Ladies and gentlemen, thank you for standing by, and welcome to Synopsys Earnings Conference Call for the Second Quarter of Fiscal Year 2014. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions).Today’s call will last one hour. Five minutes prior to the end of the call, we will announce the amount of time remaining in the conference. As a reminder, today’s conference is being recorded. At this time I would like to turn the conference over to Lisa Ewbank, Vice President of Investor Relations. Please go ahead.

Thank you, Rich. Good afternoon, everyone. With us on the call today are Aart de Geus, Chairman and Co-CEO of Synopsys; and Brian Beattie, Chief Financial Officer. Before we begin, I would like to remind everyone that during the course of this conference call, Synopsys will discuss forecasts and targets and will make other forward-looking statements regarding the company and its financial results. While these statements represent our best current judgement about future results and performance as of today, our actual results and performance are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. In addition to any risks that we highlight during the call, important factors that may affect our future results are described in our most recent quarterly report on Form 10-Q, and today’s earnings press release. All financial information to be discussed on this conference call, the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures and supplemental financial information can be found in the 8-K, the earnings press release and the financial supplement that we released today. All of these items are currently available on our web site at www.synopsys.com. You can also easily access information on your mobile device with our new IR app available for android end IOS devices from google play and iTunes. With that, I’ll turn the call over to, Aart de Geus.

Good afternoon and thank you for joining us. Our fiscal second-quarter results were very strong and solidify our expectations for the full-year. In summary, business was robust in all key areas. After many years of investment and innovation we launched several important new products including a game changer in digital design. And we closed the acquisition of Coverity bringing us into the emerging market of software quality, test and security. Highlighting our financial results; we delivered revenue of $518 million and non-GAAP earnings per share of $0.65 and a $112 million in operating cash flow. For the year, we’re now including the impacts of the Coverity in our guidance. Based on the combination of solid organic business and the impact of purchase accounting on Coverity, we expect 2014 revenue of $2.050 billion to $2.075 billion and non-GAAP earnings per share of $2.45 to $2.50. We are also raising our operating cash flow guidance to a range of $450 million to $475 million primarily reflecting strong collections in the organic business. If you look at the customer landscape, we see continued focus on balancing the drive for better faster differentiated products with a continued caution around cost. If there is any change in our customer’s mindset, it is the mounting pressure to develop and utilize a more and more advanced technology. In addition, companies are relying more on complex software to differentiate their products. And their customers are becoming less and less tolerant of software with quality and security effect. Synopsys is uniquely positioned to be the partner of choice for companies facing these challenges. With our technical expertise, standing all the way from deep silicon to the hardware software intersection to software, we now deal to nearly all companies that utilize technology to drive their business. Our edit emphasis on…

Thank you, Aart and good afternoon everyone. In my comments today, I will summarize our financial results for the quarter and provide you with guidance for Q3 and the full year of 2014. In my discussions, all of my comparisons will be year-over-year unless I specify otherwise. Now Synopsys delivered a very strong quarter highlighted by strong business levels and considerable cash flow generation. Additionally, we continued our stock repurchase program and completed the Coverity acquisition and two smaller tuck-in deals. Total revenue was $518 million, above our target range. As expected revenue from the Coverity product sales were very modest, reflecting the standard purchase accounting haircut that was applied to deferred revenue during the first six weeks as part of Synopsys and I will say more about this later. About 90% of Q2 revenue came from beginning of quarter backlog and we have one 10% customer. The weighted average duration of our renewable customer license commitments for the quarter was about 2.8 years. We continue to expect weighted average duration for FY14 to be approximately three years. Turning to expenses now, Q2 total GAAP cost and expenses were $454 million which included $32 million of amortization of intangible assets and $19 million of stock-based compensation. Q2 total non-GAAP cost and expenses were $393 million, slightly above our Q2 guidance due to the Coverity acquisition. Non-GAAP operating margin was 24% for the quarter and 23.4% for the first half of fiscal 2014. Turning now to earnings, GAAP earnings per share were $0.40, non-GAAP earnings per share were $0.65 exceeding our target range even with the $0.02 dilution from Coverity. Our non-GAAP tax rate was 19% for the quarter below our target due primarily to a more favorable geographic mix than forecasted. As a result, we think that the non-GAAP tax…

(Operator Instructions). And we’ll begin with the line of Rich Valera with Needham & Company. Please go ahead. Rich Valera - Needham & Company: I had a question on ICC II, was hoping to get some sense of the potential financial impact from this. I was wondering first you could say if it’s a maintenance upgrade or if you’ll get incremental revenue when customers upgrade to it. And then how do you expect it to sort of roll out to your customer base? It sounds like general release in July but how would we expect this to roll out to your entire customer sort of timing and how that might affect bookings and revenue as we look out over the next couple of year?

First this is not the maintenance upgrade, this is a new product. The only refinement on that statement is that we have a number of customers that can have access to new technology provided that they buy off the price list at that point in time and so they can replace existing products with the new products which will bring new revenue opportunities for us. But also brings fabulous leverage for the customer because it is truly dramatically better. So from that perspective it is a product that’s priced higher but also valued much higher than what we have, which is arguably already the best on the market. Having said that the adoption rate I expect to be quite fast, because when you have that level of productivity improvement and of course we have tried to design it so that the changeover issues are very minimal, you can very quickly move to the new product. People that are on the constant pressure to get to better design sooner -- we are immediately intrigued by us, I think that’s why we have already lot of demand. Nonetheless, we will pay high degree of attention to make sure that the early customers do very well and get good results and are very well supported. And we do that with all new products and actually all new releases to make sure that we feather them in but the interest is certainly super high right now. Richard Valera - Needham & Company: Question on EVE, you have been fairly quiet about EVE since you bought it a bit ago and now you’ve done a lot of work, sort of integrating into verification compiler and you’ve got ZeBu 3 out, so just wondering; one, wouldn’t expect that there has been a lot of growth there, just due to last commentary that could be mistaken, so I would be happy to get your thoughts on that. But two, do you see that product is maybe reinvigorated and having a better sort of medium term growth outlook than it may be had in the past, your thoughts?

Excellent question; it’s actually one year - the absolute capabilities of the product itself, and -- multiple generations of this product, and two, the degree of integration in our offering. What we just announced this quarter was really the next generation of the product. So a product that is substantially faster again for substantially higher capacity; the integration has many-many ramifications. We actually did not say all that much about it. And we have made excellent progress there, but we have still more work to do. And I would say, stay tuned on what will be coming there because there are a lot of capabilities that will be leveraged by a much better degree of integration. Richard Valera - Needham & Company: Well enough, and Brian, question for you on the revenue guidance. At the risk of splitting hairs here, if you look at the midpoint of your old and new revenue guidance for the year, you are up $15 million you guided to $20 million to $25 million from Coverity, so you know that would imply sort of down $5 million to $10 million in the base business. Is that accurate math, and might sort of this rounding, just wanted to get your take on that.

I would look kind of, Rich, this is just a narrowing of the range, given again we had good momentum for the first six months. We feel very comfortable on our Outlook now with only six months left to go. We see a fact that our run rate is up, and it’s really effectively narrowing of the range, and again the Coverity piece is performing exactly as we expected, even slightly ahead in the first six weeks. Richard Valera - Needham & Company: Brain, just wanted to understand, you gave some nice color on Coverity sort of with and without deferred and that color suggested roughly 50% deferred haircut in the sort of seven-month contribution this year which seems quite high. Is there anything unusual about their business model and how do you view that level of deferred haircut relative sort of a typical acquisition in the type of business?

Yes, we see actually based on all the valuation and work that we did and our third parties did a 69% haircut on the overall deferred revenues that we acquired at the beginning of the company. As you know just the accounting rules are that you do get to keep the cost to generating that revenue going forward plus there is more margin, and in a way the good news is that the cost of ongoing is not that significant. And therefore the haircut at 69% is typically a little bit higher than what we would see. We also saw the deferred revenues being a little bit higher relative to the annual run rates in companies we have acquired in the past have had. Explaining those two factors have combined to slightly higher deferred revenue haircut than what we’ve seen in the past.

I’ll now go to the line of Krish Sankar with Bank of America, Merrill Lynch; please go ahead.

Thanks for taking my question, actually have a few of them. The IC COMPILER II definitely seems very interesting and exciting for you guys. Just trying to figure out, you guys don’t breakout your current IC COMPILER product which is probably part of your core EDA revenue. But do you think the IC COMPILER II could be $100 million revenue product next year?

Actually you said, you felt we don’t breakout the individual product, but there is no question that IC COMPILER will, I think fairly rapidly be added on top of IC COMPILER or replace a number of IC COMPILERS that are in utilization today because it has really the ability to do the same amount of work in literally a fraction of the time. And it is interesting by the way to see how different customers use the capability very differently. Some say, well, now I can go to market faster, but there are also quite a number that say, oh now because of that I can actually do more optimization and bring out some more area or some more speed and thus make my product either lower cost, lower silicon cost of higher performance, that’s higher differentiation. It’s always intriguing to see how when one provide something that is truly radically better; the ways that which it gets used is not always predictable. The reason am sharing this is because we have already very good evidence of the very good results from multiple customers and so I expect it to be phased into utilization very rapidly. From an economic point of view this is all part of our usual three year ratable model. And we expects and hope that this will utilize up a little faster the contracts that we have in place with customers and that’s always an opportunity to grow our business.

Got it Aart that’s very helpful and I just had a couple of more questions. The last earnings call you guys kind of like flick verity you guys didn’t done your full year revenue little bit because FinFET customers are seeing some kind of like push outs in the schedule. So I am kind of curious what the status is now do you think they’ve been working to the issues or do you think that it’s still going to be a while before you start seeing those revenues slowing for you?

No actually we see a lot of business around FinFET and partially because we are not just working with customers also part of putting place to their ecosystem that’s necessary in order to do advanced FinFET design and what I mean with that our the IP that is necessary around that and a number of the stores that are looking at the yields optimization. And so you’re absolutely right that a number of the providers of FinFET technology did a number of adjustments to their schedules but also to the competitiveness of their product. And so the race is absolutely on among the people providing the silicon and what we can see is that there typically two groups there is a group that is already moving massively to FinFET because they have either the super high volume or the technology needs of a very large transits account and low power and then there is a group that is saying well I am going to wait at 28 nanometer, which is exactly behaving as we have predicted already a year ago, and is going to be a big note, and then there are a number of people that even use older technologies but really squeeze them for economic benefit. And so it’s sort of advanced design at every node at this point in time but our tools have had big impact on all of these nodes because productivity enhancements lay everywhere. So from that perspective we see a lot of intense investments and a number of people essentially jockeying for being in the lead position from a technology point of view and this year we’ll see a lot of design.

Got it, that’s very helpful. And then the final question is that obviously there is a lot of M&A means the question I asked in the past in terms of capital allocation and you’re doing like I guess like minimum buybacks every quarter. Is this still the plan or is there a plan to get more aggressive on the buybacks or maybe consider dividend down the road?

Yeah, we’ve been very clear around for many years as the priority relative to our capital structure has been on new tam creation or value and earnings generation through M&A and we have put the balance sheet to work and particularly is we look at our past quarter with Coverity, we did spend total of about $368 million in our second quarter and also did a small buyback. So again our priorities are in that order of M&A first, buyback second and our debt repayment and that’s how we plan to continue to deploy and just look continue to look at all the options in front of us from quarter to quarter.

Thank you. We’ll now go to the line of Sterling Auty with JPMorgan. Please go ahead. Sterling Auty - JPMorgan Chase & Co: So in your prepared remarks you kind of talked about the pressure at the customers have in terms of the technology side but still being balanced within cost tranches I guess what I’d like to hear is in summary do you feel that your customers’ buying behavior or buying position is in a healthier position today than where it was with the at the end of last year?

Yeah, I think if you look at the chart that sort of look at semiconductor growth rates at variety of confidence meters they all look a little bit better than last year. I am maybe cautious just because I have seen so many of these for many years and so when we say they look a little bit better than means that A people are right now forecasting the second half of the year little bit higher growth in semiconductors and B the confidence send the access up by 3% or 4%. Now 3% to 4% when you’re below 50 or above 50 is all the difference between seeing good weather or bad weather and from that perspective I think that people do feel a little bit better but they are just as experienced as I am in terms of many years and so they remain careful because these all big decisions. Sterling Auty - JPMorgan Chase & Co: Sure. Switching over to IC Complier II, how is the pricing of that compared to IC Complier on an apples-to-apples basis?

Well the IC Complier II is priced higher and there is a variety of prices because there is a variety of configuration of the system including different configuration for different computer situations and we don’t disclose all the details of that. But obviously we do it in such a fashion that the value that the customer get is many times higher than the increase in pricing so that at the end of the day hopefully both the customer and ourselves are happy campers in this equation and that’s they feel very compelled to moved to this new technology because it will have good impact on them. But this is clearly a case where there is no question that there is massively more value this is not an incremental 1.3x or 1.4x better which by the way we deliver at least every year, so we have always been on a fast treadmill. This is really an order of magnitude and that just changes the whole equation of utilization going forward. Sterling Auty - JP Morgan Chase & Co: What portion of the IC complier installed base is not on a contract where they could trade into it by just buying the or paying the price differentials? So in other words, what portion of the IC complier installed base, if they do decide to move, would end up paying the full price?

I actually don’t know the answer to that, my guess would be not all that many but in general that has never been an impairment for people to move or start spending more money, if there is more value. So, the ability to upgrade from IC complier one is often there in the contracts but the ability to upgrade from other products is really there. Sterling Auty - JP Morgan Chase & Co: On Coverity, can you remind us what the contract structure is there, where I am typically wondering about how quickly the deferred revenue that you have written-off may come back into the income statement as you go through contract renewal?

Well, the first comment would be and this was part of the earlier question of, so why is the haircut bigger than what we normally see on company. Well, this was a company that was very aggressively trying to use the revenue as soon as possible in order to be able to invest in high growth. This is a great opportunity space and we will continue to try to do that at the same time we have very disciplined typically three year contract horizon. We are in the process of learning what is actually the optimal contract configuration for Coverity, as they are in the different space, software people do behave differently. And one of the reasons we are cautious before we make a lot of changes to their business is because we want to first learn what they have done to do it so well and if there are improvements or if there are things that we can apply that we have learned in our ability to scale, is we should certainly apply those because this is business that is eminently scalable. Sterling Auty - JP Morgan Chase & Co: Last question, will you maintain or expand the Coverity sales force because it sounds like it’s a different touch point even within your existing customers to sale that?

Well we will certainly retain all the sales people. We have some very, very good people there. How we structure it is precisely part of the decision process between now and the end of our fiscal year because that’s sort of a natural point to decide to what extent we integrate or not and maybe sophisticated path in the middle to take advantage of some of the practices that have been particularly good at and take advantage of some of the brand position and the company position at Synopsys is on a worldwide basis that is much more comprehensive. So, maybe it’s a long answer to say, we don’t know the answer to your question yet because we are in the process of rapidly learning.

We will now go to line of Tom Diffely with D.A. Davidson. Please go ahead. Tom Diffely - D.A. Davidson & Co.: Yes, good afternoon. I guess first small question for Brian, when you look at the EPS upside in the quarter despite the slight negative impact of Coverity. Was the upside primarily driven by taxes or was there another component that was quite beneficial?

Well our revenues came in very strong in a quarter towards the higher end of what we have anticipated, so that helped us out as well. The spending, again as we are managing towards that EPS number for this year, even with a little bit of headwind, we have talked about back in Q1, we are still committed to making that earnings per share that we have addressed earlier. So, we have been watching our expenses very closely. And then the third point is as you mentioned, our tax rate and the geographic mix which does take into account the impact of our acquisitions and where they are located has provided a favorable geographical mix of our pretax income. And of course we have to catch up in our second quarter on a year-to-date basis to make that entry as well. So, all that contributed to very attractive tax rate for us and we see that in terms of very attractive tax rate for the entire 2014. So, overall that’s how we contributed. We had a great start to the year to get us on track and you can see that confidence in the full year guidance. Tom Diffely - D.A. Davidson & Co.: Okay. And then when you look at your cash level, I think you mentioned that it was 18% onshore. Is there a minimum level of cash you would like to have onshore when considering your potential acquisitions or share repurchasing?

Yes, there is Tom. We actually used that this past quarter, so we have about a $120 million of tax in the U.S. and that is healthy amount based on any of our commitments that we have elsewhere. So, that’s the kind of a $120 million is a good minimum U.S. onshore tax rate and for the purposes of the acquisition again very specific purpose. We borrowed a very low cost interest rate of about 1.3% and we are able to use that to leverage up the capabilities in the company. And again, our discipline is traditionally to pay that off over some period of time probably by the end of the year and again we will see our U.S. balance growing up a little bit. Tom Diffely - D.A. Davidson & Co.: Okay. Are you seeing…

I think he meant cash rates right Brian, cash rate not tax rate. Tom Diffely - D.A. Davidson & Co.: Yes.

That 120 million tax rate, you meant cash.

In the cash.

Sorry.

Cash dollars yes.

We are team here. Tom Diffely - D.A. Davidson & Co.: Okay. And have you seen a potential for more offshore type acquisitions out there most of which you look at is U.S. based?

No we look at many things all the time and as you can imagine we don’t communicate much about that ahead of times. But if you take not that long ago we did two major acquisitions off shore, one was SpringSoft the other was EVE and so the reality of worldwide taxation is such that we do distinguish between the different locations of the cash and we have to take that into account when we plan forward. Tom Diffely - D.A. Davidson & Co.: But you see plenty of other candidates out there that are on offshore basis?

One never sees plenty, one look at plenty and look at many bite you.

Tom we did three deals overall in Q2 and one significant one was U.S. based but the other two were in Europe, so again we continue to see opportunities for investing outside the country as well. Tom Diffely - D.A. Davidson & Co.: Okay great. And then when you look at the IP part of the business, have you seen an increase in competition in that space since you guys like Cadence have got little more aggressive?

Well anytime there is more competition one sees that immediately and we consider that just part of a market that is actually growing very well. And so in that context Synopsys continues to do well and last quarter was a very good example of that. But competition just tries the state of the art forward faster and that is part of why we’re an extraordinary industry. Tom Diffely - D.A. Davidson & Co.: It sounds like there is some pretty strong growth in the next couple of years as the industry moves towards more of an outsourced model. Beyond that do you see the actual IP market itself growing or is it mainly just the outsourcing portion of it that’s the growth driver?

Well that’s an excellent question because obviously initially it is outsourcing and we Synopsys have already seen multiple different ways from outsourcing stuff that anybody could design to outsourcing things that are reasonably difficult to design and where it really becomes a build versus buy decision for the customer to now outsourcing blocks that are extremely complex to build. And then on top of that extremely complex to build on the most advanced silicon technology. And so in that sense some of the Synopsys intellectual property is highly differentiated already today. So that itself is half of the answer because as people outsource more things, they also now increasingly get access to building blocks that previously would not have been able to build themselves, and I think that changes a bit the very nature of design especially in light that many of these building blocks themselves are sort of almost mini computers and therefore they come with embedded software and the opportunity for the customer to differentiate themselves more and more with the layers of software on top of that. That all sounds maybe a little complex but complexity is precisely what feeds certainly Synopsys business. And so the IP I think is a great contributor towards the next decade of very sophisticated chip design.

And we’ll now go to line of Monika Garg with Pacific Crest. Please go ahead.

The first question is on IC Compiler II with the IC Compiler II you have been -- nicely have been able to drive higher value for Synopsys with this new version of the tool. So do you think as you release the new version of the other tools in the simulation market prototype other segments that you could also drive higher value than previous generation of those tools?

Well that has been our life long objective of course as a company, in many if you look back for just a second I think it’s fair to say that Synopsys is certainly one of the reasons Moore’s law has prospered so well on the design side we have continued to support it. Going forward we absolutely see at least another decade of continuation of complexity and that involves doing exactly what we just did with all these tools, which is dramatic new improvement in light of sophisticated new technology challenges coming our way. And so just to clarify also an answer from earlier, many of our customers when they buy into one of our advanced tools, such as IC Compiler they really buy into Synopsys. And the assurance that they will be able to stay up to date and in many cases they do contracts that allow them to get the next version of the tool. And of course if there is a change in price for the next version of the tool they will have to pay for that difference. But it makes it for a smooth outlook and a high degree of assurance to have low risk transitions and get the best technology at any point in time. This applies not only tow the implementations though it absolutely applies also the verification flow and with verification Compiler this is another example of fairly radical new improvement while at the same time putting together multiple capabilities at originally were partially available only in isolation, so individual products. And from a value point of view this is a very high value because if you use a simulator and you want to very quickly debunk something simulate again maybe verify some of the aspects by using the verification IP. This is all available in one product that granted will be more expensive than just a simulator but from a value per price ratio is enormously attractive for the customer so fundamentally our job is to -- pardon the expression techonomically both the technical and economic match more as well everybody of the week and so far we’ve done that.

Thanks. I think we should now have on the EVE -- is it the hardware upgrade or is it software upgrade? And then could talk about what do you think is the installed base of EVE and do you think those people now since you have a new generation of the tool will upgrade that? And maybe you could -- sorry go ahead.

Sure, so the EVE ZeBu Server-3 is a complete new hardware machine. Now with the hardware comes in an enormous amount of software because this is -- this is very complex device that essentially maps the design that one wants to simulate on the internal hardware structure of that machine. And so the upgrades of both hardware and software but this is truly a new machine. Now a number of people essentially when they add machines, they decide which generation they want to add and mostly people will gravitate fairly quickly to the most advanced machines because they’re too the value per price invariably is the best ratio. We see an opportunity to sell more and actually you’ve heard from my preamble that we have already a number of customers that are moving in that direction.

Maybe could you take a stab at where do you think your market share in emulation can be? I mean it has lagged to the other two guys of the market.

Yes, we’ve never disclosed installed base or market share. At this point in time, we’re clearly the number three in the markets so that’s another way of say there is a lot of opportunity.

Okay, we’ll now to line of Jay Vleeschhouwer with Griffin Securities. Please go ahead.

Thanks. Good afternoon. Aart a geographic question for you first. Would it be fair to say that the very substantial sequential and year-over-year increase in Asia-Pac revenues were highly correlated to the increase you saw in your IT and software solutions business. And if that was the case, do you think that the disproportionate growth or consumption of IT is Asia-Pac can continue? Also in that part of the world do you may recall that a quarter ago we talked about the possibility that Japan might be bottoming for EDA though that’s not yet ready to inflect higher but in the quarter you saw further decline in the Japan business, was that currency for the structural weakness or what you’re thinking now about some possible bottoming for EDA in that part of the world?

Sure, so let me take them in reverse order. Japan actually it is not a decline of our business. The numbers that you see here are currency related. Now there is no question that Japan is sort of going through the hopefully the end of the their two last decades because enormous amount of change happening in the country in general and specifically in the high tech and semiconductor markets you see number of consolidations you see a number of things changing. Synopsys is now particularly well there and we expect that to continue and certainly hope that the technical talent that’s in Japan will find now a renewal phase given that their sophistication is actually quite high and connecting more to the world market is really the opportunity there. Talking about Asia-Pac, I think there are many elements there because Asia-Pac of course on one hand is a number of countries that have been highly technical for many years specifically Taiwan and Korea. And now at same time have China becoming a larger and larger in terms of its role of utilization but also in developments of chips and absorption of chips domestically. And so that country of course has come later to the high tech market and what we invariably see when new countries come to any field is that they almost immediately start on whatever the latest design methodology is. So there the question was not so much outsourcing of design one used to do it’s just outsourcing periods meaning you start write away with building blocks that are commercially available and one grows firm there. And so I think the opportunity space is very good for us there as we expect that market will continue to grow and it’s on mythologies that’s Synopsys has a lot to offer in. And so I think that AP will be - continues to be a strong market.

Can you still hear? Okay then our last set of questions then will come from the line of Mahesh Sanganeria with RBC Capital Markets. Please go ahead.

Thank you. Brian, question on the offshore cash. What is your plan for that? My question more specifically, what do you expect the tax law changes to happen -- what do expect in terms of tax changes over the next couple of years and how does your strategy with the offshore cash change with that?

As I think earlier in terms of M&A opportunities and growth outside of the United States, we believe our cash that is outside this country will remain there permanently. We have 100% permanent reinvestment position on the tax side and that is just where we will keep that offshore and we can borrow domestically at a lower cost than what we have, but it also to point out there is not a significant amount of cash offshore we’re talking $600 million to $700 million and we would expect that to continue there under the current tax regime.

Then one question for Aart in terms of your assumption for the core EDA growth of 3% to 5% where is that -- what are you assumption on that growth? Are you assuming the number of seats increasing or the content increasing? Can you elaborate on that one and maybe also talk about why can’t we get a higher growth rate considering the rising complexity and consolidated supply base? I would think that you should be able to get better growth rate than what you’re forecasting for core EDA?

Okay let me go backward on that on the growth rate first. I think it’s always little bit difficult to predict exactly where this ends up, but clearly we are for the core of that business inside of the semiconductor industry and so the semiconductor industry now 3-4 years in a row has had the growth rate of 2% to 3%. So in that sense we are getting a bigger share of that value change than our semiconductor customers at times. And that is the heart of where some of this challenges are it’s not a question of can we offer more value and make more difference and I think overtime there is certainly an opportunity for EDA to continue to grow a higher rate than semiconductors. If we look at where the value goes, I think the number of design seats will grow gradually partially because in Asia-Pac for the earlier question there will be more and more designers coming on board. But mostly the value goes into higher degree of absorption of multiple copies of the same tools for the same engineer and that’s mostly limited by the cost of the hardware to run it on. And so that sort of the balance of the equation, now I would add one more thing for us which is new and in the few quarters will gradually I think communicate more to you as we learn more is the fact that for the first time in our existence are certainly in our recently existence - we have a dramatically broader potential customer base. Meaning people we’ve never talked to and that is because as we enter or as we know have entered with the leadership position in the quality test and security verification of software. We are talking too many companies that do software that is not visibly liked to semiconductors because they’re running things on the computers. Now you can argue computers are semiconductors but the fact is most of those people do extremely complex project with all the challenges of errors and bugs and maintenance and you have what not and they are now needing increasingly the same level of quality that semiconductors have needed already 20 years ago. And so from that perspective, our outlook is going to be positively enhanced by the fact that first time we can talk to the customers that we have never met in the first place. So there is also a lot of learning but also opportunity.

Thank you. Please continue.

Well, I think we’re at the top of the hour which is sort of our cutoff point. Thank you so much for attending our earnings release. I hope that you took away that we have the strong results with a lot of exciting moving parts specifically great-great advances on the technology side and a broadening of the total TAM that Synopsys is looking at. And those are certainly exciting developments looking at our future and we hope to have your support going forward. Thank you very much.

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