 1% plus shift out of the first half into the second half of our revenue as compared to historical basis. Scott’s point is we’ve yet to see that. Didn’t say it won’t happen, didn’t say anything different will happen. We’re just yet to see it, we’ll continue to look through that in Q2 and that’s why we wanted to be specific Peter on reconfirming guidance because we feel very good about where we’re at with that point. Scott?
Scott Key - President and COO: So, when we gave guidance we’ve talked about 5% to 7% in terms of our growth goals for the year. Of course, we’re delivering 5% and we also as Jerre said told you, we’d update you each quarter as the year progressed and as you know, we saw some bellwethers yesterday, announced their earnings and of course struggle in the current economy and we’re watchful to see how spend and investment develops through the year. Again, we’re looking for those positive signs for acceleration in the second half.
Jerre L. Stead - Chairman and CEO: I think all it does Peter is, reconfirm the must have nature of our products hitting 80% of our total revenue in the first quarter at subscription based, just a good sign and a good start. Thanks Peter.
Operator: Brandon Dobell, William Blair.
Brandon Dobell - William Blair: From a sales force perspective, given all the different kind of puts and takes in different kind of categories of revenue. Are you guys making any changes to how you allocate sales people, kind of, how you hire people or is it kind of steady as it goes. I'm just kind of (indiscernible) the macro to come back in line.
Jerre L. Stead - Chairman and CEO: Great question, Brandon and I'll start and Scott will pick up on it. As we talked about last year and you're going to see a lot more of that on April 10 at our Investor Day as we shift focus to the companies that are not currently in our 1,000 largest that should be. We are standing up, and we'll continue to, those accounts with a new focus as we shift sales focus. Scott pick up on it. It's very good timely question.
Scott Key - President and COO: Of course, with the deployment of new systems, this is what we've been building for a couple years with really the ability to have a greater efficiency in the sales force. Brandon to your point to shift focus while we (tend to) generate greater value, so several things you're seeing. We continue to focus on emerging markets and you saw a really solid 15% growth in APAC and that's a result of our focus there in growth and sales capacity. As you already said, we're also, and you'll see this as we discuss the next three years, focusing on upsell and cross-sell in our core accounts and putting more resources there. But, importantly, as we've (both) great capability and depth in each industry, targeting those accounts where we should have a much larger presence. So we're bringing new sales resource and new expense in that direction, and also ensuring we continue to perform well as you see sales resource and expense in EMEA strong as we drive above market growth there.
Operator: Gary Bisbee, Barclays Capital.
Gary Bisbee - Barclays Capital: So can you give us an update on IHS Connect and really, I guess what I'm wondering is two things, how successful you've been to-date in up-selling more product in the customer within a vertical or even just, you know cross-selling different verticals? Secondly, when did the other verticals beyond energy get this platform that you showed us at the Investor Day a year ago?
Jerre L. Stead - Chairman and CEO: Great, question. What we're going to give you -- I’ll start it and then Scott is pleased to pick up on that. We’re going to take it all the way for you on April 10th and show you all of the work platforms coming, what they’re going to look like, when they’re going to deliver et cetera. We actually did that with our Board two weeks ago and feel very good about it. So, Scott gives them facts as our friends done where we're at and where we’re going to be.
Scott Key - President and COO: Thanks, Gary, appreciate the question. So one has been context, so we got five work flow platforms that we're bringing all of our capability to each industry, so Connect is one of those platforms and really ties to about $450 million in annual revenue. So, clearly an important work flow platform for us and drives into the top of corporations and decision-making. So, we've released all of energy, great update last July to complete the energy suite and a couple of additions as we ended 2012 and we’re seeing great uptake in energy on Connect. To your point about cross-sell and up-sell, so this is the point of the platform and it surfaces all of our subscriptions around strategic capital and operating decision-making and we saw a lot of strength and we mentioned this on Q4 in fact cross-sell commissions which we (incents) specifically was quite high in Q4. So good momentum 10,000 or so active users on the platform at yearend, so a year ago we had zero, now 10,000. So, good uptake. We’ll see us drive conversion to that platform in the coming three, four months and that will really be the lever to start driving more expansive and more consistent upsell and cross-sell. So we’ll see momentum as the year progresses and into next year. To your last question, energy is out. Next up is chemicals and we’re working that hard right now and expect to start showing that to customers in the coming quarters, and then we will march across with every other vertical over the next eight quarters or so.
Jerre L. Stead - Chairman and CEO: Just a quick comment on SPHERA, because that’s making great progress, Scott. As a reminder…
Scott Key - President and COO: To be clear then the other platforms, which cover all of our revenue, great progress on SPHERA and EHS&S. First, things out last year and good momentum there. Big releases this year in Energy Technical, which, of course, is really significant for us. Then huge progress on our engineering workbench where we will see a lot of momentum by midyear. As Jerre said, we’ll outline this for you at Investor Day. So it should be a fun to watch how this develops over the next 12 quarters.
Operator: Kelly Flynn, Credit Suisse.
Kelly Flynn - Credit Suisse: So I’m just trying to better understand the impact of the sequester, as you talked about it Scott. So I guess my question relates to the second quarter organic growth. I mean, do you think it’s reasonable to expect organic growth could drop below 5% in Q2 due mainly to the sequester or do you think we are kind of at a stable base here?
Jerre L. Stead - Chairman and CEO: No, a good question, Kelly. Pick up on Scott because we tried to give you all a bit of flavor of what we see going on there.
Scott Key - President and COO: Thanks, Kelly. It's great to have you on the call today, by the way. So we were very specific; about $3 million is what we see delayed out of Q2 into Q3. So that should be a good indicator for you as you think about your models and how you looked at Q2, but realize that that's measured in a very few number of basis points on our overall organic. So we’ve seen steady. This is second quarter – actually third quarter, we’re pretty steady at this level, both on subscription and non-subscription. We believe that steady growth is going to continue in the second quarter and, of course, then we are all looking for signs of an improving world in the second half, but the $3 million is delayed. So government is just – agencies are not making decisions to sign contracts right now. Yesterday, maybe they got some confidence to do that, but we still believe that would have to happen in the next three, four weeks for us to see it in the corner and not push it into Q3.
Jerre L. Stead - Chairman and CEO: The paper has stopped flowing, so assuming they start today even with paper...
Scott Key - President and COO: It will take weeks Jerre.
Jerre L. Stead - Chairman and CEO: Yes, exactly.
Operator: Andrew Steinerman, JPMorgan.
Andrew Steinerman - JPMorgan: The way I see CERAWeek, it's as much as it’s expertise it’s also a rich environment for you to meet with and sell and cross-sell your energy client. Is that accurate? Do you feel like is that you actually were able to sell additional subscriptions that might be seen near-term in energy? Or is that not – is CERAWeek really not that type of opportunity?
Jerre L. Stead - Chairman and CEO: It’s a great question Andrew, and we were glad you were there to be able to get the flavor for that. I’ll have Scott add color in a second, but we will actually at Investor Day give you some specifics on the number of (OSSs) that have been created there. We did that last year. You're very right, it's a very specific opportunity for us. When we talked about it with Brian Sweeney a couple of days ago, as I said, we're still rolling up the numbers, but it is a amazing opportunity. Scott, pick up on it more, because it's an excellent thought.
Scott Key - President and COO: That's right. Not only is it a great opportunity for customers to network themselves and that's a big attraction of the event. As you saw, Andrew, I met with over 20 CEOs and executives to spend time talking about our partnership. Then to your point, it is a great opportunity for us to meet with clients and talk about what else we can do for them. So every year we come out of CERAWeek with a very specific sales pipeline, and as Jerre suggested, we track sales opportunities that come from those discussion discretely. So it is a big momentum building opportunity as we gather with customers and talk about what we can do for them for the year. So we'll track that over the next six to seven months.
Jerre L. Stead - Chairman and CEO: Same things happening this week at our (Worldwide Chemicals)...
Scott Key - President and COO: So I think we have over a thousand executives discussing the year to come and how we support them in a dynamic environment.
Andrew Steinerman - JPMorgan: Could you still clarify do you feel like your energy business could accelerate based on the conversation?
Scott Key - President and COO: This is a feature of the development of business every year. So we do build momentum out of the event in our energy pipelines without a doubt, and that's part of – we are seasonally higher in the back half and in the fourth quarter. This is one of the reasons. We have this big opportunity to connect, build pipeline, and then we spend six months closing, and start realizing revenue in Q3 and Q4. So, a good point, Andrew.
Operator: Daniel Leben, Robert W. Baird.
Daniel Leben - Robert W. Baird: First, could you just clarify on the discrete items that benefited the subscription. Then my question is just comment about the pipelines within EHS&S given the challenges on discrete spending?
Jerre L. Stead - Chairman and CEO: We’ll do Dan. Todd, do you want to pick that up first.
Todd Hyatt - SVP, CFO and IT Officer: There were couple of past due renewals that came in that lifted the revenue a bit, we see that not unusual and the subscription to have not big amounts, but certainly enough to push the rounding up to a favorable position in the quarter.
Daniel Leben - Robert W. Baird: And then EHS&S?
Todd Hyatt - SVP, CFO and IT Officer: We’ve been building that business strategically for a couple of years. Best of breed across every element of waste and emissions compliance reporting, air water waste, do in-house gas, carbon measurement footprint and required compliance there all the way through safety, operational risk. So, you’ve seen us over three years, build the best of breed under a common platform and we’ve talked about the challenging market and some discretionary spending, but what we’re seeing is just dedication by the teams. We're seeing markets understand the importance and the risk in their operations and how they can mitigate that risk by bringing the best of breed solutions and common platform into their operations, so just good dedicated effort, consistent pipeline, translating into revenue. So, good performance, the last two quarters and I think we see a pretty solid stable year there.
Jerre L. Stead - Chairman and CEO: I’d just add to that Dan, thanks for asking. Yesterday in our monthly customer first worldwide meeting, Scott Lockhart presented how EHS&S is doing. There we used Walker as our partner in evaluating and measuring our surveys. EHS&S is exceeding best-in-class in value recognition as a return from our customers. So that tells the story a lot.
Operator: There are no further questions. I would now like to turn the call over to Andy Schulz for closing remarks.
Jerre L. Stead - Chairman and CEO: Thank you very much. This is Jerre. Just before we wrap it up with Andy again, we very much hope you all either attend or tune in on April for our Investor Day. It will be a very special one. As I said at the beginning, we’re wrapping up actually six-plus years of getting ourselves to the position of scalable infrastructure, the right organization, the right people, the right platforms and the right processes and now, we’ll be able to share with you, where we’re going to go as Scott said in 2013, 2014 and 2015 on a ramp of what we believe is a very, very exciting future that we’ll be sharing with you then. Thanks and Andy, wrap it up.
Andy Schulz - VP, IR: Thank you, Jerre. We thank each of you very much for your interest in IHS. This call can be accessed via replay at 888-286-8010 or international dial-in 617-801-6888, passcode 66722521 beginning in about two hours and running through March 28. In addition, the webcast will be archived for one year on our website at ihs.com, and as always you can contact IHS Investor Relations with any follow-up questions. We can be reached at +1303-397-2969. Thank you. We appreciate your interest and time.
Operator: Thank you for joining today's conference. This concludes the presentation. You may now disconnect. Have a very good day.