Jennifer Jordan, Corporate VP, IR Mike Fister, President, CEO Bill Porter, SVP, CFO

Jay Vleeschhouwer, Merrill Lynch Harlan Sur, Morgan Stanley Dean Witter Raj Seth, SG Cowen Securities Tim Fox, Deutsche Bank Vishal Saluja, Seligman Rich Valera, Needham & Company Sterling Auty, JPMorgan Eric Grenadie, Banc of America Securities Stewart Muter, RBC Capital Matt Petkun, DA Davidson Rohit Pandey, HSBC Securities

Good afternoon. My name is Ramona, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Cadence Design Systems Fourth Quarter 2005 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be question and answer period. If you would like to ask a question during this time, simply press “*” followed by the number “1” on your telephone keypad. If you would like to withdraw your question press the “#” key. I would now like to turn the call over to Jennifer Jordan, Corporate Vice President, Investor Relations. Please go ahead. Jennifer Jordan, Corporate VP, IR: Thank you, Operator, and welcome to our earnings conference call for the fourth quarter of 2005. The webcast of this call can be accessed through our website, www.cadence.com and will be archived for one week. With me today is Mike Fister, President and CEO, and Bill Porter, Senior Vice President and CFO. Please note that today's discussion will contain forward-looking statements and that our actual results may differ materially from those expectations. For information on factors that could cause a difference in our results, please refer to our 10-K for the period ended January 1st, 2005 and our 10-Q for the period ended October 1st, 2005. In addition to financial results prepared in accordance with Generally Accepted Accounting Principles or GAAP, we also present certain non-GAAP financial measures today. Cadence management believes that in addition to using GAAP results in evaluating our business, it can also be useful to measure results using certain non-GAAP financial measures. Please refer to our earnings press release for a discussion of non-GAAP measures and to both our earnings press release and our website for reconciliation of GAAP and non-GAAP financial measures used in today's discussion. Now, I will turn the call over to Mike Fister. Mike Fister, President, CEO: Thank you, Jennifer. Good afternoon and thank you for joining us as we discuss our performance in the fourth quarter of 2005. We had a terrific fourth quarter. We reported fourth quarter revenue of $378 million. On a GAAP basis we earned $0.08 per share for the period. Non-GAAP EPS is $0.29 per share. Operating cash flow for the year totaled $426 million. Verification was stellar. Customers are adopting our enterprising methodology, including hardware emulation. In fact, hardware emulation had its strongest quarter ever. Digital continued to build on its great momentum. In December we lost the third tier of our segmented digital solutions from counter GXL targeted at the most advanced design. Also added solid, sold all, first kits during the quarter and as we anticipated, the response to kits has been very encouraging. On Monday we introduced the first solution from our katina incubation, the Cadence Chip Optimizer, adding to our growing offerings as a design for the manufacturability, along with VCS and RET. Now let me give you a few highlights from the quarter. During the quarter we had both global customers and broader based customers choose Cadence as their enterprise partner. They are making this choice because our strategy and solutions better align with their demands for technology, efficiency and productivity. This was added in Freescale's decision to build an enterprise level partnership with us. Freescale was looking for the customer that had the breadth and depth of technology to help them create a standard design and mirrorfication methodology. This allows them to reduce internal support costs, simplify the rollout of new technology companywide, and deliver the most innovative and compelling products to their system level customers. Their customers now require that Freescale not only provide chips for end-use systems but also related embedded software and interface technology that goes with them. Building on a strong foundation with Virtuoso, Freescale added the full encounter platform and our prices, enterprise verification to constitute complete design environment. Their decision will result in major proliferation of our technology, beginning with enterprise verification. We have begun to build a bridge to the adjacent systems and software market with our enterprise approach to verification. In the fourth quarter global accounts that have adopted our enterprise verification methodologies were rapidly proliferating our solutions. For example, ARM committed to Cadence's incisive enterprise solutions, selecting both of the enterprise specon simulator and Palladium II. The combination speeds ARMs times to verification closure and enabled ARM to meet their aggressive customer commitments with confidence that their IP will function as intended with the customers software and in the end system. Texas Instruments extended an agreement, giving them multi year access to our leading technology of both hardware and software design verifications, including our latest Palladium platform. ST Microelectrics deepened its Cadence relationship with a worldwide deployment of hardware emulation and acceleration solutions, choosing both the Palladium and Xtreme server platforms. Several of these customers served to tell us communication system design chain. They've begin to see value in having a consistent verification methodology throughout, that design chain, in order to minimize risk for their systems and customers. The advanced level verification methodologies proliferating our global accounts are increasingly adopted in our broader based accounts as well, and now that these customers are tapped into a more complex design. And the fourth quarter, these accounts stepped up their usage of our enterprise and design team solutions. They added process automation capabilities, which pulled additional simulation sales and drove competitive simulation displacement. We continue to have excellent momentum in digital where the strength of our technology differentiates us from the competition, particularly at the most advanced process nodes and on the most advanced design. During 2005, in order to better align our technology with our customers' needs we segmented our digital product line around design complexities into the entry level L and mid tier and counter XL. In December, as promised we introduced Encounter GXL, for our most advanced solution for designs of over 100 million gates incorporated power and yield aware technologies. We already see solid results from product segmentation. For example in the fourth quarter, Fujitsu announced that it has adopted our most advanced solutions using our complete Encounter GXL platform for 65-nanometer internal reference design flow. Fujitsu made this decision because on account of GXL's ability to handle new design challenges such as yields, process variation and linkage power. Product segmentation also allows to us compete successfully at the entry level as well. This was demonstrated in Q4 when Encounter L was a perfect fit, in terms of price and performance for customer's 0.25 and 0.13 micron mixed signal design and displaced a competitor. Encounter has received best in test award from Test and Measurement World magazine, and we announced collaborations with Spark, an atv provider as one and validated flows for test and yield diagnostics. The market is also recognizing the value in our kits approach targeted to key verticals. We were awarded the Editor's Choice Award For Portable Design for our AMS methodology kit at the consumer electronics show. Our substantial customer relationships with leading consumer electronic companies led to a strong initial presence at CES. There are four early observations on kit adoption. Customers choose kits when they are planning to enter a new market or they are new to a type of design, like maybe RF or they want to improve their existing methodology and drive consistency and efficiency across the company. This is especially true in analog mixed signals, and or they are accelerating the rollout of new technology, such as the ARM core to their design environment. We released the RF methodology kit in mid-December and have several more kits in the pipeline. I will be anxious to tell you more about kits' progress on analyst day. Our leadership in customized and silicon package board as a differentiator for customers who seek an enterprise level partner. During the fourth quarter we saw several customers choose Cadence on the basis of the way our custom and digital platforms perform together. Inter symbol communication, this is a supplier of ICs for optical networks and a veteran of analog design, deployed RT Compiler XL and Encounter L within its Virtuoso mixed signal flow to achieve higher design productivity and better quality silicon. In customized-c we will introduce Virtuoso 6.1, which will include advanced routing technology and take advantage of our latest features in open access in mid-'06. Our leadership with open access continues to be a substantial point of differentiation. And in Q4 it drove an important customized q-win, in a major North American semi-conductor to our company, that has been a long time customer of a competitor. Amcore is a contract manager for leading edge package solutions chose Cadence for Allegro package design tools for our ability to work with them on a new system and package technology. They can use this to enhance their package zone as well and reduce their cycle times and costs. We will introduce our new system and package solution and related stiff methodology kit in the middle of the year. More than a dozen major companies are now evaluating the Cadence physical verification system we announced at CDM live in September. Several are already committed for production deployment; obviously we are competing well across some of the traditional benchmark. We have also made investments in radical enhancement technology which is unique, because we are driving the litho modeling up into the Virtuoso design flow. And this week we announced the first release from our katin, excuse me katina incubation, called the Cadence Chip Optimizer. Its capabilities use after-place and routes, but before case out to improve the yield, manufacturing and performance of complex ICs. The solution is already had production success with API displaying it on more than 10 IP designs including the graphics processor inside Microsoft Xbox 350. IBM said, and I quote, " Cadence Chip Optimizers perform flawlessly on our 65 nanometer microprocessor design methodology. The truly collaborative partnership we have with Cadence Chip Optimizer team for the last three and a half years has been an ideal working relationship. The extensive time we spent together understanding and addressing the design per yield and manufacturing challenges was key. We achieved closure to our design goals on schedule in an automated and predictable manner." To summarize, we told you at the beginning of the year, that our strategies to expand in adjacencies, such as verification and manufacture abilities that offer incremental growth opportunities. For our core design business through technology, innovation and to pursue new business and product re-models. Throughout 2005, we delivered on the strategy, laying the ground work for future growth and market expansion in '06. Our goals for the year to continue to make our customer’s lives easier to grow media and beyond, and to demonstrate operating consistency. In executing these goals we expect to grow revenue, operating margin and cash flow again in 2006, so I'm going to let Bill tell you all about that. Bill Porter, SVP, CFO: Thanks Mike. Cadence completed a very good year with strong financial results in Q4. Revenue, profitability, and cash flow all met or exceeded our expectations for 2005. Total revenue was up 11% for the year, non-GAAP operating margin improved two percentage points to 24% for the year, and operating cash flow of $426 million exceeded our $400 million goal. Book-to-bill seeded one for the year and we finished the year with a backlog of $1.8 billion in line with our estimates. We expect backlog to grow again in 2006. We finished the year with good momentum, our product portfolio is very competitive, our new initiatives such as kits and segmentation are starting to ramp, and our enterprise approach to doing business is helping customers meet the design challenges. Now, let's review our results for Q4 as well as the year. GAAP earnings per share for Q4 were $0.08 compared to $0.20 in the same quarter last year. For the full year of 2005, GAAP earnings per share were $0.16 compared to $0.25 in 2004. On a GAAP basis operating income was up 42% quarter-over-quarter and up 14% year-over-year. And in December 2005, Cadence received an extraordinary cash dividend of approximately $500 million from a wholly owned Irish sub, subsidiary of the Company, repatriating certain foreign earnings pursuant to the American Job Creations Act. We recorded an incremental tax liability of approximately $30 million, which is, which reduced GAAP EPS in the fourth quarter by $0.9 and in the full year by $0.10. Non-GAAP earnings per share were $0.29 for the quarter, compared to $0.26 in the same quarter last year, up 12%. For the year, non-GAAP earnings per share increased 26%, to $0.83 from $0.66 in 2004. Total revenue for the fourth quarter was $378 million, compared to $343 million in Q4, 2004, up 10%. Product revenue was $258 million, maintenance revenue was $88 million, in services revenue was $32 million. Revenue for the year totaled $1.33 billion, up from $1.2 billion in 2004. Revenue mix by geography in Q4 was 42% for North America, 20% for Europe, 26% for Japan, and 12% for Asia. As you can see from our geographic revenue mix, it was especially strong quarter and year for Cadence in Japan where we continued to consolidate with our major accounts and increase our penetration at our other systems and semi conductor companies. Overall we saw a good level of business in all geographies in Q4. In Q4, one customer accounted for 21% of revenue while a second accounted for 12% of revenue. For the year, no customer accounted for more than 10% of revenue. In the quarter approximately 74% of our product business was represented by licenses, for which revenue will be recognized over time. Approximately two-thirds of product revenue was generated from backlog in Q4, and for 2006, we again see, we can expect to generate approximately two-thirds of product revenue from backlog. Contract life calculated on a dollar weighted average basis, was approximately three years. Q4 total costs and expenses on a non-GAAP basis were $257 million, up $3 million from $254 million in Q3, due to seasonally higher incentive compensation. Non-GAAP operating margin in Q4 was 32%, up from 30% in Q4 of 2004. For 2006, we're looking for non-GAAP operating margin of approximately 28%. Year-end head count was approximately 5,000. Receivables quality remained high in Q4, with receivables of 90 days past due at 1%. Within our historical range of 1% to 3%. Total DSOs were essentially flat at 92 days, compared to 90 days in Q3. We expect DSOs to settle into the mid to high 80s by the end of 2006. Operating cash flow for Q4 was $177 million, compared to $139 million in the fourth quarter of 2004. For the year, we expect, or for the year we generated $426 million in operating cash flow, exceeding our goal of $400 million. Capital expenditures for 2005, were $72 million, yielding free cash flow of $354 million. For 2006, we expect to generate operating cash flow of at least $425 million, while capital expenditures should remain in the range of $75 million. Cadence repurchased 6.2 million shares of stock in Q4, at a cost of $101 million. Cash and cash equivalents grew to $861 million at year end from $619 million in Q3. As many of you know FAS 123R requires expensing of stock-based compensation. For 2006, we estimate pretax stock-based compensation expense of $100 million. Our non-GAAP measures exclude this item. Now, I'll turn to our outlook for Q1 and the year 2006. For Q1, we expect revenue to be in the range of $315 to $325 million, reflecting the normal seasonal decline from Q4. GAAP EPS should be in the range of $0.07 to $0.09 and non-GAAP EPS in the range of $0.19 to $0.21. For the year, 2006, we expect revenue to be in the range of $1.4 to $1.45 billion. GAAP EPS should be in the range of $0.47 to $0.55 and non-GAAP EPS in the range of $0.96 to $1.04. I also want to give you a sense of what the seasonal pattern will be in 2006. We expect to generate 22% to 23% of annual revenue in Q1, 22% to 25% in Q2, 23% to 26% in Q3, and 28% to 31% in Q4. Other income and expense for 2006 should be in the range of $38 to $42 million and approximately half of that amount should come in the first quarter with the remainder spread roughly equally over the last three quarters. So, as I look at our results for 2005, I'm pleased with our consistent financial performance and the great strides we've made in offering our customers the broadest and deepest set of design technologies on the market today as well as introducing innovative new approaches with segmentation and chips. We are better positioned than ever to pursue our strategy of becoming a true enterprises level partner to our customers. Operator, we'll now take questions.

Q - Jay Vleeschhouwer: Thanks. Good afternoon. A couple of questions around backlog and bookings expectations. Bill, would you be willing to describe what you think your year-end backlog might be in 2006, versus the 1.8 billion you finished within 2005? Also by comparison to 2002, 2003 for yourselves and the industry, how much better do you think EDA and the, the R&D spending environment might be versus three to four years ago? And there's been a few years of rip, as R&D spending improvement, will that necessarily translate into commensurate increases in bookings or run rates somewhere you were two to three, and three to four years ago? A - Bill Porter: Sure, Jay. In terms of the backlog estimate, I guess we said I expect to grow our backlog again, and it will be either in the $1.8 to $1.9 billion range. I don't think I will make a point estimate. And the reason I think we are continuing to grow value so it's not for us just getting to a certain size. It's trying to get the value to the customers and get kind of the appreciation for that and so that's why we were working the pricing piece of it. And the selling model that the team is working on is just incrementally adding that new technology to the customer. So it's better to kind of get it in when they need it; they recognize the value this trying to lop a big point of it on. In terms of the environment, I think we've seen pretty consistent R&D spending over the last couple of years. This year, again, I think it was, we expect to see R&D spending at least in the industry, of kind of upper single digits. 7% is what kind we have seen as a core over the last few years. I don't think that's going to change. It varies a little bit customer to customer. So I think that's pretty steady and if anything, I think the tone of innovation is continue to pick up which I think is just healthy for what we are seeing. Q - Jay Vleeschhouwer,: Would it be fair to assume that in 2006, you finally get back to or surpass your last best bookings year which was 2002? A - Bill Porter: Well, I don't think we want to, we always go back and forth on that. So I think we'll continue to grow the business. We're having very good success, but I'm not going to pick a point target for that. Q - Jay Vleeschhouwer: And then finally, for Mike, are you, in fact, seeing with the kits and the segmentation, the price yields that you hoped for out of the strategy? In other words, with your kits you know there's effectively no difference in principle between the price of a kit versus the a la cart approach to buying the product. I wonder if that's really the case in practice and whether the segmentation is, in fact, yielding the feature-based pricing differences that you have been counting on. A - Mike Fister: That's a good question and I think it's probably still a little bit early days, Jay. We definitely, I'm very encouraged by the early results, been concentrated in North America for the sales, and so I would like to see, I think both Bill, and I would like to see the world's view of those, because kit applicability extends nicely into some of the emerging parts of world, where the intellect is high, and the experience can be bolstered because of the kit-oriented approach. And so we're kind of collecting data but I, I think we could unilaterally decide that we are seeing a pull through across the product for the kits. And that, that's good. And it’s, and it’s, bolsters the breadth argument that we make for the Company, and I think it's going to be very powerful for us in the broad base of customers. Q - Jay Vleeschhouwer: Thank you.

Your next question is from Harlan Sur with Morgan Stanley. Q - Harlan Sur: Good afternoon, and congratulations on a very well executed quarter. Turning to the geographies, AsiaPac was quite strong this quarter, almost doubling sequentially and I think it's, looks like a record quarter for that particular region. I’m curious to know which geographies were particularly active and for what end markets segments were some of these semi conductor companies targeting? A - Bill Porter: Harlan, we're continuing to see if you look at our geographic breakdown, success in Japan and I think there’s a combination of factors. We have a very good set of technologies and we have a very good team there. That's one thing that's going well and I think the second thing is we are seeing the economy and particularly technology spending continuing to increase with the large electronics companies in Japan. And so I think it's just kind of our technology is fitting in real well and we are executing real well. So I think that's the biggest piece that you are seeing in terms of growth in Asia Pacific. And I think we are starting to get some momentum also in the other Asia areas but it's not showing as dramatically in the results. It's still early days. Q - Harlan Sur: So in addition to Japan, I mean, what other areas were particularly strong, maybe Korea or India? A - Bill Porter: Well, I think that we just, we'll cross the, we're seeing good business in both US. and in Europe, in general and I think we're clearly seeing the impact of some of the large electronics companies in India, primarily and we are doing very well with the large electronics companies, some of the success, for example, we've had with STTI, other companies we have talked about; a lot of that also goes back to the success that we are having with the teams in India. And so that, on its, on its own, its really being very helpful for our total business. Q - Harlan Sur: Okay Great. And then I know that you paid particular attention to this on the call, but the EDA vendor consolidation within the semi conductor industry just it may be becoming much more pervasive here, and other free scale deal your announcing queue far obviously been a very good example of that. We ourselves are hearing more talk about vendor consolidation, just I’m, talking with some of the 30 or so semiconductor companies that we cover. So I guess my question is that in addition to the IBM, are you seeing a similar trend amongst the established semiconductor companies? And then I guess as a follow-on, how much do you think the industry consolidation will be contributing to your bookings growth over the next couple of years? A - Mike Fister: Yes, we, Harlan, it's Mike. We definitely have got some. They're hard to testimonial, but your intuition is right. It's across IBMs and established companies. And we have a kind of cost and flow of testimonies from companies like ATI, as you can see. We have targeted relationships for some of the new technology entrees like the Data Chip Optimizer with them, as well as the IBM, as well as IBMs and we do an awful lot of work with the foundry, our foundry partners. So I think that, that phenomena of cost savings may well be crystallized by the established companies. In other words that's a way of differentiating themselves from the IBM as a much more efficient way to operate, and that's a lot of the catalyst. It, both trends bode well for us. I think we're very confident of the breadth of technology that we have, and our size and financial scale makes us very partnerable and dependable when someone makes that big of a bet, whether it's a big company or a small company. And I appreciate you noticing the Free scale engagement. We spent a long time doing that and making it sure that it was going to be good for both of us and we were well engaged in many, many more conversations like that. Q - Harlan Sur: Okay. Great. And then one more product question. I think as you mentioned on the call, Palladium has been, I think, continues to be, a very strong growth driver within your verification platform, and I know you can't give us revenue contributions from Palladium, but can you give us a sense of how this product segment actually grew in 2005? A - Mike Fister: Well, certainly it grew faster and we said that we had just an absolutely great quarter for verification as a whole. The Palladium, business, is obviously strong. I think what, in my mind, as we called out that adjacency and kind of we show the value of the, of the rest of the acquisition that we made, what you really see is the continuum of technology from base simulation all the way through emulation. The spectrum product adversity has is very strong and it's a drag effect for emulation as emulation is a drag effect for that with the process automation platform. So it's really, I know it probably sounds like a cliche but it's a very good complement of those technologies working together, and I think one other element of Palladium, and we are always going to harp on this but since it's been probably our best example, segmentation is valuable. We have gotten good segmentation results, and upsell, coming back to Jay's question with Palladium, to Palladium II and now dragging across the Xtreme product line, and so it is a very good demonstrable because you can see one that's smaller or sleeker or more capacity and it's very easy to quantize the differentiation in the product. So that's what, we're watching it for all three of those dynamics, but the most powerful one is verification as an adjacency, it's a growth opportunity for the EDA market in general. It's certainly a huge growth opportunity for us and all throughout 2005, I think we could show that very quantifiably and it’s going to continue through '06. I think it is going to go faster. Q - Harlan Sur: Yes, it sounds like it. Thanks for that, Mike. And then one last question for you, Bill. I think you said that other income, net in the first quarter is going to be on the order of $19 million to $20 million, is that correct? A - Bill Porter: That's good math, Harlan and the answer is yes. We see a liquidity event for one of our investing companies and that going to be some extra cash that going to come to us in Q1, so we wanted to make sure that everyone was aware of it and always a nice thing to have. The other thing that's going to be generating very solid other income for us is interest income, because of the size of our cash balances. So that's pretty steady. We just want to make sure that everyone realizes that that's there for the year and we have a little bit of extra income that we are going to be able to take advantage of in Q1. Q - Harlan Sur: Okay. Thank you. And gain great job in the quarter, guys. A - Bill Porter: Thanks

Your next question is from Raj Seth with SG Cowen. Q - Raj Seth: Hi, thank you. Mike, can you talk a little bit about the R&D intensity of this business, and whether or not with a lot of the activity that you have in that domain, you think there is, in fact, a real opportunity to decrease over time spending in the R&D line, and this, I guess fundamentally, my question is driven by the observation that margins are now pushing up into the upper 20s, historically, none of the big companies have really run much above 30 and I'm curious if you think, I know it's early Bill, but if you think you can , you have an opportunity to push margins past 30, at some point, and what might allow you to do that. A - Mike Fister: Well, Raj, many of you guys have gotten to hear Jim and recently Moshe kind of come out and showed you some of the programs. And I think those are very engaging, because you see not only passion but you see intellect behind them. I think there's an awful lot of leverage behind what we do. That's one of the reasons why we have driven the team, both in construction and focus to be internally innovative and hopefully the katina technology debut and the Cadence Chip Optimizer is just another example of a very powerful combination we have between our internally developed products, whether it's in the base machine or ,or through the incubators and you even begin to see more leverage out of the academic stuff that we do with the Berkeley labs and such. And that, itself, is a catalyst for us to be able to go and really, I think, take the Company to another level of leverage on the development dollars. And the, the cast of characters that we have across the Company from the base technologists to the management teams are incredibly focused on demonstrating that, and really kind of strutting our stuff. I think that's what leadership companies. Bill, do you have a comment on the operating margin? A - Bill Porter: Yes, Raj, I do think, in our next milestone is 30, but I don't see that as the end point; I do see leverages, Mike does. In development, I think the leadership is looking for opportunities there and we'll find it. The technology that Mike referred to with Cadence Chip Optimizer was very, very efficient, as well as going to be very good technology and we're learning things from Jim Moshe and from experiences like that. So I think 30 is the next milestone but don't look at that as a cap. And you'll see us, as we develop that experience, we'll be able to give some estimates over time, but I think now, just know that there's place to go beyond our next goal. A - Mike Fister: Hey, Raj, one more point too, I think you shouldn't overlook the sales and marketing team that we have. We have, I think, arguably the best sales and application engineering force in the industry. It's a huge force. We team that with the marketing and the strategies around segmentation and kits. You know that there's a lot of leverage in the applications engineering we think, because you don't have to have application engineers do you the program over and over and over again for every customer. And several members of our leadership team are focused on demonstrating that as well, since it's such a huge component. So I like our chances to be able to continue to demonstrate efficiencies across the whole functional elements of this Company. Q - Raj Seth: Could I ask one more if I might?. Could you talk just briefly about your strategy? We talked a lot about China and India and some of tease emerging markets. Can you talk about your strategy to develop those markets, particularly in the context of these kits? I know they are sort of less mature than the design community, certainly in North America or in Europe. Can you talk a little bit about how it is you are going to take advantage of what looks to be real secrope over there and long term, probably a lot bigger dollar opportunity? A - Mike Fister: Yes, and I can never say anything briefly, but I will try for a second. India, China emerging geographies in general, I think are a great opportunity, and whether it's the IBMs and the multinationals going over there in Greenfield spaces. Those are opportunities for us. And I think as you point out, as we're talking before, the fabless community in general is a huge opportunity because it is a seed expansion and it's a place where the people are tremendous intellects. I mean, master's degrees, Ph.D.s are commonplace without tons of practical I will say, experience quote/unquote for having developed a wireless chip or whatever their target focus is. The sub developments in China represent huge opportunities around consumer electronics, automotive electronics and across all of those geos, it's all very, very good. So the thing that bridges that gap is the kit orientation, because you take the foundation what we've got and you take the methodology and then people just use it. They don't have to redo it. We are going to exploit that distribution-wise by a combination of three things, one, we're doing some stuff direct. We're doing that in the big opportunities, the big customers, with sales and application engineer forces as you are used to seeing from us. Then, we're doing it through an alternate channel as Kevin calls it, which allows to us take more advantage some of the value-added reseller base and we are doing that first with the most mature technology like front circuit board and then moving upscale and I think low-end digital is a good opportunity for that next. And then the third thing, we're going to pile some other models. We have talked a little bit about some kind of a, ASP models that allow us to be able to support software environment with also application support, that I think could be very engaging for that part of the world, so once again it bridges the gap, and sometimes these people want to spend money a little at a time as opposed to in big gulps. So, it's a complex strategy with lots of moving parts but I think your intuition is right. We see it as an opportunity for growth. It has to be packaged that way and I don't think doing whole drinkfuls is going to be the way to get the most effective leverage out of it. And I think we have got a good component of both technology and approach that makes us a good, a good possibility for, penetration. Significant penetration. Q - Raj Seth: Thank you.

Your next question is from Tim Fox with Deutsche Bank. Q - Tim Fox: Hi, thank you. Good afternoon. Bill, just a couple to start with for you. I believe you guided for operating cash flow in '06, about 425 million if I'm correct, this is about flat year-over-year but you are guiding to about 400 basis point of operating margin improvement in '06; can you explain why you expect of cash flow to be flattish? A - Bill Porter: Well, I think Tim, what you are seeing in the past, if you go back the last year we started at least at 400 million and delivered 426. So the same thing, when I start at 425 this year. There's always a little bit of variability in just getting structures and cash, but I would expect to see the similar kinds of leverage that we got in the past, just, I guess, same thing as we started last year with top line, I think we were looking at about 6% or 7% growth and we did better obviously. So I would like to do the same thing with cash flow. Q - Tim Fox: Okay. A - Bill Porter: We look for growth, but I'm keeping my, as a least saying, we should at least do this and hopefully we'll better. Q - Tim Fox: Okay. Fine, that's great. And on your guidance, I think you said in the past, you expect to grow the top line essentially in line with R&D in the industry, and then add about 2 or 3 percentage points on top from adjacencies over time. Looking a guidance for '06 and the fact that you mentioned R&D should be up around 6% or 7%, are you being a little conservative around the adjacencies and how much that's going to add to '06 or are you just assuming R&D's going to be a little below that 7% range? A - Bill Porter: I don't think R&D's going to be really significantly below that range, the things that I have seen or that going to be in the 7% to 10% range, depending on where you see the analytics. What I think you will see is a bit of conservatism and we do want to make sure that we spend the time to develop some of these opportunities we have. And like we did this year, I think you will see that we should be able to, by some of the strength of the technology, have a number of wins in 2006. So I think you will see us be able to at least grow with R&D, and probably a little better than that. But this is all about for us execution and we want to see consistent execution, quarter on quarter, year-over-year. So I would rather have a little bit of conservatism in there and show you based on the customer examples how we are adding value and just growing the business and hopefully a little faster than we started out the year. A - Mike Fister: Tim, I think there's real learning and in the analog of growing the value-based business like we have done with some of our big customers, there's an analog to realizing the value of the segmentation and kits, the same way and so we probably are factoring in a little bit more learning or a little bit more time for conservation there, but, boy if it was anything like we were able to demonstrate in '05, as Bill said, we kind of started off one place and ended off in another. There's no reason why we shouldn't be able to do that again, and I, I, we stand by our model that we have for the adjacencies and for the innovations that we have around the marking approaches being growth components above the R&D average spending line. Q - Tim Fox: Okay. Thanks for that and just one for you, Mike, if I could. You made reference in your prepared remarks about custom IC win that I believe was competitive displacement, and you suggested it was driven in part by open access. And I was wondering if you could just elaborate more on the deal, how it was that having open access gave you a leg up here, and do you expect other deals to come in and competitive displacements because of that, that partnership? A - Mike Fister: Very good question, Tim. The, we enjoy very nice market segment penetration with our custom IC capabilities, and there's translating a few places in the world where we were not the incumbent and this is very impressive to me, because this was one of those. And open access, I think, is always one of the most forward looking things of the Company had done as I came into it and we're going to continue to drive that mantra and with big customers like this one and a few of the other components of it, it's a way for EDA companies to walk the talk of an ability to cohabitate for leverage tools that they either develop themselves or natively develop capabilities or maybe a few that are supplemented from other suppliers. And so this was one of the last actions where we really were demonstrating that and they've seen what we were doing on Virtuoso 6.1 and it was just incredibly encouraging to them. And as you could tell from the prepared remarks, there are customers of ours across some of the other digital and so they, the ability for those things to interact seamlessly, predicated on open access really delivered on every intent that we had ever made with open access and I think that other of our colleagues, competitive colleagues in the industry are going to try to emulate that strategy. Certainly if our big customers are any barometer, they want us to be able to be that way. And so we’re going to go follow through on it. I think the team is doing a nice job. I can't wait for to you see the Virtuoso release in the middle of the year. It's very impressive. I mean the early feedback from the customers is nothing short of glowing. So that's a the simple matter for open access. A - Bill Porter: And, Tim, just one other, just point of clarification for the cash flow, operating cash flow, is with the dividend that we're having, we are going to be paying a tax of around $30 million in cash in the first quarter. And so that's another item and we will absorb that and move forward. But, just so you know, as you look at your modeling, that's one of the things that's also included with the '06 estimate. Q - Tim Fox: It was not in '05? A - Bill Porter: Correct. Q - Tim Fox: Got. It thank you.

Your next question is from Vishal Saluja with Seligman Q - Vishal Saluja: Hi, Bill, thanks for taking my questions. Just on the free cash flow, you said that DSOs are going to be down this year. Tell me what we should think about for CapEx. Is it going to be roughly flat or up from these levels? A - Bill Porter: CapEx should be relatively flat, Vishal. We have been estimating around 75 million at the beginning of this year, we came in at 72 and I would think that that level, we are in that 75 million range, and its going to be continual. We're still investing and growing particularly outside of the U.S. in infrastructure, and so I think that will continue at about that same level. Q - Vishal Saluja: Okay. So a question for you or for Mike on uses of cash flow because I'm looking at what you accumulated on your balance sheet, roughly 820, by my calculation, you can generate another 400 million with relative ease this year, if you make plans. So any thoughts on, on prepared to see the buyback or whatever else you have for uses of cash. A - Mike Fister: Great Vishal, I think what you saw in Q4 was that we did do some repurchase to the tune of $100 million, and so I, in the past year, I think what we have said is, yes, let's build up a little bit of cash balance. We will look for opportunities to grow the business and we'll continue to evaluate repurchase opportunities. So we, I think we did all three with varicity through the balance and system repurchase. And I think you will see us do the same thing in 2006. We have about $20 million left on our authorization for repurchase, and we're planning in our next board meeting to revisit that and to ask for additional authorization. So we're very comfortable with generating cash and think we'll put it to good use in the business, as well as repurchase is, as we see those opportunities ahead of us. Q - Vishal Saluja: Just last question, on the margin improvement you said that margins beyond 30% is doable for you. I just going to question you a little bit to see, what's a, sort of minimum level of margin improvement we should expect on an annualized basis? So just to get to the 30%, is it something that we can look forward to in '07, or is this kind of a, a more close to 50 to 100 beats a year? A - Mike Fister: No, I think the, our near term objective of 30% was kind of an '06/’07 thing that we had talked about last year. So really, since we should get to 28% this year, it should be definitely in our sights for '07. I would be disappointed if we didn't do 30 plus in '07. Q - Vishal Saluja: Okay. That's very helpful. Thanks a lot.

Your next question is from Rich Valera with Needham & Company. Q - Rich Valera: Thank you. Just to revisit the vendor consolidation. Congratulations on the win at Freescale. On One concern I have heard raised about this type of deal is that as you, sort of these large customers are looking to reduce their overall spend on EDA by reducing the number of vendors and then gaining sort of price concessions with the remaining large vendor, do you feel like, one, there's the risk of sort of potentially shrinking the market as these deals happen, and do you feel like you held the line on pricing in Freescale? Do you have a hold on that thing? A - Mike Fister: Yes, Rich, it's Mike. I think both Bill and I have been very outspoken that we would like to project and then realize value in the engagements with our customers and I don't know who will speculate, but I will tell you that we, that we mean that when, we meant that when we say it and I think while we can't disclose the details of it, we'll find that it's more of a TCO argument, like, total cost of ownership in the IP analogy as we've often used and that's why the discussion is protracted. I think that Freescale is an example of a very forward looking management team, not just predicated to try to reduce costs and kind of beat someone into submission, and they had the same kind of mindset as we did. How could we pick a partnering opportunity and turn it into a foundation that we will build on? I'm very confident that we are not only going to be able to talk about what we are doing today but that we have a lot of green field space to build on top. And that was our intention. And I think it was the intention of our customer and it bodes well for the industry. That same way that happened in the IT industry. And so I think this is much different than may have been happened a few years ago when it was kind of dog eat dog and people would do anything to get a point of market segment share shipped. It is just not our, our management mind-set and I think the breadth of our technology, really enables us to be able to do that. So you've got to, a rare combination of management and pen both sides and technological, bulk. Don't miss the fact that I think we are a very dependable partner by our financial strength and brass of support, too; and most of our customers like that are worldwide, we are worldwide, and they are expanding and we are expanding and it's a very kindred relationship that allows us to do it and I think we'll be able to demonstrate and improve value for us and for them and that will grow the industry. Q - Rich Valera: Great. Thanks. A - Bill Porter: Yes, Rich, I would just like to add, this is Bill. In a lot of the large customers, it is rare that you get something of this size and scale that you do of Free scale at one time. There's a few of those, and so the majority of the business that we are doing is adding incrementally to our customers' capabilities. And so in adding to their capabilities at ST, TI and there we're adding capabilities when they see the value and when we see the value. So I think there's a lot of work that goes on across the whole large end, growing customer base to add value and it's not just these big, the concept of big contracts. I think that's a relic. Q - Rich Valera: That's helpful. Thank you. And if you could just maybe give an update on your new DRC to PBS, I know it's still fairly early. But anything sort of new to report there in terms of any progress made? A - Mike Fister: Rich, a good question. Obviously, something that we're proud of it, we debuted it in September, more than a dozen different customers in various stages of evaluation. Just closed somebody who's consolidated on it across their whole designing continuum. My comments said if we obviously benchmark very well that's because I'm reading from some of our competitors that we don't benchmark worth a darn. Come on, guys. I mean, why would we introduce something like that? So it's, it's something that we are in no hurry to, to try to devalue, just to be able to have a competitive displacement, because you know that the foundation of that product has got a lot of head room in it. And so I think that's characteristic of a lot of the design for manufacturability penetration. You have to do these with big companies or targeting companies that have got a lot of influence in their manufacturing element, you do that in partnership, and we're, our motivation is to do it and demonstrate for the long term and we started with TBS. I'm very excited about the Cadence Chip Optimizer. You could see that was in place in demonstration evaluations three and a half years with one of our big customers. And if anything, I hope it answers a little bit of, are we missing in action in DSM? I don't think we are. I think we're extremely calculated about how we're approaching that with our customers and in the long term, it will parlay very nicely for us. Q - Rich Valera: That's helpful, guys. A - Mike Fister: Okay. Thanks.

Your next question is from Sterling Auty with JPMorgan. Q - Sterling Auty: Thanks. Hi, guys. A couple of questions. First, Bill, can you walk us through a little bit of how this term loan that you took for the dividends is going to work in terms of, is there interest expense that will flow through the income statement on a quarterly basis? And then just the repayments of it? A - Bill Porter: Sure, Sterling. So in terms of the repatriation, we did see the opportunity to get a little leverage, so we could take $160 million term loan out. It is amortizable over three years. You should see us pay it off at least in two, if not earlier, just because of the strong cash that it will generate. And there is some expense. It's, I think, a pretty competitively priced loan, but that's already included in the other income and expense estimate I gave you. So it is not that significant and we'll easily be able to absorb it through, actually additional cash that we'll generate off the balance sheet. Q - Sterling Auty: So the 160 face value of the loan showed up as 128 on the balance sheet; what's the differential? A - Bill Porter: The other part is sitting in short term. Q - Sterling Auty: Oh, okay. Sorry. A - Bill Porter: No problem. It's hard to see this stuff in five minutes. Q - Sterling Auty: Yes, yes. And that's basically you are getting charged LIBOR for it? A - Bill Porter: Yes, it's a little plus LIBOR. Q - Sterling Auty: Okay. A - Bill Porter: There's a little bit on top of LIBOR. So like I said look for us to pay that down quickly, but it's, we think it was a good choice, the repatriation cost is 30 million and if you think of the normal tax rate we probably saved $120 million, so we'll probably save as much as we are going to pay on the loan. Q - Sterling Auty: And one other housekeeping, what, I didn't quite catch it, what should we think of in terms of tax rate for '06? A - Bill Porter: I think we should be very consistent with our 26% non-GAAP rate. That's kind of our long-term rate, and back out a lot of the non-tax charges like amortization. So that's very consistent, and we don't see anything changing in the short term there. Q - Sterling Auty: Okay. And then, Mike, a high level question. Verification was obviously an important driver to growth in 2005. As you look at 2006, what do you think the important growth drivers from the segment basis are really going to be? A - Mike Fister: Yes, I continue to think verification is a, is a key element, strong across the rest of the business and then contributes in those, very important things that we were talking about on top of, I'm going to say, contemporary R&D spending. I like our chances too on some elements of the manufacturability segment. That's why we called it an adjacency is. We are going to be careful or thoughtful about unlocking the real value of that. Because anybody can give it away for gosh sakes and we are not going to do that. And I think there's, really good opportunity in the base of the customers, as Bill said, was saying, kind of ponying on, when we have a significant consolidation with a big or a small customer, that is really a, kind of a launching pad or a diving platform, to expand the business inside those companies and move up their value scale. And high-end digital, all the things that are there still good growth segments for us. RTL Compiler had a wonderful quarter this quarter too. So there's really no one big one but I think we continue to point to the adjacencies and strut our stuff on the physical concentration of specifically EDA and it bodes well for us in '06. Q - Sterling Auty: Great. Thank you. A - Mike Fister: Yes

Your next question is from Sumit Dhanda with Banc of America Securities. Q - Eric Grenadie: This is Eric Grenadie for Sumit. A question for Bill, how much receipts for sale of receivables is embedded in your cash flow outlook for '06? A - Bill Porter: It should be less, clearly, than we did in '05. We used a lot of our international receivables to fund our repatriation, so I would see it, I think, drop a fair amount in '06, but as you probably are aware, about, 24% 25% of our business is up front versus over time. And having that level of business, it makes sense for us to finance or to basically match the cash with the revenue, where we're not able to just work with the customers directly. So that we can just minimize the credit risk. So you'll see it drop in '06 but you will still see it as a reasonable amount of the business. Q - Eric Grenadie: Okay. And just clarification on your, on your outlook for '06, basically on non-GAAP operating expenses. It seems like your guidance is assuming at least, like half of growth on the OpEx segment certainly that’s been half at the revenue rate. Can you just talk us through that and clarify what's going on? A - Bill Porter: No, I think it's very simple. For those of you who know me, that's basically our planning mantra is that we don't want to grow our expenses at any more than half our top line rate. And as we continue to do well on the top line, we look for additional investments. Q - Eric Grenadie: The reason I ask is because in Q4, it seems like your expense came in just slightly ahead of what you had and based on your guidance in Q1 of '06, with midpoints of 320, and that, other interests, income of 20 million, it seems like you are still not going to be able to make a big catch up on operating expenses in Q1. So I'm just wondering if there is a function starting Q2 or, or Q3 or A - Bill Porter: No, you actually see expenses drop a little bit Q4 to Q1 because of some of the seasonality that goes along with incentive compensation. Obviously Q4 is our largest quarter from a business perspective, so we have more incentive comp there, which is a good match. So it will drop in Q1 and then the expenses will pretty much be fairly equal throughout the year. It'll pick up a little bit as we are doing some investments and we talked at our dinner which was web cast in December and we said we are looking at making a little bit more of an investment in some of the areas as opposed to pushing for a little bit more operating margin in '06. But generally, those expenses are pretty well laid out throughout the year. A little bit of the uptake at the end but not much. Q - Eric Grenadie: Okay. Thank you very much. A - Bill Porter: Sure.

Your next question is from Stewart Muter with RBC Capital Markets. Q - Stewart Muter: Yes, thanks for taking my questions. A couple of questions. First, in terms of what you are hearing from your customers, Q4 was a pretty good quarter for the semi industry and Q1 looks good as well. Are you getting a sense of a change in time from your customer that they may loosen up anywhere purse strings this year? A - Mike Fister: I don't think there's anything that's polar one way or the other there's, some of those customers are doing good quarters and some of them are still rebuilding or restructuring or whatever term you want to use, and like Bill said before, we are that kind of I think the just of the analytical community is still in the high single digits for R&D spending. We looked at a five-year weighted average and it's been very consistent and so that's kind of the model that we use, and we are working equally aggressively with customers that are having bang-up quarters and ones that aren't. And I think it's an opportunity for us in both cases because most in that, in technology, where they can see differences to try to continue that or recover from business. And so it's there's no, there's no generic settlement that I can see that says, oh, my goodness, life is going to be great. It's kind of smooth and steady as we go. Q - Stewart Muter: Fair enough. Now in terms of 65-nanometers what are your customers telling you in terms of your interest in adoption there; are the design paths, kind of slowing the adoption, or do you think it's beginning to accelerate here? A - Mike Fister: I think it bifurcates. There is some of the biggest customers in the industry are moving aggressively to 65-nanometer. Heck, we are doing stuff at 45-nanometer with one of the giants. And saw in the prepared comments, Bill and I, we talked about a testimonial to 65-nanometers. We had quite a number of tape outs and we even had first silicon back on one. And I think those tend to be extremely high volume customers, where they are predicated to try to move forward on the process migration and they have also invested a ton of money in it. I also believe, though, that there's going to be a lot more sustenance at 130 and maybe even 90 nanometers for the analog and mixed signal components. Some of that technology doesn’t migrate very easily and it takes a little bit longer to do that. That's why I wanted to point out in my comments how the segmentation of the digital technology helps. We took Encounter L on a customer back in the quarter-micron, and the seamlessness of the continuing from the most complex designs to 65-nanometer back to 130 or quarter-micron is a value that we have that we have that I'm very, very proud of, and I think it bodes well for us. So, I don't think it all has to be about forward looking process and migration for us to be successful, but in general, if our, the customer sentiment that we are getting is any barometer, they are very impressed with our forward-looking high end, high performance digital, and Virtuoso, everything becomes an analog effect at 65-nanomters, it's not safe to be a wire, everything is in the transmission line, and I think our incumbency in those two and the leverage between them bodes very nicely for us. So, I hope that gives you a little insight. A - Bill Porter: Yes, Stewart, the only other point I would add to that is the manufacturing aware design concept you're clearly going to see at 65 and for sure 45 and the Cadence Chip Optimizer really helps customers when they are getting down to those low levels and that's why it took three years to develop it, but when you hear someone like IBM say that it really helps at 65, you are going to have to have those kinds of capabilities to try to make it work. So that's one of the next thing that customers will need; it's not going to be just do it post layout, like in the past. Q - Stewart Muter: All right. That was very helpful. Thank you.

Your next question is from Matt Petkun with DA Davidson and Company. Q - Matt Petkun: Hi, good afternoon. Bill, I'm just taking a look here, at the balance sheet, the long-term deferred revenue is up pretty significantly both sequentially more than doubled year-over-year. Can you help me understand what's going on, on that line item? A - Bill Porter: Sure, Matt. Really what it is, we were able to, with some of our customers get some payments earlier in the contract cycle, and so we're going to have some deferred revenue that's going to be coming out in the future. And that's really what it is. We've had, one of the things we do with our compensation is that our sales people get paid in many cases when we get paid so that helps with structuring. Q - Matt Petkun: Okay. But has there been any change in terms of the overall term or length of the subscription contracts you are entering into this quarter? A - Bill Porter: No, not at all. As I mentioned in my prepared remarks our weighted average contract length continues to be three years. So this is really just a matter of an opportunity to be able to get some cash, and we took advantage of it. It made sense for the customer. It made sense for us. Q - Matt Petkun: And would you associate this cash with bookings that you received this quarter or even with past bookings that you have yet to collect on? A - Bill Porter: I don't want to get into that level of specifics but we had a very, very good business quarter in Q4 and as you can see, we did pretty well in collections as well. Don't always collect something that you book in the same quarter. Q - Matt Petkun: Right. Okay. And then maybe, I mean, I know you guys done really give bookings numbers but if you, you gave some seasonality expectations for the top line, what would you expect in terms of seasonality from a bookings perspective, as we move into '06. Should it be pretty much similar with what you have seen in past years, kind of 15ish to the first quarter ramping up to 30, 35 in the back of the year? A - Bill Porter: Well, Matt, as we go through, we indicate about two-thirds of our business comes out of backlog and so about a third of it is something that we book and turn in a quarter. And you will see the same. That's a pretty good correlation between bookings and revenue. So nothing dramatically different than the road map we laid out in terms of the percentages. Q - Matt Petkun: You wouldn't expect a slower bookings quarter you typically experience in Q1? It would be more in line with the revenue? A - Bill Porter: I think that's a reasonable way to look at it. Q - Matt Petkun: Okay. Thanks. A - Bill Porter: Pretty similar to this year, to '05. Q - Matt Petkun: Okay. There you go. Thanks.

Your next question is from Rohit Pandey with HSBC Securities. Q - Rohit Pandey: Yes, I'm looking for the revenue growth and the bookings growth in '07. They both slow down in '06, compared to '05. So, why is that slowdown? A - Mike Fister: I'm sorry, Rohit, we really couldn't hear you. It sounds like you're pretty far away from the speaker. Could you just repeat the question? Q - Rohit Pandey: Yes, Let me try again. When I look at the revenue growth from '05 to '06, that slows down to about 7%, based on the guidance, and given that you said the backlog would not increase a lot , it implies the bookings also perhaps slow down. So why is the slowdown? Is that a newer pipeline for ’06 weaker than it was for '05? A - Mike Fister:

Q - Rohit Pandey: Is the newer pipeline stronger than what it was for '05 or is it about the same? A - Mike Fister:

Q - Rohit Pandey: Okay. And why is the G&A going down for the past three quarters? A - Mike Fister: I'm sorry? Q - Rohit Pandey: The G&A expense, that is down for the past three quarters. A - Bill Porter: Are you talking about Q - Rohit Pandey: So what is driving the lower expense of G&A? A - Bill Porter: G&A? Q - Matt Petkun: Yes, it's down from, it was down from Q2 down in Q3 and down in Q4 on the income statement. A - Bill Porter: It looks pretty steady to me, in terms of just when I look at our operating results or non-GAAP results. I will have to just look at that with you. I think it's actually been relatively steady. So Q - Matt Petkun: And back to the licenses. How much was the term this year and was it about the same compared to what it was for '04 or did it change? The term percentage? A - Bill Porter: The percentage of our bookings has been very consistent. This year, I think on average, it was about 75% for the whole year. Pretty much in line with what our estimates were. Which I think is pretty close to the average we had in '04. Running in that 75% to 80% range. Q - Rohit Pandey: Okay. A - Bill Porter: It's not a dramatic change. Also in 2006. In that same level, around 75ish, or high 70s. Q - Rohit Pandey: And the large deal in the quarter, the 21 person customer, was that a subscription deal? A - Bill Porter: The percentages I gave were revenue customers. Q - Rohit Pandey: Right. A - Bill Porter: So, because they were revenue customers they would be term business. Q - Matt Petkun: Right. A - Bill Porter: But when you have that percentage, it's additive, so there are some of those customers we have existing business with, and then, so we do have subscriptions and term revenue to add on top of each other to get to those totals. But it's a big customer. You will get a predominant piece, which will be a term on top of level subscriptions. Q - Rohit Pandey: Okay and on the DSM product, how big do you think the market is now, after, like other competitors experimenting with that market for the past two years? A - Mike Fister: It's hard for me to tell the whole size of that market, you're probably better analytically, I think you'll just see us make incremental progress there with our new products both in TBS and RDN and I think just watch out for chip optimization A - Bill Porter: Really been very, very much a function of how people modified it. If everyone tries to give away the capability for whatever they think they can do, if it's $1 million then it'll be smaller. If you monetize it appropriately, I think it's got great growth opportunities in the industry. Q - Rohit Pandey: Got it. Mike Fister, President, CEO: I wanted to thank everyone for their questions on the call. It is a pleasure for us to do this. I hope that we'll see people come to the analyst day on March 1st in New York City and we'll look forward to meeting you then. Thank you.

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