Welcome to the Ciena Corporation’s First Quarter 2008 Results Conference Call. [Operator Instructions] At this time for opening remarks and introductions I’d like to turn the call over to the Chief Communications Officer, Ms. Suzanne DuLong.

Good morning and welcome everyone. I’m pleased to have with me Gary Smith, Ciena’s CEO and President and Jim Moylan our CFO. In addition Steve Alexander our Chief Technology Officer will be with us for the Q&A portion of today’s call. Our call this morning will be presented in four segments. Gary will provide some brief introductory comments. Jim will review the financial results for the first quarter. Gary will then discuss the business in the quarter, our outlook and strategy. Jim will then review our guidance for Q2 and the remainder of the year. We’ll open the call to questions from analysts at that point. This morning’s press release is available on National Business Wire and First Call and also on Ciena’s website at www.Ciena.com. Before I turn the call over to Gary I’ll remind you that during this call we will be making some forward looking statements. Such statements are based on current expectations, forecasts and assumptions of the company that include risks and uncertainties that could cause actual results to differ materially from the statements discussed today. These statements should be viewed in the context of the risk factors detailed in our 10-K filed with the SEC on December 27, 2007. We have until March 13th to file our 10-Q for the quarter and we expect to do so by then or before. Ciena assumes no obligation to update the information discussed in this conference call whether as a result of new information, future events or otherwise.

Good morning everyone. The sustained execution of our network specialist strategy continues to differentiate Ciena in a highly competitive market. We believe we are squarely positioned to continue to benefit from spending on capacity requirements and advanced service delivery capabilities enabled by Ethernet based architectures. As a result, we delivered solid financial performance in Q1 including 5% sequential revenue growth and a strong as adjusted operating profit of 17.4%. We are capitalizing on this momentum and aggressively pursuing high growth market opportunities where we can help customers align their network architectures with the business values of their customers. We remain steadfast in striking the right balance between investing strategically in our business to fuel longer term revenue and earnings growth and maximizing short term operating profit. I’ll talk to our business in the first quarter and our outlook after Jim reviews the quarter’s results.

Good morning everyone. This morning we reported first quarter revenue of $227.4 million. This represents an increase of 5% sequentially and 38% year over year. We had two 10% plus customers in the quarter that combined to represent 44% of total sales, both are North American based. One was also a 10% customer in our fiscal Q4 of 2007. Sales from International customers represented 26% of total revenue. This is down from Q4 when we had one International customer as a 10% contributor. Revenue contribution across our portfolio was generally consistent with the prior quarter. Our converged Ethernet infrastructure grew which incorporates all products previously in our Optical networking and Data networking groups increased to $191 million representing 84% of total revenue. Ethernet access which incorporates all of our access products was $11 million or 5% of total revenue down slightly from Q4’s $13 million. Total network services, which encompasses all of our services related offerings was $26 million up from $22.5 million in Q4 representing 11% of total revenue. Within our converged Ethernet infrastructure grew core switching was the largest contributor at $70 million. Core Transport grew sequentially from $41 million in Q4 to $65 million in Q1. Our CN 4200 Advanced Services platform remained our third largest contributor at $31 million in revenue. Turning now to gross margin, Q1’s overall gross margin was 51.3% up almost a point from Q4’s 50.5%. Our products gross margin remains strong at about 55%. At 24% our Services gross margin recovered nicely, actually being above our normalized high teens to low twenty’s range. In the remainder of my comments today I’ll speak to both the GAAP results and to what the results would have been if we excluded those items detailed in the press release to get to what we call the…

Let me start first by saying we remain acutely mindful of the broader economic environment and potential future market conditions. Notwithstanding the uncertainty of the macro backdrop the fundamental drivers of our carriers, customers business and therefore Ciena’s business are resilient and remain strong. Both at a consumer level and more importantly at the enterprise level the demand for increasing capacity and the transition to packet friendly IP Ethernet based architectures are alive and well. I think most would agree that we are clearly in a period of bandwidth expansion driven by new applications, video, data, mobile, etcetera. Our customers our bullish about this scenario and tell us they see it playing out for the foreseeable future. In fact, on some levels the industry may be underestimating the amount of bandwidth ultimately required given the infancy of so many of these applications. In response carriers are working to implement strategies that achieve two things. To increase raw capacity, where we have a heritage and substantial expertise and secondly to implement next gen capabilities including capacity management and service creation. Where Ciena has leveraged our heritage to add software driven solutions for truly differentiated features and functionality. To date carriers have worked to transition their existing networks to support these application and growth needs. Although this is a practical approach customers recognize it’s not an approach that will enable them to scale for the long term, nor will it position them to derive maximum value from their existing network assets and future deployments. Therein lays the inevitable need to migrate from Sonet/SDH to Ethernet based architectures and Ciena’s fundamental opportunity. Ethernet, it is a low cost widely understood ubiquitous standard, it is the logical path to efficiently address both the infrastructure scaling needs and the service deliver capabilities. The technology’s inherent…

Before I talk about guidance I’d like to spend a few minutes talking about a Ciena asset that I believe is not well understood. As most of you are aware we have accumulated substantial tax deductions from our operations and acquisitions which can be used to offset future tax payments. The majority of these deductions are NOL’s or net operating losses and they total $2 billion. The tax benefit from these NOL’s and other deductions is a deferred tax asset that in most cases would be on the balance sheet but it is not currently reflected on ours. Because of our losses in prior periods accounting rules required us to provide a valuation allowance against that deferred tax asset which effectively reduced them to zero or eliminated them from the balance sheet. We regularly evaluate this valuation allowance to determine if there are grounds for reversal under the accounting rules. Based on our expected profitability this year we believe it is likely that we will be required to release all, or a significant portion of this valuation allowance in Q4 of this fiscal year. The exact timing will be subject to change based on the level of profitability we achieve and our visibility in the future periods. A significant portion of any future release of our valuation allowance will be recorded as an income tax benefit to the P&L significantly increasing our GAAP net income. We expect that a full release of the valuation allowance could approach $1 billion. In recent years our book tax rate which is reflected in our GAAP results has been generally equal to our cash tax obligation which has been related primarily to foreign taxes. This year our GAAP taxes have also included Federal AltMin taxes, State taxes as well as some non-cash domestic taxes…

[Operator Instructions] We’ll go first to Cobb Sadler with Deutsche Bank. Cobb Sadler – Deutsche Bank: I have a question on the long term gross margin outlook. Why could you not guide to a level north of 50, you’ve been there for a couple quarters and then your product mix shifted more to CN 4200 more quarter after probably a little bit less WDM percentage of the mix? On the service outlook has that fundamentally changed or should we expect migration back to lower levels?

We had a couple of quarters above 50% and I think it’s possible we can continue to do quarters that begin with a five. I think we are at the point where we are confident enough that it has moved up from the mid 40’s given our recent performance in what we are seeing. I think it’s a bit early yet to say it’s going to be always starting with a five. Clearly as Jim talked about in his comments we think going forward certainly to get in ’09 and 2010 you’ve got higher software content on a lot of the products, etcetera. That’s certainly our goal is to get the margins north of 50. I don’t think we are quite there yet in being able to guide to there but it’s certainly possible that we can report more quarters that begin with a five. In terms of the services commentary, I am encouraged by the recovery there. I would expect it to be in the early 20’s frankly from what we can see right now. Cobb Sadler – Deutsche Bank: A follow up, you mentioned Sonet replacement with Ethernet technologies. Are you seeing a capping grow by a lot of your customers for Sonet and maybe replacing with some sort of Ethernet product like the CN 4200?

What you see is the general transition away from the PDM over to more Ethernet packets, OTM those service delivery mechanisms.

We’ll go next to Ehud Geldblum with JP Morgan. Ehud Geldblum – JP Morgan: A couple questions, first of all when you bought World Wide Packets you commented on the dilution you expected to be in the mid single digit percentage range which we all translated to about $0.08 of dilution. Can you give us an update, are we still looking at basically $0.08 of dilution in fiscal ’08 from the roughly $35 to $40 million in revenue that you are expecting. Can you give us a breakdown of how that impacts the gross margin? I see what your gross margin combined numbers are if we break out the characteristics of World Wide Packs and how we get to the $0.08 I imagine the vast majority of that $0.06 maybe $0.07 actually comes from the lost interest income. Could you give us an update if that’s what we are looking on the deal? Jim Moylan Nothing has changed since the numbers that we talked about in our call reporting the World Wide Packet transaction. We announced the deal, as you recall, we said we expected dilution to be in the mid single digits range or on a percentage basis then current first call adjusted EPS consensus of $1.62. That’s where we are today, it is possible that dilution could be less than what we originally thought when we did that calculation but it’s still too early to know for sure. As I said earlier, things are doing well with the deal and all notes and comments that we get from customers and their internal operations are positive. As far as where its coming from you should know that some of it is related to the interest income but most really is related to R&D. We are going to spend money there to finish building out their deliverables on the AT&T contract.

On the gross margin profile I think as we mentioned in the call it’s a little early for us to tell but we expect it to be in the 40’s. It’s in that kind of area.

We’ll go next to George Notter with Jeffries & Company George Notter – Jeffries & Company: Building on the World Wide Packets questions, for the full year guidance are you expecting much from AT&T in your full year guidance from AT&T on World Wide Packets or is that more a 2009 event?

We think it will mostly be a 2009 event. We expect very little revenue from AT&T in our fiscal ’08. George Notter – Jeffries & Company: Any sense for how much the AT&T contract could contribute, I know the question was brought up on the prior conference call on the World Wide Packets deal but any sense?

I think its very early days. We are working with AT&T on that. Clearly it’s a widespread deployment, we are exited about it from an opportunity point of view but I think its early days yet. George Notter – Jeffries & Company: One last question, on your visibility, how would you characterize visibility going forward is it same, equal to or better than the visibility you had exiting last quarter?

I would say the same, similar kind of visibility to us.

We’ll go next to Mark Sue with RBC Capital Markets. Mark Sue – RBC Capital Markets: Any thoughts on how things are shaping up in Europe, I ask since we are getting some mixed signals from alternative carriers there. Maybe you can parse your reply from what you are seeing with Tier ones versus the others would be helpful?

Europe particularly we actually feel pretty bullish about. We are seeing good activity amongst the Tier ones and amongst some of the emerging carriers particularly in places like Eastern Europe and some of those emerging markets. We are probably not the best overall barometer to talk about the European markets given our relatively small position in there. I think we are seeing good traction with 4200. I think particularly the Ethernet activity over there is increasing. Frankly from an Ethernet services point of view probably ahead of North America. That would be natural; I think there is a lot of excitement around the World Wide Packets piece with that. Mark Sue – RBC Capital Markets: Coming back to North America without mentioning customers any thoughts on how a carrier which begins with the letter ‘v’ is looking for converged networks?

I wouldn’t like to speculate as you say on a particular carrier but I think most of the major carriers are looking at converged architecture, looking at transitioning it, looking at mesh architecture for example. Most of the Tier ones in North America and globally are.

We’ll go next to Vivik Arya with Merrill Lynch. Vivik Arya – Merrill Lynch: One question on your organic growth rate expectations from what you said at the end of the last quarter versus what your expectations are now can you please tell us what the differences are? Are you expecting to grow faster organically than you did before or is that organic growth rate the same and most of the upside is coming from the World Wide Packets acquisition?

We guided coming into the year in a range up to 20%. Clearly as you get more into the year and we’ve had a good start to the year, in all aspects clearly we’ve got increased visibility because you get closer to the end object which is the end of the fiscal year. Our visibility has got better from that perspective and guiding up to 27%, which includes Packets, but if you take the Packets at about $35 to $40 million that would roughly put our organic growth at about the 23% range. We’ve increased our range for our original organic business. I wanted to deliberately split that out so that people can see the Packets piece and our original business. Vivik Arya – Merrill Lynch: The other thing where are we in the deployment cycle for the core director product, you have seen very strong deployment cycle at AT&T and perhaps there could be Verizon later in the year. Have the customers that are already deploying the director where are they in the deployment cycle are they towards the later innings are they toward the middle innings, if you could give us a sense of that? Steve Alexander The core director addresses what you might term the mesh networking aspects and one thing to keep in mind the converged Ethernet architectures love mesh implementations, Ethernet likes mesh architecture. What you see is the continuing adoption of mesh architecture globally. I will come in a wave action as you get larger build out and such. Adoption of mesh and adoption of converged Ethernet the use of mesh to provide higher resilient connections is continuing worldwide. Vivik Arya – Merrill Lynch: One last question, last year AT&T and Sprint were your main 10% plus customers. Do you think in 2008 we see other tier one customer being part of that 10% plus list?

I think that’s certainly a possibility of that. We’ve got a cadre of tier one customers at any one point in time in quarter in a year we’ve had people like Telmex, Cable & Wireless, British Telecom, Swisscom, and etcetera. We are getting to the point where we’ve got about two third of the large carriers worldwide. They are all capable of getting to be 10% so it’s an expanding list.

We’ll go next to Samuel Wilson with JMP Securities. Doug Ireland – JMP Securities: Could you please give us some more details around the litigation settlement that noted for $7 million?

This is a case that we’ve been working for a while. We paid just under $8 million. There’s an indemnification inherent in the settlement which we’ve not valued because we don’t think it has much value. That $8 million or so was actually paid in the first quarter and so our cash performance is actually better than it looks because of that $8 million, in addition to the $10 million in interest that we paid during the quarter. That settlement we are proud of the cash performance and by the way that settlement did resolve all claims so it should be behind us totally. Doug Ireland – JMP Securities: Did that settlement have an impact on the earnings per share?

It did on the GAAP earnings per share but we adjusted it out for the as adjusted.

We’ll go next to Scott Coleman with Morgan Stanley. Scott Coleman – Morgan Stanley: Sorry if this has been asked already, I’m curious if you could walk us through how the revenue break down particularly between switching in transport impacted gross margins. I would have thought gross margins would have come in a little bit lower on the product side given the mix you reported. I curious what happened there?

We had strong product mix and also both in terms of software content, the services business improved even though it was only 10% of our business that improvement helped. We’ve also got cost reductions on certain platforms, Core Director was up, we had a strong showing from 4200 and some of the software packages and some of the network management and the overall mix was positive. That’s why it took it up about a full point.

We’ll go next to Paul Silverstein with Credit Suisse. Paul Silverstein – Credit Suisse: I want to clarify, you mentioned that 4200 was strong but I think sequentially it was actually down a lot. Against Scott’s point wouldn’t that have an adverse impact on gross margin? My question is to transport margins increased is that a trend?

You’ve got a strong showing from core director which is high software content and 4200 was down slightly in but again they had a good mix on it, we had good software content in the 4200 that we shipped. Also the transport profile was strong as well in terms of the product mix within transport. Paul Silverstein – Credit Suisse: Are transport margins increasing?

Overall we’ve got improvement on transport, core director and 4200 really due to cost reductions. Paul Silverstein – Credit Suisse: I apologize, on the long haul, specifically on long haul transport are you making improvements there as well.

Across the portfolio, yes. Paul Silverstein – Credit Suisse: On AT&T I know there’s only so much you want to say but relative to the announcement earlier this week on the international build out where they specifically referenced, among other things mesh architecture. A lot of concerns on the street as to how much legs on that build out that is getting along in the two. Can you give us any insight in terms of how much further there is to go? Gary Smith Without going to specific about them the comment I would certainly not subscribe to. Steve said earlier I think mesh architecture generally and within these large carriers is just being adopted. You’ve got some of the different stages of the roll out but I think there’s a long way to go on this. I think it’s got a lot of legs. There are very large networks that are scaling up. The whole point about this is they are putting mesh further out from the core into the regional, into the metro and getting much closer to the customers. I think this whole roll out of mesh architecture has a long way to go. Paul Silverstein – Credit Suisse: Can you give us any sense for chassis to line card ratio?

I think it’s only relevant on transport. We don’t really spend a lot of time focusing on that any more because it’s not a huge impact on our business. We are putting new chassis out there, we’ve had a couple of builds where we are putting chassis with low line cards out there. Its really the margins are improving around cost reductions not just mix. We are less sensitive to that then we used to be.

We’ll go next to Tim Savageaux with Merriman. Tim Savageaux – Merriman: I want to follow up on a little bit of the discussion regarding mesh architectures. Whether it’s AT&T’s announcements also recently the [inaudible] the Quest CTO Bob Metcalf spent a lot of time talking about these architectures. I don’t know to what extent Quest is a quarter of their customer they should be also sounds like Verizon should be. As you look at all this commentary when people talk about mesh and G.709 and OTN should we just assume they are talking about core director? What are the implications of that architecture for Ciena and for the industry? What sort of competition do you have, you have obviously been early in staking your name onto this kind of architecture? Could you describe what those carrier comments mean from a Ciena product perspective and put a little quantification, Joe [Berr] told said sort of reminded him Sonet 25 years ago in terms of the adoption of mesh architectures? That sounds like a pretty big trend. I wonder if you could talk a little bit more about it.

Clearly we think everybody should be core director customer I think that’s pretty safe to say. The mesh architecture provides the carrier ways to give a couple things; one is very rapid service creation that serves velocity related. The other one is you can do a much better job on protection and restoration. Architecturally the data networks tend to look meshier than they do look like rings. People in the business talk about Ethernet rings as much as they did about Sonet and that’s the trend. For the sake of rings we are very well differentiated, we created the first control plane in that space the G.709. The G.709 for OTN we clearly believe we are leading the pack in that space. We have to do more in terms of bringing the features that we were able to put out in the core mesh architecture and move them into the metro architecture as well. That’s clearly on our trajectory. Tim Savageaux – Merriman: It seems like despite this being a hardware business, it’s what’s really bringing you in both in the core and maybe with World Wide Packets at the edge are software control systems. Is there any effort on your part to connect those two in the core and the edge? Where do standards play in here?

The thing that’s most valuable here is software, software, software. It is all about the control plane and the ability to build a network that handles wave lengths and time slots and packets all equally efficiently. That speaks to convergence of the various layers; it speaks to convergence of the ways that you actually operate the network. Standards will evolve to get there you can see what’s happened with G. standards. We thought we’d see G.709 out there now with them. You are starting to see that with the adoption of things like PVP on the Ethernet side and clearly an opportunity for us to converge all that together and create what’s essentially a software based operating system for Ethernet mesh network.

We’ll go next to Simon Leopold with Morgan Keegan. Simon Leopold – Morgan Keegan: I wanted to see if we could touch a little bit more on what’s going on in the competitive landscape particularly in light of a number of your larger competitors have either gone through mergers or various forms of restructuring. I’m trying to understand where you see the process right now, are they getting out of that, are they responding with lower pricing and therefore fighting you that way and really getting a sense? Also if you could throw in [Waway] if you are seeing that more that’s certainly one we hear about in the press but don’t see much in most of your customers.

I would say that the competitive environment remains challenging and it has been for a while. I think the challenges particularly of the larger players is two fold; one it’s very difficult and challenging to do these cross border integrations and acquisitions I think they are struggling for of the obvious challenges of that particularly when you talk about size of the companies that are coming together. Very complex, take a while for that to get resolved. The opportunity for us during this is that we’ve had a vision around the architecture that we’ve invested in strongly in the last few years and those features, functionalities and platforms are coming out. We have a cohesive strategy around that we’ve acquired the pieces that we need to bring that to market faster and pack it so it is a great example of that with the Ethernet operating software. While we’ve been focused on a single homogeneous vision and architecture I think the challenge a lot of these folks have had is merging two or three conflicting product lines. Therefore, the confusion that’s created in the market and the inefficiencies on their R&D is going to last for a little while. The second challenge they have is considerable part of their revenues come from Sonet and SDH type architectures which frankly people are looking to move away from. The shift continues towards Ethernet converged architectures that layer zero to three. It gets more challenging for some of these larger players and that’s why you are seeing this take market share. Clearly these are permitable players with tremendous assets and great incumbency and probably the biggest challenge that we have is that the sheer incumbency that some of these players have globally. That’s something we have been used to fighting ever since the birth of Ciena. I don’t think anything’s particularly changing. Simon Leopold – Morgan Keegan: What are they doing to respond? It’s unimaginable that they are doing nothing but it sure doesn’t look like they are doing enough to keep up with your win rates?

It’s easier for us we are a focused specialist, we are in a particular area, we are putting all of our emphasis on that, its easier for us. They’ve got a lot of other considerations, a larger customer base of installed legacy equipment and they can’t leave that stranded on their customers. I think they’ve got a more complex set of issues to deal with than we have and we can move faster, we are a smaller organization, we don’t have some of the issues that they have, that they are dealing with. I think the fact that we can move faster and we are very focused it gives us good competitive advantage when you are at the early stages of this kind of shift. Simon Leopold – Morgan Keegan: I know this is a hard question for you to answer but if you could do your best. If we could get some kind of update on the activity at BT because that’s been a customer we’ve been watching for some time that seems to pop up and down, maybe a little more color on the progress and activity and how you see that particular customer?

In terms of BT we continue to work with them on the roll out the project, its going pretty well. It’s a large project, you’ll see some ebb and flows around the project and depending on which vendors you talk to depending on which part of the network they are in you will see there are ebbs and flows. Overall a large complex project that I actually think is going reasonably well certainly from the perspective that we have. The other thing I would say about BT is what Century 21 has enabled us to do is broaden out our channels to BT and we are now selling to BTGS and different parts of BT and we are in about nine or ten different countries now in addition to the UK. It has enabled us to spread out within BT. That gives you more balanced revenue stream you are not just dependent on the large project.

We’ll go next to Jack Monte with Lehman Brothers. Jack Monte – Lehman Brothers: I’m trying to understand the traction that World Wide Packets is having with customers in fiscal ’08. Who are the big customers driving the revenue at World Wide Packets?

I would say clearly the largest one, though we also said it’s probably likely to be not impactful on revenues in’08 is AT&T. That’s clearly one of the largest wins in the industry this year. They’ve got a series of other customers as yet unannounced in both tier one carriers, cable, other tier two service providers some of them municipalities. This Ethernet revolution touches everybody and it widens the opportunity. Because of the applicability of their Ethernet software it allows a much broader customer base and they’ve got, for a young company, a very impressive list of international customer too. That was the thing that impressed us and really their competitive advantage is around their software offering around converged Ethernet. Jack Monte – Lehman Brothers: With regard to interest income the guidance last quarter was for $8 million. What was the key driver of the upside there?

Are you talking about this quarter? Jack Monte – Lehman Brothers: Yes, I’m talking about going into the January quarter, $8 million for January.

It has to do with the timing of how market interest rates affect our portfolio. We do have some longer term assets out there up to a year and longer. We don’t get immediate effect in our interest income from market Fed funds type rate. So that’s basically it.

Our final question comes from Ehud Geldblum with JP Morgan. Ehud Geldblum – JP Morgan: I wanted to dig a little bit deeper into World Wide Packets. The $35 to $40 million that you say you won’t be recognizing from them this year. That sounds like more into a calendar year ’08 number of somewhere around $60 million or so which would be double the $30 million they did last year. Can you give us a sense of how much of that is from this AT&T contract that you getting with them.

In round terms if you calendarize it we are taking eight months of them so reasonably around the $60 million mark, that’s a reasonable assumption. I would say around the AT&T very little is in that expectation. There’s a lot of activity going on with them and we’ll certainly make shipments during the fiscal year but frankly I personally think its unlikely we’ll take any meaningful revenues from AT&T because of the scale of the project. The $35 to $40 million does not include any AT&T revenues. Ehud Geldblum – JP Morgan: Do you expect AT&T to start in ’09 and organically without AT&T they could see some growth from the $60 million as well?

Yes, they’ve got engagements with a number of other tier ones and across the board so I would expect the business outside of AT&T to show very strong growth rates. Ehud Geldblum – JP Morgan: Could it potentially double again into the $100 plus range and AT&T being an additional..

Without getting into next years guidance a little early I think we’ll have to wait and see on that. We are very pleased by what we are seeing and clearly by taking that technology, their software and leveraging it across our portfolio and our sales engagements we hope to get some very positive upside to this. What we are seeing so far is very encouraging. Ehud Geldblum – JP Morgan: The gross margin profile of their business it sounds likely it’s a little bit on the lower side because its more on the access side as you mentioned in the past is that why you’ve been guiding gross margin back down into the high 40’s from the 50% range.

It’s a little bit about mix with them right now. They do have as we’ve said they are operating software which tends to be obviously software is much higher gross margins. We do over time think that their margins will improve on that. They have very good road maps to improve that gross margin. Ehud Geldblum – JP Morgan: As that gross margin goes up and as your own gross margin goes up could we start seeing you sustainably move above the 15% operating margin, you did 17% plus this quarter but guiding back down again. It sounds like all the gross margin numbers are going the right direction and then if we at a certain point, would those revenue leverages, you should be able to get comfortably above 15% on it.

This quarter is testament to that. Coming in at 17% I think it’s absolutely we have the potential to do that. It also gives us the potential to invest. We see some great opportunities now with traction we’ve got. I think we’ve got this double benefit. We are going to manage strongly to the mid teens objective in terms of our operating profit, I think that’s important and we’ll stay very disciplined about that. I think we can do that at the same time increase our investment strategically so that we can ensure growth in ’09 and 2010 going forward. It’s a double benefit, you start to get stronger gross margins you’ve got a stronger business.

That concludes the question and answer session. Mr. Smith I’ll turn the conference back over to you for additional or closing remarks.

I appreciate everybody’s time this morning and for your continued support and we look forward to talking with you over the next few weeks.