Good day, ladies and gentleman, and welcome to the Q2 2007 Autodesk, Inc. Earnings Conference Call. My name is Chamika, and I will be your coordinator for today. [Operator Instructions]. I would now like to turn the presentation over to your host for today’s call, Ms. Sue Pirri, Vice President, Investor Relations. Please proceed, ma’am.

Thank you operator, good afternoon everyone. Thank you for joining us today as we report results for our Q2 of fiscal 2007. 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 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 our guidance for the third fiscal quarter and for fiscal year 2007, our competitive position, future business prospects and revenue growth, spending related to the growth investment initiative, market opportunities for our products, our efforts to increase subscription and upgrade revenue and market opportunities in various geographies. We caution you that such statements reflect our best judgment based on factors currently known to us and that 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 filings 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 today with this 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 addition to regulation of fair disclosure, Autodesk will provide quarterly information and forward-looking guidance in its quarterly financial results press release and its publicly announced financial results conference call. We will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. We do 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. Now I would like to turn the call over to Carl Bass.

Good afternoon and thank you for joining us. I want to begin this call on a personal note. As we said in our press release, like many companies we have undertaken a voluntary review of our past stock option granting practices. We are following evolving best practices as we conduct this review. The audit committee is -- review with the assistance of independent outside legal counsel and we will not share the results of the review until it is completed. Best practices also preclude us from providing our preliminary earnings numbers until the review is completed. I do wish I were able to communicate several key points that are important to the company and our investors. First of all, we have an excellent management team and they are focused on continued strong business execution. Secondly, the practices being reviewed involve prior fiscal years and do not impact the health of our business going forward. Our business is strong, our products are great, our management team is excellent, and our employees are world class. This is a very strong company and we are well positioned to keep delivering great products and great financial results. Now let’s move to a discussion of our operations which as you will hear are very strong. Today Autodesk reported another terrific quarter of financial performance. Quarterly revenue was a record $415 million, a 21% increase over the last year. Once again, we achieved record quarterly results on many of our most important business matrix, including new seat revenue, 3D revenue, and subscription revenue. Spending in the quarter came in approximately $5 million less than the amount used for the high end of our previously delivered Q2 earnings stats. This was due to the timing of spent related to gross investment initiatives. And we continue to execute…

Thanks Carl. Once again Autodesk delivered great performance. As Carl said, net revenues in the quarter were $450 million, 21% higher than last year. This includes revenues from Alias of approximately $20 million, after the write down of deferred revenues required by GAAP. As we said, because we are in a process of completing the stock option review we have been advised that best practice is to provide only select highlights and not provide EPS. However, our spending came in at approximately $5 million less than the amount used in the high end of previously delivered guidance due to the timing of spending related to growth and investment initiatives. You should note that we have substantially completed the integration of Alias, with the merger completed we do not anticipate additional dilution from the acquisition and the former Alias operation are now indistinguishable from the rest of our operation. Therefore, we no longer provide you separate results for Alias. Each of our geographies grew substantially in the quarter. Revenue in the Americas was $168 million, an increase of 19% over Q2 of last year. EMEA grew 24% to $174 million. Asia Pacific increased 18% as reported, and 22% cost to currency. Revenues in Japan increase 8% as reported and a very strong 20% on a cost of currently basis. Looking at the division, platform technology increase revenue 11% over Q2 of last year, $201 million. Growth in PGD was led by a 29% increase in LT revenue from new commercial seats and a continued robust 70% increase in revenue from new commercial seats of AutoCAD. Manufacturing solutions revenue was $76 million, an increase of 26%. Without the results of Alias products, MSG grew revenue 15% and we shipped more than 74,000 total manufacturing seats in the quarter. Revenue for building solutions…

Thanks Al. Before we take your questions, I would like to summarize a few key thoughts. There continues to be mixed signals about the overall economy, given the price of oil, foreign exchange movements, and interest rate increases. I can tell you we see no signs of a slowdown in our business. As a company we are in a great competitive position with our strategy, our products and our sales, and marketing execution, we continue to investment in our very encouraging growth opportunities, which will drive us towards the 15% growth target. We see great growth prospects in several areas. We believe 3D adoption will expand in very market driven by our strong solutions. Geographic expansion into emerging economies will remain robust as well our media and entertainment division will see growth from the increase demand for animation and feature films and next generation game platforms. We have a wealth of opportunities and our employees and channel partners continues to execute extremely well our management team is excited about the opportunities and has committed to drive a continued strong results over the upcoming years. Our business prospects have never been better. Operator, we are ready for questions.

Thank you. Operator Instructions. Your first question come from the line of Jay Vleeschhouwer of Merrill Lynch, please proceed.

Thanks good afternoon, for Carl or Al. Let’s start with the options issue. Can you say for which period the committee is reviewing the options practices? Do you have any sense yet of how many options are an issue and can you answer whether anyone from operating management is on the compensation committee?

No, it’s a no, no and yes Jay. Most of the things regarding the ongoing investigation, we can’t say anything about. So, most of the question -- we have no answers at this point you know as we pointed -- earlier as we pointed out. As we pointed out you know at this point we think the brutal thing to do is not to really disclose anything more than we have already said. We think that’s really the best thing and you know we’ll wait for the conclusion of the investigation. The yes in there was, the question I could answer was about the comp committee and there are no members of management on the comp committee.

Already, one other short benefits issue. Do you expect to be able to file the Q on time or will you be a late filer?

We are going to -- you know, we’re just trying to move through the process so you know to review as quickly as possible. I mean I think, you know, we want to balance the speed at which we do with, making sure that was -- they were all about it.

All right, well turning to the operations, can you be a little bit more specific about the growth initiatives you have allude to in terms of the spending and with respect to subscription particularly the sequential changes you’re seeing in the third. How would you rank the relative importance of improving attach rates versus renewal versus mixed, may not do any particular product or vertical specific trend or you’re seeing meaningful movements in any of that in attach rates or renewals?

Absolute, so let me start with the first one. You know most of our growth initiatives, you know, continued to be related to the same things we’ve talked about you know only last year so there is not a lot of new -- but it continues to be about either two things; one is continuing to round out our portfolio you know, and bolster our portfolio particularly in the area of 3D solutions, and the second continues to be the expansion you know, of our channel in terms of both capacity and capability. So you know, respect of things we are going to be investing in before it’s really the same two things. I think in terms of the priority you asked for, the number one driver is renewals, number two is attach rates. You know, at this point we have about a million seats on subscription.

Okay and then the last part of that question was whether there were any meaningful differences or trends in terms of product mix vis-à-vis subscription success?

No I don’t think the trends are that different, I think you know, more or less the same.

All right, and then lastly Inventor shipped 9,700 units in the quarter which appears to have been down year-over-year from Q2 of a year-ago, how are you gaining share if apparently the reported number was lower and your peers are growing their units?

I think what I would say first of all there is five or six companies out there you know, and so I would look at kind of the gross numbers in many dimensions. So first of all in revenue, we talked about the 70,000 something seats in manufacturing if you still look specifically at Inventor you need to look at all the competitors and products out there. And so I would look at the rising revenue as well as the increased numbers. Remember, gaining market share is just growing faster than the other guys.

Thanks, Carl.

You are welcome, Jay.

Your next question comes from the line of Richard Davis of Needham & Company, please proceed. John - Needham & Company: Okay, thanks very much, this is actually John for Richard. Carl, I was wondering if you can comment on the traction you saw in the quarter for some of your collaboration products?

Yeah, I mean the collaboration products you know, continue to do well I think both robust, our business continues to grow you know, our acquired Constructware business has been merged in and there is integration going on between these two. It continues to do well as well as our data management and collaboration products with the other industries, so I mean we continue to have a very robust business here. We didn’t intend to talk about at this time. I suspect once again you know, kind of with the annual round up we’ll give you a lot more detail you know, but -- and you know, it’s interesting to watch as people are warding the size of their installed base around some of the software service models you know, and I think we would quietly have subscription bases that are quite large, we’ve talked about over a 100,000 subscribers and some of the products. So we have quite large install bases around that, you know. From a revenue perspective it’s not as important as some of the other group drivers. John - Needham & Company: Got you. Thanks very much.

Your next question comes from the line of Gene Munster of Piper Jaffray, please proceed.

Hi good afternoon and congratulations particularly about the new seat growth. Could you just I guess one question in terms of the EPS with the $10 million sequential increase in spending mean -- would that mean that EPS numbers will probably be slightly below the midpoint of the range for the October quarter, Al?

We don’t have a forecast EPS numbers for October quarter, based on what I look at, Gene, is that again $10 million sequentially increases taking $5 million from Q2 and largely in Q3 in terms of expenses for the full year our expense is going to be about the same as what we originally forecast, I think it gives you enough information to build your model.

Okay, and then I guess on the LT cross-grade orbit obviously that’s a big pull -- LT cross grade promo that you guys are running, can you talk a little bit about why you started and that and second is maybe about a potential opportunity within that promotion?

Yeah, I mean we started this opportunity to give people who use AutoCAD LT an opportunity to move to verticals and I think the logic behind it is not very different, while some of the LT population is more casual users, there are also many professionals amongst them who have the same need for our vertical or 3D products as AutoCAD adequate users and what we wanted when appropriate for them be able to give them an opportunity to move, you know a horizontal 2D product, you know to a more purpose built 3D product. It’s a good opportunity and the program really just got started, but you know we are optimistic about it.

Okay, I guess maybe the size of the LT pool, just any sort of rough numbers how many eligible LT licenses are out there? Activation?

I think, you know I think approximately there is about 3 million LT licenses out there.

And how does they compare to how many full AutoCAD licenses?

Probably you know 4 million approximately for AutoCAD -- something about that ratio.

Okay, so something like --

Just less than half.

Okay, excellent. You know I guess kind of final question is that --

35%, you know.

-- the installed base of LT is 25% smaller than the base of AutoCAD?

Could you repeat that question Gene?

The installed base of LT is smaller or large than the installed base of AutoCAD?

It’s about 25% smaller than the installed base of AutoCAD based products.

Okay beautiful. And then you guess lastly is that this July quarter is kind of -- the street perceives this as the rubber hit the road quarter after the – I guess the first quarter you guys have navigated the smaller -- and I guess the new seat growth speaks for itself, but maybe Carl, you could talk a little bit about was this -- is this the rubber hit the road quarter and do you fell like that the strength in the business came from areas that you have not seen over the past year, year and half or has been kind of consistent from where the business has come from or any sort thoughts on the street’s perception that the July was the rubber hit the road quarter?

I think, we would, I mean -- Gene, as you know we were always convinced that I mean as a matter of fact, we tried probably starting two to three years ago to lay out what we believed that the trends would be in this business and I remember back in New York several years ago just talking about it and continuing to try to show people the lens through which we look at the business, which is new seats on one hand and that combined upgrade and subscription business on the other. We also continue to say, it remains true that much less of the business is driven by the retirements than people presumed and I think that continued to be true, is that -- much less by the retirement and much less by the promotions than people seem to try to read in to it, and we try to say -- I mean, I personally have said it many times, but we feel very confident, you know we continue to talk about that two thirds of revenue that comes from new seats and emerging businesses. To answer kind of the second part of your question, I think the dynamics quarter to quarter change, I think for some of these trends they are a little to volatile to look at on a quarterly basis, but if you look over the course of several quarters or over the course of the year, most of these trends have been very fairly consistent and you have the ability to extrapolate and so I don’t think we saw anything particularly different, there are little instances, but the three 3D business has remained really strong. The new seats were was strong, emerging economies were strong and I think those are trends that we pointed out for the last couple of years.

Yeah, I really think all the trends are fairly consistent the last two years now, three years, and we have been saying for about 18 months that the subscription growth this year would overwhelm the reduction in upgrade revenue and if you do some math on what numbers are given to you and we will see that’s the case, growth and subscriptions were considerably larger than the down side in upgrade versus with last year. We have been predicting that for a long time, that’s what happened.

Okay, and final question is the backlog was a surprise going from 9 to 21, the delta in that, can you give us any color in terms of was it, really to the media side to that pattern and proportionally larger part to the backlog than the core business or any thoughts on it?

You never really do an analysis of the backlog for you. It’s across the board and there is no number we try to manage, or anything like that and it’s really kind of a fall out number and it’s across all of our business.

Great thank you.

The next question comes from the line of Brent Thill of Citigroup, please proceed.

Thanks good afternoon, a number of the other software companies we follow related to the options issue, have actually reported their numbers and have indicated that they are doing a review you’ve chosen on not to report the numbers, so, I think a number of your investors may feel that this the signal that there is a likelihood of something else going on and can you just comment in terms of this discrepancy relative to similar to those industry that have chosen and you’re choice to do that what you did?

You know, most of what I can say, we’ve already said, I think what we do it is because of our reporting cycle we are a little bit later, so we were able to watch a lot of other companies and get them tested by some who has gone out there. I mean the only thing idea is I think, several companies who said certain things regretted and I would rather than play my category.

Yeah, I describe it as rapidly evolving area and we think we were doing a best practice and I am going to read anything into it.

Okay, in the context of any investigation is that included the increment of $10 million or is that all incremental for next quarter?

Yeah, we never know for sure what investigations cost, it’s not an investigation its follow on charge review, but we factored in some cost that we think --.

Okay, and just I know like Carl you mentioned the microenvironment there hasn’t been any signs of a slow down. That has been secured from your shareholders over residential and commercial slowdown, a small percent of the revenue and it did show up but no change to the five year 15% revenue category that you gave the analyst to just 15 months back?

No, I mean this is the high point; there is no change in the overall guidance. We feel is optimistic about the long term prospects as before, with every quarter you know that we pass and we continue to do it, its just that much easier and particularly when you post 20% kind of growth numbers in the beginning of that cycle, it makes it even easier to seem very sage about it, you know the future. So, no, we were quite happy and you know the other thing I would just add is I mean, I do believe that there are people who are trying to correlate some of the things out there, some of the macroeconomic factors, a little too finally tuned to our business. One of the things is people measure these in very fine amounts over the course of a month, our business doesn’t move in that way and the sensitivity in the movement in these things just don’t seem to follow and I think even more, so I think some of the things as I pointed out before, I think like the residential indices has almost no merit and no bearing or our business at all. Any other measure, the production in Wisconsin you know and try to measure that and you know combine it with our business as well as you know residential housing starts.

Thank you.

Your next question come from the line of Heather Bellini of UBS, please proceed.

Hi, this is John Stuart here for Heather, following up on the -- Gene brought up promotion. Can you talk a little bit about the legacy promotion and success you’d have with that and what you are expecting going forward with that?

Yes, I had a couple of things about promotion I guess and I think promotions are a continuing part of our business they are an ongoing part of the business. One thing to remember about promotions as we talk about them is a lot of people seem again to read a lot -- into many of these promotions or plan well in advance. So it’s just something for important -- it’s important for people to look at that way. I think people the see the period of -- there are certain time in the year or time in the quarter and they draw all kinds of assumptions from it. In order to orchestrate the promotions throughout the channel those are the things you turn on overnight. And if you do, you certainly wouldn’t get the attention of your channel partners. I think the delay -- you see promotions as you -- in the first time -- running, which are already in the running of the promotion. We think it’s a good opportunity, but don’t have much more to report on that at this point.

Okay and then also on the 3D penetration. It’ been the 10% level for a couple of quarters here, is it something should we expect in acceleration or is it just a matter of you know you had really good update with AutoCAD, is that the reason of staying at 10%?

I think as long as that denominator keeps getting bigger, it’s got to hard you know when you have quarters with, you know, 20% plus new seeds in AutoCAD you know as we open up the opportunity to migrate from LT, it just makes it harder and harder it doesn’t mean that we are not selling they -- it just makes harder and harder for the arithmetic to workout.

Okay and then in Japan also you had a nice cost currency, had a nice growth there. Is that -- are you seeing 3D update in Japan or is that still are they sort of the region that doesn’t go into this ready at this point?

I think it’s comparative you know to the other kind of equivalent countries, there is less adoption of 3D in Japan than in other places.

Okay, all right great.

Just generally speaking.

Thank you.

Welcome.

Your next question come from the line of Sasa Zorovic of Oppenheimer & Co., please proceed.

Sasa Zorovic of Oppenheimer & Co.: Yes, can you hear me?

Now. Sasa Zorovic of Oppenheimer & Co.: Yeah, so when did you find out first about this option issue when -- I guess because this is the first time that we are finding out about it is, today?

You know, we -- I mean we started, we you know decided -- I think probably along with others as we read about things in the press. We decided to make sure that there were options to bring them correctly and so it’s several months ago now we self-initiated the review of our option practices has begin, it’s been going on for several months. Sasa Zorovic of Oppenheimer & Co.: So basically the reason that you are telling us about it today, does it make it that it’s -- maybe discovered some issue or that you just simply hasn’t crossed the threshold up until?

Yeah it cross the threshold of the quarter before, it was within this quarter. So this is the first time we are reporting in the time at which we were looking at them. Sasa Zorovic of Oppenheimer & Co.: Did you think about providing EPS assuming options away or assuming at a certain number or is there something else in addition to the options that it’s preventing you from reporting as EPS or rather maybe it should have, if you knew that the number for option were X in the quarter, would you be able to report the EPS number then, today?

Sasa, like we said, we obviously thought about it quite a lot, but I think you know our best advice and our best decision was not to give any more details than what we’ve actually reported. Sasa Zorovic of Oppenheimer & Co.: Could you also provide us with the sequential impact of currency in the quarter?

So, by the way, I mean, you can do the math on that Sasa, you can do all the math -- we just improvise it. Sasa Zorovic of Oppenheimer & Co.: Thank you, my last question would be, if you could provide us with the currency impact in the quarter, sequentially?

Sequentially. The delta for revenue sequentially is $8 million favorable. Sasa Zorovic of Oppenheimer & Co.: $8 favorable sequentially for revenue, thank you very much.

And versus the prior year, just $2 million un-favorable. Sasa Zorovic of Oppenheimer & Co.: Thank you very much. Your next question comes from the Brenden Barnicle of Pacific Crest Securities, please proceed

Thanks. Carl, I wanted to just go back to 3D. Obviously, good growth there but that growth has been decelerating -- 41% this quarter, we were 50% last quarter, we were 70% - 80% last couple of quarters at the end of last year. Is that just numbers or what’s it going to take to turn that back around and where do you see it sort of or when you see it sort of kicking in --?

I think there is number of factors going in there. One of the first ones is definitely is the numbers get larger, you know having -- growth. I don’t expect revenue gross numbers -- 19%. Those are the kind of numbers that get harder and harder to accomplish obviously. I think the other is -- one of the things is we talk a lot about customers moving to 2D to 3D, but the truth is the customers are just not picking from a bigger tool set, and they are adding 3D to their already exiting 2D solutions. And in many cases you are seeing robust growth in their 2D as well as their 3D. So I think the 3D will be an important part. I think it will continue to grow, but I think, you know on a percentage basis you are going to see a change. I think the other thing that you need to look at is some of the other -- we have these products like AutoCAD was an example, which is really a very specific product. It’s a purpose-built product for the mechanical design industry. We classify this 2D, but it has many of the same properties in terms of its price, some of the pricing, in term of its -- the nature of how specific it is for the design task at hand. That makes it much like -– more like the other products. So when I talked about that increased tool set. Its not only things like people moving to inventor and inventor professional, it’s cuddling them up either with things like electrical or things like data management products like the Products Stream.

I also was wanting -- hoping you can just clarify, you know I think there is some confusion increasingly about 3D systems, which 3D is ability functionality now that’s in AutoCAD 2007 versus kind of an enhanced modeling stuff, it’s just a 3D product. Can you just run through the distinction on a definition -- 3D visibility versus what really would be -- you guys -- 3D product --?

Yeah, that’s a really good question. I mean I think we have used over the years 3D is a really convenient shorthand and its get a little bit more confusing with placement of the 3D visualization functionality in AutoCAD. Some people -- let me just clarify one think, I’ve had this question a number of times, there’s been 3D functionality in AutoCAD for more than 10 years. So this isn’t the first we’ve done it. I mean it recently got a big overall and its really now playing confident, but its been there for many-many years. The real distinction is this that you know a little bit more subtle, this idea of bottle based design in which we are really modeling a real world phenomena in which we are modeling a building, we are modeling an automobile, we are modeling the internal workings of an engine. Those were the kind of things that we talked in our so-called 3D products, it’s really is model based design products. Whereas our 2D products with the most product tend to be schematic nature, they are used to represent you know, traditional drafting and drawing things. So the difference between the AutoCAD is really visualization and simple conceptual design using 3D and the other is really that rich model based design that not only drives better designs but also the downstream processes where people can use that information for analysis and visualization and simulation.

Great thanks.

Your next question comes from the line of Michael Huang of Thinkequity, please proceed.

Thank you. In terms of your reseller channel how much progress have been made over the past six months for being able to better articulate and sell the value proposition of the vertical solution then and how much productivity improvement you believe is still left?

Well, I think I mean I think, our channel partners continue to give more and more vertical I mean, one, by their own choosing, and two, with our encouragement. It continues to be a focus you know, as you’ve seen we’ve shifted incentives over the last couple of years, we continue to shift incentives. We believe the most effective resellers are the ones who are more vertically focused and so we’ll continue to do that you know, as we’ve talked about a lot of time I think we talked about the number of channel partners and if we look at over, let’s say the last three, four years, we’ve -- four years we nearly double the revenue and you know, the channel partners have not nearly gone up by that number. You know, I think the more interesting numbers is the number of individual sales people and application engineers and truthfully that’s a harder number to get at.

Right and another question --

I have a suggestion maybe on your channel checks you can do a survey the number of the feet on the street in each of the channel partners and let us know.

Okay, so when you -- if look at the demand drivers across the 3D solutions, in your opinion which vertical is actually benefiting from the most favorable demand environment and how you expect that trend over the next couple of years?

I think you know, the demand in -- I mean demand environments are actually very different. Clearly the building is having the greatest demand, which is why you know, you refer my previous comments about thing like housing starts and staff. You know, the building industry has clearly done that. I think you know -- but I think you have to look in to demand environment coupled with a competitive environment, and so the building industry remains really strong. And in a competitive stands, you know revenue is really head and shoulders above the competition in providing that kind of productivity and then changing the way people design buildings. So I think the combination of the competitive environmental you know, just creates more demand for our products specifically. I think you know the growth of infrastructure on a worldwide basis is slightly different as you -- it’s distributed differently between emerging countries and the more developed countries obviously we have lots of infrastructure fixed and emerging countries there is a lot of infrastructure to build. But you know one of the things that limiting the growth in the infrastructure market is really the graying of the workforce in many of the industrialized countries. If you look at manufacturing, you know demand remains robust but obviously that’s also the most competitive market in which you know we can be.

Thank you.

Your next question comes from Ross Macmillan of Jaffray, please proceed. Ross Macmillan - Jefferies & Co.: Yes thank you. Al, I just had a question on the subscription of maintenance revenue line, cool it’s growing very nicely but it tends to grow in big fits and starts, so for example, this quarter was actually up $17 million sequentially and you seen nice deferred bills but throughout few quarters it’s only been up $6 or $7 million sequentially. Shouldn’t this really be much more kind of forecast above at consistent, its given that its draw down of deferred from earlier short term deferred of the balance sheet, needs to -- understand why that is not kind of more consistent, thanks?

If you’re recalling Q1, we had really big booking quarter for (inaudible) and what happens is when that happens in the following quarter the revenue comes out, typically the Q4 is a quarter when there are a lot of renewals and lot of bookings but the Q1 was a great booking -- Q2 also was good. If you know that the deferred revenue went up $12 million buy all that stuff that came out of our account but I can say that new renewals and bookings are -- because contracts are typically annual, they come up in certain point of time, so they are not going to be a nice linear number for you like that, unless you look out at it on like an annual basis. Ross Macmillan - Jefferies & Co.: And as a matter of fact as Al pointed out, I mean its hard because what you see is kind of the shadows of former releases and former upgrades and former retirements which overtime get more muted as they go out into the future but there is bumps so to speak, still show up in certain ways. I am not sure that’s clear but -- it will be never be easier for us to forecast the bookings around that.

Yeah, but don’t interpret that as a forecast of revenue. Yeah because we started the quarter with 95% of that stuff sitting in the balance sheet, so we are now sometime forecasting the revenue -- number that we forecast there. Ross Macmillan - Jefferies & Co.: That’s what I am pointing to this, the revenue jump very materially sequentially this quarter having been more modest through out two quarters when the deferred bill was -- certainly very high with the last two quarters, I am just trying to understand why you suddenly get more revenue from the differed balance now, relative to say last quarter when we had a very big uptake.

We had a large booking quarter in Q1 and that happens during the quarter and then look at it this way, when we get a booking, when we get a booking we take revenue orders subsequent 12 months and you’re not going to see the full impact over the next quarter that gets booked, you see it in the following quarter, that is why.

Well, last quarter the deferred bill has increased $39 million, it was the largest increase in the deferred we had ever seen, and so you would expect revenue to go up next time. Ross Macmillan - Jefferies & Co.: Right, but its spread over four -- we should take it and spread over four quarters, it would only be proportional increase.

Yes, right and the Q2, the Q1 when we are get stuck -- a good portion at $39 million coming out in -- but it continues to use up resources. Ross Macmillan - Jefferies & Co.: Okay, that’s helpful, one follow on. Just in terms of the spending you actually held back some spend, can you just outline why this spending was held back without a decision taken early in the quarter and if so?

Oh, no we wouldn’t hold it back, yet you know, we make investments -- people need equity on that, people they hire -- they have a promotion -- they have a program they need to roll out and they can’t always get it done according to the quarterly timeframe and we want to think it done right, we don’t want to done according -- have to spend your money, though we can’t always ensure that that’s something playing out in one quarter -- half of a quarter, they can spill over to the next quarter and often that’s the right thing to do because we have only one done right, we don’t want people just trying to make arbitrary deadline. Ross Macmillan - Jefferies & Co.: Okay, great thanks very much.

Your next question comes from Tim Fox of Deutsche Bank, please proceed.

Hi, thank you good afternoon, just a couple of quick question. Carl you mentioned couple of commends on the Legacy program. I was wondering, given that this is the first time you have offered it outside the US, is there any early even anecdotal feedback on the program outside the US?

Not much, we’ll give you more in the subsequent quarters, but now it’s a little bit early to say much more about it.

Okay, that’s fair. On revenue -- a very big quarter. I was wondering if this anything more you can point to around the strength there regarding maybe geography or maybe taking share and that’s a quite performance in the quarter.

One of the interesting things about revenue, there’s two nice things going on other than the one I mentioned which is, you know we’ve kind of a game changing product in its industry, but besides that what’s going on is the product is maturing, as you know we’re always very excited about version one, but it takes a while for our product to reach a really production ready stage and then hit that next really stage of life where it starts really fulfilling its capabilities. So, Revit is in the really good part of products jumping up in that they can be agile with the product, but they are also getting a complete set of capabilities. Also, you know we talk about it, but it also a platform in which we have you know Revit structure for structural engineering that’s associated with a building and Revit systems, which is really about the heating the installation air-condition that goes in a building and while many of us -- to the lay person, you go around and you look at architecture as just being the part of the building you can see. Not only is there often more complexity but there is weigh more expense tied up in those parts of the building. So, we are now being able to extend that power of Revit to the structural engineers and the mechanical engineers who work on a building, and I think that’s making difference. I think also because just of the way the value chain is set up in that industry. The real power of Revit is where all of those various participants can build one building model that -- you know incorporates all those different building elements, and so we’re started to hit that mark.

Interesting, and follow on to that I guess would be the growth initiative that you have talked about in other 3D areas, I am wondering if you could just talk a little about whether that’s another vertical or is this furthering some of the existing technology?

I think the majority of what we’re talking about in terms of the shifting of the spends is really about continuing of 3D products that we’re talking about all the time.

Okay, and lastly I know you have said, Carl, that you’ve seen really no slow down at all in demand, obviously it showed up this quarter. I was wondering if just putting on your crystal ball there, if we were to see an economic slow down more globally, where would you think this might impact your business first, would it be in some of the higher ASP products, some of the 3D products, or do you think it starts to go after new seat growth. I mean, is there any way to think about how that may affect the business despite the fact you’re not seeing any slow down right now?

I mean the one thing I would say, in a couple of years hypothesis I think would not be true. I have to think more about where it would happen. I mean, the obviously -- I don’t think for the most part it would be the high ASP products, as a matter of fact the high ASP products tend to corresponded to the ones that provide greater productivity and so even a slow down that often a time which a firm would change, so I don’t think you would see it there. I think it would probably just follow the economy, I mean, we’ve never claimed to be immune from the economy -- you know, but we do talk about the diversification of our businesses and the diversification across the industries and then the diversification across the geographies you know that always had some amount of a buffer you can say. The other thing that’s interesting is you know much of our business goes into small and medium businesses that you know often powers through these downturns. And so you know there is -- and so I think we also get that distribution across the small medium enterprises as well as the large companies this is just another element of the diversification. So I think you really do you have to see a more you know something approaching your recession in the part of the world for us to you know really see a lot of movement.

Okay that’s helpful, thank you.

Your next question come from the line of Barbara Coffey of Kaufman Bros., please proceed.

Yes good afternoon, a quick question. When you look at the -- it’s now been many quarters of almost 60-plus percent new seat growth. How much of this can you attribute to some of the piracy controls that you have put in place overtime versus just more people using your software naturally.

Yeah, I need to start by -- you know, the new seat growth this quarter is 24% that’s pretty represent the range which had been there for a while, so --

Okay.

But I -- you know in truth -- of your question I think we can continue to try to fight piracy on a worldwide basis. There are many things we do to -- you know, to do that we get more -- you know we do get more successful at it, it’s -- you know, it’s an ongoing thing that we do. And one of the things that I have said about piracy is, we’ve done some things that I do think prevent what we often think of as casual piracy and we do a good you know we do a better job in controlling casual piracy. The real math piracy that goes out there, I’m a little bit skeptical of some of the you know technological solutions that -- so we continue to work with governments you know particularly in emerging economies about increasing their respect for intellectual property. And some of our most successful efforts had been in places, had been in countries, and we say who want to development their own software industry. So you know we continue to do it. I mean I think the other interesting thing about this is you know the pirated users are still real software users. They are still you know whether they are choosing our software or someone else is their act you know our software is next to a competitor for the same $2 a seat and they are still choosing ours. And what we have found is that over a period of time as the economy matures when people find that they need to legalize, that they need to comply with licenses, it makes you know the more sense than the software that they license is the one that they are already using. So I you know I think we continue to pick up business from people you know more complying with licenses some of these through our own efforts, some just you know more global economy with greater respect for intellectual property.

Thank you.

Your next question come from the line of Vic Cherimonny of Lehman Brothers, please proceed.

Good afternoon, question for Al. Al, when we do the math here for the expenses it looks like you know if you minus out the (inaudible) guidance, you guys sort of actually had, I think about $0.02 better on earnings. But then you kind of back into Q3 and then back the expenses incremental $10 million, it’s roughly about $0.02 or $0.03 lower, if I look at the consensus numbers and my numbers here. Is it fair to say on EPS, I know you are not going to be specific?

The -- what we are trying to get across because I mentioned is for the full year of spending would be about the same and you look at the revenues at there and -- but that’s exactly how to look at it, your model is reasonable but I can’t give you the guidance.

Okay, and just a follow up, licensed revenue was about $10 million shy versus our estimate here but subscription was obviously better and backlog coincidentally was also about also better, just trying to get a sense going forward given the shift in the business, what should be you be estimating for licensed revenue growth going forward in Q3 as well as the full year, since its clear that Q1, here the very strong big bookings quarter. Is there also, did you have some large deals that came through towards the end of the quarter that may have impacted subscription just trying to get a better sense in the shipment models here.

Well, you know we’re not -- never happens, we are still not. We tend to have a lot of small bills -- packages that deliver a lot of productivity but not a lot of money. If you can also look around that license line though, keeping mind that the commercial -- of 24%, as we mention though the upgrade goes to that line, they don’t go to the maintenance line and the upgrades are actually down but the commercial seats are very strong and it is consistent with the trend we’ve seen for the last couple of years, of course the upgrades are what we predicted offset by very strong subscription growth. In terms of what’s coming, I think what you have seen for last year is kind of like a blue print and the trends have been consistent for a long time.

Okay, and then just two follow ups real quick, on AutoCAD, LT the discount that’s offered is about 62%, I believe, can you give us a stance, it is the first time that we’ve seen such an aggressive discount. Why you think that the case and what impact if at all it could have on margins and then lastly Japan better than expected, why the turn around all of a sudden in Q2?

So, I think, talking you about overall discount but that’s not a number you’d be familiar with but I think if you are looking at the LT cross grade, as we pointed out in the past getting people to more purposeful, industry solutions makes more sense. When you look at the lifetime value of the customer on a purpose built tool, it just makes the economic sense though, if we can incent people to do that consideration and make that move -- will be great.

And lastly on Japan?

In Japan? I think your question was about Japan?

Yeah, Japan was better than expected, I know you guys had a little bit of trouble in the last quarter and the quarter before, so we --what was -- you just talked about some of the trends that took place and how you expect that to going forward?

I mean we talk about Japan last time. I think there is some improvement in Japan, I think we have more work to do, we continued to work you know. They are continuing to work on Japan and so, I think we are pleased where we ended up this quarter but I think we still feel that there is more to be done there.

Thank you.

Your next question comes from the line of (inaudible) Asset Management, please proceed. Unidentified Participant Yeah, one of the items in your -- is platform technology, revenue growth and that’s slowing down to 11.5%, would you mind to talk about at what's going on there in that area?

Okay, you have same questions what -- percent?

Platform.

Oh, platforms. I think we are just seeing in the platform is the slowing of the upgrades. The upgrades yes, now that we mentioned the commercial -- you speak numbers for that 2D is which is like 23%, so it’s looking pretty good, but as we mentioned before, yeah the upgrade is we’ve been expecting for a long time on our balance.

Okay, so in that case the 3D -- if there is a movement to the 3D then that numbers should have been little bit better than what it has reported because if the movement is going to continue to 3D then the cross-grades are not happening at the momentum at what you are expecting then, is that the way to look at it?

I’m not sure I understand the question, could you repeat it?

I was wondering about 3D revenue growth, you mentioned that was 37% but the platform technology growth was slower or lower because of not significant activity in upgrade. Now, despite the 37% growth in the 3D revenues you mean to say the cross-grade which should have taken place optimistically or momentum is little bit slowing down, is that the way to look it

Oh no, we don’t actually don’t separate your upgrade numbers for details like that but you know, what we have an upgrade, we have one-step upgrade, two-step upgrade, three-step upgrade, and cross-grade. What's driving the decrease in upgrade is not cross-grade it is the upgrade numbers -- these people coming back is upgrade and experts that should -- coming from.

I mean the other thing I would say is that I mean I think the important thing is to continue to look at the combinations of the subscription and the upgrade in that case.

Okay. On general macro economy you said the picture is still mixed and you don’t see any slowdown of your business in the -- do not see a slowdown for the business, but at some point of time you would be still effected because if we look at the housing market which has slowed down dramatically you mentioned that the building industry still looks good but there is a lack of growth due to person. Now how should we view that -- I think there is enough personal out there but the lack of growth due to personal seems something, which is really odd. So could you just -- just expound on that, what you are seeing in that industry -- in the building industry and also in the manufacturing industry.

Sure, I mean the one thing I would say is you know, maybe -- explaining why we always are kind of -- that residential housing I mean much of the housing that’s built in places like the United States doesn’t require a lot of design software. So if you build a track with two or three different designs and you build 3,000 homes you don’t actually use much design software. Where you know, if their indication of where our design software is used in the building industry tends to be in places like commercial. So office buildings, suburban office building, shopping malls, there is a lot used in renovations or conversions you know, for retails or something else. So that’s where you see it. It’s also with industrial applications, factory buildings, etc. so that’s where it really is and that’s why you know, we are pretty dismissive when people bring out housing starts as an indication of anything because it really doesn’t tie to our customers. I think -- to a more general question, our business is not immune from changes in the economy. We do however feel somewhat insulated just due to that diversely of -- you know, they talked about the diversity of the industries we serve, the diversity of geographies, we’ve talked about small and medium businesses I mean in some ways the lack of large deals and so we are not large deal sensitive, these are thousands of these actions that are done over the quarter. So small purchasing decisions, you know, in many ways you know while we can focus on that side we also have to jump to the other side and remember as long as we continue to build compelling applications that create more value for the customers they are going to find the money to do it. Many times the cost of our software is not really prove they’re determined of them adopting it. So the cost software is only a small fraction of the total cost of ownership. So I think many people you know are moving forward and that’s true within a band in terms of the growth of the economy. I really think you know and there had been several questions about this today. I think there are places where we hit the car drills that the extremes you know in extreme boom times and you know and in extreme bust times we are obviously you know going to be affected by that.

Okay great thanks Carl.

You’re welcome.

Operator, I think we have time for one more?

Your final question come from the line of Daniel Cummings of Bank of America Securities, please proceed.

Oh thank you, couple of questions. I wanted to clarify the effects of impact quarter-over-quarter you said $8 million is favorable. We were calculating like $10 million and I can’t remember now if we’ve calculated from the beginning of the period or from when gave the guidance. But what is the implication of that? Would you have been at the low end of your revenue guidance without the assist quarter-over-quarter and if that’s the case you know obviously you know posting a penny or two pennies surprised, in spite of that it’s pretty good you know if you could give us some color, additional color on why they are spending under rent to that degree and then I had another question, I’ll ask you if you could just clarify that first.

Okay, so when we do our guidance we use the change rate at that point in time impacted on the revenue expense. If you compare the change rate they -- they were three months, they will have -- not much. Our forecast for our guidance was pretty accurate in terms of what the change rate were like in the past quarter and remember last quarter you know we told you that we even were taking our full year range out to someone to cut the foreign exchange rate clearly was variable versus what the risk was anticipated. So there is really no surprise in the foreign exchange rate the expense -- for revenue that was pretty much as expected.

But there was movement in other words you’ve got a benefit quarter-over-quarter.

Right and the same benefit we expected three months ago and they are --

Okay all right that’s good. The other question I had was I know with Alias it seems the number is still seem to be a little light in terms of what we were expecting. Do you attribute that to the fact that you had the product launch end of July and will those numbers you know get substantially better over the next six months, and then sort of related to that I know they had the automotive prototyping suite. How soon before Autodesk gets a benefit from -- presumptive you know retooling of the North American auto lines in other words get rid of all the SUVs and start you know delivering us some really small efficient smart cars and so forth you guys have to have -- be looking at some benefits from that all old cycle.

Let me take the revenue question, the yearly revenues are almost exactly at our forecast. We are -- basically that helped us, the integration have gone really well, they got really good sales people, the sales people know what they are suppose to do, the customer’s attitude about price its right on track now there is still the further revenue write down in Q2. It takes a year to get rid all of it but most of it hit in the first half. There was -- in Q2 but Alias is right on track for revenue so we will have to do that.

You know I think -- question, I mean I think there are many more question marks certainly about the American car industry. I don’t really want to take out my crystal ball too much about the auto industry. I mean the one thing is we are really enthusiastic about the Alias products that are used in that part of the market. I would say yeah, that’s on a worldwide basis, so I think what we are going to see in some of the emerging economies probably are faster move than may be in some of the major US auto makers. The other interesting thing we are seeing is nowadays it’s a little more blurry, the lines between where these car makers are and many of what you consider to be the foreign car makers have many of their design studios in the US and so I expect to see summer sales of that into foreign automobile makers with the design studios here. But we are really enthusiastic about this product, I mean one of the things when you look at something like most of the automobile market, the way they do their business its often a commodity business and the distinction between them -- the differentiating factor is their design. That design may be in terms of aesthetics, that design may be in terms of engineering performance, but those are both areas where this whole move to 3D better enables you to build better products based on aesthetics or design or fuel economy, aerodynamics, those are all the things we are talking about with the simulation and the analysis and so, we are enthusiastic and we think one of the things we really like in the acquisition of Alias was their products that were suitable for the auto industry.

Okay, thank you.

Operator, I think we will wrap it up now, for people who have additional questions please feel free to call me, Sue Pirri at 405-507-6467 and we will look forward to talk to you later.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect, good day.