From a field perspective, we continue to make sure that we are focused on providing a great experience for our direct customers. The LiveCycle success is a reflection of what we''ve done with Matt Thompson and the field organization. In addition, we tend to focus on the mid-market. We are constantly looking at revenue and expenses and making sure that we invest in the long-term while returning to shareholders the right throughout.

Jay Vleeschhouwer (Merrill Lynch): With respect to the Creative business, is it fair to assume that you''ll keep the same segmentation with CS4 as with the CS3? Confirm that you won''t go any further with respect to configurations? Is this the right number in terms of complexity of products? Secondly, would this be the right time to change your pricing model for upgrades? Would it make sense to have a stepped or tiered pricing mechanism for upgrades?

Shantanu Narayen: Every time we release a new version of the Creative suite, we do look at the segmentation and try and make sure that we are meeting our customer demands. The overall segmentation that we put in with respect to CS3 has clearly resonated with customers.

We look at the pricing models for upgrades with every cycle and believe that there is an opportunity for people who are doing version skipping. CS3 still continues to deliver great performance. We are focused on marketing it and getting penetration among our existing customers.

Jay Vleeschhouwer (Merrill Lynch): At MAX, you had 8 new product and service initiatives like the Media Player, Astro, CoCoMo, and others. What is the update in terms of revenue contribution this year?

Shantanu Narayen: We talked about AIR a fair amount at MAX and it''s good to see AIR out in the market and customer adoption of it. The second one that I would highlight is the Media Player; we are clearly seeing a lot of customer adoption from media companies who want to have their video content work both online and offline. The bid has been a successful data. I''d encourage the market to download it and see the amount of content that people are already providing in Flash over the Internet is increasing dramatically. We are excited about that. Revenue from the Media Player is probably not going to be material this year, but I think it reflects an adoption of Flash and the Flash platform.

Philip Rueppel (Wachovia Securities): You''ve talked about the strategy to make Flash the de facto standard for video streaming on the web. How important is it to you to get greater Apple Flash support on its mobile devices?

Shantanu Narayen: You really believe that Flash is synonymous with the Internet and frankly, anybody who wants to browse the web and all it''s glory needs Flash support. We are very excited about the announcement from Windows Mobile adoption of Flash on their devices and the fact that we''ve shipped 0.5 billion non-PC devices. We are also committed to bringing the Flash experience to the iPhone and we will work with Apple. We''ve evaluated the SDK and can now start to develop the Flash player ourselves. We think it benefits our joint customers and therefore want to work with Apple to bring that capability to the device.

Philip Rueppel (Wachovia Securities): Could you give us update on the strategy behind stock repurchases given the guidance for Q2. Does that assume additional stocks repurchase ability and also do you think you will continue to fund that with debt?

Mark Garrett: We continue to believe that returning excess cash to the shareholders in the form of stock repurchases is the right methodology. We made great progress against the 50 million share authorization. We have only over five million shares outstanding. The guidance that we gave for the next quarter in terms of share count factors does not factor in anything over and above what we have already accomplished. We did draw down debt off the balance sheet. Given the stock price and interest rates, that was the right capital structure for us, and we''ll continue to evaluate that every quarter.

Heather Bellini (UBS): About 68% of your quarterly sales came from Suite on the Creative side. What''s your goal in terms of future penetration? Could you comment on your competitive differentiators as Silverlight gets ready to go into its second revs of the product?

Shantanu Narayen: Concerning the CS penetration, we are pleased with 68% penetration of the Suites, this being the first release between Adobe and Macromedia. We are pleased but we continue to see adoption of the Point products, which also represents an opportunity for us to move the Point product users whether they are illustrative, whether they are imaging users or they are premier etcetera to the platform. Within the Suites as well, we have an opportunity to continuously move the design suite customers or the production suite customers to the master collection. We certainly think there is room for improvement in getting more people to standardize on the suites, but also within the suites to move up as they use more products.

With respect to Silverlight, Microsoft also views the same opportunity that we have been spearheading with respect to video on the web. Among the key differentiators for Adobe is our Authoring Suite. It''s clear that our Authoring Suite, the video business for Creative grew over 50% CS3 over CS2. People are adopting our video products in order to output flash video for the web.

The adoption of the Flash client, we have virtually 98% of all PCs that are connected with Flash, the new edged high-definition flash player that we have delivered is having tremendous adoption. Operation MySpace is using it. We have the Flash Media streaming server; we were able to deliver a great version that allows a lot more streams. Finally, the fact that we are now delivering a media player as well as the ability to have DRM, means we''re the only company that provides an end-to-end solution across the platform. We delivered Flash Lite to all of our mobile partners as well. That''s one key competitive differentiation. Our media partners have been using Adobe products for decades and Creative people who are creating this content are very familiar with Adobe products. This enables us to be a differentiator. But none of those preclude us from continuing to innovate, which is what we are focused on.

Robert Breza (RBC Capital Markets): Can you comment on the growth in Europe in light of the related foreign currency position?

Shantanu Narayen: It''s clear that a number of the emerging markets as well as the overall European market continues to be a large market opportunity for us. We are seeing quite a bit of traction of our products in Eastern Europe as those countries enter the European Union. Given that the release of Creative was a quarter behind in these other foreign markets, it tends to continue to be strong through the cycle. Those are the two things, which reflect our European strength.

Mark Garrett: On the currency benefit from a year-over-year perspective, we''ve got a $25 million favorable uplift from the euro and $7 million favorable uplift from the yen from a year-over-year perspective.

Robert Breza (RBC Capital Markets): Do you see more new customers in those emerging areas gravitating more towards the web?

Shantanu Narayen: We are attracting new customers to the Adobe products and platform. There is no question that as the number of media companies or as the number of publishers is increasing, the Adobe products in many cases are the gold standard for what those publishers use. In addition, especially in Asia and Europe, as the value of intellectual property increases, the piracy rate is reduced in those countries.

Brent Thill (Citigroup): Do you feel that you''re going to be able to preserve the margins and to act quickly enough on the expense side?