Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation Fourth Quarter and Fiscal Year 2015 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. At this time, I would like to turn the conference over to Greg Secord, Vice President, Investor Relations. Please go ahead.

Thank you, Brad and good afternoon everybody. I would like to welcome you to today's call and with me is OpenText's President and CEO, Mark J. Barrenechea as well as our Chief Financial Officer, John Doolittle. As with our previous calls we will read prepared remarks followed by a question-and-answer session. The call will last approximately one hour with a replay available shortly thereafter. I would like to take a moment to direct our Investors to the Investor Relations section of our website where we posted two PowerPoints that will be referred to during today's call. First is our standard quarterly supplemental update on the financial results and the second PowerPoint is the new strategic overview presentation highlighting our leadership position in the EIM marketplace with supporting stats on both our historical performance and cloud transition initiatives. I encourage all of our investors to download both presentations. As in previous quarters we have updated a summary table highlighting OpenText's historical trends and financial metrics. Some of these metrics have been expanded to include additional detail on our cloud business under the tab Trended Financials. As a reminder both PowerPoints and our trended financial spreadsheets are downloadable from the front page of our IR section of our website. And with that I will proceed to the reading of our Safe Harbor statement. Please note that during the course of this conference call, we may make statements relating to the future performance of OpenText that contain forward-looking information. While these forward-looking statements represent our current judgment, actual results could differ materially from a conclusion, forecast or projection in the forward-looking statements made today. Certain material factors and assumptions were applied in drawing any such conclusion while making a forecast or projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information and the material factors or assumptions that were applied in drawing a conclusion while making a forecast or projection as reflected in the forward-looking information, as well as the risk factors that may project the future performance results of OpenText, are contained in OpenText's Form 10-K and 10-Q as well as in our press release that was distributed earlier this afternoon, each of which may be found on our website. We undertake no obligation to update these forward-looking statements unless required to do so by law. In addition, our conference call will include a discussion of certain non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to their most directly comparable GAAP measures have been included in today's press release, which may be found on our website. And with that, I will hand the call over to John.

Okay Greg, thank you very much. Welcome to the call everybody, thank you for joining. I will start out with a comment I am very pleased with our bottom line and cash performance in the quarter and for the fiscal year. Adjusted operating income was up 14% year-over-year, 19% on a constant currency basis, and operating cash flow was 523 million up 25% year-over-year. Turning to the financial results, I will discuss our fourth quarter fiscal year 2015 and then provide an update on our tax situation. Let me start with an overview of the impact of foreign exchange. In the fourth quarter compared to the same period last year, our revenues were negatively impacted by 45 million and adjusted operating income negatively impacted by 17 million. By line item the 45 million negative impact is broken down as follows; license 12 million, cloud 9 million, customer support 18 million, and PS 6 million. For the fiscal year 2015 our revenues were negatively impacted by 84 million compared to the last fiscal year and adjusted operating income was negatively impacted by 27.6 million. By line item the 84 million is broken down as follows; license 20 million, cloud services and subscription 18 million, CS 34 million and professional services 12 million. And this headwind continues into fiscal 2016 and I’ll return to this point later. So let’s turn to the quarter and the fiscal year results. First on revenues, total revenue for the quarter was 482.7 million down 2% compared to 494 million but up 7% in constant currency. For the year total revenue was 1851.9 million up 14% compared to 1.64 billion in fiscal 2014 or up 19% on a constant currency basis. Recurring revenue was 385.6 million for the quarter down 2% compared to 395.2 and up 6%…

Thank you John, and welcome everyone to our fiscal 2015 Q4 earnings call. It is great being back operating the business. Before I begin my remarks on the company, our business strategy and financial results, let me add a few additional comments on tax and structure by starting with some history and perspective. In 2010 we undertook a reorganization to centralize the management and ownership of our intellectual property. Why? With nearly 40 acquisitions completed by that point in time decentralized management of that global portfolio was non efficient. So we did the reorganization to among other things simplify the management of our IP ownership. After significant input from experts including the opinion from Deloitte that John referenced, we effectuated a structure at Luxemburg. We are 5 years into that structure. Centralized management is the correct way to manage our large acquired IP portfolio. We continuously evaluate our structure looking at the best ways to manage and optimize our business. You expect that of management we are committed to delivering that. There are two sets of issues here that I want to highlight one is backward looking and one set is forward looking. In looking backwards we received a draft note but as John highlighted from the IRS. Tax audits are normal course for large businesses like OpenText, look no further than the Google, and Amazon to the world. We strongly disagree with the position taken by the IRS and intend to vigorously contest their proposed adjustments to our taxes. We remained comfortable with our position and consistent with that view, we have not taken any reserves. Now let us look forward. As John noted our fiscal 2016 non-GAAP tax rate outlook is 20%. Beyond fiscal 2016 we do not see any issues that will prevent us from continuing to…

[Operator Instructions]. Our first question today comes from Steven Li of Raymond James. Please go ahead.

Thank you. John, the gross amount for the tax issue 550 how do you reconcile that with the 280 and 80?

Hey Steven, how are you? There are three components to the gross notional amount. One is the amount of tax that’s in the press release and the second and third components are interest and penalty. So the difference between the amount you see in the press release and the 550 they will talk about are interest and penalties.

Okay, and if I understood you, so even if IOS position stands your 20% tax rate going forward does not change, so this is a onetime issue?

Yes, it is -- Steven the issue is the outbound transfer for the IP back in 2010 and so it's the IRS is objecting to that transfer and seeking to tax it. And so looking back to 2010 issue on a go forward basis the current structure stands and that is why we are calling the rate at 20%.

Is there a possibility of an assessment for 2013 to 2015, so was there any other asset transfers of the Global 360?

No, there weren’t. So we don’t expect any assessments of this nature. Obviously we are constantly under audit by the IRS and other authorities so we are always going to have assessments for this and that. But on this particular matter we don’t expect any additional assessments.

Alright, just one last one, so this was -- this earnings report was significantly better with the preannouncement. Did the market improve that much in the last few weeks and how is that climate being maintained so far in Q1? Thank you.

I see, thanks for the question, Mark here. When we did our mid-June update we talked about a variety of things. One of which is we wanted to give an update on FX, and John if I got the numbers right for fiscal 2015, half the FX impact was just in Q4 line. Right, so part of that update was on FX. Second part of that update was on our cloud strategy and the resulting organization and the restructuring behind that which is done and working very well. And Q4 is an example of what we -- what the business is capable of with extreme focus and execution. We executed extremely well around the world in all our major geographies and product lines and as a highlight of what we are capable of when we fire on all cylinders. I also think it is an example of why we give annual target ranges versus quarterly because we really want to look at our business on annual basis. But it is under a specific results for the quarter as an example of what we are capable of when we fire on all cylinders.

That is great, thanks Mark.

Yeah, thank you.

The next question is from Phillip Huang of Barclays Capital. Please go ahead.

Hi, thanks. Good afternoon. I was wondering if you could give us an update to the sales cycle for your customers are transitioning to the cloud or hybrid solution, I think you mentioned last quarter typically it does lengthen by couple of quarters or so. I was wondering based on your experience whether that has -- is that still your view or has the refocused execution actually made the sales cycle not as long as before?

Thanks for the question. Well, first I will just highlight that our strategy is a hybrid strategy, right. We don’t believe that everything is cloud or off premise or everything is on premise. Customers are taking really a paced approach to where they wanted to play the technology on or off presence. And so we have taken the strategy that the world is hybrid and is going to remain hybrid for some time. As we have talked about in this cloud transition we have gone from zero revenues to a third of our business over three years while holding license where licenses is performing really quite at a consistent basis over the last three years. And our strategy is to target new spend and we will go out and sample our transactions from January on the enterprise. The near majority of them are new spend. It is not cannibalization, it is not substitution. It is new spend that we are going after. So, I think with all that and with another year of experience, we are in this for our third full year of cloud and we still have more things to learn as a cloud company. Right, 20 years of experience we get a license called out in five minutes. Getting cloud code out or multimillion dollar opportunities isn’t five minutes, it is a little longer. But I think ultimately the sales cycles are starting to look a lot like license.

Okay, that is very helpful. And also on the margin side, obviously very encouraged to see decreased target margin range, so wondering if you could elaborate a little bit on the key drivers supporting this. I know you got three years of track record to back this but was wondering if there is any drivers that you can point to over the next 12 to 18 months or so that you expect to drive this type of improvement in your margin despite the transition to a thicker mix of cloud revenues in your business? Thanks.

Hey Phil, this is John. So let me take the fiscal 2016 part of that and Mark can elaborate on the longer term. The first point to is restructuring and Mark talked about that. We announced that in May 22, we’re virtually done that restructuring on the people side and so we expect to see call it about 75% of the expected annual savings in fiscal 2016. The facility piece it’s going to take us a little longer as we waited on the last call. But of course you know the world doesn’t stand still and you can’t look at that reduction in isolation so that’s a big part of the reason why we expect to see overall adjusted operating margin increase. We continue to see significant headwinds on FX as we talked about and we are investing. We are investing in cloud and other strategic area so we put all that in the blender for next year. You know we are comfortable with the growth and margin that we are seeing. And then Mark maybe a comment on in terms of longer term.

Sure. If we look at maybe aspirational 2020 goals if you will I think the opportunity falls into three main categories. The first is automation, we ourselves are going through on assessing all our processes, all our systems to ensure we lead the way ourselves on digitalization and that’s going to represent an opportunity to get more efficient as a business, so automation and digitalization. Second is labor, and how we globally source our labor, provide services, and where we place that labor that’s why our Southeast Asian operations are real important to us and now 25% of our business and that will help us scale cost effectively. In the third, quite candidly just taking out third party product. You go across license and PS, cloud as well and just maniacal focus of we’ve acquired a lot of things and they come with third party technologies, they are moving those third party technologies in a paced and deliberate manner gives us an opportunity to continue to look towards continually to improve the efficiency of the business. So automation, digitalization, placing labor in the right places of the world, and taking up third party cost gives us the confidence in those aspirational goals.

Got it, it is very helpful. Thanks very much.

Thanks Phil.

The next question comes from Richard Tse of Cormark Securities. Please go ahead.

Thank you. Mark I was wondering you can help me reconcile the margin profile moving up. You got sort of 30 point difference when it comes to license and cloud margins yet you are ticking your margin profile, is it I am guessing on the operating cost side and if so maybe you can sort of walk me through on how that works?

Hey Richard, that was a big part of the question that I just answered and if you look at the restructuring so we committed to $50 million in annual savings and that was the people part of the savings and that’s as I said virtually all behind us. So that is probably the single biggest contributor to our confidence in being able to increase the bottom line margin.

Okay and I guess on Steven’s question, there is obviously a big difference between the guidance you gave back in May and the results there which were vastly better. Now at that time in point -- point in time you talked about the environment being fairly soft, now has the environment improved since then or is this purely because of the execution that you talked to?

I’ll continue to a point to focus and execution. The team was very excited with our changes in mid May. We talked about removing layers and getting closer to customers, and they delivered with extreme focus and execution. I also believe that the competitive environment is improving for us. If you allow me to spend a moment on that, when I look at I talked about two competitors the first is EMC and Documentum and we are very focused on competitive replacements here. We have Core and they really don’t have an online strategy which is helping us. We now have the analytics and they do not and that’s helpful for us. We have a business network, integrating your complete information flows in various industries and in various corporate functions like treasury management, cash management, electronic invoicing is helpful, like to have that integration. And with Blue Carbon and information flows, I really don’t see how they are going to catch up. So we are very focused on Documentum. Next is IBM and we had a good quarter against IBM. We are very laser focused on them. On Filenet we beat them at Daimler, T-Mobile, Prudential, U.S. Department of State, and we have Core and Blue Carbon and they basically abdicated their online ECM solutions to another party. On Sterling Commerce we beat them at large counts including [indiscernible] Marks & Spencer, ADP as well as Hasbro. On Cognos and Maximo we replace them at NorthStar and Barclays. And this is my favorite actually, that IBM Life sciences is turning off Filenet and going with the OpenText content suite. And we’ll be live next month so I guess the headline is IBM selects OpenText for content management. So what’s new, right, the organization had extreme focus and execution in Q4 and it worked. It is an example of what we can do and we continue quarter-over-quarter, release-over-release to strengthen our competitive position and I would like to highlight that strength over Documentum and IBM today.

Okay, that’s really helpful. Just one last question related to the tax issue like when do you guys figure that you are going to be at a point you resolve this or this is a decision one way or another and I guess related to that, I think in Canada and over these situations you have to sort of put up half the cash and I guess you are suggesting that’s not the case you are not creating liability but I just want to see them how the mechanics work behind this?

Yes Richard, its different in the U.S. you don’t have to put up the cash. And so this will play out in one or two ways, either it will get settled or it will go to court and the timeframe on that is a little unpredictable at the moment. At this stage we receive what’s called the draft so it’s a draft assessment and we are expecting to get another draft assessment. So it’s really tough to say at the moment how long it’s going to take to play out. I mean it’s not going to be settled over the next month or two that’s for sure. It’s going to take some time. So we commit to keep you updated as things evolve.

Okay, thank you.

The next question comes from Kris Thompson of National Bank. Please go ahead.

Great, thanks Mark just to go onto the preannouncement one last time, I am assuming that was mostly on some license catch-up and what I want to understand is should we be a little bit cautious looking into Q1. I mean is there going to be some normal Q1 seasonality where you may be pulled some deals, I figured wouldn’t close or we should be a bit cautious on our Q1 license number?

Kris thanks for the question. I can’t speak to Q1, we don’t give guidance but I’ll go back to my script right where over the last three years our license and PS business have really been performing on an absolute basis consistently, right. And think of that consistency continuing as we onboard additional cloud revenues either via acquisitions or organically. But the key emphasis is on the consistency of the performance of the license business.

Okay, were there any 8 digit license deals in the quarter?

How many as 8 digit.

No, they weren’t.

No 8 digits.

And just on the corp dev team, can you...

Couple of 7 digits.

Can you just give us an idea of the corp dev team how many bodies you have there now. You said you are playing on doubling and maybe just confirm that you are still focusing within your 5 pillars?

Yes, fair enough. So we remained very focused on EIM and all that means to us and we are not looking to expand into ERP or other types of technologies. We are looking to -- we expect to close transactions this year, we got the pipeline, and cash to do that, translate into multiple and meaningful acquisitions in fiscal 2016 and we are basically doubling the team from half a dozen to a dozen.

Okay, thanks a lot guys.

Thank you.

Thanks Chris.

The next question comes from Paul Steep of Scotia Capital. Please go ahead.

Great, thanks. Mark, maybe you can just on the latest SAP partnership, maybe we can go back and talk a little bit about the scope and the timing and maybe even what the potential of that new deal with Ariba means and maybe SAP in general how that relationship has now evolved?

Thanks for the question Paul. My philosophy is relationships though on products may come and go. And we continue to have a very strategic, on premise relationship with SAP and there is still more life in that for sure. When we look to future growth areas, SAP certainly is driving all things cloud. So we’ve actually worked through a few things with them. We have pricing models now in place where they can bring our technology into their cloud economic model. We support HANA which is their main deployment platform for all things cloud. And now more structurally on transactions we and this integration will be done over the next 90 days or so. So, it’s not a significant amount of work. There are large business network and our large business network will have a completely integrated commercial bridge. So traffic can flow between the two networks and that will allow existing and new Ariba customers to take advantage of our trading grid. They’ll win on Ariba, we will win on our trading grid. And for some of their cross gate customers we would look to bring them in as managed service customers. That were probably very deep integration into our van to our value added network. So there are multiple layers of goodness here. One is we have new economics in place for our overall technology. We are supporting HANA which is their main cloud deployment platform and then three, the commercial bridge will allow further strengthening to their Ariba platform, they will provide network revenues to us, and there will be a broader set of customers that will -- who will require a deep integration into our van, we will be able to provide them managed service.

Great and two quick cleanup questions then one, just post the 2016 sales kick off is there anything we should think about or note in the sales compensation that changed heading into 2016 that is either going to further incent the sales teams to go after cloud wins or again is it sort of an agnostic view that you’ve traditionally had.

Yes I think the plans are pretty much the same year-over-year. I think what’s different is seeing Rex down on stage who won large cloud deals and in getting commensurate commission checks. And being able to kind of feed off that’s how you do it and that’s what I can make and in having those kind of aha moments by example I think we are very powerful for the Florida organization. The plans are basically the same year-over-year but the examples of wins and the commensurate motivation professionally and monetary behind that was very evident that kick off.

Okay and then the last one just to put this IRS thing hopefully to bed, it was very clear that you’ve not reserved for this, can you just comment on with the Board and the Audit Committee did they go and get a second opinion that would have obviously led you to not take the reserve, obviously there was clearly meetings about this?

Paul as I said in my commentary obviously we take this very seriously and we have examined over the course of time the original opinion. We’ve got the right experts to help us look at the notice of proposed assessment and so there are a lot of great minds that went into coming up with the conclusion that we did. And so we are comfortable with that conclusion from an accounting point of view we hear around this table and the Board as well.

Perfect, thank you.

Paul we mind all our statements.

They are out today.

Thank you.

Alright, well that’s going to wrap up the call today. I’d like to thank you for your time. In summary we see good demand drivers coming into 2016 for digitalization, security, analytics, information management delivered strong fiscal 2015 results. Our cloud strategy is working three full years of experience under our belt and we are raising our business targets for fiscal 2016 as we highlighted and we have announced to buy back up to $200 million today. I would like to thank you for your time.

This concludes today's conference call, you may now disconnect your lines. Thank you for participating and have a pleasant day.