Analog & Embedded Profitability
Glen Yeung – Citi: Kevin, I guess for you, as we think about the allocation of OpEx to the Analog and Embedded business as you move them away from Wireless, one is is it sort of going along, as you thought it would in Q1, and what’s the pattern which you expect to see in terms of Analog and Embedded profitability as we go through the rest of the year?
Kevin March – SVP and CFO: Glen, the allocation that you’re talking about is the – I think you’re talking about the allocation of the corporate expenses.
Glen Yeung – Citi: Right.
Kevin March – SVP and CFO: Again just to repeat what I’ve mentioned a moment ago, because we now have less costs going forward, that corporate costs will allocate to fewer segments. So the burden by those remaining segments will be up. The cost of the corporate activities doesn’t scale one for one with the cost of the actual business operations, and consequently, while they will come down a little bit, they won’t come down near to the magnitude of – the inherent cost will come down as we wind down the Wireless segment. Now the result is the allocated cost to the remaining segments will be higher. You can see that incrementally if you look at the segments that we just published. On the go forward basis, those allocated costs will come down a little bit over time, but not significantly. The result of that if we see revenue growth going on inside the segments, we should see the profitability of those segments continue to improve…
Glen Yeung – Citi: But as Wireless winds down from here, Kevin, will those allocated costs increase further to Analog and Embedded or are they basically at run rate for the year?
Kevin March – SVP and CFO: They are pretty close to the run rate for the year that they are going to be at.
Ron Slaymaker – VP, IR: Alright, Glen, do you have a third one?
Glen Yeung – Citi: I do. We’ve had some of your peers talk about growth in the June quarter, and basically suggest things are growing but maybe not growing at stellar rates. I wonder if you can talk about your order linearity in the quarter, how that’s progressed and maybe your view on sort of the steepness or shallowness of the cycle that we’re in?
Kevin March – SVP and CFO: So, Glen, I guess I probably don’t have a lot further to add than what’s inherent in the guidance. Other than the decline in legacy wireless, we’re expecting a seasonal second quarter for the remainder of our revenue. The microanalysis of the quarter in linearity of revenue or linearity of orders, frankly, there’s nothing really to be gained there, and what I mean by that is we had a typical first quarter profile on both orders and revenue. We declined around Chinese New Year, as we do every year, and then it recovered and bounced back again in the month of March. But nothing really unique in the first quarter profile compared with what we would typically expect in a first quarter.
James Covello – Goldman Sachs: What are you guys planning on doing with the factory loadings in Q2, and any thoughts on the factory loadings at this point for the back half?
Ron Slaymaker – VP, IR: Yeah, Jim, as it relates to loadings, with the increased outlook that we have we would expect factory loadings to be higher in 2Q than they were in 1Q, and consequently utilization charges will, in all likelihood, decline quarter-over-quarter. I expect that the utilization, which was about $150 million in the underutilization charge in the first quarter, which was down about $20 million from the fourth quarter, would decline further as we go into second quarter on the back of increased factory loadings.
James Covello – Goldman Sachs: Sure. I know you guys have taken to using the trend line analysis to think about the industry and underscore that even though we don’t know exactly when things are going to recover, it’s just a way to highlight how much we’re under-shipping, sort of what a long-term level is. I think the kind of conventional bare case on that to say, long-term demand is broken now and that trend line that a lot of us using putting you guys isn’t relevant anymore. What do you say to folks when they say that long-term trend line is broken, therefore that analysis isn’t relevant?
Ron Slaymaker – VP, IR: Jim, recently we’re trying to avoid that discussion, and what I mean by that is, we have no unique insight to provide in terms of where we are with respect to that trend line, where we are with respect to the cycle. So, frankly, we’re just heads down focusing on trying to gain share in Analog and Embedded Processing, regardless of the market environment, and be able to generate free cash flow at the 20% to 25% of revenue level that we’ve described. But we’ll leave it to you experts to try to figure out where we are relative to those trends and relative to any cycle considerations.
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