Good day, ladies and gentlemen, and welcome to the First Quarter 2008 Autodesk Incorporated Financial Results Conference Call. My name is Brandy and I'll be your Operator for today. At this time all participants are in a listen-only mode and we will conduct a question-and-answer session towards the end of this conference (Operator Instructions). As a reminder this conference is being recorded for replay purposes. I would now like to turn the call over to Sue Pirri, Vice President of Investor Relations. Please proceed, ma'am.

Thank you, operator. Good afternoon, everyone and thank you for joining us as we report results for our first quarter of fiscal 2008. With me today are Carl Bass and Al Castino. Today's conference call is being broadcast live through an audio webcast. In addition a replay of the call will be available by webcast on our website at www.autodesk.com/investor. During the course of this conference call, we will make forward-looking statements regarding future events and the future performance of the company, including information regarding restatement of our past financial statements, our guidance for the second and third fiscal quarters and for fiscal year 2008. The factors we use to estimate our guidance for this period, our competitive position, our future business prospects and revenue growth, our market opportunities and trends for our products in various geographies. We caution you that such statements reflect our best judgment based on factors currently known to us and the actual events or results could differ materially. Please refer to the documents we file from time-to-time with the SEC and specifically our 10-K for fiscal year 2006, our 10-Q for the quarter ended April 30th, 2006, and our periodic 8-K filings, including the 8-K filed with today's press release. These documents contain and identify important risks and other factors that may cause the actual results to differ from those contained in our forward-looking statements. In adherence to regulation Fair Disclosure, Autodesk will provide quarterly information and forward-looking guidance in its quarterly financial results press release and this publicly announced financial results conference call. We will not provide any further guidance or update on our performance during the quarter unless we do so on a public forum. Autodesk does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. During the call, we'll discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles, a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures will be provided on this conference call and is made available on our website. And now I'd like to turn the call over to Carl Bass.

Good afternoon, everyone. Thank you for joining us. Today Autodesk reported another quarter of strong financial performance. Quarterly revenue was a record $509 million, a 17% increase over last year. Once again, we achieved strong quarterly results on most of our key business metrics, including 3D revenue, maintenance revenue from subscriptions, and revenue from emerging economies. Before we get into the detail of the quarter, I would like to provide an update on Autodesk voluntary review of past stock option granting practices. As indicated previously, Autodesk submitted the pre-clearance letter, related to its restatement of the financial statements for fiscal years 2003 to 2006, to the office of Chief Accountant at the Securities and Exchange Commission on May 3rd. While we cannot yet determine the exact date we will be filing our past financial statements, we believe we will be on file in the near future. Now let's talk about the quarter. As expected we began shipping our 2008 family of products in March. This was the fifth release on our annual release cycle. All were delivered on time and with significant improvements in functionality and performance. The successful move five years ago to an annual release cycle was a significant achievement for our development teams and for Autodesk. And our ability to continue to deliver strong releases annually is a testament to our execution capabilities. The 2008 releases, deliver important improvements, in both functionality and scalability, including both 64 bit and Vista compatibility and improved productivity for the AutoCAD family. Customer demands for Autodesk products remain strong this quarter. Compared to last year, revenue from new seats increased 10%, revenue from new seats of 3ds Max increased 30% over the last year. AutoCAD Mechanical had another outstanding quarter, as a result of recent improvements in ease-of-use, as well as…

Okay, before I get started I want to remind you we are not providing EPS data today because we are in the process of restating prior years reflect additional compensation expense associated with past stock option granting practices. While our books for prior years are open, we are also recording other minor adjustments relating to our reseller incentives and subscription program that increase revenue for fiscal year 2006 and fiscal year 2005 by approximately $50 million or $5 million respectively and decreased deferred revenues by the same amounts. Now let's talk about the quarter. Once again, Autodesk delivered great performance. Net revenues in the quarter were $509 million, 17% higher than the last year. Each of our geographies grew substantially compared to first quarter of last year. Revenue in America was $184 million, an increase of 8%. Revenue in the America was somewhat impacted by changes in backlog between years as well as the particularly tough compare in the first quarter of last year, which grew 39%. EMEA revenues were $207 million, an increase of 26% as reported and 14% cost of currency. Asia Pacific increased 16% to $117 million. Revenues in Japan decreased slightly compared to last year, but increased significantly on a sequential basis consistent with historical trends. We continue to evaluate progress we made in Japan, but believe our performance there has stabilized. Excluding Japan, revenue in Asia Pacific increased 32% compared to last year. Fluctuations in foreign currency exchange rates had an immaterial impact on revenues compared to first quarter of last year. Before I discuss divisional financial performance I want to remind you that at the beginning of the first quarter where we organized and consolidated our product divisions to better align with our customers. We now have four divisions instead of five. Let's look…

Thanks, Al. Before we begin taking your questions, I would like to share a few final thoughts. Autodesk had a terrific quarter. Once again, we delivered record revenue and managed our investments and spending in conjunction with our revenue growth. Autodesk growth drivers remained firmly in place. Our 3D Solutions are increasing market awareness and penetration. Emerging markets continue to show outstanding growth. Subscription growth remains robust with up front cash payment and predictable amortization, and revenue from new seats in emerging businesses continue to be approximately two-thirds of total revenue. Worldwide business trends are impacting our customers in real and important ways, globalization, rising energy costs, the worldwide builds and rejuvenation of buildings and infrastructure, and an increasing need to keep data digital create tremendous pressure to improve productivity and profitability while increasing innovation. Our customers are seeking differentiation through a design. And Autodesk continues to provide solutions that deliver the competitive advantage our customers need. We've launched our 2008 family products and customer response has been terrific. Early reviews of the products are very positive and we're drawing record crowds at launch events. In short, we are very confident about the future. We are raising our revenue guidance for the second quarter and the year to reflect that optimism. And finally, as I said before, we are currently working with the Office of the Chief Accountant and our auditors and believe we will be able to file our financial statements in the near future. We understand that this process has been frustrating for both our employees and our shareholders and we thank you for all your patience. Operator? We're ready for questions.

(Operator Instructions) And your first question comes from the line of Jay Vleeschhouwer with Merrill Lynch. Please proceed.

Thanks, good afternoon. Carl, with respect to your higher revenue outlook for the quarter and for the remainder of the year, how do you break that down in terms of improved sales productivity per average reseller as per the incentives program versus additional capacity? Does the strong demand you've alluded to necessitate any changes in field capacity over and above the improvements and productivity you're hoping to gain? Secondly, at the analyst meeting, you gave us a new metric, which was deals of over $100,000 and deals of over $1 million. Could you talk about how you did with either of those in the quarter?

Yes, Jay. So, on the first one, as we've talked about, we're on a multi-year plan to increase channel, capability as well as capacity. Both of those are important. The demand is out there. We’ve continued to invest. We've also outlined that in many ways you can't turn on either channel capacity or capability in the short-term so it takes a fair amount of head room, advanced notice to be able to build in that kind of capability and capacity. So what we see is some amount coming from demand but we will continue to need to make sure we add capacity and particularly capability, as we reach into those new places of analysis, visualization, simulation, all the areas we kind of outlined at Investor Day. As your second question, while we were kind enough to provide that information at Investor Day I’d also pointed out we weren't going to do it on an ongoing basis, but Jay, just for you, I will tell you that we did have one $4 million deal in the quarter. In any way there was $4 million booking.

Can you talk a little bit more?

Okay, we'll try to update you that on an annual basis but we really don't want to do this on a quarterly basis.

I Understand.

I think we really did it for more for illustrated in purposes of really doing the whole narrative but our business has changed and how the customers that we're serving are changing rather than really being a business metric, we want to share every quarter.

Finally, with respect to the stability that you think you're seeing now in Japan, what are the pieces behind that? Is that, again, a function of some of the management changes you've had in place there over the last number of months, local demand conditions, or other variables?

Well, I think we, as we pointed out, one of the signs that we were not doing as well as we thought we could is that the economy in Japan had already recovered. Demand there was good, witnessed by several of the other companies who had done well. Not uniformly well but there was certainly other companies whose business was doing well in Japan and so we looked at it as mostly a failure of our own making, and so we made a number of changes in sales management both on the Japan level and the regional level. We made some changes in terms of channel structure in working with our partners there, and in some ways, we just brought greater focus to it. We brought more resources from the overall corporation to understand it because while some of the issues are unique to Japan, many of the issues are things we have wrestled within other parts of the world.

The other way I'd noted stability is they are making their forecast recently, so they aren't surprising us. That tells me they have a handle on the numbers and that means they are more stable.

Thank you.

Your next question comes from the line of Steve Ashley with Robert Baird. Please proceed. Steve Ashley - Robert W. Baird & Co.: Great. I was hoping we could get a little bit more color on the reallocation of incentives. You talked about it having a depressing impact on the average selling price of 3D. Can you give us a little bit more color of what's going on there and how that transition might play out?

Well, the way it works is that we're giving our resellers basically a better margin for selling 3D, so the incentives are greater for 3D, less for 2D and this is actually continuation of what we've been doing for a number of years with them. So we want them to add value in selling the higher end products and AutoCAD and LT, which is increasing fulfillment type of…

Yes, I mean, the important thing to remember in this, Al is absolutely right but from an accounting point of view, which accounts for revenue is in incentive. So, accounts against revenue until as we move it away against the allocation, that's where you have the effect of depressing revenue in one category and apparently raising it in the other. In total, it's actually the same amount. Steve Ashley - Robert W. Baird & Co.: Does that suggest that the sales and marketing expense should be reduced at that line as a percentage of revenue or not?

In total, it should be the same. And I think what you'll see overtime is the allocations change this quarter, the programs themselves and we expect that there will be a one or two quarter kind of lag in terms of the behavior changing in order to catch up with that. Steve Ashley - Robert W. Baird & Co.: Great. And just lastly, very strong AutoCAD and Platform business, was there any educational large deals as part of that?

No, not particularly. This is not particularly the time of year where we see large educational deals in general, but there was nothing specifically out of the ordinary in that number. Steve Ashley - Robert W. Baird & Co.: Great. Thank you.

You're welcome.

Your next question comes from the line of Brent Thill with Citigroup. Please proceed, sir.

Thanks, good afternoon. Carl, you mentioned 1.3 million subscribers on board now. How do you think of ultimate attach rate to your user base? How do you size up the penetration today?

So, we talked about a number of numbers there. I think in the long run, we talked about the penetration to the AutoCAD base of being about% of the active install base. I think we'll see eventual numbers that had some towed out at probably double that, so 80% plus is what I think you'll eventually see. I think the only caveat I would have to that is for the extent that we've experimented with and will continue to experiment with subscription only products in which subscription becomes mandatory. Obviously, the rates would be higher.

Okay, and for Al, the FX benefits you saw it in fiscal Q1, that's assumed now and I think your 15% to 17% revenue guidance for the year?

No.

Our assumption foreign exchange, we haven't changed how we do this, Brent, so we always assume some conservatism in the rates as we look further out in the year, just in case the dollar goes against us. So and we don't try to predict the currency. We always let the current currency just assume a few kinds of conservative buffer the rest of the year.

Okay. And just I know you had mentioned option review. You mentioned the near future. Do you measure that in weeks or months?

I am sorry; I didn't catch your question.

In terms of the timing of the options review you said in the near future. Do you measure that in weeks or in months?

We don't control it again, but I’d certainly measure it in weeks, not months.

Thank you.

Your next question comes from the line of Phillip Alling with Bear Stearns. Please proceed sir.

Thanks very much. I was wanting to just get a sense from you as to whether the change that you made in the incentives for your resellers, Did you get the impact this quarter that you expected or was there something unexpected in terms of the impact to the 2D and 3D net revenues that you reported?

Yeah. I think very honestly, we didn't get the change in behavior we wanted. Now, we expected it to take a while for people to really understand the program and change their behavior. But we have not seen the change that we expect and like I said, I think it will take a quarter or two before all of our partners fully digest the change and understand it, and this is not just for the principles of our partners but its for all of the salespeople because it affects all of the compensation schemes down the line.

Just as a follow-up to that, could you quantify what the positive revenue impact was on your net 2D revenues from the change in incentives because you did sort of give us visibility with respect to the negative impact on the 3D revenues?

It's probably several points of growth. It's not material for 2D, because obviously it's larger.

All right. And then just in terms of sort of what assumptions are you making with respect to the guidance that you're giving going forward? What impact there may be from the change in incentives to the resellers?

I mean, I think we see a gradual phasing in. Like I said, we think it will take a couple of quarters. I'd love to be pleasantly surprised that people react more quickly. I think as we've said, we've been laying out this program for a number of years. And so this is just taking the trajectory we're on and increasing it a little bit so hopefully this is well understood by all our partners and it will come around quickly, but right now, we're continuing to estimate, it will take a couple quarters before it's fully baked into how people behave.

And the final housekeeping question for me, just with respect to the year-over-year impact on the recognized maintenance revenue in the quarter, from the Alias acquisition, could you let us know what that is and how much additional maintenance revenue you expect to recognize this year over last year from the Alias acquisition due to the write-down of the deferred at the time of the acquisition?

At the time of the write-down of deferred revenue a year ago it was about $4 million. Is that what you're talking about?

I think he dropped that. Alfred your next…

I think we lost him.

Your next question comes from the line of Daniel Cummins of Banc of America Securities. Please proceed.

Thank you. Al, you may have covered this but could you tell us the contribution of the change in the foreign exchange environment with respect to the higher guidance?

With respect to the higher guidance, again, we take the current exchange rate and we assume that's going to be the rate for the rest of the year with few points consortium late in the year. If you look at the change in the last quarter for the foreign currency, I think that the couple of penny. And if you look at where it was three months ago where it is versus where it is today, the couple of penny so it's not like that material.

Okay, but is it one factor in the high revenue guidance?

It is.

Okay.

But again, if you look at the change in the last three months, it's not really that much.

Okay, all right. Thank you.

Your next question comes from the line of Heather Bellini with UBS. Please proceed.

Hi, great, a couple of questions. First, Al, can you walk us through the operating margin assumptions you're using for the second quarter? I believe prior to this, you were forecasting a range slightly above at least what I have than what you currently guided too? And then I had a question, if you could just clarify on 3D growth. You're saying it would have been 10% higher, so it would have been about $117 million this past quarter if you adjust for the change in the partner incentive?

Hang on Heather. So the operating margin guidance for next quarter, I already give that in the script, so it was for the second quarter, it is 24.5 to 25.4.

Right, which is versus 25.5 to 26.3, I think is what it was prior?

Right.

And can you just explain what the differences in the margin guidance? I might have missed it. I'm sorry.

Yeah, Heather, there are few investments that we're going to make in the second quarter. Our first quarter actually turned out higher than we expect. And we turn for making one-time investments; we do that a lot during the year. Overall that the full year numbers are still in the range we've been talking about.

Okay, and then the 3D growth?

Okay, the 3D growth, now I think it will be cautious about taking that 10% per unit and just applying that and say that 3D otherwise have been 10% higher. It's very hard for us to know for sure because there's an incentive impact upon resellers. Now there's usually a delayed reaction. They can't immediately adapt to an incentive plan, but I have no doubt the number of them did indeed sell more 3D because of the incentives in the first quarter, they can't be measure precisely if I had to guess I'd say somewhere between 5 to 10.

Okay, because I thought Carl had said the reallocation impacted 3D revenue by 10%.

But when he said it was 10% on a unit basis, but again the purpose of it is to get the resellers to sell more units. So, that's why you can't precisely say what the impact of the change in incentive plan is.

So, Heather your math is absolutely right about the 10%. But we can't find out is the motivational aspect of this and how it changed behavior. No, we don't give apples-to-apples comparison but the math is right.

Okay, so 117 would have been the right number if is it safe to…?

It was identical.

Yeah, if the units don't change it all as a result of the incentive plan it would be 10% but again I don't believe that's the case. Resellers adapt to incentive plans, and they can't do it overnight but there was some reaction in Q1, no doubt about it.

So would you expect then to have lower 3D growth for the remainder of this fiscal year, reported 3D growth as a result of this and will you be providing with a way for us to somewhat reconcile to the best that you can 3D growth to kind of get it back to an apples-to-apples basis?

Yeah, It's going to be very hard to reconcile, again it's very hard to measure it how much more 3D volume we got since we changed the incentive plan. I think as we get in the latter part of the year, it's going to have its intended effect and at that point you should just measure 3D growth and not worry about the change in incentive plan.

Okay. So can you give us an idea then, what this type of growth rate for 3D, should we expect this kind of 20% type rate to change or to stay the same?

You know, when we said about trading in the past it should grow more quickly than the rest of the company and we're very happy well that’s a strong unless we double the rate of rest of the company so that's what we want to get to. They won't necessarily hit that every single quarter, but that's the goal. And as the time goes on this incentive plan should help us to get there.

Yeah, no I am just trying to reconcile that with the comments at the analyst day that this should be a 30% grower this year.

We'll take your comments you know, we understand the difference in making these comparisons and we'll see if we can do something by the end of next quarter that tries to clarify, this a little bit.

Okay. Thanks, Carl.

Your next question comes from the line of Brendan Barnicle with Pacific Crest Securities. Please proceed.

Thank you. I guess following up on the same question, if it is a 117 type number or somewhere around that, that would imply something more like 32% growth, which would be more consistent with what you guys have talked about for the growth. Is that the way we should be thinking about this and if not, is there anything particular to the quarter that would have had us at 19% growth rather than sort of the more the higher level growth we see in the last few quarters?

That's basically the answer we described, so again, if you measure the per unit, it is about 10%. It’s tough actually to say the impact on the volume, but it's somewhere between 5%, 10% impact. And that takes the number higher, probably high 20s is the right number.

When you can watch with us with the behavior changes. And we will continue to provide revenue and units and watch as this goes throughout the year.

But I guess what I'm trying to clarify is, that there is nothing else that happened in the quarter that would have had any sort of demand change or product change or anything else that would have led to a lower rate of 3D than what we've seen historically?

No, Brendan, nothing outside the ordinary, who we do these comparison they are always slightly imperfect. The reason you know is the releases don't come out on the exact same date every year, the localized versions don't, I mean there is a number of small factors in there but nothing out of the ordinary.

Great and just the converse of that, now you mentioned that 2D may be I guess negatively impacted a few points by this. We saw a pretty, we saw a big recovery in 2D growth this quarter. Is that also somewhat overstated by this by that amount? Should we see that return back to kind of a single digit growth we were seeing?

Well the overstatement in 2D would be by a couple of percent in difference, the differences are obviously the size of the denominator between 2D and 3D.

Right, so the 2D growth it is fair to assume had at least a high double-digit type growth number to it?

I think 19% and that's not from the incentive plan. LT had a really good quarter.

Great. Thank you very much.

Your next question comes from the line of Phil Winslow with Credit Suisse. Please proceed.

Hi, guys. Most of my questions have been answered, but I was hoping you could just focus back on the building solutions division and just give us an update on Revit and just sort of what traction that you're seeing there in the architectural vertical, obviously strong growth in Inventor just wondering if you could categorize where we are and sort of those transition over to Revit?

No, so I mean, I think Revit continues to do really well. It had a slower growth in some of those numbers, but we said things like 90% growth year-over-year, we are not going to be sustainable. I know, I think we've really hit that healthy point in the product life cycle in which we're not only being able to sell in but adoption is really strong across the world. We see a lot of momentum behind Revit. We also see a lot of momentum behind those auxiliary products, the ancillary ones around Building systems and Revit structure which really if you remember is really the promise of this building information model, is to have the complete model of the building. And so we're seeing strength in the other products associated with it. But we're really happy with the performance of Revit and I think everywhere I go in the world, I continue to be impressed by the awareness around Revit and either the people who have already moved or they intent to move in the short-term.

Great. Thanks, guys.

Your next question comes from the line of Brian Essex with Morgan Stanley. Please proceed.

Hi, good afternoon. I was wondering if I can get a little bit of color on performance on a gross margin level sequentially, maybe not explicitly as you may not be allowed to disclose that, but I guess by directionally whether you felt that was flat or a little bit up? And then as a follow-up to that, baked into your guidance for the year, for expected operating margins, how much of that is related to costs associated with the legal and accounting expense for the option review? In other words, if we look at the margin expansion, you're still forecasting over the end of the year, what would the normalized rate be?

Okay, I actually quoted the number for the total option related expenses review cost in the year I believe it was $5 million.

Okay.

So that has a slight impact, but it's pretty small. In terms of the gross margins for the quarter, I can't give you the number because of the reason I can't give you all of it but what I can is that in terms of direction, gross margin improves in the quarter. And that was primarily due to improvements in gross margin for Advanced Systems, which did a very good job in inventory controls and some other things to improve their margins this year.

Okay, great. Thank you.

Your next question comes from the line of Bard Manuilow with American Technology Research. Please proceed.

Hi, guys, can you talk about how we should think about the sustainable growth rate for maintenance going forward?

Could you please repeat that?

Growth rate for maintenance going forward?

I think the best thing to do with the subscription program, the easiest one, it's a lot like the maximum depth, whether the easiest way to predict tomorrow's weather is by looking at today’s. I think because of the steady nature of the subscription business, I think one of the things to look at is just plot it out quarter-over-quarter and you'll see and we haven't seen big changes either in attached or renewal rate. And obviously, the overall number is very sensitive to both of those things, and it's been fairly steady and we've seen you know abnormal jumps. The only time you see a little bit of difference, there's a little seasonality around Q4 in that related historically to when the releases came out in the past. So other than that, there's nothing special, but if you just plotted out and extrapolate it, I think you do, as well as we do it.

And referring at Investor Day, we capture now about 1.3 million seats. We still have a lot of seats to capture, so this is far from the end of the run. And in AutoCAD in particular, we have not captured the majority of active seats in AutoCAD. And but as people come back and buy new seats in upgrades they typically are catching so there's still lot of long way ahead of us on subscriptions.

Okay, thanks.

Your next question comes from the line of Sasa Zorovic of Goldman Sachs. Please proceed.

Thank you. So you mentioned here that basically, the channel inventory at the end of the quarter was below normal range of 3 to 4 weeks. Is it back up at this point in the quarter? Could you comment on that?

Do you mean, like I miss date? I don't like to quote channel inventory during the quarter. But what I'll tell you that the channel inventory has been lien now for several years continuously and we're finding the resellers are able to do their business more efficiently with less inventory and that's good for the whole ecosystem. So it is below our three-week norm.

And is it then likely to stay bit below the three-week norm then is the norm going down?

Norm is not going to go down. Somewhere around three to four weeks is about right. I don't want it to get so low that they can't meet customer needs either, but yeah, recently they have been able to keep it below the three-week norm.

And then going back to the issue of a buyback that you briefly mentioned, potential buyback rather you mentioned at your Analyst Day, do you still anticipate that one sort of you're completed with the review here and restatement of the past figures there that you would be in essence taking all the excess cash and going ahead with the buyback there?

Well, I'm not ready to forecast that. What I can tell you though is, we remain committed to offset all of the employee stock program dilution. So I expect our employees will lock out a market for eight or nine months. They will go out and exercise stock options and we'll be out there offsetting that. Now to the extent we have excess cash flow, I don't want to flying around earning, low rates and interest and it needs to find something productive to do and could be a stock buyback, but I won't predict a point in time I'm going to do that.

Thank you.

Your next question comes from the line of Ross Macmillan with Jefferies. Please proceed. Ross Macmillan - Jefferies & Co.: Yeah, thank you. So if I look at the unit volumes on several 3D Revit and Inventor commercial and I compare year-over-year, it looks like it only grew about 2%, and I'm trying to square that with your comments on the additional incentives for 3D that are only really impacting revenues. I guess, I'm not squaring the two things. I would have thought there was some better volume throughput, if you put higher incentives in place to sell 3D products. Can you help me understand that? Thanks.

Yeah, so one thing that’s hard to breakout is the mix between different geographies. So the unit is not a unit, if that makes any sense. So last year, we had a couple quarters with high unit rates in some of the emerging countries and so you can't just compare them equally and do the math around it. But we did see a good growth rate in both unit and revenue in the developed countries and as we've talked about before, we always had more volatility in the emerging countries around both units and volumes.

And then other thing to keep in mind here is, we did grow the revenue 19% and we talked about how the per unit revenue has to go down, so it doesn’t imply in slowing business. Ross Macmillan - Jefferies & Co.: Would you expect though that maybe it was a tough compare so the 3D unit volumes would improve from the Q1 position in terms of year-over-year growth?

We're not going to forecast units going forward. Ross Macmillan - Jefferies & Co.: Okay.

I mean, I think if you look at our guidance for the rest of the year, it takes into account what we think will happen. Ross Macmillan - Jefferies & Co.: And then just one for Al, $19 million foreign exchange benefit for revenue, which is about four points I think of growth. If I did a calculation where I looked at bookings such as revenues for change and deferred, can I apply sort of a similar impact to growth from foreign exchange, if I included the base of maintenance? Is that geographically fairly consistent with revenue?

It's pretty close. If you keep in mind though that subscription, people can typically pay a year in advance and that falls out of the income statement in the course of the year. So to try and do it that precisely is going to be tough. Ross Macmillan - Jefferies & Co.: Sure. Okay. Thanks a lot.

Your next question comes from the line of Gene Munser of Piper Jaffray. Please proceed.

Good afternoon and congratulations. If you could look at some of the bundling opportunities, I know you talked about those at the Analyst day, I guess kind of an update on that of when we potentially could see more bundled products or is it just not going to be enough to move the needle in calendar '07? Thanks.

Thanks, Gene. Like I said, in New York, you should see some activity from us in this area during the year. I don't think it will have any material impact on it, and certainly any of the guidance we give is not predicated on any of that taking shape or being a big mover, but you'll start seeing more activity around that throughout the year.

Excellent, and I probably got the answer to this question lost in all of those questions around the changes in the channel, but Al, what do you say about expectations in terms of margin improvements for, I know you've historically said 1% to 1.5% kind of per year. Is that still kind of the track?

Yeah. We are committed to modest improvements in margins year by year. And certainly as we grow over the coming five years and the compound growth rate we're talking about we get into the 30s but we're committed to modest improvements. We intend to keep growing this business and we constrain our margins in order to make growth investments. And that continues, we think there's a lot of runway ahead of us and we'll make growth investments while we increase the margin.

Great. Thank you.

Your next question comes from the line of David Heim (ph) with Needham & Company. Please proceed. David Heim - Needham & Co.: Hi, thanks. Carl, I just have a macro question for you. I was hoping that you could talk about sustainability and how green design is a driver. It's obviously an issue that's been in the press quite a bit these days, and I was hoping that you could give a sense of how sustainability of the driver compares to some of your other macro drivers.

Yeah, I mean, as you correctly pointed out, it seems to be the most popular trend out there. You can't open a newspaper or magazine or attend a conference without, sustainability being front and center. I mean, really what it is, in terms of our business, sustainability introduces a new kind of design problem. Historically, when people design something, the constraints surround it may be around cost, manufacturability, time to market, all of a sudden, energy consumption has entered the picture. So, let me give you just two quick examples of the context of the building, there are many, many design decisions that affect the overall energy consumption in order to heat, cool, and light a building. What it's doing is driving people towards building these digital prototypes or 3D models, so they can better understand the energy requirements. And so as an example if I had a building and I rotated it ten degrees on the site, would that increase or decrease the amount of energy needed to heat or cool the building? If I change the materials or change the amount of glass, those are all examples and by having the 3D model, people are able to do energy analysis in a way that was not doable before. The other place we see it increasingly is the manufacturing. I mean, obviously in terms of things like the performance of automobiles, things like the aerodynamics or again things where you need a 3D model to better analyze that, mainly in that case in terms of the performance and the running of the vehicle but people are also very concerned with the energy cost of manufacturing as well as the energy cost of recycling and maintenance and repair and operation. David Heim - Needham & Co.: Got it. Thanks.

Your next question comes from the line of Sterling Auty of JP Morgan. Please proceed.

Thanks. First question is for Al. Al, is there any concern that the additional changes that you made to the prior periods, the $15 million for revenue and the deferred revenue change, is there any concern that, that might actually delay the time it will take to get current on the filings?

No. It's a minor change and the $0.12 with the books open and the best practices that you have small things like that to go ahead and change them, but no it's a minor thing. It won't delay us.

Okay. And the second question is you made the comment that with $1.3 million seats on subscription you still have a long way to go but just for us to get a sense, can you tell us, out of the installed-base, how many of those seats now are kind of educational or maybe if you just want to bucket it together, how many of the installed seats would not be eligible or not likely to go subscription?

We don't provide exact data like that, but what I will say is that there's millions of eligible seats and we got 1.3 million that are on subscription. So there's a lot of room ahead of us.

And Sterling, the active penetration numbers that we've given you always reflects the active base. So it doesn't include any of those legacy seats.

Yes. Like that AutoCAD number we gave exactly, we said 40%, we went back and took the last three releases of AutoCAD and I actually use the base and I actually maintain that the eligible but the base actually of customers who could be attached is higher because customers are four or five leases behind losing a product at some point are probably going to upgrade or cross grade and get off subscription too. So I think they’re actually that under states our opportunity.

Okay, and then last question is for Carl. I know Agile traditionally, quite a different area for PLM, but just any thoughts around Oracle's bid year for Agile, maybe how it shapes the PLM market going forward and your opportunity within it?

Yes, so my first reaction, a long last Agile family finally sold itself. It's been for sale for so long and they found a buyer. Truth is, a little surprised by who the buyer was but one of the things to recognize about Agile, they built a very successful business and only roughly falls under this umbrella of PLM. I mean, they were in a very specific business particularly around high-tech with the kind of components and parts that most of the mechanical CAD Systems have nothing to do with. So, narrowly speaking I don't think it changes the outlook for PLM for us or for any really of our competitors. I mean, more broadly speaking, there's always been this question and this just heightens it of when some of the ERP vendors are going to try to come into this part of the market, engineering has always been somewhat isolated from the rest of the enterprise. So, it just makes you more curious, particularly in response to the, what Oracle's competitors will do in response to this. From our point of view, it doesn't change anything, just to reiterate what I said in New York, our opportunity in data Management and product data Management all really starts in the engineering department. We're really working from the grassroots and solving engineers problems. Our focus is on that part of the problem and as an adjunct to that, the connection to the enterprise whereas most of the kind of large complex expensive PLM Systems have that in reverse where that's their prime thing as connection to enterprise systems.

Got it. Thank you.

You're welcome.

(Operator Instructions)

Anything else out there?

At this time, there are no questions. Ms. Pirri you may go ahead with closing remarks.

Thank you, Operator. We thank you all for joining us for our first quarter results call and if you have any questions feel free to give me a call in the office at 415-507-6467. Have a great day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.