Gross margin for the overall business was 59% in the second quarter improving from 48% in the prior year with all segments posting gross margin improvement. The largest contributor was the automotive/mobile segment, where gross margin improved to 51%, driven by a one-time royalty fee benefit of $21 million, a reduced impact from net deferred revenue and costs of $40 million and improved product mix. We also had strong margin expansion in fitness and marine. Fitness margins improved due to product mix which was heavily weighted toward new high-end models in the second quarter of 2012 compared to 2011 when we were significantly discounting products at the end of their life cycle.

Operating margin for the overall business improved to 28% when compared with 20% in the year-ago quarter with the gross margin improvement partially offset by an increase in operating expenses as a percentage of sales. Total operating expenses increased $27 million year-over-year and by 200 basis points as a percent of sales. Research and development expense increased by $10 million, as we continue to invest for future growth with specific emphasis on auto, marine and aviation OEM opportunities. Advertising expense increased by $4 million as we focused spending on growth segments. Other selling, general and administrative costs increased by $13 million on a year-over-year basis due to a legal settlement in the current quarter and the effect of acquisitions made in the second half of 2011.

Our tax rate in the second quarter was 10.4% compared to 13.8% in the second quarter of 2011. We benefitted in the second quarter of 2012 from the release of certain tax reserves due to the statute of limitation expirations. We continue to expect the 2012 full year tax rate to be approximately 13%.

Free cash flow generation continued to be strong with $211 million generated in the quarter. We had a cash and marketable securities balance of over $2.6 billion at the end of the quarter. We intend to continue to fund our quarterly dividend and future acquisitions with our strong cash position.”