Polly Schwerdt – Manager, Investor Relations Min Kao – Chairman, Chief Executive Officer Cliff Pemble - Vice President of Engineering Kevin Rauckman - Chief Financial Officer and Treasurer

Noelle Swatland - Lehman Brothers. John Bucher - BMO Capital Markets Bill Benton - William Blair Ron Epstein - Merrill Lynch Mike Rappaport - Analyst Mark Robert - Robertson Company Adam Benjamin - Jefferies & Company Jeff Evanson - Dougherty & Company Peter Friedland - Soleil Group Jim Duffy - Thomas Weisel Partners Rich Valera - Needham & Company J.B. Groh - D.A. Davidson Peter Barry - Bear Stearns Steve Mortimer - Wellington Management Ron Epstein - Merrill Lynch Steve Windward - Pacific Crest Securities Steven Koffler - Shannon River Partners Mark - Ivory Capital

My name is Bobby and I will be your conference operator today. At this time I would like to welcome everyone to the Garmin Limited Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question and answer session. [Operator Instructions]. Thank you, Ms. Schwerdt, you may begin your conference. Polly Schwerdt – Manager, Investor Relations: Thank you. Good morning. We would like to welcome you to Garmin Limited's 2006 Second Quarter Earnings Call. Please note that a copy of the press release concerning this earnings call is available at Garmin's Investor Relations site on the Internet at www.Garmin.com/stock. Additionally this call is being broadcast live on the Internet and a replay of the webcast will be available until August 30, 2006. A telephone recording will be available for 5 business days after this call, and a transcript of the call will be available on the website within 48 hours at www.Garmin.com/stock under the Events Calendar tab. This earnings call includes projections and other forward-looking statements regarding Garmin Limited and its business. Any statements regarding our future financial position, revenues, earnings, market shares, product introductions, future demand for our products and our plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this earnings call may not occur, and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K for the fiscal year ended December 31, 2005 filed with the Securities and Exchange Commission. Attending on behalf of Garmin Limited this morning are Dr. Min Kao, Chairman and CEO; Kevin Rauckman, Chief Financial Officer and Treasurer; Cliff Pemble, Vice President of Engineering, and Andrew Etkind, General Counsel. The presenters for this morning's call are Dr. Min Kao, Cliff Pemble and Kevin Rauckman. At this time, I would like to turn the call over to Dr. Kao. Min Kao – Chairman, Chief Executive Officer: Good morning. From this morning’s press release you can see that we just finished another record quarter. Total revenue and EPS again both exceeded our expectations. Revenue was up 64% year-over-year and EPS was up 65%, or 59% without foreign currency. Over 1.2 million units were shipped in the quarter, up 81% from the same quarter in 2005. We are very pleased with the size of this increase in volume. This raised our total to over 15 million units shipped to date, the highest number of any consumer GPS provider, which speaks for the strength of the Garmin brand. We delivered 15 new products during the quarter. 69% of Q2 revenues was generated from products released within the last 12 months, which demonstrated the subject of our next products. Our worldwide employees increased to over 3800, R&D continues to account for nearly a quarter of our total invoices. Price compression for PND product continued but we are very pleased that it was offset by components of cost reductions and the favorable product mix. Channel sell-through continued to be very strong. As a result of the increased demand from our dealers and distributors, we have experienced some (indiscernible) and high volume PND products. We are pleased to report that our second Taiwan manufacturing facility has been up and run smoothly till the end of May. And we added additional production line in order to meet the anticipated demands in the upcoming holiday season. Additionally we continue to expand our marketing sales infrastructure, including the expectations that we assume acquire a new facility in the UK to support our European growth. Just some highlights for each of our four business segments. Automotive business experienced another quarter triple-digit growth, driven by the strong sales of PND products introduced in late 2005 and early 2006. According to independent market research, Garmin has maintained over 50% of the PND product market in the U.S. In Europe Garmin showed signs of continued improvement, we believe that we are positioned for further improvement, driven by continued focus on our advertising and marketing efforts, combined with a strong product portfolio and the anticipated deliveries of additional new products. In response to our strong growth and positive outlook for the segment, we have designed our growth expectation for 2006 from 75% to 125%. Outdoor/Fitness business was up 24%, driven by the continued strong sales of new products introduced in the early 2006. We believe Garmin has established itself as a leader of GPS enabled device in both running and cyclist markets. We would continue to increase our R&D and marketing efforts to existing markets. In discussing our continued strength, we had also revised our growth expectation for this segment from 15% to 20%. Marine business was actually down 3%, in spite of the positive response to our new product offerings, poor weather and high fuel cost has resulted a soft marine season. We also experienced some backlog on Marine products due to service component shortages. However we continue to believe the marine segment is on track to meet our 2006 guidance of 10% growth. The Aviation segment experienced another quarter of soft growth, due to delays in certain OEM programs and new product introductions. However we are on the way from the deliveries of our 430, 530 watts and GNS 200. Additionally, we announced several exciting cost cutting products at last week’s Oshkosh air show which we look forward to deliver it in 2007. Each new products presents significant long-term growth in future. As a result of this year’s slow start in this segment we have revised our 2006 revenue guidance from 20% to 10%. However we remain very optimistic about the long-term prospects for our aviation business. As moving forward we are optimistic about the remainder of 2006. The total market for PND product is presented to a least level during 2006. We saw strong product portfolio and expanded marketing and advertising campaign. We feel that we are positioned to take advantage of this opportunity. Now we continue to invest heavily in R&D, with R&D expenses expected to exceed $100 million this year and expect to introduce 70 new products in 2006. As a part of our expanded revenue campaign, we will open a retail store on the Michigan Avenue in Chicago to showcase Garmin’s product and technologies. Based on our first half performance and a strong demand for our products we are increasing our outlook for the year. With that, I would like to turn the call over to Cliff Pemble, our Vice President of Engineering, who will present a product update. Our CFO Kevin Rauckman will then discuss our financial result and update 2006 guidance. Cliff Pemble - Vice President of Engineering: Thank you Min, I’ve been looking forward to walking our listeners through the Q2 product highlights. During Q2 we ramped up deliveries of our new portable navigation devices that we introduced this CeBIT show in Hannover March of 2006. The nuvi 310, 360 StreetPilot c550 had a Bluetooth hands free functionality as a major enhancement to our product line. Garmin now offers a comprehensive Bluetooth-enabled product line up and our Bluetooth solution continues to lead the industry in handset compatibility. The StreetPilot c500 series added a brighter display and a high-sensitivity GPS receiver for better usability in the automotive environment. In addition the StreetPilot c550 now offers a unique real-time traffic solution that eliminates additional accessories and wires often down in competitive solutions. These new products have received very favorable press coverage and recommendation by experts in the industry. The c550 was selected by GPS magazine as an Editors' Choice product and the nuvi 360 was selected by PC Magazine as an Editor’s Choice product. In addition these products have received favorable press in Time Magazine and on CBS news. While we’re delighted by the positive press coverage, we’re most excited by the customer acceptance and demand for these products. Turning next to the rental car market, we continue to make progress in providing affordable EVDA (ph) solution for rental car customers. Most recently Avis and Budget rental car introduced the Where2 navigator which is based on our StreetPilot c550. Where2 will be offered to Avis and Budget customers for 995 per day or 4995 per week and will be available in approximately 125 cities in the U.S., Canada, Puerto Rico. The Where2 navigator is the first product to offer Bluetooth hands free calling and real-time traffic updates for the rental car market. These features offer both safety and peace of mind of rental car customers. Where2 was introduced at the National Association of Business Travelers Convention at Chicago and was promoted heavily by Avis and Budget during the show. Just this morning Where2 was featured on the today’s show, complete with a driving demonstration and interviews with Avis management. Going forward we believe that the rental car market will play an important role in enhancing the weariness (ph) environment and our product offerings. Moving to motorcycles we recently introduced two new products for this market. The StreetPilot 2820 and its Bluetooth capability through our existing StreetPilot 2000 series. Riders can know their audible directions using a Bluetooth-enabled headset and can also make and receive phone calls with a Bluetooth-enabled phone. This StreetPilot 2820 has been selected by BMW motorcycles for its Motorrad III Navigator program in the U.S. and Europe. We recently announced a new Zumo motorcycle navigator at the MotoGP US Grand Prix motorcycle race. We are really excited about the Zumo because it’s our first product design specifically for the motorcycle market. The Zumo features left handed controls and a high brightness touch screen display which is usable with both hands. The Zumo also includes Bluetooth enabled headset operation and hands free phone. In our Marine segment we delivered our new GMR 21 and 41 radars which feature 24-inch dome, low profile mounting and high resolution target discrimination. We also introduced our first open array radars the GMR 404 and 406. These new radar scanners are offered in 4-foot and 6-foot antenna configurations and featured target range of up to 72 nautical miles. They also feature digital processing, narrow beam width for great target resolution and they offer an exciting new look that will complement any boat. With the introduction of the GMR 404 and 406 we now offered comprehensive line up of radar solutions for almost any boat and budget. We also began deliveries of our new GPSMAP 378 and 478 chartplotters. These new products are multi-mode devices which are for both pre-loaded marine data from routing activities as well as pre-loaded street maps for car navigation. The GPSMAP 378 is pre-loaded with maps of inland lakes and waterways and the 478 is pre-loaded with our U.S. BlueChart maps for the entire continental U.S., Alaska and Hawaii. In the Aviation market we introduced the GPSMAP 496 at the recent Oshkosh AirVenture show. This product features a built-in Jeppesen database and airport directory by AOPA and a high resolution terrain database. In addition this is the first product to offer our exclusive state taxi chart which provide detail mapping of over 650 airports. The GPSMAP 496 is also a multi-mode device and features pre-loaded street maps of North America with turn-by-turn navigation instructions. Turning next to Experimental Aircraft solution, we introduced the G900X integrated cockpit solution for Experimental Aircraft. As some of you know, kit builders invested significant amount of time, money and emotional energy to create their own custom aircraft. Now, they can take advantage of high-levels of integration, reliability and support offered by the G900X. The G900X is targeted as the most popular kits in the Van’s R and RV family of aircraft. It would be offered as a package complete with mounting hardware and wiring harnesses to make the installation as easy as possible. The installation process will be supported by our distribution network which will be trained in a specific kitplane installation. The G900X will be available in early 2007 and will be offered at a retail price of approximately $66,000. In addition to kitplanes we also introduce the G1000 product configuration specifically for the King Air C90 aircraft. This popular aircraft is known for its utility and low operating cost adding a G1000 system will provide King Air owners to all the benefits of the new factory put aircraft including WAAS-certified navigation, solid-state attitude and digital air data centers, terrain avoidance, weather radar and our GSP 700 digital autopilot system. Expanding on Retrofit solution, Garmin introduce the revolutionary new G600 PFD, MFD combo system. This exciting product will bring the advantages of modern solid state electronics to the broader retrofit market at an affordable price. The G600 include the solid state attitude sensor, a digital air data system and come standard with our SafeTaxi airport maps. Customers can also upgrade the systems [technical difficulty] audio and weather capability, a terrain awareness system that represent charts. Finally, I want to provide an update on the exciting VLJ market. Progress continues on the Cessna Mustang program and we remain on track to support Cessna’s completion goals later this year. We are also making good progress on the Embraer's Phenom program, these exciting new aircraft continued to build momentum in the industry having long over 235 firm orders since its introduction in last fall. At the Oshkosh show Honda made the exciting announcement that they will enter the VLJ market. We’ve been honored to support Honda’s program leaving us to this decision and look forward to working closely with them as the development and certification progresses. Also at Oshkosh Diamond aircraft showcased its new D-Jet VLJ for the first time, the D-Jet will appeal to a broad set of honored customers because of its lower acquisition cost and simple operation. The Diamond customer will be able to experience consistency in the avionics across the entire product line from the single engine DA40 through the D-Jet platform. With that I would like to turn the call over to Kevin to discuss our financial results. Kevin Rauckman - Chief Financial Officer and Treasurer: Thank you Cliff, good morning everyone, it’s a pleasure to be able to update everyone on our financial results. And you can see from the press release this morning that numbers were very strong, actually even exceeded our all expectations. First of all my consideration of the announcement on approved 2-for-1 stock split, upcoming on August 15th, I want to make it clear that all the first share amount in this presentation on a pre-stock split basis unless otherwise noted. So looking at the financial summary for the second quarter, you can see that Garmin experienced 64% top line growth and 59% earnings per share growth excluding the foreign currency gain. We did have a $0.02 EPS impact due to this foreign currency gain of 2.9 million. Our growth margins were better than expected due to price erosion offset by the reduced product cost within the period and favorable product mix. The gross margin came in right at 50% even. 31% operating margins were down from last year but better than expected, the gross margins impacted at 290 basis points unfavorable. Our SG&A expenses of nearly 55 million or 20 basis points unfavorable with year ago quarter. R&D although grew, although it grew 51% actually it was 50 basis points favorable on the Q2 ’05 numbers. SG&A was much higher than our first quarter this year due to increased advertising in both U.S. and in European market. And it meant that we shipped nearly 1.3 million units during the quarter across all business segment and our average selling prices during Q2 were $338 per unit which is approximately 3% below our first quarter. Moving next to a view of our segment, you can see from this slide that we experienced strong revenue growth across the automotive mobile segment as well as the outdoor fitness segment during the quarter. Automobile revenue grew over two and a half times our second quarter of ’05 revenue on the strength of our new V C-series and other PND products. Within the automobile segment we now achieved our full-year 2005 revenue numbers during the first half of ’06 and we still expect a strong second half. The outdoor fitness segment continued to exceed expectations and this segment is now 22% up year-to-date. Overall our revenue had grown 65% during the first half of 2006 and the sales of product introduced within the last 12 months increased 59% of our second quarter revenue. Looking next to both segment and geography, differences year-over-year because of the expose of PND market, our automotive mobile segment now represents 59% of our total business growing from 38% of our total business a year ago and up from 47% during Q1 of ‘06. Garmin Europe growth outpaced our North American market growth, and now represents 41% of our total business, which is up from 37% during the second quarter of ‘05. On the revenue by geography, a little bit more information, here North American revenue was up 51% in the second quarter, while our European business increased over 83% during the second quarter. Our Asian sales also grew 69% during the period. The revenue results of 433 million represents the largest single quarter in our Company's history and we’ve now recognized over $750 million of revenue during the first half of 2006. Looking next at our segments, gross margin results on a year-over-year basis. Our second quarter gross margins increased to nearly 60% within both our outdoor/fitness and Marine segments. Q2 gross margins decreased to 66% and 42% within our aviation and automobile segments respectively. We did experienced sequential growth margin improvement in all segments with the exception of the automotive, mobile segment which was flat with our first quarter results at 42% of sales. Favorable product mix as I said and improved product cost per unit, were the main reasons our second quarter gross margins remained at 50% overall. And just doing a quick comparison on the entire, what we used to define as our consumer gross margins, our consumer gross margins from the first quarter to the second quarter came down from 48.1% to 47.6% about 50 basis points. Q2 operating margins increased to 45% and 42% within our outdoor, fitness and Marine segments respectively. Q2 operating margins decreased to 24% and 39% within our automotive, mobile and Aviation segments respectively. The second quarter total operating margins were down 260 basis points due to decline in gross margins and increased advertising during the second quarter. Garmin invested nearly 33 million in advertising during the period. With the exception of our automotive and mobile segment, we expect short-term margins to remain relatively stable despite the possibility of quarter-to-quarter variability due to product mix and the timing of several new product introductions. We also expect that the automotive/mobile segment will experience declining operating margins due to the reduced pricing in the markets and a continued transition towards mass-market levels. Moving next to analysis of our operating expenses during the second quarter, R&D increased $9 million year-over-year in dollar terms but was down 50 basis points to 6.2% of sales. We did add 121 engineers to our engineering team and now we employ over 850 engineers and engineering associates across the company. And as I said we increased our advertising spending and it came in at 7.7% of sales compared with 5.6% of sales in the second quarter of ’05. Our other SG&A however declined 200 basis points down to 4.9% of sales from 6.9% a year ago. Looking next at our balance sheet as we -- during the past the balance remains strong and you can see that our cash during the period increased, cash and marketable securities during the period increased to $830 million. Our accounts receivable did increased up to 296 million due to the increased revenue and accounted for approximately 62 days of sales. We did ship a significant amount of sales in June which move the – higher our balance, however we have collected significant amount approximately $170 million of cash has been collected from this June balance of 296 million. Our inventory dollars were up 28 million over the first quarter but our days of inventory metric declined. At the end of the second quarter, Garmin now holds 91 days of inventory which was down from 100 days in the first quarter of ‘06. Looking at more detail on this inventory balances we hope now at the end of the second quarter 85 million in raw material which is approximately 31 days of inventory. Our work in process and assembling were 47 million of inventory or 19 days of inventory and also we had 110 million in finished goods which represent approximately 41 days of inventory and we ended the quarter with roughly 14 million in inventory reserves. And finally on the balance sheet our retail channel inventory appears to be lean as the sell-through of most of these new products very stronger in second quarter. Our cash flow from operations during the second quarter with 76.2 million, CapEx came in at 11.8 million during Q2. Therefore the free cash flow that we generated during the second quarter was $64.4 million. Cash flow from investing was $22.3 million use of cash during the second quarter, made up of the CapEx that I mentioned of 11.8 million, $10 million net purchase of marketable securities of a two major drivers there. Cash flow from financing was 5.4 million source of cash during Q2 which is generated by 2.8 million proceeds from stock options and source stock options during the period and 2.6 million from a tax benefit related to stock options which is the FAS 123R expensing. We did earn an average of 4.3% on all cash and marketable securities during the second quarter. Couple of other points on financials, we came in with an effective tax rate of 15.5% which is very consistent with our first quarter results and we also had a pretax amount of 2.5 million which is compensation expense due to the fair value of the shares within our stock-option and ESPP plan. Therefore we had $0.02 EPS impact as expected, and due to FAS 123R and we forecast the full-year impact now to be $0.08 per share. Finally on the updated full year guidance you could see from the press release this morning that we raised our guidance, we remain very optimistic about the future success of our business. Now we expect at least 1.6 billion in revenue during 2006 with a double-digit growth across all four of our business segment. We’ve also increased our EPS outlook up to $3.90 per share, excluding the $0.08 per share of expensing of stock options under FAS 123R. The $3.90 is a 43% growth over 2005. After the 2-for-1 stock split out post split EPS guidance is now $1.95 excluding FX and will be using that, as we go forward with our updated and revised guidance hopefully. We've also increased our revenue guidance for automotive mobile segment up to at least 125% growth rate for 2006. We’ve increased our outdoor/fitness growth expectations from 15% up to 20% this year. The Marine segment remained unchanged at 10% and we now reduced our aviation segment growth expectations down from 20% to 10%. We now expect to spend 85 million of CapEx during the year, which includes 10 million for our new Taiwan facility we spent in Q1, 15 million of production equipment, approximately 30 million for the UK headquarters facility that we hope to soon have announcement on which leads approximately 30 million for maintenance CapEx across our business. We have stable pre-split outstanding share counts at $109.5 million shares, in overall we are very excited that we entered into the back half of this year. And those are the updated guidance numbers for Garmin and also concludes my presentation. At this point, it is customary to open up the lines for question and answer session and we’re happy to take any of your questions which you might have.

[Operator instructions]. Your first question comes from Noelle Swatlandof Lehman Brothers. Noelle Swatland - Lehman Brothers: Hi guys, congratulations on a great quarter.

Thanks a lot. Noelle Swatland - Lehman Brothers: I was just hoping you could talk a little bit more about this revised automotive guidance, in particular, I’d be curious to your thoughts on the particular strength in Europe relative to the U.S., also kind of where you see your share moving in the second half of the year. And also just following some of the recent component constraints that I’ll be curious, I think some of the early data for June and July has shown that you all had gained some share at their expense in those months. And then just lastly again just on auto, can you just talk about, after a very strong quarter, at this quarter, kind of what you expect for in terms of seasonality, you could just remind us a normal seasonality entering the third quarter? Thanks.

Okay, we just showed Europe is our fast growing market, and I think we’ve seen, continue to see improvements in Europe, we are now satisfied with the progress that we’ve achieved in Europe. I think, recent improvements in Europe have been in certain geographic reasons but not like UK for example. We have continued to improve focus in Europe and believe that we’ve gained some share there. Not necessarily just due to more of our competitors component shortages that just overall strength of our early products. We also hope that because through the second half that we’ll be able to gain share up to approximately 20% of the overall European market. On the U.S. side, we believe or still -- exceeding 50% market share there. So in both geographic regions have been good to us and I hope that will continue. For sequential expectations that we’ve seen early on in Q3, the trends have continued to, we’ve seen our PND market in particular continue to achieve [INAUDIBLE] results and just to remind people though we are going into a somewhat slower season in Europe with holidays and vacation kind of taking all in August and September. We are not going to give any kind of definitive numbers on Q3 in term of expectations. And then what was your final question, there was another? Noelle Swatland - Lehman Brothers: I guess just from a total company perspective, I think historically you said in the third quarter we should, normal seasonality has been around and down 5% sequential. Should we assume similar trend this year even after stronger second quarter?

I think, yeah, I think its going to be -- anything; it’s going to be single-digit that number probably without giving an exact numbers is probably not too far off. Too much variability right now, as you know we don’t have a large backlog in any given quarters, so business conditions change as we go (indiscernible) but I guess in general there is probably no results or trends that was, say to that numbers as well. Noelle Swatland - Lehman Brothers: Okay, thanks.

Thank you.

Your next question comes from John Bucher of BMO Capital Markets. John Bucher – BMO Capital market: Thanks. Here is John Bucher of BMO, question for you all on the backlog as you alluded to some of the commentary. I know last quarter you indicated that there was a fairly significant amount of revenue that couldn’t be realized because of some components scarcities. And I think that you said in the commentary that both Marine and the portable automotive categories experienced some scarcities. Can you just give us some ideas, is this place though, and can you, sort of quantify how much revenue you want to be able to realize because of this?

Probably want to quantify the amount of mixed opportunity, but you know, as in previous quarters we did experienced some shortages along lead time components. They do include LCDs and other IC components, many of these have 3 to 4 month lead time, and so the lead time, chip components do remain fairly long and as I said we’ve experienced a few, some production storages or constraints. It’s nearly impossible to get a 100% forecasting accuracy within the period, especially whne many of our customers raise demand within the lead time window. So without quantifying I think that’s basically what the curve we’ve been able to manage fairly effectively, but in any quarter we are going leave some revenue on the table. John Bucher – BMO Capital market: Okay, and then just two more, with the significant mix shift towards PND as a percentage of your overall portfolio? Do you now have any significant customers or significant specific revenue generating products like those that are reaching 5% or more?

We certainly have customers that are 5%, we don’t have any -- John Bucher – BMO Capital market: I mean on the product line?

We have only 10% customers at this time. On product line? John Bucher – BMO Capital market: Yes.

Well, certainly the PND, if you are talking of 59%, the new V and the C-series, both are very high, very strong sellers that makeup roughly 70% to 80% of our PND market, PND sales, we’re quite large. John Bucher – BMO Capital market: And then in the C-series can you say, the C500 -- gaining significant, are you seeing the typical transition in the new shipment rate between those C300 and C500, is it ramps up? It was actually dominated by the C300 series?

Well, Johnson this country – C500 just have a ramp up, the sparing of C300 very strong. John Bucher – BMO Capital market: Okay. And then final question on the aviation side, you indicated that you expect that you’re several months away, I think is what you said in terms of the availability of WAAS upgrade for the 430, 530. Do you think that’s a significant cause of overhang right now on aviation and do you anticipate fairly substantial rapid commercial response when that does become available from the standpoint of modeling aviation in the second half this year?

Yeah, John there are definitely some indication that the delay of the last 430, 530 is causing some overhang in the market. From every indication it does appear that when we complete that, there will be definitely significant uptake in aviation product. John Bucher – BMO Capital market: Okay, thank you. I’ll turn it over to somebody else.

Thanks John.

Your next question comes from Bill Benton of William Blair. William Benton - William Blair: Good morning guys, congratulations again.

Thank you. William Benton - William Blair: First, thanks for supporting Michigan avian (ph) by the way.

Happy to do so. William Benton - William Blair: And then, could you, Kevin maybe give us a sense for how correct your view is into the channel, obviously you noted, you had a lot of shipments in the June quarter. I’m just curious how often you’re getting kind of an update in regard to that level in the channel right now?

I don’t think there is been a significant change there, I believe our major customers that were selling through give us quite -- pretty good visibility into the sell-through in that channel. So, I think just given the success and the popularity of some of the new V and C-series both 3 and Wi series. We feel that the channel inventory is pretty lean right now as I mentioned in my presentation. William Benton – William Blair: Okay. And then how much of your back half expectation for automotive growth in Europe is really attributable to market share which is market growth in your opinion, just from your angle. I know you said you expect, may be I don’t know what are you thinking right now in the 12% range or somewhere between 20%?

We haven’t seen all the recent state of it, we are probably in the mid teens right now going up to -- hope to get at least 20 by the end of the year. To hardly quantify how much of that is market share growth and how much that is market expansion that it’s obviously both, for planning for the back half of the year. William Benton – William Blair: Okay. And then just a bigger picture and I guess it goes a little bit on to may be John’s question, c300 versus c500. Are you seeing anything in terms of as you are ruling out these new products? You guys obviously get a price premium on the new products versus the existence of the old product. Are you seeing enough differentiation in those products with the customers relates though, want to trade up and pay the extra money, on those new products versus may be just staying out on certain strip down version at the lower price point?

Yeah I think definitions version (ph) has been received there well, and was ranking number 2 of (indiscernible) product of this country. So, definitely there are significant number of customers who will otherwise pay premium by the best. William Benton – William Blair: Okay and there is not been, you not seen any shift there, I guess, I guess it’s too early to talk, may be the 500 series versus the 300 series will be the most. Could you get a break point back on the new V thing, but may be that comparison is too early to tell what customers are doing in terms of buying patterns then?

I think that’s correct. William Benton – William Blair: Okay. Okay great guys, thanks again.

Thank you.

Thank you.

Your next question comes from Ron Epstein of Merrill Lynch. Ron Epstein - Merrill Lynch: Good morning guys.

Good morning. Ron Epstein - Merrill Lynch: Couple of questions for you. One, Kevin, what are you going to do with all the cash, you guys are building up a quite a stock power cash in the balance sheet and in terms of capital deployment what are you thinking?

Yeah we’ve, you saw on our balance sheet, I didn’t highlighted but we have 108 million of dividend on the balance sheet. But first of all, we are doubling the dividend, I think we are continuing to look at strategic acquisitions, quite honestly we spent considerably more time in that arena in the last couple of quarter. So, we are looking to try to do some folding acquisitions where they make sense. But those are two of the major use of that, in addition to our own reinvestment as you saw from the increased CapEx. So, those are two or three major strategic areas for cash. Ron Epstein - Merrill Lynch: Now you guys, you’ve announced the one retail outlet, are you planning to do more or just going to be sort of the quiet show.

Well, we see the (indiscernible), so at this time we have no plan to go beyond this one. Ron Epstein - Merrill Lynch: Okay. And then I guess a question for Cliff, when we think about modeling out demand for the G600, and the G900, I mean, how should we think about it? Because we need, we just kind of need a starting point when we built out our model. So, what if you could give us any color on what kind of demand you think you are going to see for that product when it’s introduced would be helpful, this product I guess.

The G900 may be talking that one first, it’s targeted out of specific set of kitplanes, and so well it’s a great product and has a nice price. I think the overall market of that compared to larger retrofit or larger G1000 market its going to be fairly small. For the G600, I think we are entering into really new territory in terms of the retrofit market. We have every reason to believe that it will be a very large market just based on our 430 and 530 experience and the product is designed to work with our install base of 430 and 530 customers. So, we believe that there could be a potentially large uptake in that product Ron Epstein - Merrill Lynch: Thank you, I know it was a difficult question for you to answer, but can you plan for some sort of balance on March, just -- when we think about modeling, we need some place to start. You know what I mean? No, you cannot. Alright, so…

We are so excited, as our numbers. Ron Epstein - Merrill Lynch: Okay, now do you guys put the G1000 on the King Air C90? Can that be moved up to the B200 or the 350?

I would anticipate there will be path to that, yes. Ron Epstein - Merrill Lynch: Okay, that’s great. And, I think that’s it for now, thanks.

Okay, thank you.

Your next question comes from Mike Rappaport with (indiscernible) Mike Rappaport – Analyst: Good morning and thanks for another great quarter, I had a question for Cliff or Min. You did the C90, is it the King Air 5 or the Citation 500 series or would they give them RVSM, a pretty nimble solution and maybe a path to it?

I think if we did a 500 definitely we have to include RVSM, but a project like that is very complicated. Mike Rappaport – Analyst: Okay is there a much different time line on that than the King Air?

Well at this time we really don’t have any activity going on other programs. Mike Rappaport – Analyst: Okay. Thanks again for the great quarter and will talk to you soon.

Your next question comes from Mark Robert of Robertson Company. Mark Robert - Robertson Company: Thank you, good morning. Congratulations on a good quarter. Cliff can you give us a sense from your, to the extent you will disclose it on your marketing studies for the third and fourth quarter how the channel mix will change as we go into the fourth quarter or we’re going to see dramatic increase in catalog sales or is it going to be more retail if you could put some color around that?

We would think that the big box retailers are really going to dominate the overall sales picture with our product line as second city that’s by those kind of places. Mark Robert - Robertson Company: Are you seeing any particular channel either in the U.S. or Europe that or you are seeing increase in revenue mix?

Definitely that’s big box retailers are doing a great job right now with the product offering. Mark Robert - Robertson Company: So, as a mix should we continue to conclude that the catalog in online channel as a percent will continue to go down?

I think it will go down, I think it’s growing with the entire category. Mark Robert - Robertson Company: Okay, thank you.

Thanks Mark.

Your next question comes from Adam Benjamin of Jefferies & Company. Adam Benjamin - Jefferies & Company: Thanks. Can you give a little more granularity with respect to the automotive in mobile pocket as to how much of that is represented by the PND specifically say the nuvis and the StreetPilot series?

Well, that kind of a little earlier, depending on what you’re talking U.S. or Europe, moving in the C-series combine make up about 70% to 80% of the total PND space for us right now. Adam Benjamin - Jefferies & Company: Right, right, you said of the PND space but of the total automotive.

Yeah, PND is a significant, very significant portion the mobile aspect right now or mobile part of the automotive mobile is very, very small. We’ve seen increased subscribers with our strength relationship but not at a significant level really. Adam Benjamin - Jefferies & Company: Okay, so is it fair to assume maybe 90+%.

Yeah. Adam Benjamin - Jefferies & Company: Thanks.

Thank you.

Your next question comes from line of Jeff Evanson of Dougherty & Company. Jeff Evanson - Dougherty & Company: Good morning. Thank you for taking my question. Hi Jeff. Jeff Evanson - Dougherty & Company: Cliff, do you think the G600 could achieve the same penetration as the 430, 530 radios have?

Yeah, certainly hope so. Jeff Evanson - Dougherty & Company: Yeah, and so do we. Different way of asking the question previously I asked, lets talk a little bit about PNDs, I’d like to know what kind of ASP compression you saw here maybe sequentially from Q1 to Q2 and when you suggested that component reductions, cost reductions were helping or a contributing factor and sustaining the GM sequentially, given your ramped up at Taiwan plants here in May, are there possibly some efficiency gains to go in the back half of the year to offset some further ASP compression in the back half?

Yeah, certainly Jeff, as we reach the high level of volume, there is always room for improvement and efficiency.

And then Jeff on the ASP, just within the automobile segment we saw single-digit ASP decline between Q1 and Q2. Jeff Evanson – Dougherty Company: Can you give us some sense of how you offset that between components and efficiency gains in the quarter? Is it a 60, 40 preposition skew towards components or is it more skewed than that?

It is more skewed than that. Components reported more than that. Jeff Evanson – Dougherty Company: Okay, guess if I have a concern here, it would be that, do you feel you have sufficient inventories to meet back half holiday related demand. We could say that for a situation here where there is a bit of a rush to the suppliers going on in Q3 here. Do you feel you are well positioned there? And what are some things you maybe doing to mitigate some of the component shortages and backlog issues we’re seeing?

Yeah, frankly, we do have concern about that too, you can see first of the yield, we will keep around to component and product shortage problems, but in order to mitigate it, first now we have a new width, in the first half the yield also run to lashing half of different trend and we feel that these another second facility we are just operating one right now, we pretty much mitigate the production capacity concerned. As for the material is concerned, we try to be more aggressive and try to work much harder on the lumpy part, but again we just don’t know how explosive the market will be for the second half of the year.

Yeah, Jeff we guess, we’ve reached two level of inventory now, couple of quarters… Jeff Evanson – Dougherty Company: Exactly, Cliff this is a question for you related to your PND new products cycle plans. It seems though you are kicking out new PND models, I guess in excess of two last year to closest competitor, do you feel that’s, that you need to maintain that rate of new product introductions in that category or do you see yourself scaling that back a little bit?

Well, I think first of all, I would say your comment in very much a compliment to our R&D side. We are working very hard to bring the products out. I think some of the new products that we’ve introduced so far this year were a bit of a catch up pace, so they did get come out at a faster rate. That said though we still have a lot of backlog of development activities that we are working on, so I would anticipate some rollout moving towards into 2007. Jeff Evanson – Dougherty Company: Okay and then I apologies for all these questions. My last one here, without discouraging our friends at the FAA, could you describe what’s lead to the WAAS upgrade delays?

Well WAAS equipment is some of the most complex equipment that we are producing and involves a lot of certification detail, involves a lot of development detail and we are essentially taking a chronic line that was developed and certified under different rules and regulations meaning c129 and what WAAS is today. So quite honestly I think we underestimated the amount of work it takes to do that and we are working very hard to get there now and we’ve expanded our staff and added outside resources to help us out but its still a very good job. Jeff Evanson – Dougherty Company: My understanding is the regulators that been kind of moving the target on, you do?

I guess from my prospective I feel like there is been a high level of cooperation with the FAA and I think they are very motivated to get this out to market because they realize that the large install base of our customers represents a huge opportunity to promote the benefits of the WAAS system. Jeff Evanson – Dougherty Company: Okay, great thanks a lot.

Thank you.

Your next question comes from the line of Peter Friedland of the Soleil Group. Peter Friedland - Soleil Group: Hey guys a few things, first on the new products you are planning for the remainder of the year, could you try to break those out by category roughly?

Well I think we’ll continue to have some automotive and mobile offerings that will becoming shortly some of those that we’ve already announced like VMO (ph) and we got some OEM versions of our C-series that will be coming out as well. And then the rest are really dominated by aviation products that will be rolling into Mustang as soon as it’s completed. Peter Friedland - Soleil Group: Okay and then follow-up to another question, is the percentage of your PND revenue or unit volume roughly speaking, what percent of that goes through the big box retailers?

Yeah we don’t use to quantify that but I think that, Cliff’s earlier points, I think the trends are basically the same, I think its still obviously decline market. The U.S. market is still significant portion going to the big box retailers and don’t see a significant mix shift over time there. Peter Friedland - Soleil Group: And then on the marine business, the seasonality that you should have be generally the same as in previous years where Q3 as we then it comes back up a bit in Q4?

Yeah that is will be true. Peter Friedland - Soleil Group: Okay, great thank you.

Thank you.

Your next question comes from line of Jim Duffy with Thomas Weisel Partners. Jim Duffy - Thomas Weisel Partners: Thank you, hello everyone.

Hi Jim. Jim Duffy - Thomas Weisel Partners: Can you speak specifically to some things that you are doing to improve your presence in Europe, certainly you ramped up the advertising spend there. What is some other kind of changes in Europe market strategy that it helps your presence?

I think we talked earlier with you and others about the additional staffing and resources in marketing that we try to put in place. We set lot more focus in working with each of our distributors in the various countries. And working on specific promotional activities to try to push the demand in each of those countries and then obviously the TV advertisement and the overall advertising campaign that you mentioned, I think all three of those combined, so provided I guess, stronger focus in the European market. Jim Duffy - Thomas Weisel Partners: As you look at your advertising spends, how is it split between the U.S. market and Europe?

In Q2 it just a little bit greater toward the U.S. side. Jim Duffy - Thomas Weisel Partners: Okay. And clearly your efforts are working with the share gains you’re seeing, some of your suppliers are suggesting that the market growth may be slowing in Europe, are you seeing any indications of this or do you believe that to be a valid point or give a different perspective.

We talk a lot the second quarter or going forward? Jim Duffy - Thomas Weisel Partners: Looking forward?

Looking forward, we have mentioned that an indication.

And our suppliers probably will have visibility to the product mix in Europe versus U.S., so I am not sure what comment that we have. Jim Duffy - Thomas Weisel Partners: Okay and then final question on acquisition strategy what type of entities would you see is being nice tuck-ins to the portfolio?

I think, the main thing as we communicate in the past with technology oriented, its something that could help in the existing four segment that we, that we’re already serving, either in engineering team or technology that we could again hold in and help us a few more competitive and whatever market, depending on whether its PND or aviation or even Marine. Jim Duffy - Thomas Weisel Partners: So, wouldn’t be something that surely brings you into other market?

No, we’re not looking at any major new market at this point. Jim Duffy - Thomas Weisel Partners: Okay, thanks so much. Nice quarter.

Thank you.

Your next question comes from line of Rich Valera of Needham & Company. Hello Rich, your line is open. Richard Valera - Needham & Company: Thank you, with respect to the component price decline seems to be helping? Do you have any view on how component price will likely trend in the second half? Do you expect to continue to benefit from this price decline?

Yeah, we’re seeing continue the down trend in certain key component. Richard Valera - Needham & Company: And do you have any view of sort of a longer-term trend there? You think that something that is a pretty steady and longer-term trend you expect to see?

Just can’t really comment on whether or not the specific trends and rates will continue, I think component continue to come down generally within the markets and as you look at some of the key components like memory typically what start to happen is the density starts to increase as prices start move. Richard Valera - Needham & Company: Great and Kevin, just to make sure I am clear, your 390 per share of EPS does that include or exclude the $0.08 of FAS 123?

That exclude. Richard Valera - Needham & Company: Exclude?

I’m sorry, that’s include, you said 390 or 398, I’m sorry? Richard Valera - Needham & Company: The 390.

Yeah the 390 included. Richard Valera - Needham & Company: Okay, the 398 excluding?

Yes, yes. Richard Valera - Needham & Company: Okay, that’s it for me. Thanks guys.

Thanks.

Your next question comes from the line of J.B. Groh with D.A. Davidson. Groh - D.A. Davidson: Good morning guys. Groh - D.A. Davidson: Maybe you could help me out on this 430, 530 question, how it relates to the G600. Of the 430s and 530s you sell, could you give us a characterization of what’s going in the new aircraft and what percent is retrofit, because I’m guessing that the brand new stuffs probably not a good candidate for G600 but the retrofit would be?

Yeah the 430, 530 is really has a small presence in OEM especially as we’ve taken some of our key customers to the integrated cockpit solution. So the majority sales there is really in the retrofit market. Groh - D.A. Davidson: Okay. Do you have a install base number?

It’s over 60,000 units in the field. Groh - D.A. Davidson: Some people double up on those?

Yes they do. Groh - D.A. Davidson: Okay. And then given the 10% guidance for ’06 on the aviation, it seems like there will be a pretty significant ramp, I think this question is kind of answering in other way, but it’s most of that ramp in the second half just a removal of the delays on the certification or this new product sales play into that as well?

I think, mostly the certification completion. Groh - D.A. Davidson: So, you got a little pent up demand that’s going to fall in the second half?

Yes. Groh - D.A. Davidson: And then last question, the margin in outdoor and fitness was pretty good, you may have answered this question but what kind of that strengthened and I guess you would expect those margins to go down a long way.

I think the benefit there is that, we’ve seen fairly flat pricing and yet we’ve been able to experience some cost reduction. So, and then the overall unit volume picked up as well, so all of those run our favorite that’s why that kind of drove up the margin in the second quarter. Groh - D.A. Davidson: Great, thanks a lot guys, congratulations.

Your next question comes from Peter Barry with Bear Stearns. Peter Barry - Bear Stearns: Good afternoon for all, good morning.

Hi Peter. Peter Barry - Bear Stearns: Kevin can I ask you what ASP assumptions you’ve made as it relates to your guidance for the second half that takes us to the full-year numbers?

Well I am not going to, I mean I am going give an exact number but we certainly expect the PND market to become more price competitive both in the U.S. and Europe. So, I mentioned single-digit from Q1 to Q2 which is not only price reduction but also product mix implications, but definitely pricing coming down especially in the holiday season. Peter Barry - Bear Stearns: Of the component ASP relationship will probably be much the same in the second half as it was in the fist half?

I think we still continue to see component with cost reductions, we are all projecting that as I mentioned in my presentation that overall gross margins will continue to come down in the automotive mobile segment. Peter Barry - Bear Stearns: As you set up to the second half, obviously a very important time of the year for you. Do you note any significant differences this year from last year, I think you remember you are going to have one less week in the fourth quarter than you did in the last year. Certainly the comparisons aren’t going to be easy given out strong fourth quarter you have last year. Could you sort of address those issues and any other things you see slightly or significantly different today from where we were a year ago?

Oh yeah, we don’t really worry about difference between 52 or 53 weeks.

Clearly not a whole lot of difference, last year seem like a long time ago too. We consider with the market moving. Peter Barry - Bear Stearns: And just one final one from me, I just want to make sure I heard correctly, your current European market share is about 15% and expected to go to 20% by year-end.

It’s roughly the numbers we think were considering that right now, yeah. Peter Barry - Bear Stearns: PND?

PND. Peter Barry - Bear Stearns: Thank you very much.

Thank you.

Your next question is a follow up question from the line of John Bucher with BMO Capital market. John Bucher - BMO Capital: Thank you just sort of a house keeping question here, the other accrued expenses, they grew to 70 million from 29 million, Kevin what accounts for that?

Actually quite of few factors in that, things like we clearly for marketing expenses, from advertising dollars, accrued licensing fees, our warranty reserves and payroll, kind of those are, kind of a falling (indiscernible) that line. John Bucher - BMO Capital: And going forward, can you help us out, just in terms of whether we should expect that same percentage type of growth going on, just top modeling that line?

Well some of those are accounting with unit volumes depending on how, for example our marketing programs, if the unit volumes goes up obviously will have accrued sales program marketing programs there. But there number of, probably not go back down to the earlier level that would stay further high. John Bucher - BMO Capital: Okay and then may be just sort of try together some of the previous questions on the after market, greater cockpit the G900X and G600. Would it be reasonable to assume that we could take a look at the unit shipment rates of the RV series in the Lancer aircraft and since the G900X does not require any STCs or any certification that we could make some sort of take rate assumptions there of the base of RV and Lancers as soon as that product becomes available. And for the G600 is probably more protracted take up just because you got qualified installers as well as sort of that group or, the FTC process that you got to get up that’s probably more gradual ramp.

I would agree with both of your comments, John. John Bucher - BMO Capital: Fine.

Your next question comes from Steve Mortimer with Wellington Management. Steve Mortimer - Wellington Management: Hi guys in the past you guys have seen a lot of gross margin frustrating the prior transition quarters like we just went through in a rebound thereafter. Did we see the same sort of impact on gross margins despite the good results, it could have been, with that imply we can see a margin pick up actually in Q3?

We are not predicting a strong margin pick up in Q3 now. Steve Mortimer - Wellington Management: Okay. Thanks a lot.

Thanks.

Your next question comes from the line of Ron Epstein with Merrill Lynch. Ronald Epstein - Merrill Lynch: Hey gentlemen, more house keeping question. When we think about the tax rate for this year, (indiscernible) next year but for me I guess but it’s going to ramp up overtime, how should we think about it?

We’ve communicated as that rate will likely go into the upper teens for the next couple of years probably 20% better rate longer-term. Ronald Epstein - Merrill Lynch: Okay so long-term we should be thinking about 20%?

That’s right. Ronald Epstein - Merrill Lynch: Okay. And then just in the marketable securities what do you guys having there?

After the tax advance and taxable bonds, high quality, upgrade investments. Ronald Epstein - Merrill Lynch: So what we think about, I guess some revenue, let me think about your return on your cash and marketable securities is 4%, the kind of range you should be thinking about or?

Right now, as you know the rate that’s been pretty, we were fluctuating, and then its trending up. I mean …

Yeah.

You’re seeing a 2.5%, there are 4.3 this quarter and hopefully that were, I think what compared that, so it’s really citing with the feb range. Ronald Epstein - Merrill Lynch: Okay. So yes, if you think about kind of what (indiscernible) is doing, that should give us to kind of this guideline, guideline what’s going on with your return on cash and marketable securities?

Yes.

Okay, great, thanks.

Thank you.

Your next question comes from the line of Steve Windward with Pacific Crest Securities. Steve Windward - Pacific Crest Securities: Good morning. With regards to the success in Europe you talk a little bit about the advertising initiatives. I guess, I was curious with regards to kind of point of problems and what changes we’ve seen on a sequential basis and any initial path on what we might see in terms of the second half and on further penetration? Thanks.

You are asking number of retailers, number of, matter of sales base, what are you asking? Steve Windward - Pacific Crest Securities: Primarily retailers are, yeah, I mean, number of locations that you are selling product.

It is hard for us to predict what kind of presence going to increase in the second half, we just feel like given the product we have in the marketplace that we’ve introduced relationship that we have in the various countries, distributors that we feel like we’re going to be able to continue growth in Europe but I’m not going to quantify, I mean in doors more doors we’re going to be added... Steve Windward - Pacific Crest Securities: How about looking backward, what -- how much the change that we seen in terms of channel expansion from the end of the year to the end of the first half here?

Though we differentiate in size of continued improvement, but your market is more recommended and hence compressed on the U.S. market so I think, I am not, we had seen enough of that, in certain countries and all continue to work in other, for the rest of the U.S., it just take much time and effort to achieve a penny European (indiscernible) Steve Windward - Pacific Crest Securities: Sure okay thank you.

Your next question comes from line of Steven Koffler, Shannon River Partners. Steven Koffler - Shannon River Partners: Good morning Kevin just little further on the balance sheet, you talked about the fact that receivables went up fair amount and indicated that was sort of big ramp in June, what was the reason for June, be in a pretty heavy month.

Probably that I think, for new product (indiscernible) probably ship until may be early April or late May. And it is part of the (indiscernible) constraint. Our second factory running by the end of the May, we are able to have lot more products to fill the back orders Steven Koffler - Shannon River Partners: Okay given the seasonality, summer usually slower everywhere, is it fair to expect similar kind of linearity or the supply issues can direct that.

We had increased strong on July as we ended August, what is a set of month (indiscernible) in Europe as everybody going vocation. Steven Koffler - Shannon River Partners: Okay

Thanks.

Your next question comes from the line of Mark (indiscernible) with Ivory Capital. Mark – Ivory Capital: Hi guys congrats on a great quarter

Thank you Mark – Ivory Capital: I just had a quick follow-up question, somebody answered earlier about that tax rate, we’ve seen another company with similar tax structured, Trident talked about on 800 and 1800 basis point increase in their tax rate. And I am just curious if there is any changes in kind of a Taiwan tax credits or structures over there that you guys are experiencing?

No, hard assumptions is that there is an AMT that kicks in, that’s going to raise the rates but nothing of that order of magnitude that you just talk about with the other company, we feel we have a pretty good hand on the Taiwan tax credit that we get. Mark – Ivory Capital: Okay gotcha. So that’s, with Trident that’s a completely different situation?

I don’t know, I can’t speak to their specifics. Mark – Ivory Capital: Okay gotcha. But again kind of taking up to the high teens and kind of leveling at 20%.

Right. Mark – Ivory Capital: Okay. And then secondly just wanted to touch on the cell phone navigation by, I know Verizon recently introduced an offering with a monthly subscription. I am curious if you are seeing one any impact on PND sales there and as just kind of what your outlook is overall. And then lastly what you are doing more on the mobile side, if you can just give me an update?

Sure, we haven’t seen any detectable difference in PND sales based on the presence of Verizon or our Garmin Mobile. At that point out there, I think we said in the past that we want to participate in that space because it’s a great way to get introduced to customers that might be willing to purchase a mobile navigator on a monthly basis and then later decides that he want some other kind of Garmin product to dedicate the license sometime. So we think that there is a lot of synergy between the two market truthfully, I think in terms of Garmin Mobile, we did recently introduced our version three which introduces real time traffic and gas practice into the application right and now we are on the, I believe the only provider that can offer real time traffic and gas practice and weather in our application at a low price of 995. So we are really excited about that new update and we also rolled it out on the IBM network to spread. Mark – Ivory Capital: Perfect, thank you guys. Kevin Rauckman - Chief Financial Officer and Treasurer: Okay thank you. I think at this point we are going to conclude the call, I really appreciate the interest and again our company will look forward to updating everyone again at the end of the third quarter. So thanks again. I will talk to you later.

Ladies and gentleman this concludes today’s conference call, you may now disconnect.