新思科技 (SNPS) 2002 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Synopsys conference call, regarding its second quarter fiscal year 2002 earnings and its merger with Avanti! Corporation.

At this time, all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. If you should require assistance during the call, please press 0, followed by star P today's call is scheduled to last one hour, five minutes prior to the end of the call, I will alert the conference of the time remaining.

As a reminder, today's conference is being recorded. During the course of this conference call, Synopsys may make predictions estimates and other forward-looking statements regarding the company. While these statements represent the best judgment current judgment about the company's future performance, the company's actual performance is subject to significant results and uncertainty that could cause actual results to differ materially from those that may be projected. In addition to any risks that's may be highlighted during this conference call, important factors that could cause the company's actual results to differ materially from those that may be projected in this conference call are described in the most recent 10K 10 Q F 3 F 4 and 8K reports of Synopsys and Avanti!. On file with the Security and Exchange Commission. At this time, I would like to turn the conference over to chairman and chief executive officer, Aart de Geus, pleased go ahead, sir.

Good afternoon, this is Aart de Geus, I have with me Brad Henske, our CFO. I'm pleased to report this morning the shareholders of Synopsys and Avanti! overwhelmingly approved the merger of these two companies. We appreciate the vet of confidence from our shareholders and believe they will be recognized the mergeger brings together the two companies with the best technology in EDA innovative passionate people and deep customer relationships.

As we announced earlier today the agents waiting period has expired. On today's call I would like to explain our vision of Synopsis 3, the name we are using to describe the post merger Synopsys. I will intermingle pertinent Q2 results as we cover the different topics.

Our vision has sharpened up considerably over the last 6 since months we announced the merger as we have gotten know Avanti!'s people and products. During that time the two companies have individually made excellent progress as well. Most notably, both physical come power and Astro the anchor point products of our future continue their penetration into top accounts and grew more robust as point tools. We're excited finally to start executing together.

Following strong enthusiasm at the announcement of the merger customers have been very vocal about their support and their expectations. Their messages have been loud and clear. First, they want greater integration among our products between front end and back-end tools, between design and signal integrity tools, between analog and digital simulation tools and between timing analysis and everything else.

Second, they want us to continue to offer best in class solutions that are open and easily connectible to third party tools as well as to their own in-house technology.

And of course, they want road maps to both the tools and their integration and they want them now.

They understand the power of the combined company's technologies and they want to make design flow decisions and choose their partners right away.

We are committed to making initiate road maps available within 30 days of the close.

For the purpose of sharing our vision, it is useful to go back to basics.

IC design can be interviewed as two fundamental task sets, design creation and design verification. The design creation flow implements the design from a high level description invariable HTL all the way down to the minute detail of the layout point. The objective of design creation flow is to optimize the final results for speed, area and power, all within the market window, of course.

In contrast, the design verification flow is much and more aimed at checking for absolute accuracy. This applies from high level descriptions in which functionality is checked all the way down to the physical domain, where every detail of the chip is rigorously verified and signed off.

Although the benefits of Avanti! merger have been highly touted in the design creation flow, Avanti! actually adds enterprise value to the verification flow as well.

Let's talk about design creation. Top to bottom the principle tasks are floor planning, synthesis, placement, routing extraction, signal integrity, and timing analysis. Against this list be, the combined company instantly has a broad portfolio of best in class point tools.

This is great news. We will continue to invest in point tools. They will not only build our own flows, but will also ton play a central role in customer's flows that may use pieces from Cadence, mentor, Magna or others.

Focusing only on point tools, though, would completely miss the point of the Synopsys Avanti! merger. The real point is to deliver a next generation design flow for .03 and .09-micron. Such a flow requires a great deal of tool integration.

To understand why the combination of Synopsys and Avanti! is so powerful, let me take you back about three years fo a time when we predicted three successes evolutions in the design creation flow

First, below point 25 micron the delays on a chip move increasingly from gates to the interconnect. For any high performance designs, this trend requires that synthesis and placement merge. Synopsys let the solution to this trend by introducing physical compiler.

Second, below .18-micron, previously negligible physical phenomenon, such as [cross talk] begin messing up signals in unexpected and sometimes disastrous ways. This trend requires that routing and signal integrity verification merge.

Avanti! addresses this challenge with Astro, which succeeds the Apollo project, product.

Third, below .13-micron, chip complexity is enormous. This trend requires an entity great design flow book ended by floor planning and a rock solid physical database. And [signoff] is state-of-the-art timing verification.

The reason the new Synopsys is so exciteing to our customers is that the merger greatly accelerates our momentum in all three of these trends. Starting with the first trend of integrated sin think is the cities and placement we have made great progress. Physical compiler had a record quarter for orders and revenue.

In Q2 there were 131st time purchases, 20 repeat customers. To date, we count I68 customers for our physical synthesis product. Although we can no longer measure the take off count precisely, we estimate there are well over 800 [tape-outs] using physical compiler. Physical compiler is critical to many customers today. Let me give you just one in-depth example.

Texas instruments recently used PC to tape-out multiple versions of their next generation flagship digital signal processor chip, the TMS 320C64X, a big name. It's 600-megahertz .13-micron 64 million transistor device. This platform enables full convergence of video, voice, and data on all broadband networks for TI large based station systems market. These next generation Eves which TI is shipping today not only mark a performance milestone but also become the platform for most of TI's future ESP products. TI was able to achieve timing closure and save two months in design cycle time.

As this example shows, TI is making the highest performance designs on our physical compiler.

By the way, the layout of these devices were done using the Avanti! router.

For flows requiring less performance than physical compiler, design compiler remains the industry workhorse. Just last quarter, we issued a new release of design compiler with impressive stats. Up to two weekss faster flow times 16% higher circuit speed and 14% smaller area, not to mention a number of enhancements aimed at ease of use.

A higher version of design compiler and DC Ultra had record bookings in Q2. Our thinking has evolved on how design compiler and physical compiler play together. We're finding that it is very common for customers to buy a PC license as an addition to their design flow rather than unplug their DC licenses all together. In many cases they use DC quote on top of PC. DC helps them design small portions of a larger block then they feed those portions to PC to finalize and place the entire block. When used in this way our estimate is that customers use 3 to 4 DCs to feed one physical compiler

l this is called the technical optimization and a cost opposition for the customer.

Overall we're still in the early stages of the upgrade cycle from DC to PC, and we see the two co-existing for many years. One aspect of our upgrade strategy has been to enhance the power of PC for use at the [ITL] level which will promote more rapid replacements of DC with PC. In any event, there is no doubt PC and DC will be key products for us in the foreseeable future and we expect the combined revenue from both to grow.

The second trend in merging is bringing together of routing and signal integrity solutions. Astro, the new backhand system from Avanti! is just starting to catch on to meet this need. Billed as a replacement for Apollo, Astro's benefits include parallel routing capabilities, 3 X faster run time than Apollo and an array of signal integrity prevention and repair features targeted at .03 and .09 design. So what about Astro's route compiler, you might ask? Route compiler is an excellent piece of routing technology and has progressed remarkably in the past six months. We have decided to focus first on integrating physical compiler and Apollo Astro. We have some important customers who are using route compiler and we are working closely with them to determine how best to continue to meet their needs. Some of you have also asked about PC and Apollo Astro in terms of placement. The two technologies are complementary. In most cases, physical compiler will be used for the placement of high performance, timing critical blocks and Apollo Astro will be used for the rest of the chip placement routing and assembly.

Customer acceptance of Astro is growing rapidly. Last quarter, new license bookings for Astro were equal to the new license bookings for Apollo. To date, Astro has already been licensed by 63 customers, including 6 of the 10 largest semi-conductor companies.

After your combined synthesis and placement on the one hand and routing and signal integrity on the other, the next logical step is to combine both sets of tools into a single well-connected flow. That is by far the number 1 wish of our customers. It's what makes PC plus Astro an immediate winner. We have made the integration of these tools our top priority and expect to deliver initial results to customers in a matter of months.

Now, let's move to trend 3 from below .13-micron. As you may recall, this trend required and integrated design flow book end by floor planning and a rock solid physical database and signed off with state-of-the-art timing verification.

Over and above what we're doing with PC and Astro, our immediate first step is to integrate prime time with the milky way database. Not surprisingly, this has been the second most frequent asked request from our customers.

Customers realize that the Milky Way database brings together much of the detailed information that ultimately determines delays on a chip. During the entire design process those delays have to be verified buy sign-off timing verifier over and over again. As you can see, timing really is the backbone of modern design.

A number of years ago, we also recognized the impact of signal integrity on timing. For that reason, we have continued to improve prime time, and recently added signal integrity analysis capabilities to it. Since then, it has continued to gain acceptance as the most trusted static timing analysis tool in the industry. In Q2, prime time SI, where the SI stands for signal integrity, had its highest orders to date. We're still thein the early stages of the upgrade cycle, but by the end of the fiscal year we estimate the SI option will Actuate for over 10% of PrimeTime's over bookings. Our customers request to connect PrimeTime to Milky Way makes a lot of sense. In Milky Way we have a state-of-the-art very robust database.

In PrimeTime and PrimeTime SI, we have the leading timing verification tool, connecting the two brings the leading advantages to our customers design tool by establishing a consistent way of verifying timing throughout the process.

Now that I've covered the database and timing verification, let me spend a minute on floor planning. Although most customers prefer to design their chips flat, for design over 5 million figs or more a high graphical approach which breaks the design up into smaller components is critical. For these designs floor planning tools have begun to attract customer's attention. We believe that about quarter of today's designs would benefit from the use of a floor planner. Current solutions still work for large designs that don't push the performance limits of the silly can. But they choke on the demands of high density, high-speed chips.

To meet this challenge we have been retooling our floor, planner a project most of you know as Hidden Dragon. This product will be targeted as designs that push the limits of timing congestion and area. Stay tuned for more on this topic at any design automation conference next week.

Through the merger we will also acquire Avanti!'s Jupiter which has a sizable customer base. Jupiter will continue to be sold into design floors that use design power at the front end while the Hidden Dragon product will be sold at the high end on into design flows that used physical compiler and as an upgrade to Jupiter.

The summary of these three trends is veryle. The core of the design creation flow rests on four pillars, physical compiler, Astro, PrimeTime, and Milky Way. Each one of these is best in class. Around this set of pillars, Synopsys can sell additional technologies. Our leadership in tests and our number 1 position in extraction complement this flow perfectly, in addition Avanti!'s OPC, optical proximity connection, adds the final touch to the layout prior to making the actual fabrication.

Moving forward we will approve product integration to our leading edge customers within months. We believe there is no company so well-positioned as Synopsys to deliver such a completes high performance design flow with so little risk to the customer.

Our product rollout approach will be the same as it has been for the last 15 years. Deliver revolutionary technology in an evolutionary manner. Existing customers will see their design power in Apollo investments migrate seamlessly into the physical compiler Astro flow. Potential customers are already comparing the benefits of our solution to others, with renewed interest.

As a result, we believe that Synopsys will capture significant market share in the quarters to come.

I have talked a lot about design creation. Let's now move to design verification.

Here I would like to highlight two areas. First, our increased opportunity in analog and mixed signals and second the major announcement yesterday on our move into smart verification.

Let me start with our increased opportunity in analog and mixed signals. This is an area in which both Synopsys and Avanti! were each contenders but the combination of the two makes us a major force. With complex chips considerable attention has been focused on the growth and importance of analog design. What is not well understood is that analog design consists mostly of small discreet components on a chip that will be predominantly digital. So while the design of the analog is certainly tricky it is equally important to verify the analog part of a design efficiently in the context of the chip as a whole.

This combinational scenario is referred to as mixed signal verification. the market for analog mixed signal verification tools is over 200 million. It's a sizable opportunity and one that we are only now fully able to address.

In practice, designers need very detailed simulation of the transistor level for the analog blocks. The gold standard for comprehensive circuit simulation today is called spice level simulation. But designers also need something called fast spice simulation for transistor circuits that are very large but can be verified with a bit less accuracy. With fast spice you run simulation 100 times faster, but you give up some accuracy.

Last, but not least, designers need [inaudible] simulation for the digital portions. Following the same trends as highlighted in design creation, ideally one would like to have all these simulators interact seamlessly with one another. This is another area, where the combination of Synopsys and Avanti! is very powerful. We absolutely have a set of best in class verification tools. H-Spice from Avanti! is the market cheerleader at the spice level. [Nansyns] from Synopsys and [Starsyn] from Avanti! make up the lion's share of the fast spice market. And VCS is the most advanced gate in RTL simulator on the market today.

In addition, Avanti!'s Taurus TCAD or technology computer-aided design family of products is a leader in this market. These tools feed the key library data to all these simulators, what makes our simulation position so strong is all these simulation tools are doing very good business.

[Nanosyn] for example has an exceptional Q2 reflect recent accuracy improvements for transistor simulation and new links to VCS. We saw strong renewals and new sales especially in Asia Pacific. In addition, [Nanosyn] recently displayed [NAPA] in two top semi-conductor houses. Integrating these tools with one another is not only feasible but has already begun. The connects between Nan no sand VCS has turned out to be a major positive for our customers, it is only a matter of months before we will integrate H-Spice in a similar fashion. VCS as you know is a powerful anchor point in high performance design.

The topic of VCF brings me to yesterday's announcement while much of the attention of Synopsys in the past has been focused on the merger we have quietly been putting the final touches on the bold new approach to verification which we call smart verification. Personal verification in a particular simulation has increasingly come to be interviewed as a commodity business. Not anymore, smart verification changes the game although we call it VCS 7.0, we have transformed VCS from a point tool to a whole new verification platform. It brings an integrated solution to high level verification for the first time. At the center of the platform is an improved VCS simulator. As you are aware, VCS is the platform of choice for verifying large multi-million gauge chips. The Lenix version has been especially successful in large round the clock computer farms. During Q2, major VC customers included ANV, Broadcom, [inaudible] [redback] and Teradyne. I'm pleased to announce that also in Q2 microelectronics endorsed VCS for a sign-off. With smart verification, we have now revved up the core simulation engines under the hood so to speak W a host of powerful capabilities previously available only as independent point tools.

These include [Veralite] a subset of the open Vera language, which produces significant improvements in verification productivity . Built-in support for open [inaudible] assertions which helps designers easily capture their design specifics and use simulation to verify to those specifics. Advanced code coverage capabilities that provide feedback to increase designer's confidence about their verification quality.

And [inaudible] cycle C support, which enables up to 10X performance improvement over HTL simulation for [inaudible] RTL design.

Users see this new platform both as a major technology step forward and as a significant price performance improvement since it reduces the number of these point tools that they must buy.

As many of you know, I could talk to you forever about technology. In fact, looking at my watch, I nearly have. In the end, however, technology is no good if your customers aren't using it or if you don't trust, or if they don't trust you with their most complex chips. That is why it was so gratifying for us to be selected in April by Texas instruments to receive their supplier excellence award for 2001. We are the first EDA company to receive this award since they established it in 1983.

TI gives it annually to the top one-half percent of their suppliers. In giving us the award TI said that our relationship Has the proved vital to enhancing their ability to bring advanced products to market with minimum risk.

As far as I'm concerned this this type of relationship we want to have with all our customers.

In closing, let me say that the merger is more than just the acquisition of a technology powerhouse. We are also bringing together two teams of people with a passion for technology in the service of customers and their designs. Some of the people with this passion include Paul Lo, former president of Avanti! who is joining our executive staff as a senior vice-president.

In addition, a majority of Avanti!'s key managers will join us. Leading technologists from both companies are already fully engaged to bring our product strategies together as rapidly as possible.

Our field forces will be consolidated within weeks and visiting customers with road maps in 30 days.

There is no question in our mind that a number of very talend and motivated people are joining our team note talented.

Now customers are eager to see us deliver on the promise of the meger. This is something they have asked for and we will satisfy their wishes quickry and comprehensively. The merger accelerates our strategy and leased us leapfrogs us into the next league. The race is on and we've hit the ground now running.

Let me now turn it over to Brad Henske our CFO who will give you a brief view from our financial perspective.

!!! Thanks, Aart. I'd like to start with a brief review of our perspective from the quarter talk about the Avanti! acquisition, now six months after signing, and then describe our perspective for future and guidance I will then open the call to Q and A.

In a tough environment for 2002 was a good quarter for Synopsys. Our revenues came in at the middle of our guidance range, expenses at the bottom, and earnings per will good share was 39 cents, above the top of our target range.

The semi-conductor environment continues unchanged from last quarter. Shipments continue to be flat although the beginnings of somewhat modest uptic in March and April. Almost no one expects much incremental down side from here, at the same time, few will profess to have a confident few of the timing and magnitude of the upturn. The volatility of decision-making and timing on tool purchases within our customers continues.

In this environment, customers are focusing on the critical needs and consolidating their purchases with the design partners they think will help them be the most successful over the next few years. We value being chosen as such a critical partner expect to become more so thin fureture. So despite a tough environment continuing we had a good quarter.

Let me now turn to the results. Total revenue for the quarter, as I said, was 185.6 million. Total software revenue including maintenance, drew 21% versus the same quarter last year, while total revenue grew 14% driven by lower performance of our consulting and training businesses.

Rateable life [inaudible] continues to grow. It was 67.6 million for the quarter or 40% of software revenue. While our consulting and training businesses continue to be under considerable pressure, consistent with what is reported, revenue and order showed a modest uptic in the quarter over Q1.

For the quarter, 79% of our software product bookings were subscription licenses. The average [audible] bookings in Q2 02 was 3.2 years, consistent with our target. We booked only 21% of our software orders, and licenses where the revenue was recognized in the quarter, at the low end of our target range for the quarter and by far the lowest of any of the EDA companies.

Services revenue totalled 65.8 million download sequentially year-over-year driven by the natural conversion of all maintenance streams to TSLs and lower levels of maintenance renewals as customers continue to try and cut corners by trying to get by temporarily without support.

Overall growth margin was 81.5% revenue, up 1.5% compared to prior quarter, largely attributable to head count reductions in our consulting group .

Our aggregate EGB operating expenses, including cost of goods were 161.8 million which was at the lower end of our guidance. Operating earnings were 23.9 million, up 23.2 million from the same quarter a year ago. Operating margin was 13%, as we said before, we expect to exit the year around 30%.

Other income was 11.2, million inclusive of the termination fee from [Icode], net of its expenses and two write-downs in our venture portfolio. Earnings before goodwill amounted to 39 cents per share, above our guidance and up 63% from the same quarter last year. Diluted share account was 64.9 million. Cash and short-term investments continued to be strong with our Q2 balance ending at 532 million, up $93 million from the prior quarter.

Accounts receivable totalled 152 million for the quarter. DSO was 74 days.

Deferred revenue at the end of the quarter was 397 million up 54% from the same quarter a year ago and up 6% from last quarter.

During the quarter we repurchased no shares, as restricted throughout almost all of the quarter in anticipation of closing our acquisition of Avanti!. We will resume the program this quarter. Head count totalled 3056 employees for the quarter, down 177 from the prior quarter reflecting our work force reduction undertaken early this quarter.

Let me now move to our view of where we are today as we are about to close the Avanti! acquisition versus what we expected in December. It is almost all positive news. We are closing on time. The business did better than we expected over the period for both orders and revenue. We will be able to recognize the bulk of Avanti!s pre-acquisition deferred revenue and backlog in terms of business going forward. We are getting one hundred million dollars more cash than we expected. A number of assets we which adescribe no value including investments aser labs in the venture fund which are material future cash flow. Pricing is held and attrition has been low across the company.

On the negative side the cost of facilities closes will be higher as the real estate market has deteriorated in silicone valley and across the world. Also, we will inherited a complicated tax situation which we'll have to integrate into our tax planning going forward.

Finally, I'd like to describe our expectations for the future what the transaction means for the commission and reported results of our business. As I mentioned earlier visibility continues to be full poor in the semi-conductor industry. Most estimates expect it will grow in the mid teens next year not reach its previous revenue high pointed of 2000. The estimates R and D spending will grow in the mid single digits we don't necessarily have any unique forecasting ability this is consistent with our current view.

With these assumptions as a starting point we expect the revenue for physical 2003 will be approximately 1.3 billion, 15% growth over the full 2002 year combined companies. We expects expenses of approximately 920 million, we expect earnings will be $3.25 per share. We will continue to reported earnings on a proforma basis before certain costs and charges, these will include the amortization of goodwill and specifically identified intangibles, transition officer related to the avanty acquisition and integration expenses. Despite closeing the transaction in the middle of the quarter with partial quarter impact we have reasonable good visibility in Q3 we expects revenues between 230 and 240 million. Total expenses of 189 to 193 million. Other income expense to 12 to 14 million, including approximately 10 million investment sale gains. Investment gains will be somewhat more volatile going forward since the number of Avanti! investments which we require mark to mark on a quarterly basis.

Our outstanding shares of 75 to 78 million. A proforma tax rate of 34 1/2 percent proforma earnings of 43, say 48 to 53 cents per share. For the full physical 2002, we expect revenue between 905 and 925 million, total expenses of 720 to 735 million, other INE of 38 to 40 million, including approximately 22 million investment sale gains, outstanding shares of 75 to 78 million, a proforma tax rate of 32 1/2%, which will continue to 2003, and proforma earnings of $2 to $2.10 a share.

Judging from the number of questions that we've received, considerable efforts on the part of investors and analysts is going into modeling our business.

With that we'd like fo help with some additional guidance and assumptions. On license mix Avanti! license mix is included 40 to 50% perpetuals with remainder booked subscription licenses. We will drive this toward Synopsys stand-alone license mix of 20 to 25% per perpetuals.

For the remainder of 2002, we expect a combined mix of approximately 25 to 30% perpetuals. For 2003, approximately 22 to 27% perpetual licenses. This remains the lowest mix of licenses with revenues in the quarter booked of any major competitor in our industry. We expect the duration of subsriptions will be roughly between 3 and 3 1/4 years, and like the impact of the original change in Synopsys license mix, the impact of moving the license mix of Avanti! to be similar to Synopsys, reduce reported revenue by about $50 million in the remainder of 2002 and about 60 million in 2003, versus the two companies stand-alone rate of course to the difference will go into backlog.

l as we announced previously the FCC is concerned concurred with us with respect to how we will recognize the revenue from Avanti!'s pre-acquisition deferred revenue and backlog. We will be able to recognize approximately 70 to 80 % of aggregate at closing. The impact of this accounting haircut will be do reduce reported revenue by approximately 45 million dollars to the remainder of 2002 and $15 million in 2003 again versus the stand-alone rate of the two companies.

In 2003 we expect our reported revenue will be made up of approximately 15 to 20% product, 50 to 55% subscription, and 30 to 35% services revenue.

We expect integration expenses one time charges in Q3 will be slightly more than $100 million including $95 million for our litigation insurance policy and approximately 5 million for various integration activities there will be additional integration expenses in Q4 and 2003 in addition merger costs of approximately 70 million for facilities closure, 15 million for severance and personnel related charges 27 1/2 million for professional fees and 5.6 million for other deal related expenses willing be included in the the total purchase price of Avanti!.

Our share count, as I mentioned the average share count in Q3 will be approximately 75 to 78 million. For Q4 in 2003 take into account the full period fully diluted outstanding shares will be approximately 80 to 84 million, including over the 14.8 million shares issues for the acquisition.

So in summary we're off and running very excited about our future as a combined company. Thank you for your attention we are now open for questions.

Thank you. Ladies and gentlemen, if you wish to ask a question, please press the one on your touch-tone phone. You will hear a tone indicating you've been places in queue and you may remove yourself from queue at any time by pressing the # key. If you are using a speaker phone please pick up your handset before pressing the numbers and your first question comes from the line of Jessica [Coracklas] of Goldman Sachs.

Hi everyone, I think probably what the biggest question I have is what-actually was the guidance. I think people would have expected the aincreasing to have been a little bit better than what you're guideing to, can you talk a little bit more about what assumptions are there I guess what level of orders growth you're expecting for the combined company for this year and for next year? That would be helpful,, thank you .

Sure. So let me take those in reverse order. As I said, I think we expect our R and D spending among our customers to grow in the mid to high single digits next year it's clearly in the single digits this year. I believe that in 2003 we will do modestly better than that given we're now close to half of the industry our business is our major competitive business is going to be driven where R and D spending goes with our customers. In terms of assumptions more suspension thing you're looking for?

Well, it's just more again I'm just looking at my numbers and for example the for the July quarter it just seems like I'm not exactly sure where the disconnect is between my numbers and frankly your numbers and the guidance you have for next quarter for the July quarter I'm just trying to see where the disconnect is, if it's in the base Synopsys business where you are becoming a little more conservative or if maybe it's related to the subscription late for this quarter of what you think it is or is it related to the Avanti! business in maybe thinking there might be some sale disruption, there again I'm just trying to figure out what the disconnect is between my model and your model, Brad, that's all.

It's hard to compare without looking at both of them but I suspect at least in Q3 the biggest impact is going to be what happens to deferred what we talked about and the change in the license mix. Our view of orders for the quarter, both for our business and to the extent we had one for the Avanti! business is not changed.

Do you think it will be immediate in terms of variable to switch over to the Avanti! models on the subscription side just to be clear?

Yes.

All right. Great. Thanks.

Thank you. Your next question comes from the line of Rog [inaudible] from Fullen and company.

Yeah. Thanks. Aart, I wonder if you can step back from some of the detail you talked about in terms of products and just cut your business into segments and size those for us? Roughly, even and talk about what you think relative growth is in each of the major segments. You talked for example about physical compiler and design compiler growing together, growing, into next year. How much of growth that you're expecting comes for example from that segment? You've done that historically for Synopsys as a stand-alone, can you talk a little bit about the combined company and where you see growth coming from?

Rog, as you're asking this question I see a whole bunch of people making faces at the table here because yesterday we debated for like an hour the fact that we wanted to move away from these segments because the problem is becoming more and more integrated. So the very direction we're seeing the market go is towards having a central flow that's made up both on front end tools and back-end tools.

At the same time, I can sympathize with some of the need of understanding a little bit so what's hot and what's not, where are the areas that we see good moves forward.

So let me fall back a little bit on the older cuts of on one hand having some of the design creation that is very much the front end. There, I think we are very much in the middle of the growth rate that the rest of our company has. It's very much the company is a growth rate.

For the site of Synopsys that was very much towards the design integrity side, which some people would have called in the past, the epic tools there also, some timing there, there, we have seen remarkably strong growth, so we call that a year-and-a-half or so ago that was an area, that was lagging the company, now, I think it is a little bit ahead.

The area that is the verification, meaning the simulation, and the system side, is relatively solid, but not outstanding growth. The picture I'm trying to paint here is all in all a fairly balanced picture. This is just before we're now starting to scramble this all up, and move toward much more integrated flow.

Into this picture of course comes Avanti!, Avanti! has had reasonably very strong quarters, as customers are starting to look at their technology with renewed interest, and as they are rolling out Astro. And so I think Astro has just come out of sort of the alpha beta phases and now is really a product to go to the market with heavy duty

In that sense the timing is perfect.

As it relates to the Avanti! business, can you give any more detail, in terms of the portion of Avanti!'s business, for example, that comes from routing products relative to some of their verification products and other products, and Aart, is it your view that there's any fundamental reason that physical design products either offered by Avanti! or others in the industry, are growing at a higher rate than products that have classic lie been designed do be in the logic design space, is there any reason for that that? Is that in fact true?

You know, Avanti! has never had much of a product split. And so I'm still a little bit uncomfortable giving a lot of detail partially because off the top of my head, I wouldn't be able to cite that. I think it is fair to say the routing portion of the business is probably about half of the company. And but routing cannot be split from placement, which cannot be split from the database, which really cannot quite be split from a number of the extraction tools. They're very connected. And Avanti! has done extremely well in doing that.

l I think that the, the back-end tools have done well recently, partially, because it is just unvoidble that you need to have them, and because they have been all in all quite capable of holding their price at a high level

l and so as we now move forward we will integrate more and more into that base, and I think overall, that will help the whole company hold price quite well.

Let me make sure I understood your answer. Is it your view that industry growth in product centered in the physical design state is somewhat higher than products in the logic on the logic side?

Actually, it is not my view, but I think these things come a little bit in waves. You have two or three-quarters where there's a little bit more emphasis on the back-end, there's two or three-quarters where there's more emphasis on the front end. The reality is you neneed a complete flow and the competition on the back-end has been fairly low. There have been very few players, and so I think that is why the back-end has been able to hold price very, very well. But in general, I'm fundamentally not a believe that one segment will grow over time more than another. I think they are very much on par.

Okay. Brad, I'll hang up after this last question. Can you talk briefly about what you need to do, in terms of sales force integration, what's going on there?

sure. It's pretty simple. You need to figure out who the resulting sales groups are, who the account teams will be and then get them aligns with their accounts with quotas. We will be done on Monday.

All right. Thank you.

Your next question comes from the line of David [Raiser] with Morgan Stanley.

Just a question I guess for Brad. It's just sort of a follow-up to Jessica just to get some clarification. Brad, could you just give us some idea of what, from a revenue and EPS standpoint the stand-alone business, what in your forecast for E 2 and 03 the stand-alone business is contributing just so we can get an idea here what Avanti! is contributing versus a stand-alone business so we can get an idea both from a revenue and EPS standpoint really what's implicit in your guidance.

David, unfortunately, I can't, because given how close the businesses are and how rapidly we're going to integrate them, all of the transactions with the customers will be common. The cost structure within a month or two will be almost completely common. We did not even, as part of our own planning attempt to try and break out a separate quote Synopsys and separate Avanti!.

If we're just trying, I mean, is it possible you can just give us even from an earnings perspective. There were expectations set even for this year, as to, you know A bar for revenue growth in the stand-alone business, and a bar of those $2 in earnings for the stand-alone business. And before we move on, I think it would just help if we can get some aappreciation of how is-what is that stand-alone number now improvement in the guidance? Has that stand-alone number change for '02 or '03 O is this something we can view as being generally consistent in the modifications to the numbers are largely just Avanti! being followed in?

so, for '02, we didn't do a plan. I think it's consistent with what we had put out of $2 before. For '03, we had not given any guidance so there's nothing fo be consistent with

You would say the stand-alone business is still roughly $2, there's really been no modification there, roughly the revenue bar that was sets for Synopsys, whatever people have been looking for in a stand-alone basis is roughly unchanged as well, and the incremental changes here are basically just Avanti! being followed in to roughly you know, where people had gone following the January quarter?

yeah. I think a better way to say it is that the outlook for our existing business has not changed. There's obviously a lot of moving parts with integration and all the things that are going on with deferred license yeah, the underlying business is $2.

One other thing, just on '03, you had stated that your, you know, your bookings guidance really hadn't changed for '02 and '03, either for Avanti! or Synopsys. I don't believe you had really given I believe you had spoken to growth in bookings in 02 I guess that's single digit boxings in 02 for stand-alone business. Can you give us some appreciation of what it is now for the combined entity pore '02 and '03.

for the combined entity I think in the same place in '0 the 2. As I said in '03 the expectations for our customers are indeed spending up in the high single digits.

You would expect the book goes to track that.

yeah, I think we'll do little boat ter 03 in the market as a whole we get paid out of R and D spending as do our competitors, therefore none of us diverge wildly from that number in any given year.

Great. Thanks a lot.

Okay. Your next question comes there the line of Gregg [Wagenhoffer] from [GSSC].

You look at route compiler versus Apollo Astro. You talked about you got a lot of questions on this. What caliber-it seems to me like you're segmenting the marketed with route compiler, physical compiler maybe higher end flocks higher end design you know DCNC then Apollo Astro kind of the mid range what's the customer reaction to that? Has there been, how have the conversations gone on as far as having dual platforms?

Well, the customers actually sympathize with there at greatly because they all see their designs are different, have different retirements. The different customers, those that have been steady Apollo customers that are now moving to Astro or route compiler, for them, anything that's a lot better is of immediate interest. Then obviously, the people that have done good work with route compiler that are very interested in us looking at that technology and preserving it in some form, and then there are the customers that have already started to move to Astro, that see there's an immediate natural migration path from Apollo to Astro. Astro holds great promise. This not a new phenomenon for us. We have emergenciers in the past have situations where we had multiple strong technologies, and the lesson that we've learned out of these mergers is don't cut off what you do too early and for sure, never put the customer in any situation of risk. And so that is exactly the plan that we are following, while at the same time, stating, very clearly, that our main emphasis is PC plus Astro. That is the reason one of the key reason We*s merged with Avanti!. So we're going to go there as rapidly as possible. But the route compiler technology is quite valuable and we will find a good way of integrating it in our future releases.

Then you talked about solid or I guess record quarters on the order size. Physical compiler and the DC family as well. Any competitive lens you can talk about either physics or in general?

Well, in general, when we have the opportunity to compete directly on technology benchmarks, we do extremely well, because that typically means that the customer is truly interested in having a solution that's technology-wise superior, and there we have no fear. So we go head to head. So I think the reason PC is doing so well is fundmently it executes on its promise. So you may have noticed it is as much new accounts as well as renewals by the way what was not mentioned we also have a number of customers that tend to remix into PC from their installed basis. So overall, that train is running really well I would say.

Then, lastly, have you guys looked at or have you tried to break out the synthesis product orders, as far as new seats versus renewals or remixing of old seats?

I don't think that we did that recently. I think in general, you know, obviously, we have a very good coverage of the market and so there's a very steady stream of renewals.

We still surprisingly enough do find new seats and I'm always surprised to discover that there's still some companies that 13 years later are still looking at a synthesis. Maybe more important is the gradual move from design compiler to what we call design compiler ultra, so that is really a strategy, whereby once somebody has used synthesis well invariably they have some additional needs and we can essentially upgrade them.

Great. Thanks.

And your next question comes from the line of Garitt [Majanean] with RBC Capital Market.

Thanks. A couple of questions for you. With strong bookings growth sequentially and routeble bookings coming in in the expected rank can you explain why the routeble revenue was up only about a million dollars from quarter to quarter?

because the impact of bookings on a quarter on revenue in that quarter is largely a function of when they are booked in the quarter. Q2 is not a quarter that had particular good linearity. Most of what we booked in the quarter did not get booked until close to the end and therefore had relatively little impact on revenue in the quarter. Differently the growth in rateable revenue from Q1 to Q2 is mostly driven by the orders in Q1

Gotcha gotcha, okay. Understand. I guess one of the things I'm curious about also in terms of semi-conductor bookings overall it appears as to the according to recent SEA data they are on the rise, one of the things I'm curious about is what will it take for customers to buy the technology they have had on hold? Is it better pick upin bookings on customer side enough for them to start looking at ordering some of the stuff they've had to delay or does it really take them to see their revenue picking up?

well, I think, you know, from their perspective bookings are obviously the leading indicator unless there's a segment where they're particularly worried about cancellations. Bookings picking unwill clearly drive them to start thinking about their expenses. The thing you have to remember, and you know, it's perhaps if you look at where we are peek to trough, we're still in a spot that. [] peak

More than 40% below the peak so an upturn of 4 or five points is certainly better than a downturn but we're a long way from where they were a year-and-a-half ago. Therefore, I think you see relatively few customers, in fact probably no customers have turned on the expense spigot full blast.

Okay. So they're shooting at a certainly level as well as the growth data that's important.

yeah.

Lastly with respect to civil litigation with Cadence, can you give us a sense what the next steps are there also give us a sense where you think it is regarding trying to resolve the case out of court?

so the next step or the current step, which is actually not different than we were six months ago, is the question on trade secrets has been referred to the California Supreme Court who's picked it up. The lawyers in the brief is is from both sides have actually occurred. The lawyers tell me that some outcome will come interbetween three and 18 months, when they get around it to, it's wholly unpredictable. I think that's where it sits at least for the near future. Until that resolves nothing else will start.

Okay. So there couldn't be any side kind of activity to try to resolve that in court that goes on in parallel.

the rest of the cases is stayed.

Great. Thank you.

And your next question comes from the line of Alex [inaudible] with [inaudible] Webber.

Hello. Thank you very much. I had a question that gets to trying to size market penetration with physical compiler and Astro and then some of the opportunity that's coming up with the combined tool that you've mentioned will be coming up in a couple of months here. Should we think of the opportunity as really rolling in as an upgrade to the 80 or 800, I'm sorry licenses already sold for physical compiler or is that just the tip of the iceberg and really it's matter of upgrading the 63 Astro customers to a number something like 168, and then rolling out across 800?

I think you have upgrades on both sides. I think what is what is exciting is that the term "upgrade" is actually a good one. I like that term because first and foremost it says to the customer a low risk transition, upgrade also implies more money or new money coming towards us. That is true both on the front end with many more PCs possible in the existing front end design environment. And it's just as much true in the back wend Astro being just at the very beginning of completely replacing Apollo over some period of time.

In addition to that, what is exciting is that the combination of the two, I think, is a flow that will be of very high interest to people that in the past, may have been hesitant to commit to Avanti! in some form or another and now suddenly we see some very, very powerful tools be connected very well. So in that sense, we do see that there's a big opportunity, essentially opening up immediately for us, and it's us to executing them.

Is one of the primarily drivers of this or the appeal of this combined tool set, is it going to be particularly useful is deep set micron the .13 and below or is it across all design flows?

It is useful on all design flows. Invariably, it's the people that drive the leading edge that move first. And more Joeffer, they become sort of the test market for everybody else watching. So the people that are designing today in .13 have already reported, for example that Astro is one of the only products that is doing well at executing on all the intricacs you need at .13 and .09 which is the next node after that. So your comment is sort of to the point, which is the people at the leading edge are the first ones moving.

Okay. And I know this is a rather subjective question, but what's your assess. Of what percentage of the market is now moving at the leading edge..

Well, invariably, I would say it is about 25% that is at the leading edge, as in using the most recent production silicone. So that would be today .13-micron. There are a few, isolated cases of people started to design .09 but the libraries of technology for .09 are not really there it's more pilot lines or pilot project. Then there's still a large contingent of people that design for .18. So.

The other comment to that is the leading edge people are also the ones that spend the most money. So even if you look at point-25% being at the leading edge, they probably spend 50 or 60% of the money.

I see. You mentioned .09. Will that create another as dramatic an opportunity for tool upgrades for you to roll out to your customers, or is this a less significant product cycle for the semi-conductor manufacturers.

Actually it is a a very significant product cycle you can see or gauge how significant it is by reading recent announcements major companies before were very independent for example FT, Philips and Motorola are actually lining up to develop .09 technology together because it's very expensive to do, it's very difficult to do. From our perspective, that's a great opportunity because much of the technology that on our side in design integrity we have been developing, much of the technology that Avanti! has been integrating and connecting Astro to is precisely aimed at the problems you encounter at .09, and signal integrity is sort of the main theme there.

the other observation I would have is as you go to these much smaller geometrs what used to be nicely behaving digital circuits become increasingly really mixed signal type circuits and that is one of the reasons why we think that our spice and fast spice products Nan no san and H-Spice and the modeling around that will doingr do very well especially at those small gee om tris.

How is it going to work between [Nanosyn] and [Starsyn]? Are those going to held into one product or market separately?

Undoubtedly over time they will be held into one product, right now they each have lair own constituency of users, users send tend to like certain features than others, we will probably do follow a similar path we did a few years ago when we had two timing verifiers we supported both for a long period of time to make sure the customer would have no risks and then gradually merged them into a sting single better product. So again good technology but introduced at low risk for the customer.

Okay. A final question, if I may, as we enter the back half of this year and we have some very impressive growth followed into this model, would you please characterize what's really driving the growth? Is it is it average selling price increases as we move into the new tool sets? Is it you know, three year renewals really starting to kick in from the period we have '98 '99 or is it some raw seasonality that's really benefitting? What's the ranking of those?

Okay. In general we have some seasonality against our fiscal year, really what is driving things is the fact technology keeps moving. You know, in our industry and certainly Synopsys has always invested well in excess of 20% in R and D, there's a reason for that. We continually crank out new technology. Our customers buy this because that's the only way they can be competitive.

In addition one of the reasons you see very good reported growth almost two years ago we moved to a rateable revenue model that was a big step at that time and we now see the fruits of that which is we have a very big backlog that cranks off regularly renewals and new business. And so all of these together, thick, make for a very good outlook for 2003.

Okay. Thank you very much.

And your next question comes from the line of Jennifer Jordan with as well as Fargo securities.

And Ms. Jordan your line is open, please go ahead.

Good afternoon gentlemen and thank you congratulations on what seems to be a pretty tough environment out there in getting the job done.

I want to go back one more time and kind of revisit the numbers for Avanti!, looking at it in a different way, Brad. When I look at my model for Avanti!, what I saw was about almost 500 million in revenue for expected for fiscal for their calendar year '03. And you had said basically that you expected a deferred revenue about 70 to 80 percent of that to flow through.

So to my mind, that suggests maybe in the period of your fiscal year '03 about 360 million or so and I guess the question comes down to Avanti! had extremely good operating leverage, almost 45% leverage and if you had to look at it in terms of what your leverage would have been on those new revenues, how do you see that?

let's see operating leverage on new revenues. To be honest I haven't broken it out. As I said, we expect the combined companies to move through the end of this year, or to exit around 30%.

Okay.

we'll move slightly above that for next year. I haven't looked at what the marginal leverage kind of revenue to the tune of Avanti! is next year. I obviously the very margin the leverage on marginal is on a%. Eliminate right. Right. Right. At the very margin. What I was thinking for I looked at it said well if 45 if they actually got the 45% margin you could just add that in, we'd get a a number that's those a 300, $3.65 number on your number on what you had before. If I assume that for instance the R and D E suspensory lated to Avanti! has to go up a little bit because you're working on the integration, then your number that's intera. Be of 325 starts to make more sense to me.

so the way we plotted through expenses is pretty simle. We started with the run rate of the two companies as they are today. You know, as we said before we will take about $50 million out of the operating costs in short order in the next few months. And then we've assumed that we will have about 10% growth in that for next year. Now, there's actually a much more detailed plan below that but that's the gist of it because we do expect the business will grow the opportunities will grow and we'll invest particularly in the field and R and D and new things.

Okay. I think that covers it for me. Thank you.

Do you have a question from the line of Lucas Bianchi with Robertson Stevens point. [] you have

Hi. I was wondering what your strategy was going to be with regards to pricing going forward and how you're going to price the Avanti! products, kind of related to that, is customers of Apollo going to get Astro on you know, a maintenance fee?

Let me answer those in reverse order they don't get Astro for maintenance on Apollo. Secondly from a pricing strategy, in the very short-term we're essentially bringing Avanti!'s pricing across in tact, and then we will, over time, as we sort through product marketing strategies in all the groups, which remember given the strictures of how much integration work you can do before a merger actually closes we really just started on. Over time those will get adjusted as we think appropriate.

How do you think appropriate just from what you know now?

In our industry, prices as a general matter tend to grow 3 to 5% a year. You know, I would expect that whatever adjustments we make on average would be consistent with that trend.

Okay. Then the it seems to me that the switch in license type at Avanti! books was higher than 50% just from the reported figures, and that doesn't really mesh with what you said. How-what's the discrepancy there I guess.

When you say higher than 50%, which way do you mean?

Eliminate that they're radical revenue was more like in the 70% regone.

the Reeve new is higher, it tends to be at least as being historically Avanti! much more noisy quarter to quarter so it will be higher last quarter but their average over the last year has been 40 to 50% anyplace

Okay. I think that's it. Thanks a lot.

And your next question comes from the line of daily howker with Merrill Lynch.

Thanks, Brad, a few questions. First on your last conference call for Q1 you had mentioned your cumulative subscriptions bookings for the 6 quarters through Q1 were soak in excess of 800 million can you provide us with an updated booking for the quarters with the model change. Also respect to targeted expense reduction is that $50 million reduction in expense run rate inclusive of the $35 million expense reduction you talked about in the last call or is it over an above that a couple follow understand.

The second one either and above the first one is we're now above 480 million. As we talked about we're not going to get bookings quart ter to quarter. [] 480-million

the number we gave before was the cumulative bookings, I don't have that updated in front of me.

Okay. Might that be available at some point?

Not precisely.

Okay. If we can go back do the integration issue, first on the sales side, is there going to be a net reduction in combined sales capacity, that is, do you expect some reduction of sales in the field on either the Synopsys or Avanti! side and on the product side a question for Aart regarding product integration or product road map. To the extent that you will have the dual routers, might it make some sense at some point, for instance, to bundle up a route compiler with PC, call it something like PC ultra, the way you now have DC ultra for instance, perhaps in that way lessen the apparent overlap?

So to the first question first due we have almost 100% common customers, the number of sales people in the field ultimately will be less than the sum of the two today. That as you look at application consultants who are the technical support. [] this is.

It looks a lot closer to the sum of the two. Aart Aart

Regarding the router, I think the way to look at all of this is primarily as a basket of fantastic technology and so the technologies can be used in many different ways. We have not committed to any additional products beyond the ones that we've announced so far. I think on this call we want to emphasize strongly something very simple, which is PC Astro is the pathway of choice that we're focusing on right now. I think the whole discussion on route compiler is primary lay technology discussion at this point in time the type of things you're suggesting are certainly being bantered around.

The one thing we're not planning to sell route compiler to new customers beyond the ones we're working with today. [] that was.

now

Brad you talked at some point post merger trying to do some kind of contracts consolidation or rationalization, that is for contracts with common customers. Can you talk about that and how active do you see that being where you can consolidate contracts even perhaps intercontract area?

I think, the thing that drives that ultimately is, you know, the customers today have all got a contract with us, say contract with Avanti!., I think as a general matter, either the coming close to expiration of either of them, or the customers desire to get, you know, some meaningful new internal churning of technology on either side will drive the whole thing to be redone as one integrated contract just by its nature, you know, they view it as one relationship now. So that will play out over the coming months.

Is that something that we, is implicitly taken into account in your photographs forecaster?

It is.

It is. Okay. Thank you.

And your next question comes from the line of just maycy with Needham and company.

Thanks a lot. Just a couple quick questions. First of all you mentioned your customers R and D, you see that growing in the mid to high single digits, I was wondering, are your assumptions that the percentage that they spend on EDA tools is going to remain about flat with this year?

So I think firstly, in terms of review of how R and D spending is going, to some extent that's the composite of what forecasters are out there. I will tell you that we nor anybody else I have found hat got great visibility on what they think's going to happen next year. That having been said, I think we expect to your second point that EDA as a proportion of the R and D spending tends to fluctuate around our suspicion over the next few years it will inch modestly higher, the denam mics a not going to change radically. It doesn't change that fast.

Just a couple of how keeping things. On the 100 million charge for next quarter, maybe you mentioned this but how much of that will actually be cash?

about all of it actually, so the Vass bulk of that is the insurance company which we will write a check for.

Could you tell me what the capex and depreciation were for this quarter?

yeah. Hang on. [] Vass bulk

Go to the next one, I'll find the number for you in a second.

One last question after that. Would it be possible to comment at all on what you're planning to do with the library business of Avanti!?

No at this point in time we don't want to comment about that because we lav some contractual agreements with Aart an, we're looking what to do in this situation and once we have resolved those then we will comment about it.

depreciation was 14, capex was about 9.

Okay. Good. Thanks a lot.

A question from the line of ar Lin chin dough with Lehman Brothers.

Thank you. The question about the otherincome, you know, in terms of the gain that you're talking about the $10 million for 30 quarter and the 22 for the fiscal year, shouldn't that be considered sort of non-continuing operations and therefore for EPS are you recommending analysts exclude that? If you could shed a little color on that?

his store Rickly most people have included onincome before goodwill but it is what it is so I would say you can treat it in the way you think most appropriate. [] historically

Thanks. [] income

Our final question comes from the line of Tim Klein with piper Jeffrey.

Yeah, just I want to go back to just clarify a little bit, since it sounds like you guys are not changing your view on the core Synopsys business I know obviously everything's going to get increasingly intertwined at this pointist it's a flex shun point help us delineiate a bit. If you look at assume we're basically add adding to Avanti! model 2 the current Synopsys model, can you help us understand, Brad, for you look at the run rate for last quarter from Avanti!, obviously you take that run rate with current estimates we're getting something who less than that in our guidance, can you characterize as a percentage rough percentage contribution what that what makes up that delta, how much of that is not having the backlog come through, how much of that is transitions to a routeble, more of a routeble ex-and how much of it is maybe other?

so the transition to routeble is about 50 million. The backlog is about 45 million, both those pretax. After tax, with the shares outstanding for the quarter that's about a dollar per share for the remainer of the year.

Okay. Then the other question I had, was on just some clarification, in terms of the product sets that you're bringing foggy, you know, there are some products it sounds like in simulation space and others, where you have sort of comparable offerings, it sounds like you have some sort of different strategies, can you give us sort of review quickly where you have comparable solutions and how you're going to rationalize keeping both solutions or maybe de-emphasizing one or the other?

It's very simple. We have actually very few areas like that in the verification sized. In many cases it's is being rationized as we speak in a matter of two orb three days this will be mostly done we'll be at the design information conference tomorrow not tomorrow next week, it field like tomorrow note so this will move very very quickly. Some of the products will be held in parallel, some will move quickly forced one or the other. [] towards

In no case will the customer being held in a state of not knowing, because within a month we will have road maps on that.

Okay opinion great. Thank you very much.

At this point in time this concludes the earnings release call and the call regarding the Synopsys Avanti! merger. We appreciate the time you spent with us, all the more this is clearly a moment where Synopsys is taking a turn into its next phase and we think that this will reshape the EDA industry positively so for us and so we appreciate all your support in the last few years and look forwardture supportinging for ward. Thank you very much.

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