Good morning, ladies and gentlemen and welcome to the Xerox Corporation fourth quarter 2006 earnings release conference call hosted by Anne Mulcahy, Chairman and Chief Executive Officer. She is joined by Lawrence Zimmerman, Senior Vice President and Chief Financial Officer. During this call, Ms. Mulcahy and Mr. Zimmerman will refer to slides which are available on the Xerox investor website at www.xerox.com/investor. At the request of Xerox Corporation, today's meeting will be tape recorded. Taping and rebroadcasting of this call are prohibited without express permission of Xerox. After the presentation there will be a question-and-answer session. During this meeting, Ms. Mulcahy and Mr. Zimmerman will make comments that constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements reflect management's current beliefs, assumptions and expectations and actual results might differ materially from those projected in these statements. Information concerning factors that could cause such material differences is included in the company's 2005 Form 10-K and third quarter 2006 Form 10-Q filed with the SEC. We do not undertake to update these forward-looking statements as a result of new information or future events or developments. At this time, I would like to turn the meeting over to Ms. Mulcahy. Ms. Mulcahy, you may begin.

Thank you and good morning, everyone. Thank you for joining us today. If you will turn to slide 4, we will provide you with a summary of our Q4 results. I'm pleased with our Q4 performance and the progress we're making in key areas of the business. It's consistent, steady momentum and it's delivering solid returns that contributed to another year of double-digit earnings growth. We reported earnings per share of $0.22 and net income of $214 million; that's on a GAAP basis and includes the $0.16 restructuring charge. Excluding restructuring, we delivered adjusted EPS of $0.38, an increase of 19% from Q4 of last year and ahead of our expectations. We're building our annuity through strong install activity, document services and color and the real measure is in the post sale improvement. Post sale and financing revenue grew 5%, contributing to a 3% increase in total revenue. This includes a 3 point benefit from currency. Equipment sales were down in the quarter, a dynamic of mix and price. Install activity, the driver of future post sale revenue, remains strong in key markets and I'll talk more about that in a moment. New color products and high page volumes from Xerox color systems continued to generate positive results. Color revenue grew 13% in the quarter and now represents 37% of total revenue. Gross margins were 41.1% in the fourth quarter, about flat from Q4 '05 and an improvement from Q3. We typically see an uptick in margins in Q4. Looking ahead, as we balance price investments and the dynamic of product mix, we expect margins will stay in the 40% to 41% range for the full year. Selling, administrative and general expenses were 23.3% of revenue, down 1.3 points and at the lowest in more than 15 years. The reduction…

Thanks, Larry. I will summarize on slide 17. So here is a look on really how we performed on all fronts for the full year. Revenue was up $194 million, 1% due to the benefit of stronger post sale. Although equipment sales were slightly down, we're confident in the strong pace of install growth in key markets and the flow through from install activity to drive annuity growth. Annuity at 2% growth turns the corner in 2006, the benefit of our focus on color and services. Annuity growth from digital was up 4% for the year, DMO was up 6%; and light lens was down to $339 million, all solid indicators of future progress and future revenue growth. Our cost and expense management continues to be a key strength. We balanced cost and investments and took the right steps to ensure we're competitive in the marketplace. Our full year adjusted earnings were $1.05, that's year-over-year earnings growth of 17% and well in line with our commitment to deliver 2006 earnings in the high end of the $1.00 to $1.07 range. So as Larry noted, we significantly strengthened our financial position during the year. We generated $1.7 billion of full year cash from core operations, exceeding expectations of $1.2 million to $1.5 billion. We acquired companies that broaden our share of the fast-growing document management and production color printing market. We returned to investment grade and we bought back $1.1 billion of Xerox shares. It was a year of steady improvement across the board and we're ready to do it again. Turn to slide 18 and we'll look at what we expect in Q1. We believe our strategy is sound and it's closely aligned with attacking the growth opportunities in a $117 billion market. In 2007 you'll see activity that strengthens our leadership in color, accelerates the new business of printing, and expands our offerings in document services, all of which fuels our profitable annuity stream. We're confident in our ability to execute effectively on a business model that generates significant operating cash flow. We're financially strong and remain diligent about reducing costs, generating cash and prioritizing profitability. This momentum will continue in 2007. You can expect consistent steady improvements based on a solid strategy, well executed that delivers value for shareholders. For Q1 we expect to deliver earnings in the range of $0.21 to $0.23 per share setting the stage for continued earnings expansion and profit growth in 2007. So thank you all for listening, and Larry and I will now be pleased to take your questions.

(Operator Instructions) Your first question comes from Shannon Cross - Cross Research.

Hi, good morning. With regard to the product introductions that you're talking about in '07, can you give us an idea if they are geared toward the lower end, the higher end? Also, are these predominately just refreshes of existing products or are you expanding to new markets?

I think what we've said about new product introductions is that will be more than double than last year. If you remember in 2005 I think we announced about 49 products. We refreshed the entire product line, so actually 2006 was a little bit slower and we're going to pick up the pace now as we come into 2007. They will be across the board. As I indicated, next month we will be making a series of announcements in the office. As you could imagine, it is primarily in color and it will be both new and refreshed products. So you are going to see, I think, a very robust set of announcements as it relates to office products. It won't just be products. It will be channel expansion as well which is as important obviously as the product portfolio. And then on the production side it will be a first half approach. It will be both enhancements particularly as it relates to highlight color as well as what I would call new market opportunities as it relates to our TIP technology, the tightly integrated parallel printing technologies and continuous heat. So you're going to see, I think, a really good mix of both enhancements and new product offerings that will certainly be a stronger array than we saw in 2006 just because of the cycle of product announcements.

You've obviously undergone a number of recent restructurings. Where do you think you stand with regard to benefit from those? What can we expect to see rolling into '07? I'm sure it's baked into your expectations, but just trying to figure out how conservative you are on that side.

Well, I think our restructurings really enable us to first of all, enable the kind of investments we make in terms of price and mix and also to stay really efficient on the cost and expense lines. I think we've said in the past and I will say it again, is about 50% of the restructuring really addresses SAG and R&D and about 50% addresses cost in terms of gross margin. I think it will be paced throughout the year. One of the things about restructuring is it takes a little longer to get payback in Europe whereas in other parts of the world it is quicker. So it will clearly be paced throughout the year; there won't be any disproportionate impact in Q1 versus balance of the year, just based upon the regions that we do restructuring in. Most of it is focused really on infrastructure rationalization and enabling some of the offshoring activities that we talked about, so sustainable efficiency going forward.

Okay and then just one final question on Fuji Xerox. They recently were quoted talking about 50% revenue growth over the next three years. Just curious if that matches what you're expecting from them? They talked about a lower cost color production engine as being one of the drivers of the growth. Anything you can share on that?

I actually went back and looked at that announcement and they're talking about a 50% revenue growth in the production segment, which is really almost an emerging market in Japan. It is a very small part of their business today and they are, from both a focus and a market expansion perspective, looking to do more in the production market. Great in a number of ways: a lot of its new revenues which is important. By the way it also indicates the strength for products like iGen and DocuColor which will be great for our business, but it is on a small base. So I don't want to get overwhelmed on the leverage from that particular announcement, simply because it is growth on a small production base because of the digital production market in Japan is much smaller than it is in the rest of the world.

Okay, thank you.

Your next question comes from Ben Reitzes - UBS.

Thanks a lot, good morning. Larry, can you talk about your cash flow expectations for '07? Obviously good cash flow in the quarter you just had. Particularly what you're expecting for your free cash flow, including CapEx. Then the uses of that cash going forward, what do you need in terms of acquisitions and expectations for repurchase?

Good morning, Ben. First of all, I'd say that right now we're not going to update our outlook or guidance on cash. As we said at the investor conference, $1.2 billion to $1.5 billion cash flow and we're at January 23rd so we're inclined to just leave the cash flow. As far as CapEx I think we expect next year to be around the same number it was in 2006 which was $290 million to $300 million. That includes accelerating some of the systems work we're doing in Europe to try to reduce infrastructure and have better processes there. The uses of cash, if you look at 2006, our cash flow depending on how you look at it, total cash flow $1.6 million or $1.7 million full year cash flow. For CapEx, which was $300 million, we used for Amici and XMPie which was almost $300 million and then we bought back $1.1 billion worth of shares. So we used the entire cash flow to enhance our hand and to enhance shareholder value and we're going to do the same. You saw we accelerated share repurchase as we saw good cash flow in the fourth quarter and so we're going to keep our eye on that and where acquisitions are and use the cash in the right way.

Any particular areas that you feel are gaps or you don't want to give any edge to your competitors?

I think it is consistent with what we said. I mean we're interested in services acquisitions would be important. XMPie was a software. There could be some distribution. So we are open to anything that will play our hand better.

I think we've got a great track record, Ben, now with the Amici and the XMPie acquisition, we're really pleased with the performance of those and I think it's a great base to build upon going into 2007.

Also Anne, I've asked you this before, but competition-wise some of your competition has been delayed on products, some of it is out there. If you could talk about where you stand and where you feel you are competitively in terms of what kind of product rollout schedule you're going to have for the year that you feel like sharing or even directionally, just so we can stack things up?

I think we feel really confident about the positioning. We don't actually provide as much detail on our future products as our competitors have provided. We like to get a little bit closer to the launch dates. The fact is that with the kind of product rollout launches that we have this year it is across the board, I'm really feeling quite comfortable that we're going to be able to both face off and surround any competitive announcements. We're pretty aware of them because most of them have been out there talking about them. We are both on the production color side as it relates to whenever the Canon product reaches the market; certainly on the black-and-white side, very strong office color. There will be lots of announcements there. Solid ink we're very confident. I talked about TIPP which is really enabling a very high-speed cutsheet offering that we think will particularly be attractive to both publishing markets; and continuous feed as well which will be a part of the product array this year. So there is nothing I feel that we are not addressing from a product launch perspective. And I think we've got to great intelligence in terms of what it's going to take to compete successfully.

Thanks a lot.

Your next question comes from Jay Vleeschhouwer - Merrill Lynch.

Thanks, good morning. I'd like to ask you first to comment on geographic conditions, specifically Europe. When we go in detail through the market data by vendor, by segments and the like, at least for the first three quarters of '06 Europe seemed to be underperforming North America and Japan. Units looked okay, but spending was not good as best we can tell, industry wide in Europe. I'm wondering if you could make some observations at least as far as your business there is concerned? Secondly on the equipment sales side, do you think that there will be any quarter in '07 or perhaps even the entire year where you would have flat to some positive year-over-year comparisons, or are we going to continue to see some negative comparisons over the course of the year in constant currencies?

Jay, that last part of the question, you're talking about total revenue or equipment sales?

Equipment only.

Equipment only, yes. So let me begin with geographies and say that on the European side, what has been quite frankly buffering us against what I would call a more aggressive pricing environment in Europe on the hardware side has been our success in services in Europe. So in total I would say our European business might be performing better than the market because we are leveraging our services success to offset some of the price investments that are being made in Europe at a much more aggressive rate than the U.S. and that is actually been true for a while now. So that is not terribly new news. I think North America has been consistent and obviously DMO has been a real plus. As we've actually strengthened each of the regions that we deal with in DMO, the compounding impact on DMO performance will continue to be a strength going forward. So there is nothing that we see in terms of systemic weaknesses in any geography that would be a real standout from a portfolio perspective. In terms of ESR, and it's almost important that we step back a little bit and look at this strategy and say that our focus is always going to be now on placements and post sale. This is all about the metrics that are going to drive post sale improvement in specifically color and services. As you saw from that annuity scorecard that Larry presented, the vast majority of our metrics are going in the right direction and will have a very positive influence on post sale. So we are less focused on the equipment sales side and, quite frankly, are looking much more at the activity growth since whatever it is, it varies between 5% and 10% of pricing investments we make on the hardware side do not flow through to post sale. So it is almost like the aggressive investments we make can only help us win downstream. I do believe, Jay, product launches, they will be stronger in 2007, and we know that a lot of the equipment sale performance really does coincide with product announcements. So we are hopeful that the aggressive nature of product launches for 2007 will be a plus on the equipment sales side. Also, of course, all of our outlooks are kind of pre-acquisition oriented. And if we do pick up the pace on acquisitions, we have a great pipeline that we're looking at today, that could also influence if it enabled some additional equipment sale, and certainly the strength of the cash flow allows us to do some of that as well. So all in all, although that is not our primary focus, we do have some levers that could drive a better performance on equipment sale but I have to say we're going to stay real focused on the drivers for a post sale annuity because of the profit leverage and the sustainability of the post sale revenue.

With respect to post sale what percentage of your color pages now is from the office? You've always said that production is the majority of pages. But have you seen any proportionate increases in color coming out of the office space?

I don't think there is a dramatic change. Remember, the color pages for production have been growing significantly. I mean every time you put an iGen in and even some of the lower end color, I don't think it would have changed the numbers dramatically at all.

I think last time, Jay, we said that there are more, if you will, color pages in office than there are in production. We grew color pages this quarter at 36%, a higher growth rate in office than in the production business, but not by much. Over time, I do believe that the compounding impact, particularly of iGen installs, will perhaps start to have a more accelerated impact on the production pages.

Lastly, you may want to hold off on this because you said you'd talk more about the channel, but at least for now what do you think some of the incremental revenue opportunities might be out of the channel or for that matter, the execution issues in terms of your channel strategy?

I think that we do believe that because of the breadth of our product line up we've got more product per market segment than anybody else who participates in this space, that we are somewhat constrained by our distribution. So I would certainly look at it and say new channels, and that would be potentially different types of resellers or partners that we have not utilized before or, quite frankly, taking our open distribution a little bit more up-market would be kind of the hints that I would give you as to how we believe we could get more productivity from both existing channels and engaging new channels. That has been a big part of our focus, particularly in North America, over the last few months to really be able to deploy that. So you will see more detailed announcements about it in the next couple of months.

Thanks very much.

Your next question comes from Matthew Troy - Citigroup.

Good morning. Anne and Larry. I was just wondering, you certainly with the execution we've seen, staying on message and delivering on color and aftermarket mantras, you've got sufficient credibility to expand the message and focus in 2007. In your conversations with the board, you're now investment grade. Has the thinking changed of the prioritization changed around capital deployment? Is dividend more likely? If you could help me conceptually with how you prioritize the dividend in the future.

Well I think, Matt, I wouldn't announce if you will a change of strategy here. That is that we do believe that we will continue to deploy our full operating cash flow in the ways we have in the past. Certainly our share repurchase strategy, I think, has been well received by investors. I do believe at least for the near future that we will pick up the pace on the acquisition side and therefore flexibility is the best approach for us in terms of deploying our cash flow. That suggests that share repurchase is probably the short term better approach to optimize the overall returns in the business. I've said it before and I do believe that we will be a dividend company again, and I think that we have to look at this combination of levers and that share repurchase and acquisitions are the best way for us to deliver the best results in the near term. I believe when the time comes that we can, quite frankly, do a dividend that I'm sure that the board will be inclined to do so.

Thanks. A follow-up on the services side. My understanding and certainly you've cited in the past that the services-led selling initiative would be, while dilutive to gross margin, certainly a mix positive below the line on an operating margin basis. I was wondering if you could just give us an update directionally on where this is falling out and more broadly, how you balance the need to invest in this business up front with a need to generate higher adequate returns longer term? Are we near an inflection point where we start to see more margin fall out from the services business?

Well, I think I would say we are on track and that we've actually managed over the last few quarters to be pretty predictable in terms of how we think about the services impact. I mean the good thing about services as opposed to hardware is that you have a lot more flexibility of when you invest. We invest obviously when we see and have very strong indications about the pipeline and, if you will, the backlog that we have on the services business as it relates to hardware R&D are years in front of actually the delivery. So I think we've been pacing it very well from an investment and return perspective. We're really pleased. We believe that the 40% to 41% gross margin is absolutely maintainable with the impact of the services growth that we plan for this year, but as we said, the real opportunity here is that services deliver a very strong operating margin and obviously provide us with incremental growth. So far, so good. Obviously the bigger our base of services gets the less volatile it is with single deal implementations and some of the volatility, if you will, of the start up costs associated with new contracts. So fourth quarter was a great quarter for us, great growth, great signings and very good margin performance. Our intent is to stay the course.

Last one on the expanding scope and focus front, you've given us an update around some technologies you'll be rolling out around book publishing and other areas. I was wondering, can we expect to hear more from Xerox on the photofinishing front in 2007? What might your approach be? How do you approach that market? You certainly have, at least on the periphery of some industry trade shows, had some interesting technology showcased. PMA is coming up in a couple of weeks. How do you think about that vertical and the opportunity there? Thanks.

Yes, I think we are very much focused on it and we actually announced an image quality enhancement to our iGen that we are rolling out that absolutely is all about capturing a bigger share of the photofinishing market. Obviously the Shutterfly win was a huge one but we've got a lot of other examples where more and more iGen placements are being structured against the photofinishing opportunity versus the traditional commercial print marketing. You mentioned PMA and we're there. We will have our biggest presence that we've ever had there so from a marketing perspective I think you'll see us very much front and center in terms of marketing to that capability as well.

Thanks, Anne.

Your next question comes from Bill Shope – JP Morgan. Bill Shope – JP Morgan: Great, thanks. Anne, just a bit more clarity on the sources of growth or the potential sources of growth going into '07. Obviously it looks like you're going to continue to look for post sale momentum. How should we think about hardware mix and pricing acting as a counterweight to that as we progress through the year? The second question is going to be on the acquisition area. Should we assume that you'll still be focused primarily on small services and software-focused assets or should we assume that there is a possibility you could potentially consider acquisitions with an equipment bend to it?

Let me talk a little bit about sources of growth for 2007 on the hardware side. For us, pricing although it is significant and certainly has impacted the equipment sale line, it's been pretty consistent, 5% to 10%. That is what we plan on, that is what we see and it has given us the elasticity to continue to grow our placement. So I don't see any major shift in the pricing side of this. On the mix side, obviously the faster we grow color the faster we'll grow revenue in total. There is nothing more important for us in the short term than the rate of color growth and that is why you'll see obviously the emphasis on color placements and colored launches to really fuel the growth on the color side. But we also recognize that the biggest downside for us has been the mono-production side so we're going to be very focused on maintaining our participation in mono production -- and by the way, maintaining our strength in mono office where we've actually increased placements and share throughout the year. So we are in great shape as it relates to the office side where we've actually grown our office mono business primarily through our services contracts. So that has been a positive story. I think that the story on the hardware growth opportunity comes from continued focus on placements, primarily color and the strength of the product launch schedule for 2007 and to the extent we do some things on the channel side to get better distribution, I think that is clearly an opportunity as well. On the acquisition side, I would still say our priority is services and software in the sense that that's really the value add for our business and where we think it makes sense to really bolt-on the kind of things we've done with Amici in terms of vertical services practices that deliver great returns, are a natural fit, accretive quickly. We like those kinds of deals a lot. But the possibility I would say of doing something outside of that is there and it would be opportunistic. I would focus less on hardware, as I said, than I would on distribution. I think we would be more interested in an acquisition that enhanced distribution than we would in, quite frankly, hardware capability which we feel we've got the appropriate and best line up in the industry today. So I think that possibility is there, but as I said, it would be opportunistic.

Your next question comes from Keith Bachman - Banc of America.

Two questions if I could. First off, congratulations on the nice cash flow. My two questions are first on the operating profit, it looks like your operating profits on production as well as office equipment was just a little over flat in terms of year-over-year growth. Roughly half your operating profit was driven by the other category. Just wondering what is in the other category?

I would actually recharacterize that a little bit, Keith, and say the office operating margin actually had a nice bump and production was kind of flat. Other did help us a lot and the value-added services part of the other was really what drove the improvement. So we are very pleased about that. You'll see that certainly flushed out in the MD&A as well. But the other piece of it is DMO.

Sorry, Anne, just to be clear, I'm talking about dollars, the actual dollar contribution to your operating profit so it was roughly flat in production and office. But, yes, DMO was basically half of it and then the other category was essentially the other half. I'm not sure what you mean by value-added service -- oh, that is where you run all your services through?

Absolutely. All of our consulting services go through other and that is really where we had it and there was a little bit of the bump as well from Fuji Xerox income there but it was primarily value-added services.

Got you. Okay, that is helpful. Thank you. The second question is on the post sales number, I'm assuming that currency impacted post sales roughly equivalent to the rate that it impacted total revenues so that is an assumption, feel free to correct me on. But if I look at the September quarter and the December quarter in terms of the year-over-year growth rate of post sales, it was roughly flat or even down a little bit in the December quarter. How should we be thinking about that going forward in terms of the year-over-year growth rate of post sales? Will that continue to bump up a little bit? I was surprised I didn't see a little bit of a bump in the December quarter given the higher MIF.

You are right, and it actually was a bump. This is where rounders can be a little bit challenging. If you looked at the third quarter it actually rounded up from I think 1.6 to 2 points, so you saw a 2% improvement in post sale; it was 1.6 improvement. In the fourth quarter it was a 2.4% improvement and it rounded down to 2%. So it was almost a point better and a very nice bump from what we would view as all the right drivers. So unfortunately having to drop off and do just a 2% didn't really describe the strength, but if you look in absolute dollars it was actually a very, very good bump in post sale.

So should we think about that as a trend going forward and just continue to see expansion there as we look out into '07?

Yes, I think if you looked at and there was a chart that Larry showed that looked at the post sale constant currency improvement quarter to quarter and you would see some quarters it's a little bit less than other quarters, but it is really consistent. And I think if you average that out that's what you should expect going forward. The only caveat I'd say is that actually that light lens declines will begin to mediate a little bit and have a little bit of less of a positive impact. But having said that, I think you can look at our trajectory over the last year and say that is a really good indicator of what you can expect in post sale going forward.

Okay, thank you.

Your next question comes from Chris Whitmore - Deutsche Bank.

Thank you very much. I just wanted to come back to the restructuring charges and the expected benefit. It looked like you took about $385 million of total charges this year. What are you baking into your full year guidance in terms of a payback? Can you quantify that? That would be quite helpful. Related to that, it looks like the bulk of the earnings over the past couple of years has been driven by SAG reductions as gross profits have been fairly flat. How much room is there to take SAG down further over the next 12 to 18 months? Can you give any specific targets around SAG ratios? Thanks a lot.

Okay. So on restructuring, the full year number I think was 385. Certainly we don't think about it obviously as a complete flow through simply because it helps fund some investments and some enhancements that we're making on the business model. But as I said, the pace of that isn't necessarily front loaded, particularly when you're dealing with Europe and some of the international countries the payback is longer by nature than it is from a U.S. perspective. Some of this also is done to enable and set up offshore changes in systems that also take a little bit longer to pay back. So the answer is it's not the full flow through in the first year by any means. But yet, it is sustaining I think some real systemic capabilities for the long term. On the gross profit side, I think one of the things that we were really pleased about was is that gross profit in Q4 was the source of improvement. If you look at the operating segment profit, it was the highest at close to 12% that we've seen in the last three years. So it was clearly gross profit driven and certainly that is a trend that we expect to continue and to be less reliant, quite frankly, on SAG ratios. I mean we are pretty efficient and we always certainly manage our cost ratios very tightly. But I do not think that they will be the source of earnings improvement at the pace that we've seen in the past; that it will be more of a growing revenue gross profit driven kind of improvement for 2007 and beyond.

Are you finished with the restructuring charges or do you expect any to recur in 2007?

We've not announced any restructuring for 2007.

Thanks a lot.

I think we have time for one more question.

Your final question comes from Carol Sabbagha - Lehman Brothers.

Thanks and just a couple of questions. Given that equipment sales may not be the right number to focus on for '07, would you expect in '07 that your total machines in field should be up versus '06? Would you expect sequential improvement given your focus on installs?

Yes.

Then in the high end, in the production black-and-white space if we looked back through 2006, do you think you gained or lost share in total high end production?

You are talking color and mono or just mono?

No black and white, sorry.

Mono, yes. I think share has been relatively stable. We may have lost a couple of points, Carol, but overall I think it was pretty stable in terms of what our mono share was. I think we've been hovering around the 68% to 70% share. Certainly if you look at it, I know in the U.S. we gained share there at about 4 points and I think it was relatively flat in Europe. So maybe we did actually gain a couple points of share. As we said, mono production is not going to be a source of growth for us. We're going to participate and gain share but we're going to grow because of highlight color, full color and continuous feed.

One last quick question on that. When customers are trading down from high end mono to light production, are the number of pages that are being done on the light production unit similar to the high-end production? I mean is it where they had overbought before or the number of pages actually dropping down on an install basis?

I would say that the pages are going in multiple directions, Carol, but light production devices clearly do less than the high-end cutsheet production pages. What we're seeing is it is that those pages are going to more units. Some is going to color, some is going to light production, some is going to highlight color, some is going to continuous feed. So it is not precise but I think we're not losing the pages, they are just going to different places. But light production machines average less than the high-end cutsheet machines.

With the close of '06, how are iGen new unit sales in '06 versus '05?

We are really pleased with the finish on iGen and had a great fourth quarter. Our population in 2007 is 50% higher than it was in 2006. So that is a huge, both revenue and profit, driver of growth for us and we think of the flow through to 2007.

Thank you very much.

Thank you all. We certainly appreciate your interest and participation today. Have a great day.