Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Moshe Katri from Cowen & Company.
Moshe Katri – Cowen & Company
I am just trying to get some clarification regarding the impact of FX. Obviously it did help revenues, maybe can you quantify that, but then it did impact margins, can you quantify that as well and then in the same respect obviously it will impact ?08’s operating margin levels. You said now you’re looking for 8%, so what was the impact for the year all together? Thanks.
Ofer Segev
If you look at our sales and expenses denomination in currencies, about 70% of our sales are in non-dollar currency and 90% of our expenses are in non-dollar currency. When you do the math it inflates the revenue much more or inflates the revenue very similar to the way it inflates expenses in dollar term and the result is that we feel the same operating income, but the revenues are much higher so the margin is actually lower. So it’s about 60 basis points. So as we said at the beginning of the year we expect it to be 8.5 to 8.7 we currently believe it’s going to be around 8.
Moshe Katri – Cowen & Company
Understood and then Ness Israel continues to show very impressive improvements in margins and this is something that you guys spoke about since you came on board; how far can you push EBIT margins in Ness Israel and then also Ness Europe showed very impressive improvements in margins; what sort of targets do you have on both?
Issachar Gerlitz
I think in Israel, the target is to be relative today and I don’t think we can improve from where we are today. In Ness Europe we should do a little bit better; we said that 10 to 12 and again it depends on the quarter of course. You have to remember everything we sell is in an annual basis and not quarterly base and so you should expect Q3 lower than it is today, because Q3 is always the summer vacation in Europe and Q4 much stronger, much stronger again, overall for the full year that will be between 10 to 12.
Moshe Katri – Cowen & Company
Okay and then finally you’ve disclosed operating cash flow, what was free cash flow for the quarter and then do you have a target for free cash flows for 2008?
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