Lisa Ewbank – Vice President of Investor Relations Aart de Geus - Chairman and Chief Executive Officer Brian Beattie – Chief Financial Officer

Rich Valera – Needham and Company Raj Seth - Cowen & Company Matt Petkun - D. A. Davidson & Company K.C. Rajkumar - RBC Capital Markets Saket Kalia - JPMorgan

Welcome to Synopsys Inc.’s earnings conference call for the first quarter of fiscal year 2009. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) Today’s call will last one hour. Five minutes prior to the end of the call I will announce the amount of time remaining in the conference. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Lisa Ewbank, Vice President of Investor Relations.

Good afternoon everyone. With us today are Aart de Geus, Chairman and CEO of Synopsys; and Brian Beattie, Chief Financial Officer. During the course of this conference call, Synopsys may make forecasts, targets and other forward-looking statements regarding the company and its financial results. While these statements represent our best current judgment about future results and performance as of today, the company's actual results and performance are subject to significant risks and uncertainties that could cause actual results to differ materially. In addition to any risks that we highlight during this call, important factors that may affect our future results are described in our 10-K for fiscal year ended October 31, 2008, and in our earnings release for the first quarter of fiscal year 2009 issued earlier today. In addition, all financial information to be discussed on this conference call, as well as the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures and supplemental financial information, can be found in our first quarter earnings release and financial supplement. All of these items are currently available on our website at synopsys.com. With that, I'll turn the call over to Aart de Geus.

Good afternoon. I am pleased to report that our first quarter of fiscal 2009 was capped by solid financial performance, continued technology momentum, and visible customer success. Let me begin with our financial results. In Q1, we delivered revenue of $339.8 million, 8% growth year over year. Non-GAAP earnings per share were $0.50, well above our target range. We achieved these results under a predictable business model with more than 90% time-based revenue. With the recession in mind, we continue to focus on expense controls and operating efficiency, and we expect our earnings to be solidly on track for the year. Finally, we excited the quarter with $842 million of cash and no debt. Turning to the overall landscape, we see that in the deepening recession, our customers are de-risking every aspect of their business, and our strong position clearly sets us apart from other suppliers. In other words, because of our financial stability, we can and do continue to invest in technology development and provide vital support. This customer scrutiny of vendor stability is unlikely to change anytime soon. I just spent a number of weeks traveling to customers in the US and Europe and attending world economic forums. As I tally the perspectives of the nearly 100 executives I talked to, most believe that the recession will be deep and are preparing for it to last well into 2010. It’s fair to say that all customers are battening down their hatches and focusing on reducing risk and even more importantly reducing costs. At the same time, many of our customers are also keeping an eye on the future. These companies are explicitly using this difficult time to streamline their processes and better focus on the most important customer, technology, and current projects. Fortunately for the EDA industry, semiconductor expense cuts have been mostly on the manufacturing side. Our gross margin is sensitive to chip volume. On the R&D side, design is clearly continuing, albeit with some caution. Many customers are reassessing their design flows with the goal of coming out of the recession streamlined, more efficient, and recovery ready with compelling new products to sell into an improving economy. This trend plays well for Synopsys’ strength, and we fully intend to emerge as an even more viable partner for our customers. Not only are we their safest bets based on our financial stability and the completeness of our product portfolio so that we can actually help them attack their total cost of design, and with our advanced methodologies and tools help ensure that they remain technically robust. The proof of this trend is evident in our steadily growing number of primary partner relationships. Today for example, we announced that LSI has joined a number of other key companies in selecting Synopsys as its primary EDA partner. Across our portfolio ranging from digital design to digital and analog verification to IP and low power solutions, LSI is betting on Synopsys to jointly drive design cost efficiency and technology leverage. Meanwhile, we’re actively working with several other important companies on transitions to similar partnerships. While we intend to weather the storm and expect to come out of the recession in an even stronger position, we are very mindful of the economic uncertainty and of the challenges our customers are facing. Since January, we have seen a couple of companies filing for bankruptcy protection and an increase in late payments. Bookings were lighter than expected, and we anticipate that some customers hesitant to make commitments with little visibility in their business will renew contracts closer to their expiration. Our business model is well suited for times like these. Timing of orders is less important enabling us to focus on what is best in the long term for our customers and ourselves. The economic outlook is uncertain though, and we are aiming to deliver continued solid earnings. We’ve already taken a number of expense mitigation steps contributing to solid Q1 EPS. Having said that, our top priority is to avoid any disruption to our customers in either technology or support. So we continue to systematically reduce expenses in non-differentiating areas and invest those resources to drive long term customer success and commitment. With this approach, we feel confident we’ll be prepared if the market continues to soften. If the market starts to improve, all the better. Now, let me turn to our technology which has been a critical factor as customers select their key partners. We have a comprehensive portfolio built over many years from the system level through design and verification of both digital and analog mixed signal chips and down to manufacturing. Our leading IP portfolios span the key connectivity protocols today, and our global engineering force is unmatched in terms of talent, scale, and expertise. We continue to invest strongly in R&D and are delivering technology enhancements across our core portfolio, focused primarily on performance and cost effectiveness. In physical design, IC Compiler features a new router that delivers 10X faster performance and better quality of results. Based on a large amount of customer feedback, we feel that our physical solution is stronger than it has ever been, and we’re seeing significant competitive wins. In December, we delivered the much faster multicore version of PrimeTime. In addition, we are collaborating with companies such as ST Microelectronics to develop leading edge methodologies and flows for low power and high performance cells. We now have multi-core capability throughout the digital design platform, a key differentiator for Synopsys. In verification, we delivered major performance and ease of use advances in VCS that have already driven competitive win with both advanced and more mainstream customers. In manufacturing, our TCAD is increasingly used by customers developing process technology, especially advanced modes. TCAD simulation is able to reduce a good amount of expensive hardware based experimentations and thus helps to get better technology at lower costs. Looking forward, we see a strong technical pipeline as well. In March, at our San Jose user group conference, we will be introducing many new capabilities. First a single solution for custom simulation that combines accuracy and speech features into one flexible easy to deploy solution. Second, an extension of our multi-core capability to VCS functional verification, and finally we will introduce a brand new top-down approach to helping customers reduce their total cost of design. That is streamline their design projects, optimize EDA investments, and manage projects to get faster and more predictable results. This new design system is architected for easy of adoption providing both mainstream and advanced users a more efficient, low-risk foundry ready path from design to silicon. Stay tuned for more details. I’d like to now highlight two of our strategic investments—custom designs and system level solutions. In just the first few months of limited customer availability, our new analog mix signal design solution custom designer has generated a substantial amount of customer interest and new orders again in Q1. While small companies with legacy cost structure were the natural initial target customers, we’re increasingly seeing interest from larger customers wanting to evaluate our solution. General availability is currently on track for the spring. At the system level, we are addressing the accelerating demand for more effective yet powerful hardware based verification solutions. Last week, we introduced an expanded rapid prototyping platform, Confirma. It already includes the recently acquired CHIPit technology which significantly improves the economics of both embedded software development and system validation. Synopsys now delivers a comprehensive software to silicon verification solution, from system modeling to rapid prototyping in virtual platforms to functional verification and analog mix signal simulation. To conclude, while the economic weather became more turbulent, Synopsys began the year with solid Q1 results. In addition, a number of customers have increased their reliance on Synopsys as they ride out the tempest. While transitions are never simple, we are helping them reduce their total cost of design while capturing the benefits of a more streamlined design methodology. As the saying goes, never let a crisis go unused. Together with our customers, we’re doing exactly that. In summary, our strategy for ’09 is to weather the recession and emerge even stronger by being fiscally conservative, competitively aggressive and strategically focused. With that now I will turn the call over to Brian Beattie.

Good afternoon everyone. In my comments today I will summarize our financial results for the quarter and provide you with our guidance. As a reminder, I will be discussing certain GAAP and non-GAAP measures of our financial performance. We have provided reconciliations in the press release and financial supplement posted on our website. In my discussions, all of my comparisons will be year over year unless I specify otherwise. We executed well in the first quarter to deliver solid revenue and earnings growth, strong operating margins, and our balance sheet remains very healthy. Total revenue increased 8% to $3339.8 million, at the high end of our target range, with greater than 90% of Q1 revenue coming from beginning of quarter backlog. One customer accounted for slightly more than 10% of first quarter revenue. Turning to expenses, total GAAP costs and expenses were $272 million, which included $11.8 million of amortization of intangible assets and $14.1 million of share-based compensation. Total non-GAAP costs and expenses were $250 million, an expected year over year increase due mainly to our Synplicity acquisition but also slightly below our target range due to companywide cost control and timing of quarterly expenses. For the balance of the year, we expect typical quarterly expense profile with a sequential increase in total expenses in both Q2 and Q3 and a traditionally higher Q4. For all of 2009, we continue to expect total costs and expenses to increase generally in line with or slightly less than our targeted revenue growth. Non-GAAP operating margin was approximately 26% during the quarter, a very good start towards achieving our goal of 23% for the full year. We intend to aggressively manage expenses to reach our margin targets and prepare for an uncertain outlook in 2010 while at the same time aligning resources to where Synopsys will add value to our customers. Turning now to earnings, GAAP earnings per share were $0.37. Non-GAAP earnings per share were $0.50, exceeding our target range. Earnings outperformance was driven by solid topline growth and expense control, higher than expected other income, a slightly lower than expected tax rate, and fewer shares outstanding. Our non-GAAP tax rate was approximately 26% for the quarter. For modeling purposes, we think that a 27% non-GAAP tax rate is a reasonable estimate for the full year. Our revenue visibility remained strong. Upfront revenue was 5% of total, well within our target range of less than 10%, even with the inclusion of hardware sales. The average length of our renewable customer license commitments for the quarter was about 2.7 years. Now turning to our cash and balance sheet items, our balance sheet remains very healthy with $842 million in cash and short-terms investments and no debt. Of this balance, 53% is held within the US. As expected, there was an operating cash outflow of $82 million in the quarter due primarily to the timing of our annual incentive compensation payments. For all of 2009, we’re closely monitoring cash collections as we’ve seen a recent increase in late payments from some of our customers; however, at this time, we’re maintaining our FY09 operating cash flow target of approximately $200 to $220 million. Continuing on with our cash and balance sheet items, capital expenditures were $8 million in the quarter, and for the full year, we expect to reduce capital spending by 15% to approximately $30 to $35 million. We did not repurchase stock in the quarter and have approximately $210 million remaining on our current authorization. Also recall that we acquired CHIPit assets of Prodesign during the quarter in an all cash deal funded from a combination of our international and US cash balances. As always, we will evaluate the best uses of cash each quarter including company operations, investments, and stock repurchases. Our strong cash balance has served us well in the current environment, and in the near term, we value the flexibility that our cash provides. We’re also pleased with the high quality and conservative risk profile of our cash investment portfolio. Q1 net accounts receivable totaled $150 million, and we maintained industry-leading DSOs of 40 days. Deferred revenue at the end of the quarter was $609 million. We ended Q1 with approximately 5700 employees. This was an expected year-over-year increase due primarily to our acquisition of Synplicity, but also slightly down from our Q4 headcount. For all of 2009, we currently expect headcount to be about flat with year end 2008. Now moving on to guidance, for the second quarter of FY '09, our targets are revenue between $332 and $340 million, total GAAP costs and expenses between $280.5 and $296 million, which includes approximately $15 million of share-based compensation expense, total non-GAAP costs and expenses between $257 and $267 million, other income and expense between zero and $3 million, a non-GAAP tax rate of approximately 27%, outstanding shares between 142 million and 147 million, GAAP earnings of $0.25 to $0.30 per share, and non-GAAP earnings of $0.39 to $0.41 per share. We expect greater than 90% of the quarter's revenue to come from backlog. Now our fiscal 2009 outlook: Based on what we know now, we expect revenue of approximately $1.37 to $1.40 billion, other income and expense between $6 and $10 million, a non-GAAP tax rate of approximately 27%, outstanding shares between 144 million and 149 million, GAAP earnings per share between $1.11 and $1.27, which includes the impact of approximately $60 million in share-based compensation expense. Given the uncertain environment, we’re maintaining our non-GAAP earnings per share, of $1.60 to $1.72; however, after delivering solid Q1 earnings, we have more confidence in this range and expect a penny or two of our Q1 over-achievement to benefit full year earnings driven primarily by higher than expected other income. As I mentioned earlier, we are still targeting cash flow from operations of $200 to $220 million. In conclusion, I’m pleased with our first quarter execution given the many challenges in the global marketplace. We delivered solid financial results highlighted by top and bottomline growth and continued solid operating margins. We exited Q1 in a strong financial position providing us the flexibility to best position our business for long term growth during this difficult period. With that, I will turn it over to the operator for questions.

(Operator Instructions). Our first question will come from the line of Rich Valera with Needham and Company. Rich Valera – Needham and Company: Aart, just wanted to ask a question on the bookings front. You mentioned that booking were a little lighter than expected in the quarter. I know last quarter you had mentioned you were still seeing some increasing run rates on your renewals. I just wanted to get your sense of what was it that caused the light bookings in the quarter. Was it lower run rate renewals or was it just some companies deferring their actual orders into future periods?

Rich, it was clearly the second. The run rates are flattish. The reason people tend to renew sluggishly, if that’s the word, is that they’re clearly not having much visibility themselves, and so what I expect will continue to happen over the next many quarters is that people are just gradually going to drift more towards the end of the contracts because at this point in time making no decision is often easier than making any decision. Rich Valera – Needham and Company: With respect to the duration, which was the lowest seen in quite a while, do you think there’s anything to that? Do you think customers are less willing to make long-term commitments now, or is this just noise in the statistics?

I think it’s mostly noise, although I think you’re still aiming at a very interesting question because I think that we’re going to see more binary behavior, meaning that we clearly see some customers that want to do business with us and that are banking on us wanting to actually at times do longer deals whereas people that are not sure will just try to minimize any decision they have to make, and so I think the sample set was not all that relevant in this case, but nonetheless, I think it’s not indicative of a major trend yet. Rich Valera – Needham and Company: Last quarter, you gave us a qualitative bookings guidance that you expected book to bill to be slightly less than 1 to 1 for the year. Would you care to update that? Presumably maybe you would expect it to be slightly weaker than that. I don’t know if you’d be willing to add any color to that previous guidance.

Largely, I don’t want to do that partially because I don’t think I have necessarily the color. I think there are an enormous number of moving pieces right now in the economy, and so it is possible that a number of people suddenly decide to want to do longer deals with us, and it is also possible that we see a number of people just waiting for their contracts to end, and thus be back more next year or the year after, and so frankly I don’t have the answer. I think we’re in a good situation that from a business point of view we’re well placed, and from a business model point of view, we’re of course in an outstanding position.

Your next question comes from the line of Raj Seth with Cowen & Company Raj Seth - Cowen & Company: Brian, a question for you. In the $2.6 billion of backlog that you exited last year, I notice in your supplement what looks like a new note highlighting the fact that there may be some risk to the backlog, and I’m wondering if you could expand a little bit on whether you think you have exposure in the backlog and what it is that would move in these what I thought were contractual commitments with customers.

The contracts that we have as bookings are all firm commitments, legally binding, no escape clauses, so they’re really locked down. What we saw in the quarter was a couple of our customers filing for protection under Chapter 11 under the bankruptcy court, so in that case, to the extent there is some of their business still in the backlog, then we will de-book that as a conservative approach to take our any forecasted revenues and any forecasted bookings that will come in there. Up to this point though, it’s a very immaterial number for our total backlog, but we’ll continue to monitor it, continue to look at cash payments, collections, and credit status of the customers, but as you know, the majority of our customers are very large semiconductor companies who are financially pretty stable, albeit with some uncertain times in front of them. Raj Seth - Cowen & Company: Aart, abstracting away from some of the detail in the quarter, etc., the semi industry and certainly the capital equipment side the worst downturn ever. I’ve heard people Mike Splinter suggest that we’re going to see profound structural changes in this industry. There’s obviously a push to consolidation, etc. How do you think, and maybe it’s too early, but what do you think happens to the industry and what are the implications of likely consolidation and some of what’s going on in EDA and specifically Synopsys in your view?

First, I agree with Mike’s perspective that the entire semiconductor industry is going to shift towards a more efficient model one way or another, but I don’t think it’s unique at all to the semiconductor industry. It’s clearly part of a massive recession that initially had nothing to do with semiconductor industry, so having said that, the first call there is that many of the products that are on the market today may have a hiatus or may be working down on their inventory, but over time, it’s an industry that will come back and will continue to deliver and develop many new products. Having said that though, I think that the entire industry looking for efficiency will also look at how to do better design, and fortunately, we’re in a very good position because we started to focus on total cost of design already a few years ago, and you certainly have heard me say many times that includes much more integrated design flows, it includes better utilization of the most advanced tools and technologies, and gradually a more consolidated spending picture. In that context, next month in March, we’ll be rolling out specifically a tool set around making the design flow much more manageable, so we’re very much aimed at how do we help not only the technology future but also the cost equation of our customers. So notwithstanding that, there are huge economic waves around us. I think our ship happens to be particularly robust at this point in time. Raj Seth - Cowen & Company: How do you think about M&A in this environment? You clearly indicated that you’re going to be very careful with cash, that cash is king. I think that’s good. There are a lot of really wounded companies in this ecosystem here that you can almost buy for free. Is this something that you still consider or you’re not really looking at M&A at this point or is indeed a mechanism that you can use to get even further ahead in the short term?

We’re always keeping our mind open and looking at everything. At the same time, in M&A right now, the A in many cases stands for attrition, meaning that there are a lot changes occurring with companies that I don’t think will survive period, and of course one may be tempted to look at spending money on those, but upon closer inspection, often one finds that it will take more money than it brings in in the future. Having said that, I think that it is very difficult to predict the whole makeup of the recession going forward. We will be careful. We’re fiscally, I think, at this point very conservative, because we realize full well that in these waves one needs to be very careful with the cash. Having said that, I think we just acquired a small asset this past quarter, CHIPit, that fits particularly well into our offering in an area that is seeing very great customer demand which is rapid prototyping, and so I think it shows you that we will be open to interesting opportunities, but we’re certainly not rushing into things.

Your next question comes from the line of Matt Petkun with D.A. Davidson & Company. Matt Petkun - D. A. Davidson & Company: Brian, on the expense line, that was where we saw some of the upside obviously in Q1, and you did mention that there were some cost cuts. Looking to the guidance for Q2, I know you said to expect expense growth as revenues grow, but it looks like revenues this quarter could be flattish but we’re still going to see about $11 million in crease in non-GAAP expenses. Can you help us understand where we’re going to see that increase?

The expenses are going to fluctuate from quarter to quarter, just given the levels of accruals we make, the business levels of activity that we close in a quarter, and it’s going to move around a little bit, and this is pretty typical for us. Q1 typically is a lighter quarter, and then as various teams hit various compensation levels and so on throughout the year, the expense base and commissions and so on gradually increases until basically you’re into an accelerated mode in the fourth quarter, so that’s what we’re representing as far as the profile we expect for the rest of this year. Matt Petkun - D. A. Davidson & Company: Any commentary, Aart, you might be willing to share in terms of the pricing environment, especially in light of your commentary about maybe some competitors facing more pressures?

I think there’s no question that some people will fight for survival at this point in time, and will try to do that at the end of the day with pricing. At the same time, it’s also clear that quite a number of customers have now become very concerned about a variety of suppliers not just in our domain and would be weary even if things are very cheap to commit their future on companies that they’re not sure are going to be around, and so that doesn’t mean that there’s no price pressure. There has always been, but it’s also clear that we have the opportunity to keep investing. In fact, we have the opportunity by the way to also keep supporting on a global basis many of our customers, and that has not gone unnoticed. Matt Petkun - D. A. Davidson & Company: Aart, on the last call you will talk about the opportunity with maybe a specific deal on a specific consolidation scenario where you guys might have an opportunity to improve your standing. Have you see that business come in this quarter, and is there any way you could elaborate on that?

Actually one of them was, I believe, announced today which is with LSI where we had worked closely with them over a period of time to see how we could help them optimize their overall design flow and solution, and they clearly picked us as their primary partner for the future, and so there are quite a number of these types of situations that we’re working on. As you can imaging, every company is different by virtue of their history, their type of designs, etc., but the common denominator in all of those things is the same, which is how do you I stay a the leading edge from a technology point of view and how do I simultaneously rein in the cost, and that is the dialogue that is the dialogue that we absolutely seek with our customers.

Your next question comes from the line of K.C. Rajkumar with RBC Capital Markets K.C. Rajkumar - RBC Capital Markets: You guys mentioned that you expect people to drift closer to the contract renewal date as the year drags on. Can you just comment on how many or what fraction of customers you expect that to happen to and if that places any pressure on the target bookings which you have fiscal ’09?

From a sales force point of view, there’s always pressure on booking because that is their main role in the company. At the time, precisely because we have a business model that has been crafted over many years, we can plan ahead and sort of see what is going to happen in the economy and prepare the company. If the downturn worsens, then we can plan ahead from an expense point of view. If it starts to look up, we can take positive strides from there. Be it as it may, I think we’re in a relatively solid position, and not likely to be sort of held hostage at the end of a quarter, if that’s the right terminology. I think if one doubles up from that picture, I think we fundamentally have to realize that this is very deep and long recession, and therefore for us the most important thing is really how do we help our customers do well during this time, how do we help them focus on their total cost of design, and at the same time make sure that the business we do is healthy for the long term, and I think if we follow those premises, Synopsys will fare just fine. K.C. Rajkumar - RBC Capital Markets: Is it fair to assume that as and when your customers renew closer to their contract expiry, some of those contracts would simply slip into next fiscal year and probably therefore that has now placed your fiscal ’09 guidance into any jeopardy?

Well, these are bookings contracts, and typically if you take a round number for all three years, while the contract is running, fundamentally we keep reporting on revenue on a completely ratable fashion, so it really doesn’t matter technically if a booking is on this side or the other side of fiscal quarter or fiscal year. Now from a sales point of view, of course, we drive our sales force to continue to work the customer interactions and close booking, but from a revenue point of view, it is all a very smooth transition, so I think as I said earlier what is very unique and very powerful about this business model is that it allows us to plan much further ahead and take preemptive action if necessary well ahead of the time that there may be challenges. K.C. Rajkumar - RBC Capital Markets: Aart, you made a comment earlier which goes “never let crises go unused.” Can you elaborate what you mean by that comment?

Yes, and pardon if this is a little bit too popular management, but many people will say that crises are opportunities to make changes that companies have wanted to do or should have done a long time ago, but so often the daily urgency takes precedence on the long term imperative, and so as many of our customers are forced to relook at their P&L and are very much compelled to look at their cost equation, they also realize that not just the spending in EDA but how they spend in EDA is often suboptimal including a lot of internal work that could be reduced or could be improved upon, and so one of the key values we think we can bring to our customers is to explain and show them how they can substantially streamline their design flows, follow some standardization in IP use for example that allows them to cut the amount of expenses they have around these flows, and what happens in crisis situations is only high level management has a much higher degree of attention for these types of proposals than in the past and thus there is a better opportunity for us to advocate that perspective, and indeed we’re seeing that we’re having quite a number of high level dialogue with customers to help them save money in the long term and in the process build a very strong relationship with Synopsys. K.C. Rajkumar - RBC Capital Markets: Maybe this is way too early to ask this question, but for those customers who are due to renew next year, what are you guys hearing from them? Are they coming back to you guys and tell you that they expect that things are still on track or is it too early to ask that question. I guess what I’m getting at is what is the sense that you guys have on your customers who are due to renew next year?

Frankly it’s not always not the best idea to start asking customers that renew way in the future now what they think as everybody is looking at a recession that is not fully understood, and so there is no reason to rush forward on that, and I think it’s also fair to say that it is very difficult to predict what will happen. The stimuli may have some impact in the short term, but maybe it’s just sufficient to keep the economy going rather than prospering again. Be it as it may, my own sense is that we probably do well to be very conservative and careful at this time and that an assumption of thinking that the recession could go well into 2010 is probably wise as we look at our resources, our cost base, and how to support our key customers, and so if the weather looks up before that time, all the better, but meanwhile I think we are very solidly on top of having all the mechanisms of cost control works out, and if necessary, we will have the courage to take action.

Your next question comes from the line of Saket Kalia with JP Morgan Saket Kalia - JPMorgan: Aart, would you be willing to disclose how many primary EDA relationships you have worldwide?

Actually we have disclosed a few explicitly over the years, and I think it’s five that we have talked about. We can get back to you specifically with those that were announced. De facto, we have a few more that have been either de facto or have been accomplished without any communication, and then we have a slew of other relationships that are progressing in that direction. Saket Kalia - JPMorgan: For Brian, sales and marketing was down pretty significantly in the quarter over the last quarter. Just wondering how much of that decline was related to the lighter bookings than you expected versus expense control done in the quarter.

When you look at the spending in sales and marketing expense, the headcount is relatively flat if now down a little bit, so the rest of it really relates to commission expense that as I mentioned earlier hits accelerators typically in the fourth quarter, and then in the first quarter, you start accruing a new base, if you like, so as we achieve that number, as I mentioned, continues to grow throughout the year, so from an ongoing expense perspective, we’ve held the operating margins where we are, we are shooting at the 23% mark and did very well in the first quarter with 26%. We’re looking at keeping the expenses as tight as we can going forward, but we did give you the profile of the expense increase from Q1 to 2 and 3, and then based on achievement of the targets in the fourth quarter, that expense does go up.

At this time, there are no further questions. Please continue.

Given that there are no more questions, as usual Brian and I will be available after the call. We appreciate your support at this time that is to say the least very interesting. I’d like to reiterate that although we see quite a number of clouds on the horizon, Synopsys is actually in a very good place to advantage of our position, and we will continue to communicate very directly and frankly with you.