Harley-Davidson Inc (HOG) 2002 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the Harley-Davidson second quarter 2002 final results conference call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Vice President and Chief Financial Officer, Mr. Jim Ziemer. Sir, you may begin.

Thanks, Charlene. Good morning and welcome to Harley-Davidson's second quarter conference call. I would like to remind that you this call is being recorded and a replay will be available after 11:00 A.M. this morning.

Please call 973-341-3080 and enter pin number 3343286, followed by the pound key. Recording will be available through July 24. It is also being webcast live on our website at Harley-Davidson.com. The webcast will be available for replay throughout the next several weeks before being archived on the investor relations portion of our website.

In compliance with regulation FD, I will make the following statement. This call will include forward-looking statements that are subject to risks that could cause actual results to mean materially different.

Those risks include, among others, we have noted in our latest earnings release and filings with the SEC. Harley-Davidson disclaims any obligation to update the information in this call.

Now, starting out, I'm not going to wait for the question and answer session and the first caller to congratulate us on a great earnings report. I'm going to tell you up front this is a great quarter. In the midst of recession, sales of Harley-Davidson motorcycles in the U.S. are up over 20%. Harley-Davidson has record revenue and earnings to announce.

In fact this first quarter in our 99-year history, this is the first quarter in our 99 history -- 99-year history we have recorded over $1 billion in revenue.

The employees of Harley-Davidson just spent the four days with the dealers from around the world, and the dealers are having a great year. They are very excited about the new anniversary products from motorcycles, parts and accessories and motor clothes and the exciting events that will be driving customers to stores. We have increased our financial exposure by providing information on gain for securitization this quarter and included a cash flow schedule with this release. We have also revised our pension plan -- pension plan investment return assumptions downward from 10.5 to 8.5%. Like I said, this is an exciting quarter.

As in our typical approach, I will spend a few minutes discussing some of the highlights of the quarter and then I will open it up for questions. We have achieved records in many different categories for the second quarter and it is my pleasure to review with you some of the highlights.

These include Harley-Davidson units, 65,540, up 8.9%. Revenue, I mentioned, $1 billion, up 16.1%. Gross profit, 335 million, up 16.1%. Net income, 144 million, up 24.8%.

For more detail, I will start out with the motorcycles and related products segment. During the quarter, we shipped 65,540 Harley-Davidson motorcycles, which is approximately 500 units more than our guidance of 65,000.

We did this in our scheduled 64 work days. During the first quarter conference call, I mentioned that we were -- we would begin production of some of the 2003 models in the last week of the second quarter and, in fact that is what we did. We produced approximately 3,000 units, which will inventory at the end of the quarter, waiting for the completion of our dealer meeting.

They are now in the process of shipping and will show up at shipment in the third quarter. The average selling price of Harley-Davidson motorcycles was up 3.4% in the second quarter, compared with a year ago quarter. This increase was due to addition of the

as a new family of motorcycles. The

included in the

. The

make up 79.7% of the total versus 78.6% last year.

The

per unit is considerably higher than the

that they replace. And also helped by a model increase, as we mentioned before, of 1.4%.

In the press release, we mentioned we raised our calendar year 2002 production goal of 262,Harley-Davidson motorcycles. This represents an 11.8% increase in production over 2001. This was incorrectly stated in the press release as 11.2 and I apologize for that. This increase is the result of continued strong demand for our products and some ongoing capacity increases.

Parts and accessories billed another strong quarter sales of 168.9 million, up 21.8% over 2001's second quarter. This double-digit growth was led by strong accessories performance across the entire product line. General merchandise sales for the second quarter were 51.3 million, up 54.7% over last year, a strong quarter led by over $10 million in sales of 100th anniversary items to our worldwide dealer network. There will always be quarter-to-quarter fluctuation of pricing accessories and general merchandising growth rates, but in the long-term, we continue to expect a growth rate of revenues be slightly higher than Harley-Davidson motorcycle growth rate, and over the long-term, general merchandise is expected to grow slower than the motorcycle unit growth rate.

On the

in April, we began shipping the brand new (XP9R) motorcycles. This legendary sports fighter received strong reviews from the motorcycle industry around the world. The

is powered by 984 CC powertrain and retails for $9,995.

Shipments are 2006 units the quarter and shipped 3303 blasts in the quarter bringing total

shipments to 3309 units this year versus 2,468 units in last year's second quarter. The dealer

announced a new model for the

family, the

Lightning. This new model will be available for shipping later in the year, sometime in the fourth quarter. It too will retail at $9,995. This is the second member of our new XP family, V-twin headway

motorcycles. The Lightning is a street fighter motorcycle, and there is plenty of information on it and the fire bolt in the -- on the

website.

Gross margins were even with last year's 33.5%. Margin was held slightly by a lower sports and mix with negatively impacted by the our new model launch costs associated with the our new models.

production was still in the ramp-up mode and pension costs associated with the change in expected return. The new model launch costs are referred to on the new model --

2005 marks the first time we -- new model year in a second quarter.

is still in the early stages of becoming a new family of motorcycles. And until the volume grows, profitability will not be as high as some of the other big twin motorcycles.

Finally on the pension costs, two-thirds of the $3 million that we reported in the press release were recorded at the cost of good soul but we --

operating margin for the motorcycle segment was 18.3% compared to 17.9% in 2001. Operating expenses did increase 13.0%, less than a 16% increase in revenue. As we have discussed before, the nature of our operating expenses means that they won't necessarily move in line with revenues.

Now, turning to our financial services segment. Harley-Davidson financial services had another great quarter with operating income of 37 million, up 14 million over last year's second quarter. Subsidiary continues to benefit from strong Harley-Davidson motorcycle retail sales, which are increasingly being financed and insured through HDFS. Remember, HDFS derives over 95% of its income from Harley-Davidson motorcycle business, which create the opportunity for dealers offer the competitive finance and insurance products for both new and used motorcycles.

Strong loan originations resulted in a gain in new motorcycle lending market share to the mid-30s and also led to the $2 20 million increase in our second quarter securitization versus last quarter's securitization. I would like to point out that the gain on new securitizations as a percentage of receivables sold is more this year as compared with last year. This year's gain is measured as a percent as 3.7% and is more than last year's gain of 4.6%.

2001, as we reported before, we did benefit from declining interest rate environment. Harley-Davidson Financial Services analyzed credit losses for the first six months, 68 basis points, down from 79 basis points last year. Although this would seem counterintuitive in our recession, losses remain low due to the better credit quality of our portfolio, since performance operation was implemented and continued emphasis on collection efforts.

At the end of the second quarter, retail delinquencies, defined as greater than 30 days delinquent, are tracking that approximately 3.2%, down from 3.9% at the same time last year. For the reminder of the year, we believe that HDFS will continue to perform well, and that is why we have raised our guidance for the full year operating income for HDFS to be approximately 50% higher than it was in 2001.

Moving on, Harley-Davidson Inc., corporate expenses for the second quarter of $3.6 million, down slightly from last year's $470 million. Interest income was 4.4 million, approximately .4 million lower than last year's second quarter this is due entirely to lower interest rates as averaged cash and marketable securities balances were higher than last year's second quarter.

Some additional information on the quarter. Depreciation expense for the quarter was 44.9 million, which brings the six-month year to date 87.5 million, for the year still in the range of about 175 million. Capital expenditures for the second quarter, $69 million, brings the six-month year to date total to 122.5 million. Capital investments for 2002 were still expected to be in a range, 270 to $300 million. As we stated in press release, we are providing investors with even greater financial disclosure by including the cash flow statement as one of the supporting schedule us in the earnings release. Typically, investors have had to wait until the

to get this information. And in the pension plan, the response to the uncertainties of the equities markets and the world economies, we have reduced their expected return of

assets of 10.5 to 8.5.

Although we have historically -- in fact, although we have had a 16-year track record of returning approximately 13% of our client assets, we have adjusted our return assumption to be more in line with other S & P 500 companies. Looking at the balance sheet, finish the quarter with 727 million in cash and marketable securities on hand, up $90 million from the year end. Year-to-date, we supported our internal growth, funded 122 million in capital investments, bought back 56 million in stock. We have paid dividends and we still managed to increase our cash balances.

Switching to production, as we have mentioned before, the scheduled production days for 2002 by quarter are somewhat different than 2001, especially in the fourth quarter, which is scheduled for 57 days. Last year's fourth quarter had 62 equivalent days of production this will make comparisons between 201 and 202 for the fourth quarters more difficult. Third quarter is scheduled 59 days, which is the same number of work days that we are in 2001. For the remainder of the year, 2002, we plan to ship 67,000 units for the third quarter. 64,750 units for the fourth quarter, bringing the total year shipments to approximately 262,000 units.

In the last six months in the year, we have we plan to ship about 10,000

or about 7% of our total Harley-Davidson shipments in the back half. Motorcycles in the last six months should be between 25 to 27% or a mix. Our customs should be between 45 and 47% and

at about 20 to 22% of the mix. This is all the timeframe of the last six months of the year.

I will now review the

motorcycle market, which we define as the motorcycles on an engine displacement greater than 650 CCs. U.S. Harley-Davidson retail sales of new motorcycles remains strong throughout the first six months, evidenced by the 20.4% growth in the U.S. We are also experienced growth in other major markets, with Europe up 11.3%, Japan 10.3%. -- up 10.3%. Although we only have U.S.

industry data through May, it looks like we have gained some market share in what is still a strong U.S. market. European markets are growing, although we only have data through April. Even though many of the economies are still weak,

industry is growing in Japan and appears we are continuing to grow our share.

Other new and exciting news, on Saturday, July 13th, Harley-Davidson introduced the 2003 motorcycle lineups to the worldwide

network. We also issued a press release on the new products, and I won't review it here but it is on our website or you can call

for a copy.

Every motorcycle we will be selling in the 14-month-long model year, we specially identified as a 100th anniversary model. U.S. price increases are different for all models and color options, but they will range from 1.5 to 6% with a 3.4% average on the U.S. market. There has been some initials reports indicating higher ranges or broader ranges of price increase. These analysis, we are not comparing like products. The most appropriate comparison is to compare two-tone '02 models with two-tone '03s, pearl '02s with the gun metal or vivid black '03s and base color blue with the color offerings in '03.

We are proud of the financial results of our second quarter and they are the results of our drivers success. These drivers are exciting new products and services. A strong brand, worldwide demand for

motorcycles that continues to grow, strong relationships with all our stakeholders and experienced management team supported by powered employees. These drivers will continue to support our success in the future.

On Friday, July 19th, we are going to kick off the start of our 100th anniversary open road tour in Atlanta. This is the only one of ten events in the world tour, but there are many different events designed to appeal to our current market -- but there are many events designed to appeal it our current riders, riders to compare models and to bring new people into the family during the next few years We hope you will take the opportunity to attend one of these events, especially if you have never been to a Harley event before. We believe you will find it exciting, invigorating, and just might have a great time.

Now, Holly, I would like to open the phone lines up for some questions.

Thank you, sir. The floor is now open for questions.

If you do have a question or a comment, please press the numbers one followed by four on your touchtone phone. If at any point your question has been answered, you may remove yourself from queue by press the pound key.

We do ask while you pose your question, you please pick up your handset to provide optimum sound quality. Once again, ladies and gentlemen, that is one and then four on your touchtone phone.

Please hold while I poll for questions. Thank you.

Our first question is coming from Felicia Cantor of Lehman brothers.

Hi, good morning.

Good morning, Felecia.

I'm not going to congratulate you, since you did it yourself.

Rough when you do it to yourself.

I just have a couple of questions.

First, regarding the margins, which you explained through pretty clearly, I just have a question going forward. So it is -- is it assumed that the balance of the charge, the 3 million will also run through the

the same way? The second question regarding that, so in other words, two-thirds will be in the -- we assume that going forward and then also, how do you view the timing of the

cost ramping down? In other words, you know, when do you think you should see that reversion and we could see -- start seeing a greater benefit from the higher prices?

And then also, in the third quarter, will we see kind of a comparable benefit? In other words, you had some of the costs of new models, startup costs in the second quarter versus the third quarter, and then just quickly moving to Harley-Davidson Financial Services, you stated in terms of the increased guidance, it was due to continuing to gain share there, but I was wondering if you factored not guidance, any kind of assumptions for gains as well?

And then regarding the 2 -- 221.4 gain in the press release, was that all gain or did that include other components, such as interest commission, fees those sort of thing. Those are my questions.

Thanks. Um, first question on the

yes, that will be factored in the second half of the year, same portion, two-thirds of that additional expense will you go through on the --

The

margins, we said we introduced the

, the first of a family of motorcycles, so as we, you know, ramp up into a family of motorcycles, the margins will improve. Right now, the volumes are relatively small and the margins will be less than the -- every day, we are proving our efficiencies as we produce this new motorcycle, new employees, new equipment, new plant and gaining efficiencies but over time, as that approaches the better margins, margins comparable to the other

.

On new model startup, as I mentioned, we had new model startup. We had startup the last week of the second quarter in our

facility. We will experience -- continue experience startup, since that was just one week in the beginning of the third quarter and also, we will start up the

2003 in the third quarter and there will be some startup there. So we will still experience some startup by launch, new model launch expenses in the third quarter.

As for HDFS on gain share, I mean, they continue to do a great job and in offering a great product and enhancing the value to the customer, the dealer. That is why they have gained share.

And guess I didn't scribble down all your questions, I will have to ask you to repeat the last one.

I was just wondering in terms of -- that was one of the reasons that you explained that the guidance and HDFS, but also wondering if when you figure out your guidance. You are including any gains from securitizations in that numbers as well?

Yes, think we have pretty well factored in what we currently see going forward with the current market environment and the current market share, both gains from securitizations, fee income on insurance. I think that is all factored into the second half guidance.

And just following up then, that brings me to the other question, had the 2144 million gain you reported, is that just gain or does that include interest, commissions or fees?

That is just a gain. I mean, obviously, we had income total of year of 37 million and 21 is the gain that current year securitizations. There are some gains from prior year securitizations as we have said before, very conservative in our assumptions. And as we continue to -- as the securitizations mature, continue to

additional income. So you have insurance income, additional income and additional income on the past securitizations.

Okay, to so to be clear, the gain was just the gain?

Yeah, that was just on the current 586 million dollars securitization. I have got some additional information coming in here. Now, 21 million goes to the bottom line 'cause there are some expenses that are -- as it backs securitization that we record. That gives you a feel this year versus last year what the -- on the gain portion, so that our net spread is less as we continue going into the year. We thought we would expect experience a more narrow spreads on our securitizations and that is true, but we are definitely doing more business, both in the -- as we reach out more motorcycles through the dealer network and continue to gain market share.

OK. Thanks.

Welcome.

Thank you. Our next question is coming from David Cumberland of

.

Good morning, Jim, and well done again.

Morning, Dave.

You provide any near-term guidance for P&A, general merchandise for dealers related to the products, related to anniversary coming off your dealer meeting?

We are just coming off the dealer meeting and they are shown the new products, given opportunities to take some of the books, although a lot of ordering goes on there, opportunities to take the books home and order some stuff when they sit down and talk to their general merchandise managers and the parts managers. So, it is hard to get a good feel, except for talking to both our people, you know, just general size orders.

And as I mentioned at the beginning of this presentation, the general size we are coming out with, no doubt, all 100th anniversary items, whether talking about P&A or general merchandise, is incremental. It may be more incremental of general merchandise. More people will maybe jump in, want to buy a 100th anniversary jacket, whereas in parts and accessories, people may switch. Instead of buying a derby cover, a

derby cover, it will be one with the 100th anniversary. Won't be incremental.

No doubt we have generated excitement and we will see a blip in both parts and accessories in general merchandise. That is higher than our long-term guidance on these product lines. Long-term guidance is a long-term guidance and as we go forward. The 100th anniversary, we should see some very good results from the new product offerings that we will stage over the -- over this coming year. That is about as good as guidance as I can give you.

Thanks and one other question on HDFS. What is the current approach on interest, re, hedging and do you have any details on the size of the securitization in Q3 relative to the one done last Q3?

I don't have any information on the size at the moment, but we are, you know, in this environment, hedging, shorter time periods, since it is an uncertain interest rate environment. You know, last year, everybody was certain that interest rates were coming down. We weren't doing our time periods of hedging, were much more broad. Now, our timeframes are much more narrow. So we are -- hedging is still going on, but on narrow timeframes. We could probably get back to you on the size of the securitization.

Thank you.

Thank you. Our next question is coming from Michael

of Salomon Smith Barney.

Good morning. Thank you.

Hey, Mike.

A couple of questions. Could you be a little bit more specific on the equivalent production days for the '02 models and for the '03 models in the second quarter and also to what extent did that affect the variant -- cost variances, and obviously, affect the margin?

Secondly, could you give us some indication of what you see in the '03 models in terms of mix relative to the '02? And I'm talking now about the options, the two-tone mix this year versus the two-tone last year?

And thirdly, we think that your free cash flow is gonna approach 500 million this year, that is after cap X, after dividends, after a lot of other things and just very curious, as we are each quarter, as where that money is gonna go.

Okay. Um, first question was on equivalent production days. As I mentioned, at the time I brought that up in the presentation was last year in the fourth quarter. I called the fourth quarter production days equivalent production days, because there are some overtime added during the course of that quarter, that hour here, half-hour there, whatever the case. That actually ended up to be an additional equivalent day during that fourth quarter. Going forward right now, we are not predicting that we would like to keep our flexibility. So, if any open time, if things happen in the production environment, we have the ability to keep on track and meet those scheduled production that we have given guidance for. So, the 59 days that we gave guidance for in the third quarter this year is what we expect. For 57 days the fourth quarter this year, that is what we expect.

I was really asking about the second quarter for the '02s.

Oh, this year?

The second quarter, history, what equivalent production days were spent on '02s in the second quarter, what were on '03s in the second quarter?

I can probably get back to you on that Mike. Have that quite easy. That is right in front of me, but I mean this year, there wasn't any equivalent production days in the second quarter. I have to get back to you on history for comparison, but this year, there wasn't any equivalent days.

You had another question on the third quarter. As I mentioned, we produced approximately 3,000 '03 models in the second quarter. Those stayed in inventory. That did not add to our cost. The cost of producing goes into the inventory, so that did not add to any of the cost variances or did not detract from the margin.

And then free cash flow, comment on your estimate of free cash flow, I think we are very proud that we have a real business. Our earning does generate cash and our cash will continue to grow and fund the business and fund our capital expenditures and at the same time cash will be continuing to grow. Right now, they are -- besides funding the capital expenditures and growing and growing our flexibility, the ability to invest in a business, there are no other plans for that cash in the near term.

And the other question was about mix?

Um, give it to me again, Mike, I'm sorry, I apologize.

When you look at the '03 models, how do you expect the option mix to break down compared with the '02? For example, the silver and black two-tone compared to last year's two-tone and et cetera, et cetera.

Oh, right. Now, on our two-tone versus two-tone, we are probably going to be in the 30% range this year, which is a little bit higher than last year, after we had some complexities that kept that percent down, but it is typically a -- more of a manufacturing issue than it is a demand issue.

Sorry, I had some technical difficulty. What did -- you said 30% this year for the '03 models and what was it for the '02 models?

The '02 was somewhat less than that, and this is always more a production issue than it is a demand issue, over the long run. It is capacity. Two-tones take another pass through your paint booths and we have been continuing to increase our capabilities and our mix of two-tones will be slightly higher, I mentioned, about 30% for the '03 model year.

And was that taking into account in your price guidance?

Yes, we weighted that price guidance based on that?

Based on the mix?

Yes.

Thank you.

Thank you. Our next question is coming from Tim

of A.G. Edwards.

Good morning, gentlemen, and again, Jim, I would like to give you congratulations anyhow.

Thanks, Tim, I appreciate it.

Question here just on the math on the units. Year-to-date, you know, what you have already reported as far as shipments and then again with the guidance that you gave for third and fourth quarter production that gets you up to the 262. But again, the third and fourth quarter, that's production and that doesn't count in the 3,000 units that you produced yet didn't ship for the '03 models, so could we --

Actually, cut you off there. Probably a great question for the

The guidance we gave does include the 3,000 units for the second quarter, so, the units does include the 3,000 that were left in inventory at the end of the second quarter.

Okay. Great. We just want some clarification on that. Thank you.

I appreciate it, Tim. Good question.

Okay. And who are your competitors, in general? Do you think you're gaining some share out there? Obviously, some people are having some difficulties. You can maybe comment on that?

And then circling back to the HDFS, it appears from the ratio there that you are taking in lower gain on sale up front than you have in the past. Is that a policy you are going to continue for the foreseeable future from a conservative standpoint?

Again, competitors, we have got -- there is a ton of competitors out there and I mean, some are -- I mean, they are in the

motorcycle market, but they are not real competitors. Some are selling performance bikes and as long as the change over many, many competitors -- you know, most of the

-- other manufacturers

there isn't big changes, just adds up incrementally. So, I wouldn't say that, you know, any one competitor is seeing big decreases, but we are the big winner, by far. And think when motorcycle industry data comes out, you will see that just small changes.

And the game of sales, that is a function of the market and interest rates, the difference you have seen. It is -- we have not changed our assumptions on the sale -- gain on the sale, accounting, so our prepayments and everything else are fairly static. We do look at those and adjust them on a monthly basis, but there has not been any big adjustments. This difference that you see on the net spread change is really due to interest rate difference on the markets, primarily and not due to assumption changes.

Okay.

And that is a big difference.

Okay. Finally, Jim, you just have the actual OT that you worked in second quarter versus what you. worked a year ago second quarter?

Yes, but I don't have it in front of me. I will -- it was in the teens -- it's -- I got a whole folder of data here. Actually the OT, overtime manufacturing, was 18% this quarter versus 18% last year, so it is very comparable.

Okay. Great. Thank you.

You're welcome.

Thank you. Our next question is coming from Burt

of Merrill Lynch.

Good morning, gentlemen.

Good morning.

I just had a question about allocation differences between domestic and Europe or overseas. With the strengthening -- with the currency fluctuation now taking place, should we expect to see a lot more

going to Europe and should we move the

slight decline in gross margin because of that?

Good question, but right now, we are trying to balance the markets. The markets are all doing well. We are doing well in the markets. But at the same time, the U.S. is going at 20%, which is a faster rate than our production and we are going to have to remain -- maintain our allocation to the U.S. pretty much similar to where it has been for the last year or so just to try to keep up with that market. Retail going out for the first six months at 20% compared to international markets, 11%, our units allocation is going to have to remain fairly static of what it has been. So, it is market-driven more than it is exchange-driven.

Okay, great, I appreciate it. Thank you. All my other questions were answered.

Thank you.

Thank you. Our next question is coming from Carol

of RBC Capital Markets.

Hi, good morning and congratulations.

Morning, Carol.

Um, just one question with respect to the 2003 model year, for the

, how many units do you expect this year compared to last year?

well, last year, we only started producing in the fourth quarter.

Right.

And believe the number was like 1700 for the year. This year, we have shipped out

plus and indicated at the beginning that we would do another 10,000 on the back half. So it will been 18,000 units per calendar year 2002 versus last year, 1700.

That about the first two quarters going into calendar '03 to round out?

We haven't given any guidance on that yet.

Okay. Well, thanks.

Thanks, Carol.

Thank you. Our next question is coming from Chris

of Goldman Sachs.

Good morning, guys, nice job.

Good morning, Chris.

Looking at the cost line in HDFS, it looks like your costs are down around 20% year-over-year. Is that just lower interest rates or are you doing anything different with your loan loss provision or just managing operating expenses better?

I would always congratulate any of our divisions on managing their expenses, but the big driver of that is the interest cost being lower. That is primarily it.

Okay. And then the second question on HDFS, what's actually driving the lower spreads? Seems like you alluded to not being all that much more conservative in some of your assumptions, but I would have thought that the lower interest rates would have actually increased the spreads that you would see.

Not at all. I mean, we are getting -- I mean -- last year, we are going back to a more normal environment. Like I say, 2002, as we pointed out, was the declining interest rate environment, so when you made a contract one month with a customer and sold it on the market with interest rates maybe drop once, twice, three times later, we were enhancing that spread just due to the market. With a stable market, with interest rates being rather stable, we are not getting that benefit of decline interesting rates. So, this is a more normal market versus the benefit that we had in 2002.

So it is not so much it is declining this year this is normal, last year was abnormal.

Okay, that makes sense. Thanks a lot.

Thanks.

Thank you. Our next question is coming from Dean

of J.P. Morgan.

all right. All my questions have been answered. Thanks.

Thanks.

Once again, ladies and gentlemen, if do you have a question or a comment, please touch one and then four on your touchtone phone at this time.

Sounds like we might be done.

There are no further questions at this time.

Thank you for your time this morning. Remember, a tape replay of this conference call can be heard by calling 973-341-3080 until July 24th, or by accessing it on our website.

If you have any questions, please contact investor relations,

, 414-343-8002. Thanks again and have a great day.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time and have a great day.