David Gennarelli Carl Bass - Chief Executive Officer, President and Director Mark Hawkins - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Brent Thill - UBS Investment Bank, Research Division Jay Vleeschhouwer - Griffin Securities, Inc., Research Division Heather Bellini - Goldman Sachs Group Inc., Research Division Sterling P. Auty - JP Morgan Chase & Co, Research Division Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division Gregg Moskowitz - Cowen and Company, LLC, Research Division Melissa Gorham - Morgan Stanley, Research Division Kenneth Wong Richard H. Davis - Canaccord Genuity, Research Division Ross MacMillan - Jefferies & Company, Inc., Research Division Kash G. Rangan - BofA Merrill Lynch, Research Division Philip Winslow - Crédit Suisse AG, Research Division Brendan Barnicle - Pacific Crest Securities, Inc., Research Division Matthew Hedberg - RBC Capital Markets, LLC, Research Division Steven R. Koenig - Wedbush Securities Inc., Research Division Blair H. Abernethy - Stifel, Nicolaus & Co., Inc., Research Division Daniel T. Cummins - B. Riley & Co., LLC, Research Division

Good afternoon. This is the operator, and I would like to welcome everyone to the Fourth Quarter Fiscal Year 2013 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to David Gennarelli, Autodesk Director of Investor Relations. You may begin.

Thanks, operator, and good afternoon. Thank you for joining our conference call to discuss the results of our fourth quarter and full year fiscal 2013. Joining me today are Carl Bass, our Chief Executive Officer; and Mark Hawkins, our Chief Financial Officer. Today's conference call is being broadcast live via webcast. In addition, a replay of this call will be available at autodesk.com/investor. As noted in our press release, we have published our prepared remarks on our website in advance of this call. Those remarks are intended to serve in place of extended formal comments, and we will not repeat them on this call. During the course of this conference call, we will make forward-looking statements regarding future events and the anticipated future performance of the company, such as, our guidance for the fourth quarter and full year 2014; long-term financial model guidance, including our operating margin goals through fiscal 2015; the factors we use to estimate our guidance; new products and suite releases; market adoption and expected growth rates; cost management efforts; hiring plans; business executions; large transactions; strategic transactions; business prospects and financial results; and market opportunities and strategies, including our transition to the cloud and mobile computing; trends and sales initiatives for our products and trends in various geographies and industries. We caution you that such statements reflect our best judgment based on factors currently known to us, and that actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, specifically, our Form 10-K for the fiscal year of 2012, our Forms 10-Q for the periods ending July 31, April 30 and October 31, 2012, and our current reports on Form 8-K, including the Form 8-K filed with today's press release and prepared remarks. Those documents contain and identify important risks and other factors that may cause actual results to differ from those contained in our forward-looking statements. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Autodesk disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. During the call, we will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of GAAP and non-GAAP results is provided in today's press release, prepared remarks and on the Investor Relations section of our website. We will quote a number of numeric or growth changes as we discuss our financial performance, and unless otherwise noted, each such reference represents a year-on-year comparison. And now I would like to turn the call over to Carl Bass.

Thanks, Dave, and good afternoon, everyone. We are pleased with our stronger-than-expected fourth quarter results, capping a year in which we made significant progress on our strategic initiatives and drove meaningful non-GAAP operating margin expansion, despite a mixed economy. As we near the 2-year anniversary of the launch of our design and creation suites, we couldn't be more pleased with their progress and growth. Revenue from Suites increased 50% over that 2-year period. Suites now represent 30% of total revenue, up from 23% just 2 years ago. We're delivering exceptional value to our customers, who get to utilize and experience more of our broad product portfolio. What's more, we have seen a meaningful increase in our ASPs. It's a win-win. Growth in our Suites help drive the record revenue results in both our AEC and Manufacturing business segments. The investments we've made over the past couple of years in our major account direct sales continue to pay off. In the fourth quarter, we had a record 45 transactions that exceeded $1 million in value. This is up 25% year-on-year. Even more impressive is that the total value for these large deals increased 36% year-on-year. The list of these large transactions is diversified geographically and by industry. For FY '13, large deals increased by 18%. And we're seeing increasing involvement of our channel partners in these large transactions as well. Our AEC business had record quarterly results. This was driven by strong large deal activity around the world and growth in AEC Suites. We attribute our strong growth in AEC Suites to the growing implementation of BIM across all disciplines of the AEC industry, including infrastructure. BIM 360 wins in Q4 were concentrated in construction, reflecting our leadership role in providing cloud and mobile technologies to that industry. From a geographic perspective, Q4 revenue was driven by strong results in Asia-Pacific. Strong growth in Japan and China led APAC's results. EMEA had modest growth as reported, but was better on a constant currency basis. Results in EMEA were led by strong large deal activity in Northern Europe. The Americas performance was uneven by country. Canada was strong, while the U.S. and Latin America declined. Large deal activity in the Americas at the end of the quarter was strong. I'll also note that a disproportionate piece of the meaningful backlog build this quarter was from the Americas. Growth in China was strong. Outside of China, results in the emerging economies were disappointing. Emerging markets are typically choppier than mature markets. Some of this is currency-related, but we are also working through leadership changes in India and Brazil. We continue to believe revenue from emerging economies will be a growth driver for the company over time. Usage and adoption of our cloud and mobile platform, Autodesk 360, continues to grow. Customers across a range of industries are taking advantage of the scalable computing power and flexibility provided through our cloud and mobile services. Autodesk continues to lead the industry in cloud and mobile applications for design and engineering with the introduction of new offerings. On the Manufacturing side, in just a few quarters, Autodesk PLM 360 has expanded to over 10,000 users. We're involved dozens of pilots and early deployments that are the seeds for the future. It's been an exciting and fast-moving first year for us in this space. Customers are giving us great feedback that this solution is dramatically easier to deploy and configure at a cost that is a fraction of legacy systems. Fusion 360 was introduced during the fourth quarter as the world's first cloud-based 3D mechanical modeling and industrial design product. Fusion 360 allows design and engineering professionals to more easily create 3D product designs and collaborate with others in their supply chains, all while working online. Simulation 360 is a powerful cloud-based simulation solution that we introduced last fall. Customers have used Simulation 360 to run more than 30,000 simulation jobs and are responding positively to the productivity gains, cost savings and the new business model. Looking at Autodesk 360 across industries, we saw a significant jump in the number of cloud rendering jobs completed by our customers. More than 1 million jobs were completed in the last quarter alone, bringing our total rendering jobs to more than 2 million. AutoCAD WS, one of our first and most popular cloud and mobile applications, has surpassed 11 million downloads. More than 2 million unique users now access WS each month. We are very excited about the growth potential of cloud and mobile services. We are transforming the company in the way our customers utilize the cloud to get their jobs done. Starting later this year, you will see more rental and usage-based offerings from us. These offerings will be designed to give our customers even more flexibility in how they utilize our products and will provide us with new ways to capture new market opportunities. These offerings are a significantly different model, and we expect adoption and consumption of our cloud and rental offerings to increase gradually over time. As such, we are not anticipating any significant changes to our core business model in FY '14. We've also successfully brought mobility to personal design on the consumer side of our business. Autodesk 123 Design becomes the first mobile 3D modeling application enabling users to create sophisticated, precise 3D models on their tablet, Mac, PC or via their web browser. We also debuted an Instructables mobile application, which provides users access to over 100,000 tutorials on do-it-yourself projects in technology, workshop, living and more. We recently surpassed the 50 million downloads mark for our mobile apps on Apple's App Store, which is truly amazing in just a few short years. While our consumer business revenue is very small relative to the rest of our business, it's growing rapidly. Bookings growth from advertisements in FY '13 grew more than 3x year-over-year. Over the past few years, the vast majority of our cash balance was located offshore. In December, we addressed that structural issue by raising $750 million in our debt offering. We took advantage of historically low interest rates and our investment grade credit rating, securing cost-effective new capital that gives us significant financial flexibility. Uses of this capital could include M&A, continued share repurchases and general corporate purposes. Looking back on FY '13, we accomplished a great deal, including launching our cloud platform, Autodesk 360, PLM 360, BIM 360 and Simulation 360. Sales of our design and creation suites continue to ramp, and we worked through a realignment of our entire organization to better serve our customers and drive future growth. We accomplished all of those things and more while achieving record non-GAAP operating margin dollars and EPS, as well as record billings and deferred revenue for the fiscal year. Overall, we believe our progress in each of these important initiatives positions us well as we enter FY '14. Looking forward, the unevenness of the global environment keeps us somewhat cautious on near-term growth. For FY '14, we believe we can achieve revenue growth of approximately 6%. We continue to balance our ongoing spend management measures with making key investments in our strategic initiatives and expect to increase non-GAAP operating margin by 125 to 150 basis points. As we look at the year, we expect a greater portion of the growth coming in the second half of the year. In the longer view, we remain confident in our ability to drive growth and deliver meaningful operating margin expansion. And finally, I want to thank our great employees and partners for their outstanding efforts and contributions throughout the year. Though our results were uneven, we accomplished a great deal. We are well-positioned and excited by the future. Operator, we'd now like to open the call up for questions.

[Operator Instructions] Your first question comes from line of Brent Thill. Brent Thill - UBS Investment Bank, Research Division: Carl, just on the guidance. You're coming off a fairly easy comp. And just curious to get the assumptions that are underpinning your 6% revenue guide, considering you have what would seem to be a pretty easy comp for the majority of the year.

Yes, Brent, I think there are 2 things that are competing with each other as we thought about guidance for next year: On one hand, on the secular stuff, we're certainly seeing improvements. We look out there, and you see good indications in manufacturing and certainly strong indications in construction. Data points out there, not huge trends, but certainly good data points. And I feel like we turned a quarter in Q4. On the other hand, there's no shortage of economic and political volatility. I just witnessed the news this morning, or the nonsense that's going to go on in Washington, leading up to Friday. So I think we still have a little bit of nervousness, particularly in Europe and the Americas, about how the political situation is going to impact the economic situation. And really, what we wanted to do was kind of drive down the middle of the road, trying to balance those 2 things. Brent Thill - UBS Investment Bank, Research Division: Okay. Just as a quick follow-up. The promo, did that create any pull forward? And just from a usage-based perspective, you said there's no big shift, but that was not factored into the 2014 guidance?

Yes. So Brent, let me talk a little bit about the supplemental upgrade pricing -- simplified upgrade pricing #2. It did have an effect of accelerating revenue into Q4. We talked about it being roughly $24 million out of the first half of FY '14. And so that is an effect that happens, and we planned on that. And it performed pretty much as we planned, a little bit better than we planned, but basically as we anticipated. The thing to keep in mind on that, Brent, is also don't forget our backlog went up $18 million sequentially as well. So when you think about revenue, that's something to kind of consider.

Your next question comes from the line of Jay Vleeschhouwer. Jay Vleeschhouwer - Griffin Securities, Inc., Research Division: A couple of questions around licensing and pricing. The early revenues from the promo is not unprecedented. We've seen that many times in the past. But could you talk about how there might be some residual effect from the price increases for not only upgrades, but the price bump for subscriptions coming in March? And also, clarification for you, Carl. You mentioned that ASPs went up, which is, of course, true for Suites versus standalone. But at least in the language of your filings, through the first 3 quarters of fiscal '13, had mentioned that net revenue per new license declined as did maintenance revenues per license did decline through the first 9 months of the year. So if you could clarify what you're seeing in terms of those price changes relative to performance earlier in the year?

Okay. So let me see if I get -- let me work backwards. I mean, generally speaking, yes, we've seen a move from single products to Suites. Both the suite in a new license and the suite as in part of subscription carry higher ASPs. And that is performing according to plan. When we look forward and we -- when you look at the new year, absolutely, as we talked about, you're going to start feathering in some of the increased subscription prices that are in there. As a matter of fact, when you look at the growth in billings, a portion of that certainly has to do with subscription prices. And then to kind of summarize of that Jay, I'll let Mark try to answer your parsing the fine language in our disclosures. But generally speaking, Suites are doing exactly what we intended. We're giving better value to our customers, they're getting to use more of our software, and we're enjoying higher prices for them.

Yes. And so let me tag team with Carl on this one, Jay, and make sure we hit the mark on the various questions you asked. You talked about -- certainly, we've seen this before on a simplified upgrade pricing. You're exactly right. This is the second leg of what we've done there. We are pleased with the result. And I think in addition to the point that we talked out and called out, in terms of the $24 million impact approximately in Q4, I think you're right in saying that eventually, over longer periods of time, that will have an effect on revenue. And that's all factored and comprehended within the guidance of approximately 6% revenue growth that we've given. So there is residual benefits in the future. I agree with you on that, Jay. So what part of this did we not catch? Carl caught one part of it, I caught the other. Are there other questions remaining? Jay Vleeschhouwer - Griffin Securities, Inc., Research Division: No, you touched on those. Just 2 quick follow-ups. With respect to sales and distribution, you did mention direct sales, but could you be a little bit more specific about how you've expanded your own direct coverage of named accounts and your commitment to invest in consulting services, for example, in connection with driving all the 360 businesses? And lastly, vis-à-vis rentals, you've been running an experiment on 90-day rentals for Max and Maya. When you talk about rentals later in the year, is that across the product line? And will you limit future rentals to 90-day terms or might they go longer?

Yes. So I mean, a couple of things about the named account. When you really look at how we distribute, it's a continuum. On one end of the spectrum, we have Autodesk employees working with the customer directly in Autodesk fulfilling that business. The broad middle of our business is business that is done through our network of partners, where our partners sell and our partners fulfill. In the middle, there's a handful of ones in which we cooperate closely with our partners to work with medium- to large-sized customers. What I said in the remarks were, one is, we saw a lot of activity in named accounts. By far, that's the biggest quarter ever in terms of that. And that's just a result of more coverage, just having more feet on the street selling directly to customers. But I was especially pleased that many of those very large deals were actually being done in coordination with our partners. I think what we do ourselves is we open up markets and small ecosystems, networks within companies, but it's really nice to see our partners taking place in that. On the second one about rentals, you have -- we've been building the back-office infrastructure to support rentals and shorter-term licensing models. It's one of the things we think is important if you look at our customer base in many industries. It's actually project-based rather than annual or multiyear. People ramp up for a period of time and then they want to ramp down. What we look to do is offer more flexibility to customers. 90 days is something we chose to go out there and pilot. What I'd say is, the results have been very promising. And we will limit ourselves to just those 2 products or to the 90 days. More details to follow as we roll it out during the middle of the year.

Your next question comes from the line of Heather Bellini. Heather Bellini - Goldman Sachs Group Inc., Research Division: I was just wondering if you could talk, either Mark or Carl, about how you're thinking about margins? I guess, if we back out the $24 million that you referenced from the promotion in Q4, it looks like you're kind of guiding to normal revenue seasonality in Q1. But the margins do seem to be taking a pretty big dip down in Q1, only to ramp back pretty significantly in the back half of the year. Can you talk to us about what's going on, on the expense line in Q1 and how we should expect that to trend?

Sure, Heather, happy to do so. I think you've got the big picture in terms of the $24 million normalization largely in the first half and certainly impactful in Q1. One of the things we looked at is understanding, putting that aside and also running the business and making sure that we're going to have a good game plan that delivers the approximately 125 to 150 basis points of operating margin for the year. We did talk about the fact that revenue seasonality is going to be slightly different in the first half versus the second half, almost by definition of what we're talking about for Q1. And that would relate slightly to the profitability as well. So we've kept -- I think you can see, Heather. This quarter, we delivered 0% growth year-on-year in Q4 in terms of operating expense. We did 1% in terms of total spend. We got a tight handle on spend. And at the same time, we need to run the business. We need to invest in cloud and things like that, that are going to prepare us, but this is all part of delivering the 125 to 150 margin expansion. Carl?

We always have certain expenses in Q1. Seasonality is a little bit off this time, not much, but when we looked at it, there were just a bunch of expenses that we noted in Q1, there were onetime things or that are annual recurring onetime things. And when we looked at it, that's just the way the numbers played out. Actually, making any dramatic change, we didn't feel was the right judgment to make at this point. We would have had to go to kind of extraordinary measures to even it out more, and it didn't feel like it was worthwhile. And we have confidence about, as we have shown before, of delivering those margins in the subsequent 3 quarters. Heather Bellini - Goldman Sachs Group Inc., Research Division: And then if I could just ask a follow-up for the federal business in particular, the U.S. federal business for your current quarter, the April quarter, kind of how are you thinking about -- what are your expectations, given everything that's going on in Washington? Can you give us a sense for what you're expecting for that segment this quarter and kind of what you've seen in the federal vertical thus far?

Only if you can tell me what you've seen. Yes, I mean, we don't know what the heck to make out of the sequester and how that's -- I mean, I think this is unknown territory for everybody. And we saw nothing extraordinary in Q4. Our federal business was not special. We didn't see a lot of people spending ahead of it. So it seemed kind of normal all the way up to today, it seems kind of normal. But I think we're all in unchartered territory. I think, though, is one of the things that gave us a little pause as we were giving guidance for not only the quarter but for the year is, what effect are these things really going to have. On one hand, you see the sequestration. On the other hand, you see all this movement about infrastructure build and the President being very committed to do that. And so I think they're kind of a wash, and we haven't done a lot of forecasting down to the segment level.

Your next question comes from the line of Sterling Auty. Sterling P. Auty - JP Morgan Chase & Co, Research Division: I'm curious in terms of how the guidance for the year -- you commented more back-end loaded. How much of that is macro versus some of the pricing and rental changes that you plan on rolling out?

My view on this one, a couple of things here, Sterling: One is the pricing discussion that we had just earlier with Heather, I think she absolutely nailed it. I think the $24 million, you kind of take that out of the first half. It was accelerated into Q4. We understand that. The good news in Q4 is we build backlog to a degree. I think when you look at the rental, it's not going to have a material impact on our business model for the year. It actually serves a new market opportunity for us. And we'll continue to do that exactly as Carl described and keep reporting out on that. So I think the other thing to keep in mind, the third point, is as you know, the second half of the year is a easier compare for us, compared to Q1 last year was 11% growth year-on-year. The second half is a much easier compare and we'll also have a dynamic. I guess the last point that I would say is, we're pleased with the momentum that we've been gathering within our go-to-market team. And we think we'll be able to harvest even more of the business by the time we get to the second half. So those are the thoughts there, Sterling. Sterling P. Auty - JP Morgan Chase & Co, Research Division: And do you think that the rental is not an impact on the business model because it's rental and not usage-based, and that's why it goes after a different part of the market or maybe put another way, would you anticipate as you evolve to add more usage-based pricing and when would you anticipate maybe kind of following like Adobe and some others where you go to a predominantly subscription or usage-based model?

Yes. So on the first more immediate concern, I think -- I mean, one of my things about is I think the take-up will just be slow. We've seen that historically. When we make more new offerings, it takes a while for them to gather steam. I don't think this will be any different. Second thing is, I think some fraction of this is actually coming from people who didn't actually pay for our software. There is certainly some legitimate use that's transforming into rental use, but a fair amount of that is, there are illegal ways of having rental models right now. And so I think in some ways -- we're actually tapping into that. People who really do want to pay for it but haven't availed themselves of that opportunity before. Just in general, you will see us -- similar to Adobe and others, when you look not only at our cloud-based offerings, but at our desktop offerings, offering more subscription-based things. We've been building that program for almost 10 years now. It's gotten to be a substantial part of our business. What we laid out last quarter was how we were going to take some of the desktop offerings and combine them with the cloud offerings. But I think over time, it's really fair to say that you'll see a lot more of our stuff coming from term-based [ph] offerings.

I think Carl's point was -- is really helpful to you, Sterling. It took 9 to 10 years to get it to the point where we're at right now. We all saw -- seen 2D to 3D transition and such. The end-user market picks up a little bit slower, but I think it adds a lot of credence to Carl's point.

Your next question comes from line of Steve Ashley. Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division: Great. I'd just like to ask about the domestic commercial construction business. You're probably aware, we've seen some encouraging data points from the ABI data. Just wondering what your take is on the health or probability of a -- seeing a cyclical recovery domestically in commercial construction during calendar '13?

Yes, Steve. I would say, we're seeing the same thing that you are. Certainly, some of the indicators are up. We're also anecdotally hearing that pipelines are growing. That hiring is starting. So I mean, we're seeing good signs, and I tried to refer to those earlier in my remarks that both in manufacturing and in commercial construction, particularly in the U.S., we're seeing good signs. I don't think we're out of the woods yet. The optimism I hear from our customers is just tempered somewhat by the stupidity I see by our politicians. Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division: Good. And then a couple of quarters ago, you talked about some internal challenges during the sales transition in India, Brazil and Central Europe. Maybe you could update us on where you stand in transitioning some of those folks.

Yes, yes, so I mean, we're continuing, we have new people in place, they're building out teams. Generally speaking, it takes a couple of quarters for people to get up and ramped up. So I'm happy with the changes we made, happy with the people we have in place. And I expect better performance out of the emerging countries this year.

Just to add to Carl, Central Europe, we had a really solid performance in Central Europe.

Yes, yes, we had talked about Central Europe. We had talked about China. China had a good quarter. So...

Your next question comes from the line of Gregg Moskowitz. Gregg Moskowitz - Cowen and Company, LLC, Research Division: My questions have been asked.

Your next question comes from the line of Keith Weiss. Melissa Gorham - Morgan Stanley, Research Division: This is Melissa Gorham calling for Keith. My question is around EMA. You saw a nice improvement in growth in the quarter. Just wondering if you could maybe give some more color on how much that was related to the benefit from the promotional activity versus maybe the macro stabilizing versus maybe better adoption of Suites or just any color on what was going on there.

It's a great question, Melissa. I think the truth is, I don't think we can precisely pinpoint what went on. You've identified a number of the factors. We saw stabilization and improvement from our own execution, both in our organization as well as some of the stuff we've done in emerging countries. We're starting to see improvement in -- some of the secular improvement in end-user markets. The promotion help was offset a little bit by the build in backlog. But we certainly saw willingness of customers when sufficiently motivated to buy more product. So we saw a lot of good signs. It's really difficult to know for certain the contribution from each of those, but those were all positive things we saw during the quarter. Melissa Gorham - Morgan Stanley, Research Division: Okay, that's helpful. And then just a follow-up on your debt offering. Are there any changes in how you're thinking about capital allocation, particularly around share buybacks? I noticed that the number of shares that were repurchased in the quarter down ticked quarter-on-quarter. So just wondering if we should expect to see that pick up?

Yes.

Yes, let me just say one thing and then Mark can jump in. We actually have talked about increasing the share buyback, and we talked in great detail a number of times about this. This quarter, our purchases were held down by the fact we were actually doing the debt offering, and so we couldn't be in the market for a long period of time. I expect that will rebound in the subsequent quarters. But there was a onetime thing of actually being in the market with an offering. Mark, you want to...

That's exactly what I would have added, exactly. Well, you can just expect us to continue to over the long term take shares out as communicated.

Your next question comes from the line of Walter Pritchard.

This is Ken Wong for Walter. Kind of building on Heather's question, based on the trajectory that you guys are talking about in terms of the margins, do you guys still feel comfortable with the 30% margin target that you guys laid out there for fiscal year '15?

Yes, a lot depends -- we're kind of 2 years away. We always talked about an exit rate coming out of FY '15. So we look out there and say, we're making good steady progress, particularly pleased with low revenue growth this year that we were able to have such good operating margin expansion. The probability of us exiting FY '15 at 30% goes down unless the macro environment improves. So if we had 2 more years of a lousy economy, I think it's doubtful. To the extent that it doesn't happen, we will still aim for it in FY '16. So it may be slowed down a little bit by the overall macro, but our commitment to expanding margins remains the same. Slightly difficult against the growth that we saw this year.

Of course, of course, that's helpful. And Mark, on the DSOs, looks like they jumped up a lot to 74 days. Can you perhaps elaborate a little bit on that? Is it just the back-end loaded quarter? Or...

Yes. So -- it's a great question there, Ken. Two things, one is, as Carl called out, kind of record deals. Our deals were up -- our big deals were up 25%. They came in at the end of the quarter. And I might add that not only did they come in and we shipped, but we also put a lot in backlog as well, but the ones that came in obviously go right into receivable with no chance to collect yet. So the nonlinearity, the back-end linearity of the timing of the business basically contributed to that. The second thing I would add to that, that also amplified the shift in linearity, had to do with when we did this simplified upgrade pricing promo. Again, by definition, that gets driven toward the end of the quarter. So as that came in, our billings came in late, too. So those 2 effects can amplify the linearity shift. We had a disproportionate amount in the third month of the quarter. I want to call out to you one important point: our receivables look excellent. The timeliness and the currency of the receivables look excellent. This is purely a linearity shift.

So we should expect the DSOs to kind of trend back down over the coming quarters?

You should expect that.

Your next question comes from the line of Richard Davis. Richard H. Davis - Canaccord Genuity, Research Division: So like over the -- it looks like over the last 3 quarters, you've made about $260 million, $263 million of acquisitions. So if I kind of do the math, I'm not -- I don't know how much you paid for all these companies, but some of the revenues would fall into last year, but some of it will fall into this year, of the 6% -- 6% to 7% revenue growth, is it -- am I close figuring maybe 1/4, so 2% or 1.5% of that is inorganic, so that the underlying organic growth is, I don't know, 4% or 5% or something like that, is that a logical conclusion?

No, I would say, Richard, it's closer to 1%. And given the number -- I mean, we -- so as we look at the year, there are a number of shifts going on in the business. Things that are coming out of the business. And on the plus side, I would say it's not even quite 1%. Most of the acquisitions we tend to do are these small tuck-ins. We're more positioning for the future. So when you look at it, for example, one of the acquisitions was the backbone for all of our social stuff. There were a couple of mobile acquisitions. There were a number in simulation that were really technologies. They'll get folded in. That's more typical of the way we do it. As you know, you've been following us, much more so in very few of the cases have we actually bought real revenue streams. Richard H. Davis - Canaccord Genuity, Research Division: Got it. Okay. That makes sense. I just wasn't sure what the ratios were, so that's helpful.

It's really relatively small and in many cases, it's hard to parse even for us. For example, we make a Simulation 360 offering. It's a combination of stuff that we've acquired over -- acquired and built over a period of years. And truthfully, we don't spend huge amounts of time trying to dissect it because it's a fruitless exercise at some point. We try to look in aggregate at the benefit that we get from the investments in M&A.

Your next question comes from line of Ross MacMillan. Ross MacMillan - Jefferies & Company, Inc., Research Division: Maybe first one, Mark, just going back to operating expenses. I guess my question is, I hear you on the revenue ramp through the year, but I think the way to model this would imply that there's not a lot of OpEx growth after Q1 as we move subsequently through the year. And I'm just trying to understand on that basis, is there any sort of front-end loading of the OpEx this year beyond normal sort of 1Q seasonal, call it, onetime items? Is there any other aspects to the operating expenses that mean they're higher going into the year?

Not really. I mean, I would say -- I mean -- for the most part, our seasonality is not that terribly different. There's a little bit of a degree, some of the things that Carl touched on, just a few things here and there, but nothing dramatically different.

No. The only other thing I would do to try to understand this, Ross, is that this year, we're coming off about 2% OpEx growth. So rather than ramping into it, we're kind of fully loaded at the end of the year. And so when you look off that, many years, when you look at the model, we're coming off years in which we've ramped up over time. This one, we only grew operating expenses about 2%. So that lends a different dynamic to the model. Ross MacMillan - Jefferies & Company, Inc., Research Division: Okay, that's helpful. Two other questions, if I could. Is it possible that you will get to a point where you will -- help us with the aspects of this transition of the model so that we can better gauge if there's any sort of immediate revenue sort of deflationary aspects, either based on usage licenses or more of the cloud offerings? Just trying to understand if there's going to be a point where your business would have otherwise grown faster as a result of some of the transitions, and what you might help us understand the kind of underlying nature of growth to be?

Yes, I think that -- and Vic [ph] may take a shot and Carl might add in here. I think, Ross, from that standpoint, to the extent that things become material other than, for example, there were experiments and pilots and initial very controlled activities going on, when they become material, you'll certainly hear from us well in advance from that standpoint. I think Carl had called out with all the experience that a lot of the offerings that we have take time to build momentum, not because we don't want to sell them, it's because the way the end market actually works, and the way people apply the technology. So that certainly would be something on our mind to be in front of that communication whenever something is material. Ross MacMillan - Jefferies & Company, Inc., Research Division: Okay, that's helpful. And then last one, just on the direct business, is that getting to a point where it's now breaking out beyond that sort of normal 15% of annual sales?

No, it's not really changing substantially. Just because the other part has grown -- I mean, look, it's a little -- it's grown a little bit faster than the rest of the business. And we'll break it down for you further. But we're also working hard as we do that to make sure our partners are involved in many of the large deals. For us, the most important thing is cracking into the very large accounts, where we've always believed our technology was applicable, but we didn't have a way to go to market. That's the most important part of this for us. It's not breaking it down between direct and indirect. It's really just access to customers who we believe are best served by our products and that historically have underutilized our technology. That's the real thing we're trying to accomplish. But we will continue to give you updates on the breakdown between direct and indirect.

Your next question comes from the line of Kash Rangan. Kash G. Rangan - BofA Merrill Lynch, Research Division: Carl, your comments about the politicians was very vague and ambiguous. I just wanted to clarify -- I'm just kidding, that's not my real question. My question was, when you look at Adobe and the big model transition that they're embarking on, I just wonder if you guys have thought about that? Would you take steps to accelerate the transition? Obviously, cloud and mobile and recurring revenues are big opportunities for you guys. But why not just bite the bullet and just offer subscriptions on a go-forward basis across the base and do what Adobe did? You get a short amount of pain in a very brief period of time, then your growth rate starts to pick up and you get the advantage of recurring revenues. I'm just wondering what you thought about the pros and cons of making that wholesale approach. And I have one you, Mr. Hawkins.

Okay. So to your first point, I have 2 teenage sons, and I expect them to act like knuckleheads. I don't expect members of Congress to act like knuckleheads, but they're acting more like my teenage boys than they should. On your second question, Kash, we've looked at Adobe a lot. I'd say, let's just step back a second and kind of see the difference. I think in many ways, us and Adobe are trying to get to the exact same point. There's the short side of the -- so if we're at a rectangle and we're trying to get to the diagonal corner, there's the short side and the long side, and one of us took the short and then the long and vice versa. I think they've done a remarkable job on getting their offerings ready with the Creative Cloud and done a nice job of moving their business model there. We've taken a little bit of the long leg and changed our offerings to be cloud-based. I assume in the end, we will both have term-based business models with cloud-based and mobile-based offerings. I think that's the inevitable end game for all of us. So we've done what I consider to be a really good job in getting our cloud-based offerings out there. They're very successful in the market. What I expect us to do this year is do stuff similar to Adobe in terms of the business model. And you'll see a lot more of that during the year. As we gauge the success in our customer base, which is similar, but certainly not identical to the Adobe customer base. We're in larger companies and larger deployments. We'll see what the take-up is there and we'll react to it. I have not ruled out accelerating that if it made sense. And as Mark previously said, we'll give you guys plenty of warning if we're going to kind of step on the gas around that. We -- like we've done repeatedly, we generally go out and test these things. If you remember, like what we did with Suites, a couple of years ago, we started with a couple of very limited tests. They were limited by product, limited geographically. We're doing the same thing this time, limited terms, limited things. To the extent they're successful, we'll roll them out, and if it makes sense, we'll go full speed ahead. Kash G. Rangan - BofA Merrill Lynch, Research Division: Mark, a question for you. The shippable backlog increased sequentially very nicely. And also, on a year-over-year basis, seems to have come down a little bit. I would have probably expected an upward trajectory on a year-over-year basis, can you talk to the puts and takes of the backlog on a year-over-year basis? And why it's driving [ph].

I think you described it well, Kash. I think it's up $18 million quarter-on-quarter, slightly down year-over-year, $20 million versus $27 million. I think, keep in mind, I think as we modernized our fulfillment and stuff, we expected our backlog would probably operating in a slightly lower zone. One of the dynamics that happened with the major big deals that came in is they came in late, they came in big. And I think that caused our backlog to be bigger than we would have really envisioned it in the current period. And so you should expect that to go down over time, much like we've signaled before. So we're pleased to see it. It was a nice outcome. It was an outcome of a really strong response in our direct business, as Carl talked about, including collaboration with our indirect helping us there and the promos. But you should expect that to be down to more normal levels in kind of the new environment going forward.

Your next question comes from line of Philip Winslow. Philip Winslow - Crédit Suisse AG, Research Division: Carl, I'm just wondering if you could dig in a little bit more on a vertical basis. You've provided some commentary in the U.S. on commercial and construction and on manufacturing. But as you were kind of contemplating your Q1 guidance and then this coming fiscal year, just kind of how you factored in the relative strength and weakness in the various verticals?

Yes. So let me just break it down both ways. On verticals, we're definitely seeing manufacturing. Manufacturing has rumbled through this recovery. It's been relatively strong all along. Manufacturing continues to do well. We see some variation on a global basis, but not a huge amount of it. Clearly, the construction market went down the most. It was the most volatile. We see improving -- we see signs of improvement around the world in the construction market. Some of it's driven, I think, by improving macroeconomics. Some of it is, as we've diversified our offerings into more parts, we talked about BIM for infrastructure. We talked about more sales into construction rather than just architecture and engineering. That's a secular factor that's adding into this. When you look at it and break it down a little bit geographically, what we continue to see are: Asia was really strong, even if somewhat uneven. It was strong with particular and unexpected strength in places like Japan. When we look at Europe, from north to south, I think this is not different than anyone's seen. Good strength in the north, average performance in Central Europe and it's weak in Europe. And we're not forecasting any difference there. We talked about uneven performance in our emerging economies. And we're looking for improvement in some of the places where we've made changes to effect that, but we're constantly aware that those are -- have greater variance just naturally. And we think the U.S. as everyone has seen, is recovering but slowly. So hopefully, that cross-section helps.

Your next question comes from the line of Brendan Barnicle. Brendan Barnicle - Pacific Crest Securities, Inc., Research Division: Carl, what percent of the installed base do you think has moved to Suites? And what percent do you think have upgraded to BIM?

Those are good questions. I mean, what we reported is 30% of our revenue is coming from Suites. So if you just took -- if you took your question at face value of what -- who's on it and what are they paying for, the answer is 30%. I think that probably overstates the number that have moved because there are people, as always have been, who are a couple of releases behind. We've made it very attractive, so when they do move, they will move to Suites more likely than to individual products, although they have their -- certainly, they have their choice. So I think the 30% probably overstates the movement there. When you get to BIM, really, much harder to tell because in some ways, BIM is both a set of products, but it's also a methodology that these companies use. We certainly have crossed the tipping point in terms of -- I would say on a worldwide basis, there is no reluctance, no resistance to BIM being the new technology for how to drive more efficiency in the building process. It's -- like we've said a couple of times, the concept of BIM has really been extended to more parts of the construction process, including construction itself. So those are all good signs. So I say, while I would have felt we were kind of reaching the majority in architecture and engineering, as the market opens up to construction, we're probably falling back in our penetration because the market has opened up. There are many more opportunities for us to bring BIM into the much bigger part of the market, which is the construction part. Brendan Barnicle - Pacific Crest Securities, Inc., Research Division: Great. And then Mark, I just wanted to follow-up on margins in the quarter, in the fourth quarter. Were they impacted at all by the simplified pricing and the larger deals at the end of the quarter?

Well, I think a couple of things here from that standpoint, Brendan. The $24 million of revenue that was accelerated in certainly had a favorable effect. Keep in mind, we sequentially build our backlog by $18 million. So most of that went into backlog, if you think about it from that standpoint in terms of a net effect. I think the other thing that we did is, if you look at our total billings growth was 9%. And so that was a good thing. And you can see that as you look at our deferred revenue hit a record $835 million, up 16% year-on-year. One of the effects of that is that we paid for some commissions for some of the stuff that came and that was billed, but that didn't show up in revenue yet. So I think those were some of the effects that impacted it.

Your next question comes from the line of Matt Hedberg. Matthew Hedberg - RBC Capital Markets, LLC, Research Division: It sounded like in the quarter, you had good strong results from China, made some leadership changes in Brazil and India. I guess I'm wondering, from a 4-year perspective in your guide, are you sort of assuming more of the same there? Maybe a rebound in the back half of the year from some of the leadership changes, but a good strong year from China?

Yes, I mean, we're really assuming kind of business slightly improving to the extent that Brazil, India, Russia outperformed. That would be upside to what we're forecasting right now. We tend not to want to get too far in front of ourselves and assuming that changes we made will pay off until we've actually seen them. We're certainly confident in making those decisions, but we don't go so far as to forecast improvements that we haven't seen evidence of yet. Matthew Hedberg - RBC Capital Markets, LLC, Research Division: Great. And then one point of clarification for you, Mark. In terms of the $24 million promotional rev, how much of that was actually in guidance?

Most of that was in guidance, Matt. It was the vast majority of it. It was a little bit of the upside delighted us. It came in a little bit stronger, but the vast preponderance of that was within guidance. It's just nice to see the execution and people responding to the value.

Your next question comes from the line of Steve Koenig. Steven R. Koenig - Wedbush Securities Inc., Research Division: If I may, I'd like to ask just one sort of tactical question and then just follow-up with one strategic sort of question. On the tactical side, you all haven't talked much about, in this call, about kind of having put the problems created by the sales reorg in Q1 and then your channel policies Q1 a year ago behind you. The results speak to the idea that you have. But I wanted to offer you guys a chance to comment on that. And specifically, I was curious, where do you feel about your progress in rebuilding your pipeline that had become somewhat hollowed out because of those changes? How do they look to you now? And related to that as well, I'd ask, how are you doing in terms of getting your AEC resellers and your Manufacturing resellers to work together and bringing in the best person to sell a deal instead of competing with one another? So just any thoughts there and then I have one quick follow-up.

Yes. So I would say, we're certainly feeling like we've seen improvement. If the worst of it was in Q2, we saw steady improvement. As we look at the planning and forecasting for next year, that's getting sales quotas and compensation in place for our sales force, we're in a much stronger place than we've ever been. We've also worked really closely with our resellers to modify some of the things that upset them and -- or better explain the things that may have upset them, but we still think were the right things. So we've worked closely with them to make sure that we're better aligned. So I feel better -- I feel much better about our relationship with our resellers heading in. And I have substantial evidence on the inside that things are much better in place than they were last year. There are a lot of moving pieces at this time last year. And this year, I feel like it's much more nailed down. Steven R. Koenig - Wedbush Securities Inc., Research Division: Okay. So you feel like those issues are pretty much behind you now?

I sure hope so. Steven R. Koenig - Wedbush Securities Inc., Research Division: Okay, all right. I think we all do so. Okay. And then my follow-up question, a little bit more on the strategy side. You have gotten a bunch of questions on this call on the move to more subscription-based or rental-based offerings. And you've been pretty clear that you don't expect much, if any, near-term revenue from that. What I'm curious about is, as you make more progress in that product transition and ultimately a business model transition potentially, how much can subscriptions get to in the mix? And kind of the other part of the question is, what are the implications for your channel in this shift?

Yes. So I would say 2 things about that: The first one is, I mean, in the limit, we can get pretty close to subscriptions being the vast majority of our business. And I'm using the word subscriptions here really in 2 senses: Subscription as we know it today, plus the subscription for term-based offerings. So if you think forward or us we talked about with what Adobe is doing in calling subscription, if you think of that, the majority of our business could -- the vast majority will come from subscriptions. I think that's the nature of where the business is going. What we've tempered it with hopefully all afternoon is saying, we don't expect this to happen too suddenly. To the extent that our customers respond well to this, we may try to accelerate that transition. But we see that as the direction we're headed is in terms of long term subscription relationship, so a long-term relationship with our customers that has all of those characteristics. Steven R. Koenig - Wedbush Securities Inc., Research Division: And Carl, what -- can you just comment on the -- what are the implications for your channel in this transition?

Yes, I continue to believe that there are 2 transitions going on: One is the way that people pay for it, and the second is the way the software is delivered. In both of those, I continue to believe that the channel plays an important and vital role going forward. I know there's a lot been written and speculated about this. But if you look out there, in companies that have subscription-based, cloud-based business models, what I see increasingly is greater reliance on a third-party channel. Even ones who started out all direct are recognizing that the benefits of the channel in terms of reach and service are the same, whether you deliver the software by a box or by the Internet. It really makes very little difference. And so I can -- and our resellers get paid on subscription as they do on new licenses. So I continue imagining a world in which resellers play an important role. The only thing that -- like we've said, we're going to continue investing in our direct accounts as long as it continues to make sense and opens up new business for both us and our partners.

Your next question comes from line of Blair Abernethy. Blair H. Abernethy - Stifel, Nicolaus & Co., Inc., Research Division: Carl, I just wonder if you could give us a little bit more color on the take-up of the hosted PLM service and maybe a little more background on sort of the size of customer accounts or any industries that maybe you're getting more strength in than others?

Yes. So we've gotten remarkable progress. Remember, we launched this on February 29. So we're not even 1 year into this. And what we've seen is a fantastic reception by customers. As I've said before, quite publicly, I think some of it is the result of a really quality product offering from us. Some of it is a result of some really terrible product offerings by the legacy providers. Behind the firewall, old iron, multi-tens of millions implementations really are dinosaurs and people are recognizing that. When we've looked, what we've seen is -- a couple -- less particular industries and more some characteristics. And the 2 characteristics I see most commonly, people who are in fast-moving industries, where there's a premium on getting product to market and where we've been brought in is to accelerate processes that they see as impediments to getting high quality product to market more quickly. That seems to be the defining characteristic. We've seen a good cross-section from small to large, although I'd say in small companies, we tend to be used as the only PLM system in which they look and they say, "We always wanted PLM, but we couldn't afford it. We know we needed it and we're brought in there." In large companies, it's more often to fill in the gaps into places where companies have chosen or cannot afford to take their old monolithic system or the process is so dynamic and they want to get moving quickly on it. So in those cases, we're more a supplement. The replacements of existing PLM systems have mostly happened in the small to medium ones. So a lot of places, we're sitting alongside existing PLM systems. In other ones, we're clearly seat for seat replacing them. We'll give you more as we update this. We said we have about 10,000 seats out there. But many of these are pilots. They've already expanded once or twice, but they are nowhere near what I think the eventual size of the implementations will be. Hopefully, that gives you some more color on it. Blair H. Abernethy - Stifel, Nicolaus & Co., Inc., Research Division: Yes, that's great. If I could just follow up, Ross' question on the direct sales reps. What's the capacity looking like there in terms of feet on the street that you have today at the end of fiscal '13? And what are your plans? Are you adding bodies this year?

Yes, we will be adding bodies this year. I would say in a targeted way. And the 2 places where we're really interesting, there are specific countries where we feel like the model has proven itself quite well, and it's proved itself not to be cannibalistic relative to our other business. So there were certain countries in the world where we're definitely light in terms of the new number of direct salespeople. And there are a number of places, particularly in selling into construction, the PLM business, we just talked about the simulation business where I think we need more direct sales there, too. So those are the kind of places. I don't think we'll try to upset the applecart in terms of the other places, where our business is doing well and rebounding, and I don't want to interject more disruption there. But in a number of those very specific places, I think it could really help. And we could see a substantial increase in the number of feet on the street.

Your next question comes from line of Dan Cummins. Daniel T. Cummins - B. Riley & Co., LLC, Research Division: Can you tell me -- tell us how much visibility you guys have into use cases with respect to specific Revit deployments regarding, let's say, a building start versus a retrofit or a rehab? And a follow-on to that is, do you think that your partnering or your M&A strategy or your government relationships affect your ability to tap faster or more broadly into green retrofit? How big an opportunity is green retrofit for Autodesk in the next couple of years?

Yes. So it's very hard to tell from Revit deployments per se because Revit is a desktop piece of software. So we don't always know what it's used for. From some of our other offerings, like our BIM 360 offering, the online project collaboration, we know a little bit more and certainly from our large customers, we know more about what the usage of it is. I think with -- during the downturn, there was a fair amount of refurbishment and renovation. What's going to happen in the next couple of years is mandates around sustainable building. We've seen stuff starting with the GSA in the United States. On a worldwide basis, governments are adopting new standards that we think are really important. So first, it was just the adoption of BIM as a better technology for governments to get more for their money. Secondly, we're starting to see specific mandates around building performance. I think both of those things will drive it. Some of them are a little bit far out when they first initiated or legislated. They gave people like time to 2016 or 2020. But those aren't so far out anymore. And I think we'll see a pretty good business. We've done a number of things in our product development process to accommodate doing much more for refurbishment and renovation. And we've done a fair amount in terms of building performance in energy analysis for our building professionals. So I think it'll be a good thing. I'm not sure it'll will be dramatically different this year than next year. But if you look over a few number of years, I think it will.

There are no further questions at this time. I would now like to turn the call back over to Mr. David Gennarelli. Please continue with your presentation or closing remarks.

That concludes our conference call today. Upcoming events, we will be at the Morgan Stanley conference this Wednesday, and we'll also be at the Wedbush Morgan conference next week on March 6. And if you have any questions in the meantime, you can reach me at (415) 507-6033. Thanks.

This concludes today's conference call. You may now disconnect.