Welcome to the Xerox Corporation first quarter 2010 earnings release conference call hosted by Ursula Burns, Chief Executive Officer. She is joined by Larry Zimmerman, Vice Chairman and Chief Financial Officer. During the call, Xerox executives will refer to slides that are available on the web at www.xerox.com/investor. At the request of Xerox Corporation, today’s conference call is being recorded. Other recorded and/or rebroadcasting this call are prohibited without express permission of Xerox. (Operator Instructions) During the call, Xerox executives will make comments that contain forward-looking statements, which by their nature, address matters that are in the future and are uncertain. Actual future financial results may be materially different than those expressed herein. At this time, I would like to turn the meeting over to Ms. Burns.

Good morning, and thanks for joining us today. We’ll get started on Slide 3. We’re very pleased with our results for the first quarter, which reflect solid performance in revenue, operational improvements and cash generation. We also recognize that this is an unusual quarter in our financial reporting, so before we go into too much detail, let me walk you through what we’re reporting and how we’re doing it. Our acquisition of Affiliated Computer Services closed on February 5, so our first quarter GAAP numbers include about eight weeks of ACS’s financial results and show revenue up 33%. To provide a clear year over year compare, we’re also reporting on a pro forma basis, which assumes that ACS was in our 2009 results for the same period. First quarter pro forma revenue was up 5% or 2% in constant currency. During our fourth quarter earnings report, we said that following the acquisition, we would differentiate between GAAP and adjusted earnings both in our guidance and in actual results. By doing so, we believe we’re providing more transparency to the fundamentals of our business. At that time, we expected $0.24 of adjustment of the first quarter, which we included in our guidance. We ended up with $0.22 and Larry will walk you through that detail in a moment. Therefore, on a GAAP basis, we’re reporting a $0.04 loss for the quarter. On an adjusted basis, w delivered earnings per share of $0.18, above our guidance of $0.11 to $0.13. Cash from operations were also very strong. We generated $375 million in operating cash and closed the quarter with a cash balance of $1 billion. Through disciplined cost management, and capturing savings from restructuring actions, our operating margin of 8.5% was up 1.5 points on a pro forma basis. This reflects improvement…

Thank you Ursula and good morning. We delivered first quarter results above our guidance, and as we started to see some positive improvements in trends compared to2009. I believe our commitment to increasing our distribution capacity, consistent cash generation, and relentless cost and expense management have positioned us well. The ACS acquisition is going extremely well. The business continues to grow and the team is focused on delivering synergies. As Ursula mentioned, with the current size of our services business, we thought it appropriate to change our segment reporting to be consistent with how we will focus and manage the company. Our segments will be; first, technology, which includes the equipment sale revenue and post sale revenue of our product businesses. Management services revenue have moved to our services segment. Our second segment is services, which includes document outsourcing, business process outsourcing and IT outsourcing. And third, other which is essentially our paper business and small and miscellaneous business and other corporate expenses. We believe going forward this will provide the clearest insight into our business. We also show a pro forma format, which adds ACS results to2009 to have a valid comparison. So let’s first start with technology on Slide 6. Technology revenue grew 6%, 3% in constant currency. In the quarter, it’s over 50% of our business at $2.5 billion with a segment margin of 9.4%. We’ve categorized the lines of business in technology as entry, which includes all A4 devices and desktop printers, mid range that includes A3 devices that generally serve workgroup environments in mid range to large enterprises, and high end which includes production printing and publishing systems that generally serve the graphic and communication marketplace and large enterprises. Al of these lines have positive overall trends and color performed well across the board. In…

Thank you, Larry. I understand that we’re having a few technical problems on the lines. We’re hoping – they’re working on it in the background, and we’re hoping that when we get to Q&A that it will be brought back in line. That’s a good lead in to our status on the acquisition of ACS. We’re about ten weeks in with the acquisition and making very good progress on every front. Most of the synergies with corporate governance were captured shortly after the close. It was one big bucket. We’re now piloting some of ACS’s proprietary practices with Xerox’s technical and management services leading to productivity gains. Through our cross selling in over 100 accounts, we have strong traction to deliver on our revenue synergies and we’re already validating the use of advanced imaging for data recognition and ACS’s claims processing, automating more steps in typically manual workloads. We’ll spend more time on all of this, the synergies in particular at the investor conference on May 4, but in short, we remain very confident that we’ll deliver at least $100 million in profit synergies during year one with upside potential to $150 million. By year three, this will ramp to over $75 million. Now let’s turn Slide 12 to wrap up and then Larry and I will take your questions. Our company is now the world leader in business process and document management. Through our expanded offering, we’ve become more differentiated in the marketplace and we are leveraging our global scale, our renowned brand, and our innovation in ways that add more value for our business, more value for our customers, and ultimately more value for our shareholders. Our first quarter results indicate that we are on the right track. Revenue was up. We delivered strong cash flow and disciplined cost management helped drive improved operating margin. As a result, adjusted earnings were above our guidance for the quarter. To strengthen our industry leadership, we’re continuing to invest in innovation. In fact, we just launched our new presses in office systems with more to come throughout the year. So, we remain quite confident in our global competitive position and are seeing strength in services signings and of course, our channels business. We feel well positioned to deliver continued revenue growth and strong cash and earnings expansion throughout the year. For second quarter, we expect to deliver adjusted earnings of $0.20 to $0.22 per share. For the full year, we now expect adjusted EPS to be at the high end of our previous guidance of $0.75 to $0.85 per share. Thanks again for joining us today. Sorry for the technical difficulty. Now I’d like to open it up for your questions for Larry and I.

(Operator Instructions) Your first question comes from Benjamin Reitzes – Barclays Capital. Benjamin Reitzes – Barclays Capital: I wanted to ask you about your longer term earnings targets. Now you’re at the high end of $0.75 to $0.85, frankly actually it seems like you’re running above the high end there, and then the midpoint of your other years have been $1.00 and $1.15 I believe. Are you looking on track there or with the better than expected pace right out of the gate this year and towards the end of last, are you running at the high end of those ranges?

I would say right now, we’re not changing any guidance for 2011 or 12. Obviously the better we do in 2010, the numbers, our ability to achieve in 2011 will improve, and I think as we talked about at the investor conference and as we look forward and see more results in 2010, we’ll take a hard look at that, but as I said in my script here, we’re cautiously optimistic going forward. Benjamin Reitzes – Barclays Capital: Is there also with regard to synergies, you have $100 million to $150 million in costs and no revenue synergy in your model for ACS still I believe. In terms of the cost, would you say you’re right in the middle of the plans of $100 million to $150 million or is it looking better than expected? The same with revenue. Are you seeing anything a little earlier than you expected that actually may bring some revenue synergies to the table this year?

I think where we are, which is what I said earlier, we are very, very confident of $100 million from a cost synergy perspective. We have team as you are aware because we spoke about it before, working on all the lines of synergy, especially on the cost area, so we’re very confident with the $100 million and we are definitely targeting our organization. I’m targeting the organization to hit the $150 million or even higher. But I think right now, we have our eyes clearly set on getting the $100 million. As far as revenue goes because of the way these deals are structured, both in the BPO, especially in the BPO space, there’s a lot of work to do even after you actually engage the customer to stand it up and actually have it flow through the revenue. So we took a measured approach on the BPO revenue synergies. We’re working hard to get revenue earlier. The first one we get and we’re allowed to talk about it, we’ll tell you. If it comes, it will be great and we’ll tell you about it. We’re working on it but I wouldn’t put a lot in the bank for early revenue synergies. Benjamin Reitzes – Barclays Capital: How was Europe and how are you looking at the for the year, especially in regard to the noncore ACS here on.

I think we’re having difficulties in Europe in the same places that everyone else is, Greece and Italy and Spain, but even in those areas, we were not surprised by anything from a bad perspective. Our receivables are solid. Our revenue is good across the board so Europe is doing fairly well. Benjamin Reitzes – Barclays Capital: It grew about the company average?

It grew. It wasn’t hard to grow over 2009 by the way, but it did grow.

You're next question comes from Shannon Cross – Cross Research. Shannon Cross – Cross Research: Can you talk a little bit more about what you’re seeing on the supply side, clearly up 15% year over year, what sort of in that, how we should think about it with regards to the price increase that I think when you price in April, and also what you’re hearing from customers, any more anecdotal information you can give on page volumes which clearly are improving.

Let me start with supplies. We did have a strong supply quarter. It’s important to note, and I’m glad that you brought it up, that we had, the price increase we announced that would take effect on April 1, the normal process is that the buyers, or our resellers, our channel people would buy ahead of that price increase. So we had about a $70 million - $60 million to $70 million improvement in supplies quarter over quarter and half of that is because of the supply pricing increase. So I would expect as we go forward in quarter two and quarter three and probably quarter four that we normalize back to a normal growth level which is probably low single digits for supplies and not stay at the level that we had which was we had double digit supply increases. So supply pricing helped us, but strip that out, we did have increasing page volume which was good and some channel restocking which was normal. So I think supplies will get back into a normal range, even pre 2009 for the rest of 2010. As far as what I’m hearing from the rest of the customer types and the industry in general, color is interestingly taking off again. It’s doing well. We have some new offerings that help that. Color Cube is great. The 7002 and 8002 that Larry mentioned earlier, we just launched the 8001 device as well, so we expect – it’s been happening, and we expect color to continue to be strong. Enterprise accounts and the graphics art market continues to be stressed, so equipment activity is down on a year over year basis. It’s weak. The good news there is that pages are increasing. I look at pages because it’s an indicator that people who…

BPO, you are correct that the star of the show this quarter was definitely BPO. By the way, BPO we expect to grow faster than any of our other service segments, faster than ITO and faster than document outsourcing. It is great. Great is probably an overstatement. It’s very good and we’re pleased with it. The segments that’s we’re seeing growth in are in health care and finance and accounting and education, so I think just about every segment is doing fairly well there in the BPO space. In the ITO space and in document outsourcing the weakness is associated with what we’re seeing with other people in the ITO space, which is an extension of contracts, not signing new business necessarily, but extending the contracts that they have. And on any kind of technology plays that we have businesses that are buying tech hardware, we’ve seen extensions there as well. So ITO and document outsourcing in the first quarter, we’re still waiting for a turn there. Signings are good in ITO and document outsourcing. The pipeline is good, so I think we’ll start to see that turn throughout the year. Shannon Cross – Cross Research: Can you talk a little bit about puts and takes on working capital as we go through the year. Any sort of things we should keep in mind now that you have ACS in place with some of the parts of working capital so we know we forecast correctly.

Working capital generally was a use of cash as you saw in the first quarter with inventory growing and A/R growing and accounts payable coming down offsetting them both. I think two things happened in the first quarter. Normally we have inventory and A/R as a use of cash in the first quarter, particularly with the fourth quarter that we had last year. We did $2.2 billion last year. We did significant amount of improvements in inventory the whole year in A/R and I think going into the first quarter looking at trying to go after growth and some volumes we buildup inventory and we actually grew revenue which kind of takes your accounts receivable up. So it was not surprising to me that we grew both of those. I think what we’re going to see during the year is a moderation of that and hopefully by the time we get to the end of the year – now this also depends on well we do on revenue, but I think we’ll see a moderation and it’s not going to affect our ability to make the $2.6 billion.

You're next question comes from Mark Moskowitz – J.P. Morgan. Mark Moskowitz – J.P. Morgan: As far as the California Medicaid deal, how should we think about that in terms of similar sized deals being able to be captured going forward on a quarterly basis or should we normalize our expectations for the funds run rate for the rest of the year?

The California deal is clearly a large deal, and we don’t expect every quarter to have deals of that size, probably one of the biggest deals that ACS has signed. So I would not model those into your normal going rate. Obviously when they happen, we will tell you. It’s really not that easy to predict them. A deal of that size is just amazingly large. So through June of 2012, there are about 30 Medicaid deals that are available to come up for renewal or for bid. Only five of them – we have very few of them. So we’re going to compete for every single one of them out there. California was one of the biggest that’s available to win, even of all of them. The good news is that we won it. We’ll compete for the others as we go forward, but I would not net, net, do not try to model these things into your going rate. It’s not an every quarter kind of thing. Mark Moskowitz – J.P. Morgan: Anything that was learned from that win that you are able to expand now to try to capture maybe some incremental or other verticals as well?

Obviously, one of the things that we do is pay attention to how we win and what formula we used to win. ACS is really good at this. As we said, our penetration here is low, not because other competitors are winning, but because States are still doing a lot of this work themselves, so we will use California and other Medicaid platforms that we have to sell to other States. For sure, the platform is extremely strong. It is a foundational platform so we don’t have it create it every single time we go through. Every one we win makes the next one a little bit easier to win, especially when you win a really big one. And then we’re actually throwing some of the Xerox offerings into it and makes it even significantly more attractive to the client. So net, net, I think we are positioned very well here, very well in this space. It’s hard to do. It’s hard to sign, and after you sign it’s hard to stand up. And we’re the best in the industry in the market and expect to win more, but not in every quarter. Mark Moskowitz – J.P. Morgan: Looking longer term could you help us understand any update to the number of deals to underpin your year three revenue synergies? Has there been any change there? And as we layer on that synergy potential, how should we think about the pricing curve that you must fight or contend with in terms of renewals? As you renew some of the EPO deals in years three and four, what’s going to be the discount rate we should assume? Is it going to be 5% or 10%?

The number of deals that we need to win to hit the synergies that we originally laid out in our original case hasn’t changed. We said that we had to win somewhere around three deals, three reasonably sized deals to actually meet the synergies that we had laid out in the BPO space. I think there’s no new news on that. As far as pricing, there’s no new news on that either, meaning that pricing, especially for renewals, you renew at generally at a lower price than you had the previous one. The good news about renewals though is that we can also actually drive technology or improvements in the process that makes the margin actually hold. Pricing is generally about 10% decline and we actually in the latter years of a contract are better operating the contract than we are in the beginning. So when we resign it, we actually hold or maybe improve margins because we have a lot more knowledge about how to extend the deal better. And then we’re applying our Xerox technology by the way which is also synergy case that we spoke about to actually automate even further the deals that we have. Mark Moskowitz – J.P. Morgan: Any sense in terms of the renewal for this year. Is there a disproportionately higher level of renewals up in the next 12 months versus say the next two years?

The number of renewals are not unusual and our win rate is no unusual. Usually, we renew about, a number of deals, about 20% of the deals in the year, and the deals are about five year life and we win, hold 85% to 90% win rate, always hoping to get to the 90% range. So nothing unusual has happened in that space at all.

You're next question comes from Ananda Baruah – Brean Murray. Ananda Baruah – Brean Murray: I was wondering, you mentioned your confidence in achieving the revenue synergies as we go forward. I was wondering if you could offer any anecdotal comments or stories about your experience whether it’s go to market or feedback you’ve gotten back from customers as you walk through what you see as the merits of the partnership.

We have been out since the day we signed as you know and what we’re hearing is the value proposition is compelling. We’ve seen no change in that whatsoever. The value proposition is compelling. Individually in the BPO line, they were compelling before the deal, and with the addition of Xerox, the brand, the innovation in particular and the reach that we can extend to them, clients continue to call us and engage. So we’re seeing a very, very good uptick there. We are also too early to say any signups, but we also in the pipeline – so we’re doing work today and the pipeline grew as you know 5% in both BPO and IPO and so it’s strong. It’s looking good. No pauses in my expectations for the cost synergies or the revenue synergies in year one or in the out years. Not a lot of revenue synergies in year one, but in the out years there are. So I am confident there and I’m hearing nothing but good things about this. Ananda Baruah – Brean Murray: You mentioned that customers are actually calling into you folks. Does that happen to a degree greater than you expected or is it – can you give us maybe a little more context around that part of the dynamic.

It is happening to a degree greater than I expected. I expected in the beginning for people to call, but they’re still calling. That’s actually good. By the way, calling doesn’t mean that we sold anything yet. It means that they want to find out some more information, but it’s definitely a good start. The other thing that’s happening, we said that we would train people in North American and train people in Europe and we have done that. We’ve trained nearly 200 North American account people to actually go to market and actually start selling the value proposition of the combined company. We’ve trained Europe. We’ll train Europe and the rest of the world next month, so I expect to even not only people call us and see the pipeline grow, but for us to continue to far more effectively see it grow. We’re very encouraged with the early results. Ananda Baruah – Brean Murray: Touching base on new product introduction that you have planned for this year, and this week was obviously a big week on Tuesday. I hear you saying that expectations or tone from enterprise hasn’t picked up substantively on equipment yet. I believe your expectation for projects this year is to be pretty healthy in terms of cyclical. Can you recap for us how you view product introductions this year relative to past years and, I wouldn’t assume that you’re going to introduce new product if you don’t expect there to be a demand for them at some point. Is it a fair expectation for there to – that this could perhaps be a tailwind as you move into the second half of the year? I just want the proper context.

The product introductions this year are actually pretty interesting in that the numbers are not as high as in some of our previous years, but the lines that we are introducing are amazing. At the end of last year we introduced the 7002 and 8002 and that really helped us solidify and actually increase, and improve and solidify our position in the EPC space, EPC high space. We are just earlier this week we announced the 800 1000 which will help EPC is color by the way, just in case people on the line don’t know. We also introduced the product right below I-Gen, the I-Gen 4 which is 100 page a minute, meant for lower volume, more flexibility. It has a fixed housing which allows us to expand our reach significantly, more page, paper types that you can handle. So strong product. Also refreshed a whole mid range color line as well. Color Cube is on line. You are right. We would not launch products if we didn’t expect to sell them, and so we clearly expect to sell them, and I expect one of the weaknesses that had from last year, we see a little improvement in the first quarter, I expect for the rest of the year to continue to see improvement in equipment revenue. That’s what this is all focused at is equipment revenue, and then driving the pages off that and I think that we have an unbelievable lineup that can do that. Ananda Baruah – Brean Murray: With cash remaining so solid, is there any chance that you may choose to pay the debt down sooner if you have an opportunity or would you still stay on the cadence you’re expecting even if you do have the opportunity to do so.

I would assume we’re staying on the cadence we showed here.

You're next question comes from Richard Gardner – Citi. Richard Gardner – Citi: Before the downturn started, we were talking about your revenue growth rates accelerating because color was becoming a big enough percentage of the business that it was going to start to have a really meaningful impact on growth rates and it feels like during the downturn, we’ve seen black and white production decelerate more than folks had expected as companies tried to steer people toward online billing and bill payment and so forth. I’m wondering if you’re worried at all that black and white production just doesn’t come back and is a little bit more of a headwind during the next upturn than we were thinking about before the recession started. Just wanted to get you general view on that.

My view is that black and white production will continue to be stressed from now into the future. We have – it’s not only because of the downturn. It’s because Xerox primarily are offering clients a lot more options to do things in color at an amazing price. So we launched what the Docu Color 1000 and if you look at that machine, or the Docu Color 800, these machines actually fundamentally change the way that work gets done – Color Cube as well. So I do not expect us to see a snap back our bounce back to the heyday of black and white. I am not – and by the way, we also took restructuring focused on those areas to continue to drive profitability in this segment of the business. But I am not overly concerned about that because the strategy is to continue to invest in color so we can drive more and people towards color, and we are doing that. So I don’t expect there to be a significant recovery in black and white. What we’re trying to do is make sure that clients move towards color and use their current black and white technology as efficiently as possible, and help them to do that by providing them with document services as well. Richard Gardner – Citi: I know you’ll probably address this at the analyst meeting next month, but I was wondering if you’re still comfortable with the, I believe it was 3% to 5% top line growth for the core Xerox business that you were talking about before the downturn started as well from a longer term perspective.

I am. Richard Gardner – Citi: It looked like part of the upside in the quarter at the gross margin line was driven by services segment margins which were up I believe 130 basis points year over year. To what extent was that driven by the lack of new contract start ups in the quarter either because of disruption around the acquisition or just the general sluggishness that we’re seeing in ITO across the industry right now and if we just forget cost synergies for a minute, do you believe that these margins are sustainable or is it a situation where as the new contracts start coming back in in a quarter or two we’re going to see margins back off a little bit.

I think there’s a couple of things at play here, but I do think what you said is right, which is that we have a lot of our contracts reaching an operational phase where they get better profitability than they would otherwise. You know it would be a good problem to have to get a lot more early business, have the margins go down a little bit which would lead to a lot of profit growth in the future. That’s one of the dynamics of this business, but I think there are other things. I think the mix was better in services from a standpoint of BPO and ITO going down as a lower number. They had good volumes growth which flows through to the bottom. And I think from a total company standpoint, we’re at the 33% to 35%, so there’s a point swing up or down just like at Xerox we were 39% to 40%. I think there’s a point swing there depending on who grows and how they grow, but I don’t view it as a big exposure going forward.

I just want to add that signings did grow total, total company signings did grow and BPO signings grew as well, so it’s - I don’t want you to walk away with the impression or the understanding that signings, we had poor signings and that actually contributed to the increase in margins. Actually not so. In BPO we had strong signings growth. Richard Gardner – Citi: You talked about the fact that corporate governance represented the early savings associated with the one to one fifty range that you’ve given this year. I guess my take away from your comments was that you had perhaps realized some of those corporate governance savings a little bit faster than expected. Was that the right take away from your comments if so, should we assume that you’ve already enjoyed a pretty significant portion of the $55 million that you expected to come from that area?

Actually, what I said, and if I didn’t what I meant to say is that there were some I would call them low hanging fruit from the governance perspective. If you have two of something, you need one of them, you do that. We did that. We did that part of the savings on plan as we expected. The rest of the corporate governance savings and all the savings are also on track, but they didn’t all already happen. The low hanging fruit, we needed to implement one, and every other one we’re working on.

You're next question comes from Keith Bachman – Bank of Montreal. Keith Bachman – Bank of Montreal: The two questions I wanted to ask relate to some of the questions Rich just asked, but on the gross margin, I wanted to try to just understand why specifically you think it’s going to trend back down. I understand you only had a partial quarter of ACS, but within that context, I wanted to understand what did currency do? You called out a couple of times in the reports that you provided. What did currency do and how does that impact your thinking amongst other things.

The only reason I said that margin might trail down a little bit is – it’s not a currency point, but supplies were, as Ursula said, supplies were a big bubble in the quarter because of the price increase and they’re very profitable. That gives you a couple of points of margin. That’s really the only reason you would see it. And ACS as we said before, ACS was two months versus next quarter will be three months and they have a lower margin because it’s a services business. They have a very good operating profit, but it’s a tradeoff there in gross profit margin. The currency didn’t have much effect year to year. The yen has been bouncing around $0.93 to the dollar so it might have even helped us a little bit in the quarter and may not help us in the next couple of quarters. So with all the moving parts in gross profit margin to land on an exact number is very difficult and sometimes a lower margin, you actually do better in total. So we’re confident we can be in that range and we’re confident we can deliver the earnings no matter what it is. Keith Bachman – Bank of Montreal: On BPO, had very strong margin profile and you illustrated or talked previously about the good volumes in that business. It was up quite a bit year over year on a pro forma basis. How should we be thinking about that over the next couple of quarters?

I think it’s what we said on the other answer, is that it depends on the mix of new business coming in and the business that get into operational phases, so we have a little bit here of operational phases where it’s more profitable than we started at the beginning. If we get a lot of new contracts it’ll vary. But again, I think generally speaking we’re going to land where we said we were going to land here no matter what, operational ones or not. We’re going to land on the earnings we want an we’re going to be in that range of gross profit margin.

You're next question comes from Doug Ireland – JMP Securities. Doug Ireland – JMP Securities: In your assumptions in your guidance, could you give us a sense of what the share count is that you’re looking at coming out of this partial quarter?

I think it’s probably better if you call us Jim Wesco and go through the share counts. I think that’s a better idea. Doug Ireland – JMP Securities: The same thing with the tax rates.

The tax rate is 32%, is what we’ve said. Doug Ireland – JMP Securities: On the head count, I noticed that you had done some reductions of 2,300 but I’ve also seen some announcements of hiring in specific area, so I was wondering if you could give us a sense of what happened to the headcount and maybe your proportion of where that is in Cogs versus OpEx.

Headcount is essentially on the headcount number when we announced the deal, about 130,000 people give or take 100 people here or there, so we do let people go. We sign deals and bring people on, so we’re about where we said we were, about 130,000 people. And where they are Cogs and OpEx, actually, I think it’s around evenly split, maybe a little bit weighing in one direction or the other, but this is another one we can give you details in a follow up. Doug Ireland – JMP Securities: I know that you were working on reducing the Cogs and that ACS has reported almost all of their expense as Cogs, so I was just trying to figure how that had come together after putting the two companies together.

The places where we wanted to reduce in the base Xerox we didn’t do and I don’t know the mix now when you add back ACS, but we’ll get to you on that. But we did or are, some of them are done, in place to actually take the headcount actions that we said in our cost actions that we said in R&D and SAG and so on and so forth in the base business, so nothing has changed there. Doug Ireland – JMP Securities: Around you cash flow generation, it’s a phenomenal amount of cash flow that the company produces or is forecast to produce. Your free cash margin in this quarter was about 6% and it’s pretty closely related to your operating margin. I’m just wondering if you could talk a little bit about the linearity of your free cash generation plan over the next year and maybe going into 11 and how that relates to your operating margin. I know that you have a target for your free cash margin. I’m just wondering how we get there.

I think it’s a little bit of an academic question. We manage every quarter on cash and every quarter significant lines in the cash flow have been met including inventory, accounts receivable, accounts payable, not to mention earnings, and so there isn’t necessarily any kind of specific formula I can give you. I think if you look back in our history, you’ll see that we continually deliver and exceed the numbers that we give and each quarter is managed sometimes. Last year we started off we did $22 million of cash flow from the first quarter and we did $2.2 billion for the full year. So if I had given some percentages on the first quarter it would have been drunk and disorderly conduct. So it’s your ability to manage within the quarters and work your way to the numbers that you said you’d deliver and that are appropriate. So I don’t think there’s any specific number. At the end of the year we take some percentage of revenue and you say that’s what we deliver. I don’t know if that’s helpful, but that’s how we do. Doug Ireland – JMP Securities: In your uses of cash you have your cash fairly well allocated between running the business and paying down debt. Before you had talked a little bit about doing more of your small channel acquisitions. Does that mean that is not on the table for awhile? Is there any change in that thinking?

We have not change in the thinking of how we’re going to acquire as we go forward in BPO or in channel. It would be small. They would generally tuck in under the running business today, so no change at all.

You're next question comes from Ananda Baruah – Brean Murray. Ananda Baruah – Brean Murray: Is there any way you can give us a sense of some of the areas where you saw things play out much more positively in the quarter than you thought they may have back in January when we spoke with you last.

The only place that played out better than I thought was probably in usage. BPO I expected to be strong, acquisition synergies and the go to market plans, all we expected to be strong. Obviously things worked out very well here in the quarter and hopefully next quarter they work out that well as well. The one place that I had positive unexpected news was the enterprise usage. Ananda Baruah – Brean Murray: Would that be you didn’t account, if you backed out the usage that was because of the purchasing ahead?

There’s no usage associated with the purchasing. They’ve bought it. We have not had them use it. But I’m talking about in large enterprise accounts, activity didn’t but pages, and printing on our install machines did. There’s nothing indicating, there’s nothing special about that. You just asked whether I was surprised about that. Thank you very much for your time all of you on the phone, and let me close with a reminder that we’re hosting our investor conference on May 4 in New York City, and online in the live webcast, and we look forward to your participation there and we can get into more detail. So enjoy the weekend. Thank you.