Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Peter Appert from Goldman Sachs.
Peter Appert – Goldman Sachs
Thank you. Mike, I was hoping you could help me understand better the margin leverage implications of accelerated organic growth rate over the balance of the year. I’m thinking intuitively that this might imply that we should see even greater margin improvement as the year progresses. How do you think about that?
Mike Sullivan
Peter, certainly higher organic revenue growth comes with the greater opportunity for margin expansion. I think one of the things you ought to keep in mind are the investments that we’ve been articulating need to be made in a business to support long-term growth and we’ll continue to balance that in with the deliver of the margin expansion we promised.
Jerre Stead
Can I just add to that, Peter. If you do the math as I know you already are of our guidance of revenue and adjusted EBITDA during the year, you’ll see that number pretty strong as the year continues.
Peter Appert – Goldman Sachs
Jerre, the extent that you’ve used a good portion of the cash balances at this point, do we assume that perhaps the acquisitional activity flows on the near term basis and maybe you could just chat generally.
Jerre Stead
That’s a great question. We have not consumed a lot of our cash. As you might have heard Mike say we expect to pay back that $50 million probably this quarter or most of it in the next two quarters and you also heard him talk about the 77% delivery of free cash flow this quarter and our expectation that we’ll continue 75% for the balance of 2008. So feel good about that. Would like to comment that as you remember we were able to receive and negotiate at $375 million dollar line of credit at very attractive rates, 3.25%, which is very good investment basis today. So we feel very good, Peter, about our ability to continue to make strategic acquisitions. As I mentioned, both the top ends as well as the ones that will fit all four complimenting our domains with a particular focus to the kind that touch in the middle of those four domains, like we were fortunate enough with Lloyds Register-Fairplay.
Peter Appert – Goldman Sachs
The last thing and I’ll let someone else speak. Can you give us any, and maybe this is a question for Jeff, on the drivers of improved organic revenue growth within the engineering business, specifically what product lines. What areas are driving it and again does that translate into some measurable leverage in terms of margin over to the engineering business specifically where the margins have been sort of flat as recently.
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