Autodesk Earnings Call INSIGHTS: Macro Issues, Renewal Improvement
Sterling Auty – JPMorgan: I guess my first question and then the follow-up, but the first question is how can you tell that the big issue of the macro is the sales productivity from people being in (teams) with new responsibilities versus other things such as competitive or some other factor?
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Carl Bass – President and CEO: Sterling, I think there are really two things that we’re trying to parse, is what was due to our own execution issues, sales realignment and all the rest versus macroeconomic. I look at the competitive and I don’t think that played almost any factor in this. Like I said, you look at the first quarter, you look at the first two months, we’re on target. If you look at the shortfall it really happened in three geographic areas, the vast majority of it comes in three areas that I don’t think are particularly sensitive to competitive stuff. So, I think the really tricky question is trying to ascertain how much is due to the faults of our own making versus what’s going on in the global economy.
Sterling Auty – JPMorgan: Then I guess the follow-up I guess would almost be in two parts. One, is there any trend as you move through August that gave you sense that productivity wise things are getting more – people are getting more comfortable and the transition or the realignment structuring you’re announcing today what does that entail, is that also people moving into the new jobs or is it just simply a headcount reduction?
Carl Bass – President and CEO: So for August and what we’ve seen and we’re relatively laid in August relative to other years. We’re on track for the guidance that we gave you obviously. So, really nothing about that. What I see is we have three and a half more weeks under our belt in terms of people moving into their new positions ironing out some of this. As we said, we’ve really had seven and a half weeks or something like that, July when we stated to weakness to digest and then tried to make accommodations to try to fix this. So, we’ve been looking it for a while. As it relates to the restructuring there will be people who are moving out of jobs and they will as we said there will be people moving into jobs as we continually do. But it will be nothing on the scale of what we did in the beginning of the year where there was a big kind of game of musical chairs amongst sales and marketing people within the organization.
Ken Yeung – Citi: This is Ken Yeung for Walter. Just kind of building on what Sterling was asking there, just wondering, are you guys starting to see any of the trend that you guys during the last downturn in terms of things like attach or some of the early indicators that might suggest that you guys are in for a more bumpy road?
Carl Bass – President and CEO: What’s interesting and we call that one in particular, which was, what we saw last time and what was the most striking was our AutoCAD and LT business, and that was the most resilient this quarter. So, it was totally a contrary indicator from what we had seen in the last downturn. We haven’t seen anything on the subscription front. So, most of it doesn’t look anything like it. Mark you have got…?
Mark Hawkins – EVP and CFO: Yeah, I would say actually the renewals we were pleased to see actual sequential improvement there. It’s been a good year-on-year improvement modest. So, back to the point that Carl is making, these are not the kind of signs that we would see like we saw in other kind of economic circumstances.
Carl Bass – President and CEO: Like I said what we are seeing, I think it’s important, while in some ways July was an unmitigated disaster because for the first two months, we were right on target, certainly when we went to Analyst Day, we were feeling very comfortable with our guidance for the quarter. A lot happened and it particularly happened in three areas, and so it was geographically isolated, so it has a very different feel to it. I think we went into kind of the postmortem of the quarter, thinking that it was more about macroeconomic weakness, and I think we emerged from our analysis, saying that it was more from flaws and execution on our part.
Ken Yeung – Citi: Then on the restructuring, I mean it sounds like it’s more just you guys are trying to get the right people in the cloud. If things start to get worse, I mean it sounds like you guys probably have a little room to cut if, to pair that cost and maintain profitability if that’s the case?
Carl Bass – President and CEO: We’ve certainly created a bunch of headroom that allows us much more flexibility without cost going forward.