David Gennarelli - Director of Investor Relations Carl Bass - President, Chief Executive Officer, Director Sue Pirri - Vice President of Finance

Jay Vleeschhouwer - Merrill Lynch Steven M. Ashley - Robert W.

Baird Michael Olson - Piper Jaffray A. Sasa Zorovic - Goldman Sachs Michael Huang - Thinkpanmure Brendan Barnicle - Pacific Crest Securities Brent Thill - Citigroup Greg Dunham - Deutsche Bank Ross MacMillan - Jefferies Phil Winslow - Credit Suisse Richard Davis - Needham & Company Sunil Dapdrinder - Sentinel Asset Management Analyst for Sterling Auty - J.P.

Morgan

Thanks, Operator. Good afternoon.

Thank you for joining our conference call to discuss our second quarter fiscal 2009. With me today is Carl Bass, our Chief Executive Officer; and Sue Pirri, Vice President of Finance.

Today’s conference call is being broadcast live via webcast. In addition, a replay of the call will be available by webcast at Autodesk.com/investor.

During the course of this conference call, we will make forward-looking statements regarding future events and the future performance of the company, our guidance for the third and fourth quarters of fiscal 2009 and full year fiscal 2009, the factors we used to estimate our guidance for those periods, our future business prospects, revenue and earnings growth, our market opportunities, trends for our products and trends in various geographies, and the anticipated benefits of acquisitions. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially.

Please refer to the documents we file from time to time with the SEC, specifically our Form 10-K for fiscal year 2008 and our 10-Q for first quarter of fiscal 2009, and our periodic 8-K filings, including the 8-K filed with today’s press release. These documents contain and identify important risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements.

Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information.

Autodesk disclaims any obligation to update or revise any forward-looking statements. In adherence with regulation FD, Autodesk will provide quarterly information and forward-looking guidance in its quarterly financial results press release and this publicly announced conference call.

We will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. During the call, we will discuss non-GAAP financial measures.

These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the GAAP and non-GAAP results is provided in today’s press release and on our website.

In addition, we will quote a number of percentage increases as we discuss our financial performance. Unless otherwise noted, each percentage represents a year-over-year growth rate showing the second quarter of fiscal 2009 as compared to the second quarter of fiscal 2008.

And now I would like to turn the call over to Carl Bass.

Good afternoon, everyone and thank you for joining us. Today, Autodesk reported solid financial results for our second quarter of fiscal 2009.

Revenue for the quarter increased 18% over last year to $620 million. Diluted earnings per share were $0.39 on a GAAP basis and $0.56 non-GAAP.

Both revenue and EPS grew beyond our expectations. We also managed our operating expenses very well, stemming from initiatives we implemented in the first quarter.

Overall, we are very pleased with our performance in the quarter and I’ll get right into some of the highlights. By geography, our results varied.

The Americas posted 4% growth for the quarter and there were a number of positive trends. We were pleased with the rebound we saw in our business in Canada and we posted a record quarter in Latin America.

We also continued to make inroads with our government business in the U.S., where we posted solid results of federal agencies, state agencies, and city level departments. We believe our business in the Americas has stabilized and we are taking actions to drive stronger performance going forward.

Outside of the Americas, our business in EMEA and Asia-Pacific continues to underpin our overall revenue growth. Combined, these regions increased 26% in the second quarter.

Even at constant currency, this growth rate was 13% overall, with pockets of exceptional growth. Revenue in our emerging markets grew 40% and represented 18% of our total revenue for the quarter.

Looking forward, our international business remains very strong. We are confident in our ability to maintain the momentum and volume of business we are winning internationally.

Moving on to product performance, our model-based 3D design solutions -- Inventor, Revit, Civil 3D, NavisWorks, Robobat, and Moldflow -- posted solid results and increased 36% to $166 million. 3D revenue was 27% of total revenue for the quarter.

Excluding Moldflow, our 3D solutions grew 31% to $159 million. We shipped over 36,000 commercial seats of these products.

During this quarter and going forward, we saw less correlation between revenue growth and seat growth, due to changes in our mix of geographies and products, proportion of maintenance in the user base, currency exchange rates, and average selling prices. Turning to our 2D products, revenue from 2D vertical products remained strong and increased 16% compared to the second quarter of fiscal 2008.

AutoCAD grew a solid 12%, while LT grew 6%. LT growth was impacted by very strong sales in the first quarter, in advance of the price increase instituted with the release of AutoCAD LT 2009.

In addition to delivering strong results for the quarter, we closed four small acquisitions, including REALVIZ, Kynogon, Square One Research, and Green Building Studio. The technologies acquired with these firms advance our base of robust solutions for visualization, simulation, and analysis, as well as technology used to create energy efficient buildings.

We also closed the acquisition of Moldflow in the quarter. This acquisition will augment our presence in the manufacturing industry.

Moldflow has already made a meaningful contribution to our business and we believe there are abundant opportunities to provide a fully digital development process for plastic injection part and mold design. Before we take a closer look at the financials, I’ll give you an update on our CFO transition.

As you may know, Al recently left the company. To date, we have narrowed the search to several highly qualified candidates and we are working our way through the interview and selection process.

We are hopeful that we can identify and announce a candidate within the next month or so. In the meantime, we have a very deep bench of highly experienced people in our finance organization to bridge the transition.

I think you all know Sue Pirri. She is leading our finance efforts, so I’ll turn the call over to her for a more detailed discussion of the results.

Thanks, Carl. Net revenue in the quarter was $620 million, an increase of 18% as reported and 10% constant currency.

License revenue increased 12% to $440 million. Revenue from new seats grew 8% in the quarter.

Total upgrade revenue, including cross-grade, increased 27%. AutoCAD LT had an unusual impact on performance in both of these areas this quarter.

New seat growth was impacted by the very strong sales of LT in the first quarter. Excluding LT, revenue from new seats grew 13% in the second quarter.

Upgrade revenue was driven by an LT cross-grade promotion in sending customers to migrate from LT to any other Autodesk product. As an example of the program’s effectiveness, over half of the migrating LT seats moved to 3D.

In addition, upgrade revenue was driven by a retirement promotion designed to get customers to upgrade to our most current products. Maintenance revenue increased 36% in the quarter to $180 million.

Combined, upgrade revenue and maintenance revenue increased 34%. Looking at the geographies, revenue in the Americas was $203 million, an increase of 4%.

EMEA revenue was $267 million, an increase of 31% as reported and 15% constant currency. Revenue in Asia-Pacific was $115 million, an increase of 18% as reported and 11% constant currency.

Breaking down revenue by segments, platform solution and emerging businesses had a good quarter, increasing revenue 12% to $270 million. Both AutoCAD and AutoCAD Map showed solid growth.

AutoCAD LT revenue increased 6% this quarter; however, year-to-date LT revenue has grown 17%. Total revenue from our manufacturing solutions division increased 32% to $131 million.

Moldflow, which was acquired during the quarter, contributed almost $7 million, which was higher than our expectations when we closed the transaction. We are pleased that their sales force was able to achieve these results with minimal disruption and finished the quarter strongly.

Excluding revenue from Moldflow, growth in manufacturing was 25%. Revenue from our Inventor family of products increased 28%.

During the quarter, we shipped more than 10,000 commercial seats of Inventor and Moldflow, and approximately 56,000 seats of our manufacturing products in total. Our AEC segment increased revenue 21% to $144 million.

Revenue from our Revit family of products grew 27%. We shipped approximately 26,000 commercial seats of Revit, Civil 3D, NavisWorks and Robobat.

Once again, during this quarter and going forward, we saw less correlation between revenue growth and seat growth due to changes in our mix of geographies and products, proportion of the maintenance and user base, currency exchange rates, and average selling prices. Revenue from our media and entertainment segment was $69 million, an increase of 12%.

Revenue from Advanced Systems increased 4%. Animation revenue saw continued strength, increasing 19% driven by 3DS Max.

Moving to the rest of the income statement, gross margins were 90% on a GAAP basis and 91% non-GAAP. Operating expenses were $501 million GAAP, $449 million non-GAAP.

Our operating margin was 19% GAAP and 28% non-GAAP. Our tax rate in the quarter was 28% GAAP and 26% non-GAAP.

GAAP diluted earnings per share increased 3% to $0.39. Non-GAAP diluted EPS was $0.56, an increase of 27% over the second quarter of last year.

At the end of the quarter, there were 225 million shares outstanding. Compared to the second quarter of last year, the impact of foreign currency exchange rates was $42 million favorable on revenue and $11 million unfavorable on expenses.

Compared to the first quarter, the foreign currency impact was $7 million favorable on revenue and had an immaterial impact on expenses. Turning to the balance sheet, cash and investments were $970 million.

During the quarter, we issued 900,000 shares from employee stock plans, generating $15 million in cash. We did not repurchase any shares this quarter but as a reminder, we repurchased approximately 8 million shares in the first quarter.

Cash from operating activities increased 63% to $209 million. Deferred revenue was up 37% year-over-year to $563 million.

Unshipped product orders, or shippable backlog, increased $11 million sequentially to $29 million. Total backlog, including deferred revenue and unshipped product orders, was $591 million, an increase of $158 million over last year.

Our channel inventory remains below three weeks. DSOs were 48 days this quarter, decreasing sequentially due to seasonally lower maintenance billings than last quarter.

Now let’s talk about the rest of 2009; in preparing our guidance, we’ve considered the significant strengthening of the U.S. dollar versus other major currencies in the last few days.

While we can’t predict where currency exchange rates will move in the future, we are confident in our currency assumptions for the third quarter, as we have already locked in those rates. For the fourth quarter, we believe it is prudent for us to be conservative than usual in our currency assumptions.

As a result, if the dollar does not continue to strengthen, our estimates may prove to be overly conservative. For the third quarter, we expect our revenue to be in the range of $625 million to $635 million.

GAAP earnings per diluted share are expected to be in the range of $0.40 and $0.42. Non-GAAP EPS is expected to be between $0.54 and $0.56, excluding $0.07 related to stock-based compensation and $0.07 for the amortization of acquisition related intangibles.

For the fourth quarter, we are assuming an increase in the underlying level of business relative to our previous guidance. We are also assuming that the U.S.

dollar will continue to strengthen. As a result, we are now expecting our revenue to be in the range of $660 million to $680 million; GAAP earnings per diluted share are expected to be in the range of $0.52 and $0.56; non-GAAP EPS is expected to be between $0.64 and $0.68, excluding $0.08 related to stock-based compensation and $0.04 for the amortization of acquisition related intangibles.

For fiscal year 2009, we expect our revenue to be in the range of $2.5 billion and $2.53 billion, which represents growth at 15% to 16%. Full year GAAP earnings per diluted share are now expected to be in the range of $1.72 and $1.78.

Non-GAAP EPS is expected to be in the range of $2.24 and $2.30, excluding $0.29 related to stock-based compensation and $0.23 for the amortization of acquisition related intangibles and in-process research and development. Now, I’d like to turn the call back to Carl.

Thanks, Sue. So to wrap things up, we had terrific execution in the second quarter.

We have positioned ourselves well for future growth and for an eventual rebound in the U.S. economy.

The strength of our products and our highly diversified model has allowed us to weather the headwinds in the U.S. and capitalize on the international markets, where we are seeing very strong growth.

We believe there are still untapped opportunities in all of our markets and we are working hard to realize them. We have close to $1 billion in cash, excellent cash flow, and very little debt.

The demand for our products remains strong and we are seeing an increase in our underlying business. We also continue to improve our competitive position by investing in our products, channels, and infrastructure.

Our strategy is working well and we are disciplined in its execution. With that, I will turn it back over to the Operator so we can take your questions.

While the Operator is polling for questions, I would like to announce that Autodesk plans to attend the following upcoming conferences: the Citi Tech Conference in New York on September 4th; the Deutsche Bank Tech Conference in San Francisco on September 10th; and the Jefferies Tech Conference in New York on September 11th. Operator, we are ready for questions.

Carl, for the second half of the year, would you be able to be a little bit more explicit about expectations for revenues from new seats? Those numbers have been decelerating the last few quarters from 20% in third quarter of last year -- sorry, in the 20s down to just 8% or so as you said in Q2.

So what’s your thinking about that for the remainder of the year? And secondly, notwithstanding the improvements in deferred maintenance revenue year over year, are there any signs at all in the Americas or any other geos of any deterioration in new attach rates or renewal rates, particularly in AEC?

One is, Jay, we don’t really break down the revenue from new seats and we certainly don’t provide guidance on it, as you know. The only thing I’d say is if you look at the growth rate, the one thing that affected it a lot this time was LT, so you need to take that into account, and I think you’d be better if you look at it over maybe a six-month period, is actually a fair representation of what went on because of the -- you know, the anomaly of the price increase.

On the second question, we’re not seeing anything except maybe an increase in attach and renewal rates, and so we’re -- we’re not seeing I think what a lot of people surmised, which was somehow a down-turn in the economy was going to make people not renew their maintenance or attach maintenance -- no indication whatsoever of that.

With the results thus far for the year, and with your comments about an improvement in the underlying business for the remainder of the year, what is the relationship of that, if any, to plans for channel capacity? That has been something you have been increasing for a while but does the environment or do your expectations alter in any way capacity plans geographically or vertically?

I think it alters it somewhat. I mean, if you look at it, you’ve got to think about channel expansion as being a long-term thing anyhow.

I always chuckle a little bit when I hear people thinking about building a channel in a year or you know, “Here’s our quarterly plan for expanding the channel”. Managing the channel as well as managing the sales force is a long-term relationship and so I think you have to look at it that way.

Having said that, I think there are some things going on in the economies of the world that are making us invest differentially; so for example, we are looking at emerging countries, seeing great results there. We can get immediate payback on our returns there so we are putting -- you know, we are dong more in putting our own headcounts as well as developing channel partners in the emerging economies and the places where the economies are strong.

I also see some opportunity in that as we look to expend our channel partners, some of the new channel partners come from people who have sold competing products. As some of our competitors weaken, the opportunity to get people to move over to sell our products increases, so I think we are a little bit more opportunistic in some of the places where the economy is more challenging.

So I think the overall strategy of increasing channel capability and capacity remains in place. I think tactically we are just going about it slightly different to reflect what is going on in the world.

All right -- lastly, your Inventor unit count was down sequentially from a good Q1 and down somewhat year over year, which is similar to what PTC saw with Pro E and what Dassault saw with the SolidWorks being down sequentially, but it was a fairly large decrease nonetheless for Inventor. Could you comment on that and how you think that might possibly improve as the year plays out?

I hate any comparison to Pro E but having said that, I think what we were trying to indicate in the prepared remarks a little bit is I think the dynamics around our products are changing. You really have to look at where those products are being sold, and so a product -- you know, a copy of Inventor sold in Vietnam is different than a copy of Inventor sold in Western Europe or the United States.

In developed economies, we are selling more seats. We have seen our ASPs steady to rising.

We have seen the mix to higher priced products, and so we’re less focused on pure unit numbers and more focused on some of the other metrics, which we believe drives longer term success. And what is interesting about it, as we move that way we are seeing others go to things like running promotions and doing two-for-one and three-for-one promotions.

We found those to be particularly unsuccessful because the real measure is the adoption of the software. It’s not how many seats you can sell.

There are a lot of ways companies can sell more seats. The real important measures of what is the adoption -- and as I pointed out in the past, I think things like attach and renewal rates are a really good proxy for adoption, and I think if you look at some of the competition you mentioned, they are getting fonder and fonder of running promotional things but I don’t think the uptake in the customer base is anymore than it was before.

Thanks, Carl.

I just would like to ask a question first on the upgrade revenue -- a very nice increase year over year, the first increase we have seen in that in maybe almost a couple years and I’m wondering how we should look at that going forward. I understand you did run some promotions that were out of the norm this period, but how should we think about that upgrade revenue as we go forward?

A couple things about it -- one, it was driven a lot by the LT promotion. One of the things we say repeatedly, I think you need to look at upgrades, cross-grades and subscription as one because I think that is the only meaningful thing.

When you try to factor it, you run into oddball situations that I do not think is representative of the business. If you look at it collectively, you have a better understanding of what is going on in the customer base.

I think this is actually a case in point this quarter. We run the promotion, upgrades go up and so I think we have the ability to kind of turn those knobs and dials to do it.

I would say most of what went on this quarter with the upgrades is really revolving around LT but I would say going forward, continue to measure us by looking at upgrades, cross-grades and subscriptions together.

You know, Steve, within that line there’s two components that are actually trending differently -- upgrade revenue is trending down, although we had a strong, the pure upgrade portion of it had a strong quarter this quarter because of the focus on LT with a retirement promo. But the cross-grade part of it is something that over time should continue to grow.

So what we are seeing is two types of sales that we aggregate for financial reporting purposes that are actually trending in different directions.

And really represent different phenomena in the customer base.

And then also, Carl, you mentioned you continue to have confidence in your international business. I was just wondering if you could give us anymore color on what kinds of things might be giving you some confidence looking out.

Thank you.

You know, as you guys know and we’ve shown you this a bunch, our business is fairly linear and so one of the best indicators of our business is what the business was the day before and the week before and the month before. One of the best indicators of the strength of our business going forward has been the strength over the last quarter and certainly over the last month, we saw strength there.

Some of it is really derived from looking inwards at the results we are producing, you know, and then -- you know, I looked this week, there was a French construction company that reported their public earnings and they in their construction sector had high-teens growth, 16% to 17% growth. Anecdotally, talking to customers their pipelines remain full and so we are seeing strong business and I think people have gotten a little bit too spooked, particularly when it gets to emerging economies.

I think particularly in the emerging economies the idea that China is going to shut down after the Olympics or things like that, I don’t think there’s any basis in fact for that.

Thank you.

Just a question on Europe -- the checks that we did really suggested that the U.K. was maybe seeing some challenges but the rest of Western Europe was doing pretty well.

Can you just talk about more specifically which portions of Europe may be doing better than others? Thanks.

We usually don’t break down Europe by country and I would say just generally speaking, month to month what is going on in a particularly country is not a really good indicator of what is going on. Generally speaking, we have seen strength across Europe, strength across the emerging economies of Europe, so all in all we have seen a pretty strong -- and we’ve spent as much time scratching our heads trying to correlate it with what we read in the newspapers but from what we are seeing in our business, it is strong in Europe.

Okay, and maybe you’ll let me squeeze one in on the LT cross-grade promo; I know you guys have done this for a few years now. This year you raised prices on the promo, I believe, and it seemed to actually be more successful.

Is that right? Why was the promo more successful this year?

You know, honestly I don’t have a great reason why. I do believe that during more challenging times, customers are looking for a bargain and so they are trying to take advantage of the assets they have and so the LT cross-grade is a great way to take advantage of something you have already kind of put a down payment on.

And particularly what I thought was most interesting is what we were trying to point out, is that more than half the people moved to 3D, so that was the real future they were trying to get to and they were using this, as they had already made an installment payment. And you know, I think in less challenging times people are a little bit more care-free with their budget money and spend it a little bit more loosely.

You know, Mike, I think there’s another thing that we’ve talked about a lot, is just in periods where people are not running at full capacity, they have time to make the transition in a way that they don’t when they are at 100% efficiency or 110% efficiency or something like that. So for those of our customers who are slower, this is a time where they are thinking I can make this transition that I have been waiting to do for a while.

Got it, thanks.

My question would be you mentioned 4% growth in the Americas, but then you highlighted that Canada was strong and Latin America was particularly strong. I guess that leaves one to wonder about the U.S.

specifically, and so could you tell us really specifically what you are seeing in the United States and what gives you this confidence that this business is turning around?

I would say what we really have said is that we think the business in the U.S. has stabilized.

I don’t think we’re seeing a recovery yet. I think we see a stabilized business and I think we see pockets of good things happening.

We pointed out some of the things going on in our government that we thought were good. I think we’ve had other successes.

I think we saw manufacturing remain stronger than we might have imagined in this kind of downturn but we are not predicting, nor is our guidance going forward predicated on an improving economy in the U.S., but we do think that our business has stabilized.

And Sasa, you have to remember, the U.S. is the lion’s share of the Americas’ revenue, so despite strong quarters in those other areas, they are still very small relatively speaking.

Thank you.

You didn’t mention in this in the call but could you talk about how the anti-piracy efforts are going, including in the U.S.? Are these efforts trending better than you would have expected?

And could you give us some sense for how much benefit you saw in Q2 from this program?

I think our anti-piracy is a long-term program. It’s been going on for a long time.

We continue to invest in it, we continue to expand it. And one of the things I would say is, particularly in the license compliance work we do, really hard to place it in a particular quarter.

A lot of that stuff, you know, that can be nine months or twelve months worth of work and so we look at it more as a run-rate part of our business that’s continuing. And we are continuing to invest in it because we think it makes sense and still overall, if you look at the worldwide piracy rates, they are not changing.

Our business is benefiting greatly but we are not making a big dent in it.

I just wanted to follow-up on Moldflow and the acquisitions; the $7 million was a lot more than I had expected it to contribute. You briefly mentioned that the [inaudible] executed better than you had expected.

Does that change your outlook on what Moldflow might contribute for the remainder of the year? Is that factored in the guidance?

And also, what should we expect in terms of contribution out of these four additional acquisitions that were done through the quarter? And do they symbolize more of a move to more like a vertical solution type of strategy on your part?

What I would say is first of all, Moldflow, it was more than we thought it would contribute. Moldflow is not a significant contributor to the guidance for the rest of the year.

I think the sales force just finished strongly with the end of their fiscal year, you know, there was a changeover to a new company and so I think people brought in the business they could.

We actually didn’t change our assumptions about the rest of the year for Moldflow.

Great -- what about the new acquisitions?

The other acquisitions are really small acquisitions. None of them contribute any material amount of revenue at all.

These are really, really small acquisitions, almost entirely we did it to acquire certain technology. These things will come to fruition a year or two years from now.

And is this a strategy that gets you more verticalization, more specialization, like a Moldflow, and we should continue to watch for this type of strategy?

Yeah -- I mean, I think we’ve been -- for a number of years, we’ve been really clear about the markets we are in. It’s manufacturers, it’s our architecture/engineering/construction business, our media and entertainment and we continue to be real focused on that.

In each of those, we want to provide our customers a more complete workflow that generally involves creation and design and engineering tools, as well as simulation analysis and visualization. A bunch of these are more down the simulation analysis and visualization but in almost every case, it’s really completing a workflow that our customers want.

Great. Thank you.

Carl, your comment on everyone’s too spooked about the international markets, that’s just going to fall, go into a free-fall. When you look at the international markets, where do you still see the largest untapped opportunities that are easy to describe from this point?

First of all, the emerging economies continue to grow fantastically well. We had another great quarter, but that’s quarter after quarter, year after year of good performance in the emerging economies.

That clearly remains a big opportunity. Like the question a little bit ago, anti-piracy continues to be a big deal and has -- you know, has more opportunity.

I think there are places in the world in some of the even less emerging economies that still present a lot of opportunity for us but it’s not only there. If you just look at international markets in general, our European business was very strong.

Germany grew more than 50%, and these single data points are a little bit hard to rationalize when you hold it up against the newspaper but if you look at it over a period of time -- I mean, one of the things we talk about a lot is the diversification of our business. I think it is just important for people to remember that across industry, across geography, what diversification does, it does not mean everything is going to perform well but it also does not mean anything is ever going to perform all badly, and it’s really that mix that we see.

And so we continue to see pockets here, pockets there, but I still see the opportunity in Western Europe, other parts of Asia, and I think as the U.S. economy rebounds, I think there’s plenty of opportunity for us there.

The other thing we don’t spend a lot of time talking about but you’ve got to remember our market position -- we continue to be the upstarts in most of our markets, providing more value, lower cost than any of the competitors. And we do that in a kind of broad-based, [volume] way, easier-to-use products -- all the kinds of attributes that good times and bad times, kind of makes gravity on our side.

People are moving to these kind of solutions because they fit their needs better and at different times, I think it’s different drivers of our business but our market position remains strong and we’ve proven over time -- I mean, if you look at any of these markets, take the manufacturing market. If you look at the design/engineering business of our competitors, they grow in low single-digits and we’re talking about growth rates in the mid- to high-20s.

I mean, it’s really a completely different dynamic that’s going on there. So while the macroeconomic factors are really important to consider, I also think you need to consider the market position and our offerings against the backdrop of our portfolio, which is really broad-based and diversified.

You did mention before the strong July, and I just wanted to get around the delta in terms of the guidance provided on the closure of Moldflow and the performance in July. I know that Moldflow exceeded expectations but how about the core business?

What kind of linearity was there? And if that was really an acceleration in business momentum, how much of that are you factoring in going forward, given as you mentioned in your guidance that that embeds continued strengthening in the dollar for Q4?

All of our comments are really leaving Moldflow out of the equation. I think our linearity didn’t change much through the quarter, although I would say we felt real strength in the business towards the end of the quarter.

And when we look at the beginning of this quarter and the forecast and what the people in the field are saying, we feel good about this quarter going forward, but we did see strength at the end of the quarter.

I guess I don’t recall you guys ever being as conservative now with, or putting the language in on that, the foreign exchange. Typically you don’t guide -- but what’s the difference today and why did you feel that you needed to cite that on the call?

That’s a great question. We almost never talk about currency.

It never is a big factor in us preparing our guidance or thinking about it. We generally try to be kind of conservative and we’ve talked about the methodology of looking at the spot rate and building in a little bit of buffer to make sure.

I think what got to us is seeing that kind of precipitous drop in a single day, and I think if you would look, a lot of the markets, whether it’s in commodities or in currency, there are just things going on out there where I think the movement could be more than ever before. We don’t have a hedging strategy in place that accounts for things more than three months out.

We just thought it could affect the outcome more than ever before, and so given that, we wanted to make sure we were conservative about it and particularly in this environment, we felt there was really very little upside in going any further than that.

Makes sense, thanks.

Two, if I could; just a quick one first -- did you see any disruption in China due to the earthquake?

No. First of all, most of our business is in the other part of China.

It’s much more along the eastern, the seaboard. I think it was disruptive to our employees there but I think overall, there was no disruption in business because of the earthquake.

And then just on the currency point, I think in the first half of this year, you’ve had about a three percentage point benefit to margin, operating margin because of FX. And I can understand you’ve taken that into account as we look through later this year.

How are you thinking about, on the assumption that let’s say the dollar stays where it is, or even strengthens a bit -- what you think about doing on the cost side, as clearly that benefit will unwind really more next year than this year? How are you thinking about that as you are thinking about next year?

We’re not doing anything about next year right now. We are obviously looking at it and thinking about it but I think the guidance we have given for our long-term business is in place.

I’d say what we’ve been doing around talking about long-term CAGRs of 15%, increasing operating margins 100 basis points a year -- all of that remains in place and we will manage that as we have so far, around whatever fluctuations in currency there are.

Okay. Thank you.

Most of my questions have been answered, but just two quick ones; first was just what are your assumptions for Q3 and Q4 as far as the headwind to revenue growth there? Are we shaving a point or two off year over year?

Just more detail there would be great. And also, if you could comment on Europe, what you are seeing just by vertical over there, if there’s any difference between manufacturing, architectural, et cetera.

In Q3 and Q4, like I said, we continue to think our business is strong. If you look at our overall guidance, there are two things affecting our outlook on the world.

One is what’s going on with currency, which we just spent plenty of talking about what we think about currency, and this clearly affects it a considerable amount. I think the other thing is if we assume that the U.S.

continues at the rate it’s grown at, so an Americas growth rate of 4% -- just algebraically, that has a huge impact. So it’s way beyond 1% or 2% growth points on both currency and the underlying business.

But those are the two things that are weighing on our mind. As you get to the second question, we are not seeing any dramatic difference in the business in Europe that I would consider a trend yet.

Like I said, we assume when we see a particular country with a particular vertical in one quarter, but nothing special long-term -- nothing worthy of calling out at this point; just underlying strength in the business.

Thanks.

When you guys made your acquisition of Moldflow, you’ve to some degree increased the complexity of the product line that you are selling, and historically you’ve gone through channel partners and stuff like that. How do you think about the fact that you -- I mean, this is a good thing to make the product a suite-oriented product, and you talked about business flows and things like that, but how do you think about managing the channel, managing the multiple sales forces that you have, at least for a while, and those kind of things?

I think it’s the evolution. It’s the progression we have to go through as our businesses get more vertical.

I mean, the first thing is, people forget that 15%, 17% of our business goes through a direct sales force all the time, so it’s a fairly large software business being run through a direct sales force just in and of itself. But what we see is when we bring in new vertical products, as we’ve talked about, the reason we generally acquire them is that we see that they have more mainstream appeal, and that we want to put them into more broad products, incorporate them through suites or other means, incorporate the technology in there.

So over a short period of time, we will continue to manage them in a standalone basis but over time, we blend the products into more complete solutions, and it’s all with an eye towards what we would think of as getting towards volume. And you’ve seen us do similar things with the Alias acquisition, where we try to improve upon the business as is but then we actually try to bring what’s unique about Autodesk to it and add the reach that we have in our channel, the ability to combine it with other products, to really add what I would consider real synergy and positive synergies, rather than the kind of things that people talk about when they bring two companies together.

Thanks very much.

Carl, about the new seat growth that was weak, is it possible to give where geographically where the seat growth was weak? And my second question was in the architectural construction market, in the emerging economies you see lot of reports coming in the papers these days that the real estate market is cooling off.

Are you seeing any effect on your business in those markets?

We don’t break down the new seat growth but once again, I would just point out, remember about the LT number; if you take LT out or you look at this over two quarters, you will see strong new seat growth and I think that’s a healthier way of looking at it. When you look to the emerging economies in AEC, it’s funny -- people talk about a slow-down in some of these economies but that may mean a GDP that’s growing at 9% going to a GDP that’s growing at 7%.

And along with that, there is still a need for the build-out of infrastructure, and so when an economy growing at 5% to 7% with massive moves towards urbanizing the population, so people moving, moving to the cities, you continue to see a large market for AEC both on the building side and on the infrastructure side.

Thanks.

It’s [Sakhit] here for Sterling -- just two questions, if I can; first, it feels like the operating margin for next quarter at the midpoint of the EPS guidance is flat to maybe even down slightly, so I was wondering if you could explain that. And then secondly, Sue, last quarter Al had talked about embedding a 12-month rolling average for FX rates in the second-half, sort of being a little bit more conservative.

I just wanted to know if your new assumptions are more conservative or roughly the same. Thank you.

Well, with regard to FX, our new assumptions are more conservative. We’ve actually -- our previous process was to look at the spot rate, look forward, justify them against the numbers that we had seen in the past, and as we looked forward, especially after seeing a seven-point drop one day last week and a little up-tick and then some more down this week, we felt like we really needed to be more conservative than that looking forward, particularly with a mind for that fourth quarter.

With regard to the operating margin, we did see revenue out-performance this quarter, which drove our margin higher than we expected. Our margin for the third quarter is in line with the numbers that we have given.

Typically, our biggest margin quarter is the fourth quarter, as you’d see this quarter and what you need to remember is that the business this year, the core business is in line for that 28% margin. Clearly we’ve layered on top some dilution from Moldflow, which impacts that, as we do the integration this year.

Thank you.

All right. Thanks for joining us this afternoon.

If you have any further questions, you can reach me, Dave Gennarelli, at 415-507-6033. Thank you.