Kerri Thurston - Director of Investor Relations Clifton A. Pemble - Chief Executive Officer, President, Director, President of Garmin International Inc, President of Garmin USA Inc and President of Garmin AT Inc Kevin S. Rauckman - Chief Financial Officer, Principal Accounting Officer, Treasurer, Treasurer of Garmin International Inc, Treasurer of Garmin Usa Inc, Director of Garmin International Inc and Director of Garmin Usa Inc

Charles L. Anderson - Dougherty & Company LLC, Research Division Benjamin James Bollin - Cleveland Research Company Tavis C. McCourt - Raymond James & Associates, Inc., Research Division Paul Coster - JP Morgan Chase & Co, Research Division Mark Sue - RBC Capital Markets, LLC, Research Division John F. Bright - Avondale Partners, LLC, Research Division Simona Jankowski - Goldman Sachs Group Inc., Research Division James E. Faucette - Pacific Crest Securities, Inc., Research Division Jonathan Ho - William Blair & Company L.L.C., Research Division Andrew Spinola - Wells Fargo Securities, LLC, Research Division

Good day, everyone, and welcome to the Garmin Second Quarter 2013 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Ms. Kerri Thurston. Please go ahead.

Good morning, everyone. We'd like to welcome you to Garmin Ltd. Second Quarter 2013 Earnings Call. Please note that the earnings press release and the related slides are available at Garmin's Investor Relations site on the Internet. An archive of the webcast and the related transcript will also be available on our website until August 30. This earnings call includes projections and other forward-looking statements regarding Garmin Ltd. and its businesses. Any statements regarding our future financial position, revenues, earnings, market share, product introductions, future demand for our products 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 year ended December 30, 2012 filed with the Securities and Exchange Commission. Presenting on behalf of Garmin this morning are Cliff Pemble, President and Chief Executive Officer; and Kevin Rauckman, Chief Financial Officer and Treasurer. At this time, I'd like to turn the call over to Cliff. Clifton A. Pemble: Thank you, Kerri, and good morning, everyone. As we announced earlier this morning, Garmin recorded strong second quarter revenue and margin performance, with revenue growth in each of our traditional segments of Outdoor, Fitness, Marine and Aviation. While consolidated revenues decreased 3% year-over-year, our traditional market segments contributed 50% in the total revenue mix in the quarter and grew 8% on a combined basis. Gross margins improved sequentially to 55% from 52% in the prior quarter, as segment mix and product mix improved in the seasonally stronger second quarter. Gross margins declined from 59% in the prior year when margins were aided by a one-time royalty benefit of $21 million. Operating margins were 24%, a sequential improvement from 15% in the first quarter, but it declined from 28% in the prior year due to the royalty benefit. Traditional markets contributed 64% of the operating income in the quarter. These strong results allowed us to generate $186 million of free cash flow in the quarter. Kevin will further discuss our financial results in a few minutes. Next, I'll walk you through a review of our results segment-by-segment. Starting first with the Outdoor segment, revenues grew 6% in the quarter, generating 3% operating income growth. Our newer product categories continue to perform well, with golf products and dog tracking and training solutions contributing to the growth. As we forecasted in the first quarter, margins improved as we entered a more seasonally robust period. As we look at the back half of 2013, we continue to see significant opportunities for growth with the introduction of new products and new product categories. The recently introduced Monterra is one example. Targeting a new generation of outdoor enthusiasts and professionals, the Monterra is built on the Android open OS architecture and offers expanded utility through the availability of third-party applications from the Google Play store. In addition, there will be ongoing expansion into new adjacent markets. Turning next to the Fitness segment, revenue grew 3% on a year-over-year basis, as our new cycling products and the Forerunner 10 performed well in the marketplace. Our level of R&D investment in Fitness continues to grow as we prepare for a number of product launches in the back half of 2013 and also explore new product categories. The most anticipated new product deliveries in the third quarter is the Vector power meter, which is expected to accelerate revenue growth in the back half of the year. Vector has entered mass production, and we expect to deliver the product to retailers soon. We are thrilled to finally cross the finish line with this new product and anticipate our customers will appreciate the unique features and value proposition that Vector brings to the cycling market. Finally, as we have previously stated, we anticipate entering new adjacent markets in the future and continue to make investments that position us for long-term opportunities. In Aviation, we posted robust revenue growth of 16% with both OEM and aftermarket contributing to strong gains in the quarter. Operating income was flat due to the acceleration of R&D spending, which increased by $8 million over the second quarter of 2012. We are making good progress in the completion of deliverables through the G5000 system, which enables our OEM partners to complete aircraft-level certification work. Overall, we expect our Aviation segment to perform well for the remainder of the year as the broader market improves and as we benefit from new platforms with our OEM customers. Revenue in the Marine segment grew 7% in the quarter as we deliver new products to the market, including our GPSMAP 8000 series of glass helms and our new combination products as well. Operating margin came in at 20%, rebounding sharply on a sequential basis as new products and higher volumes contributed to improved performance. While this is still not where we would like to be in the long term, we believe it is a step in the right direction. Market results indicate our new products are doing well, and strong shipments have continued into the third quarter due to pent-up demand for these products and aided by the delay that started the Marine season caused by unseasonably cool temperatures. As with each of our segments, R&D expense continues to increase, driven mainly by the increase in staff over the course of the past year. In the Marine segment, we believe our staffing levels are now appropriate and consequently, the rate of growth should stabilize going forward. Finally, in our Auto/Mobile segment, revenues were down 12% in the quarter, with PND market volumes declining at a global rate of approximately 20%, as we anticipated. This decline was partially offset by ongoing market share gains, growth in our OEM business and the amortization of previously deferred revenues. During the quarter, we launched our 7-inch nüvis, which have unique differentiators over competitive and substitute solutions, such as the larger screen and lifetime digital traffic. We also announced the expansion of our relationships with Volkswagen and MINI, offering factory or dealer installed solutions at compelling price points for the compact car market. Overall, our expectations for the PND category remain unchanged, with industry volumes down approximately 20% on a global basis. As we focus on profitability in the category, we will continue to identify niche opportunities, such as fleet management, over-the-road trucking and our recently introduced head-up display for mobile applications. Finally, as stated in the press release, we are maintaining our revenue and pro forma EPS guidance for 2013. While our performance is strong in the second quarter and our traditional markets are on a solid trajectory of growth, we continue to expect the declines in the PND market will be a significant headwind for our top and bottom line. In particular, we expect PND revenues to further decelerate as we compare against the period of strong selling during the third quarter of 2012, driven by the timing of new products and end-of-life promotional activity. We anticipate operating income and operating margin will tend -- trend towards the high-end of our prior range, which will be offset by an anticipated increase in our tax rate. That concludes my remarks. Kevin will now walk us through our Q2 financials in more detail. Kevin? Kevin S. Rauckman: Thanks, Cliff. Good morning, everyone. I'd like to begin by reviewing our income statement and segment results, then move to summary comments on the balance sheet, cash flow, taxes and guidance. We posted revenue of $697 million for the quarter with pro forma net income of $150 million. Our pro forma EPS was $0.76 per share, excluding the large FX gain. Our revenue represents a decrease of 3% year-over-year. Gross margin came in at 55%, a 370 basis point decline from prior year, driven primarily by the $21 million one-time royalty benefit recorded in the second quarter of 2012. Operating margin was 24%, down 400 basis points from the prior year. The components were gross margin unfavorable by 370 basis points and an unfavorable operating expense impact of 30 basis points. Total operating expenses decreased by $4 million in the current quarter with strong reductions in advertising and SG&A, partially offset by a $16 million increase in research and development. Each of the operating expense categories will be discussed in detail on a later slide. Our pro forma EPS, which is adjusted for the foreign currency gain, was $0.76, representing a 22% decrease year-over-year, and we shipped 3.6 million units during the quarter, which represents a 7% decrease year-over-year. Total company average selling price was $192 per unit, up from $184 in Q2 2012, driven primarily by segment mix and the amortization of previously deferred revenue. Cliff has summarized revenue changes by segment, and I would just like to briefly highlight the charts on this page, which illustrates the Auto/Mobile segment representing 50% of our total revenue during Q2 of 2013, as each of our traditional segments grew during the quarter. Looking at profitability by segment, our traditional segments delivered 64% of operating income in the quarter, an increase from 57% in Q2 of 2012. Outdoor and Aviation each contributed an increasing proportion of the operating profit in the current year due to revenue growth. I'd like to briefly discuss year-over-year gross margin changes by segment. Total corporate gross margin declined by 370 basis points in the quarter, with all segments declining. The biggest driver was an Auto/Mobile gross margin decline of 620 basis points, which is primarily attributable -- attributed to the $21 million royalty benefit booked in Q2 of 2012. Marine and Fitness gross margins declined 740 and 390 basis points, respectively, due to product mix in the quarter. Marine continued to discount older products, which pressured margins, but they did improve sequentially as our new products shift. And total corporate operating margin declined 400 basis points, due to the $21 million royalty benefit booked in Q2 2012 and the increased R&D spending within every segment. Looking briefly at year-to-date metrics, revenue contribution for 2013 is shifting to our growth segments with Aviation, Outdoor and Fitness each growing in contribution. A similar shift is occurring in operating income as well, with 68% of our year-to-date operating income coming from our traditional segments. As previously mentioned, Q2 operating expenses decreased by $4 million on a year-over-year basis from $218 million in Q2 of 2012 to $214 million in Q2 of 2013, while increasing 30 basis points as a percentage of sales. R&D was the only expense category that increased, with a $16 million year-over-year impact. This represented a 260 basis point impact as R&D increased to 14% of sales. We continue to invest in innovation and grow our engineering workforce with a heavy emphasis on Aviation, currently. Our advertising spending decreased $9 million over the year ago quarter and decreased 110 basis points as a percent of sales at 4% in Q2 2013. Much of the decrease was related to declining volumes in PND, and we will continue to scale our advertising expense to match our revenue trends. SG&A decreased $11 million compared to a year ago quarter, declining 120 basis points as a percentage of sales to 13%. This decrease is primarily attributable to a legal settlement and related fees that were recorded in Q2 of 2012. Moving next to balance sheet and cash flow. We ended the quarter with cash and marketable securities of just over $2.7 billion, which is consistent with Q1 this year. Accounts receivable increased sequentially to $484 million, due to the seasonality of the quarter. Accounts receivable accounted for 66 days of sales, compared to 64 days of sales in the first quarter of 2013 and 62 days of sales in the second quarter of 2012. Our inventory balance decreased slightly to $383 million on a sequential basis at the close of the second quarter. Our days of inventory were 116 days, compared to 119 in the first quarter of 2013 and 98 days in the second quarter of 2012. And we continue to generate strong free cash flow across our business, as cash from operations was $204 million during Q2. CapEx was $18 million during the second quarter. Therefore, we generated free cash flow of $186 million during Q2. Financing activities were $102 million use of cash during the second quarter due to the June dividend payment and the repurchase of $13 million of company stock. There a few more items to discuss relative to our Q2 announcement. Our effective tax rate for Q2 2013 was 16.5%, compared to 10.4% in Q2 of 2012. The increased rate was primarily driven by unfavorable change in income mix by taxing jurisdictions. Similarly, we now expect our full year tax rate to be 15%, an increase from 13.1% in 2012 due to the geographic mix. And finally, as Cliff previously discussed, we're maintaining our full year guidance of $2.5 billion to $2.6 billion of revenue and $2.30 to $2.40 of pro forma EPS. As the forecasted growth within each segment remains very close to our original guidance, we are not updating revenue growth by segment at this point. As a reminder, we forecasted 5% to 10% growth in Outdoor, Fitness and Marine segments; 10% to 15% growth in Aviation segment, offset by a 15% to 20% decline in our Auto/Mobile segment. Our current revenue forecast doesn't anticipate that Auto/Mobile will be less than 50% of our total revenue during 2013. This concludes our formal remarks. Operator, please open the line now for a period of Q&A.

[Operator Instructions] We'll have our first question from Charlie Anderson, Dougherty & Company. Charles L. Anderson - Dougherty & Company LLC, Research Division: First question on new products. I wonder, as you guys do your forecasting, how do you feel you sort of assumed the ramp of new products in the guidance? And obviously, it could be a pretty big wildcard here. So any color on that? And then also, I wonder if that was why we saw the days of inventory spike up versus last year. Clifton A. Pemble: Yes. I think, Charlie, the new products' forecast has already been built into our guidance. I think, as you know, our Outdoor and Fitness has been trending a little bit below where we expected on the segment level guidance, but we believe that will come back as we introduce these products in the back half of the year. Kevin S. Rauckman: And in terms of the days of inventory, I think it's the natural seasonality that we see from Q2 to Q3 if you look at -- we talked a little bit about what our expectations are in the upcoming quarter, due to the PND year-over-year differences. But with inventory being down and with just looking at the next few quarters, there was a nominal change in inventory days of supply. Charles L. Anderson - Dougherty & Company LLC, Research Division: Got it. And then R&D seemed a little bit elevated, and it looked like from the segment detail, maybe specifically in Marine and in Aviation, I know sometimes that's sort of a leading indicator of design, and I wonder if that was the case there in terms of new platforms maybe you haven't been able to announce yet or if it was more activity around the platforms you've already won. Clifton A. Pemble: I think in terms of Marine, as I mentioned, we're experiencing year-over-year staffing increases based on headcount that we added during the past year, but we do believe that we are at a level now in Marine that will stabilize going forward. In Aviation, we've had ongoing program costs related to the platforms that we're working on. And so we're investing heavily to finish those and then move on to the next projects.

We'll go next to Ben Bollin, Cleveland Research. Benjamin James Bollin - Cleveland Research Company: I had a couple of questions. So first, Kevin, what was the net impact of the amortized revenue contribution in the quarter for the PND business? Kevin S. Rauckman: Yes. We actually had a benefit of about $4 million of operating income, about $3 million of sales actually during the period, which is, as we've said throughout the year, we're expecting a fairly small impact each quarter, but it was about $3 million sales impact on deferred revenue that was positive for us. Benjamin James Bollin - Cleveland Research Company: Okay. And another one, when you look at Monterra, the product announcement in the quarter, it's the first alternative OS product that I can recall in the history. What's the strategy, as you look at other operating systems, going forward? Are there any specific segments where you expand on that? Or is this kind of a trial run and you'll see how it goes from here? Clifton A. Pemble: Ben, I think this is a good example of a market that really wants to have an open OS platform in order to be able to do unique kinds of applications out into the field, whether it's GIS data collection or specialized kind of computations on a geographic basis. So I think we would approach the use of alternative OSs on a case-by-case basis. We feel like Outdoors is one great example, and there may be some others, but I wouldn't expect that it would go across our product lines. Benjamin James Bollin - Cleveland Research Company: Okay. And my last question, when you look at the legacy PND business, how would you look at expense management as those units continue to decline? You talked a little bit about R&D resources there, but what's the right way to think about headcount in that segment and other expenses as you continue to see declines in those units? Kevin S. Rauckman: Well, I think we faced reality for the last several months and quarters on the PND business as it's on a trajectory that's down about 20%, as Cliff said. And we're not spending as much in that segment on R&D, so we have been able to scale that back and -- in some of the other operating expenses as well. And so we have been able to move resources within our business from the declining business into these other traditional segments that are in -- that are still on growth mode. And -- because we manage our businesses by the 5 recordable segments, we have good information on the size and then the scale of those businesses, and that's really how we manage day-to-day.

Your next question is from Tavis McCourt, Raymond James. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: In the Marine business, you're guiding for 5% to 10% growth for the year, and we saw a nice pickup in June. But I guess, I want to be clear on that. You expect kind of the positive year-over-year trends to continue in the back half of the year, I guess, which would be needed to get to that guidance. Is that correct? Clifton A. Pemble: Yes, we're seeing, as I mentioned in my remarks, continued follow-through in the Marine market, and we're pleased with that. We did miss the seasonally strong first quarter due to the late delivery of our products, so we have some ground to make up, but we believe the overall guidance for Marine is reasonably sound. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: And in terms of the -- I think in both the commentary related to Fitness and Outdoor, you mentioned about moving into new product adjacencies, which has kind of been your history the last several years in those categories. I guess, can you walk us through any -- like what are the costs of doing that? Are we already seeing the uptick in either research and development or sales and marketing to do that? Can you move in the product adjacencies and still realize leverage? Or are there investment phases that you'll have to go through in those product lines that might impact the margins near term? Clifton A. Pemble: I think some of the investments have already been realized in those areas as we've been working on those new products and new categories for some time. We do see that we'll have to invest some additional resources in those areas, so I think I would characterize those as incremental at this point. And probably, it doesn't structurally change the overall profile that we have in those segments. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: And aside from Vector which, I guess, I would classify as an adjacency, are any of these kind of this holiday season? Or is this -- that more commentary about next year? Clifton A. Pemble: Probably, the biggest impact will be next year.

We'll go next to Paul Coster with JP Morgan. Paul Coster - JP Morgan Chase & Co, Research Division: I ask the same kind of question every quarter, I think, which is, do you have a view yet on what the sort of end game is for the PND market? Will it -- at what point will it stabilize? And what kind of growth decline do you anticipate on the way there? Clifton A. Pemble: Yes, Paul. I think it's truthfully anybody's guess at this point. The people are prognosticated what the numbers are in the market both in the growth mode and now on the decline mode has tended to outwit some of the best guesses that people have had. So I think it -- we probably can't speculate. We do believe that it does stabilize at a point, and we're planning our business around stabilization. But at this point, we probably can't predict what it is. Paul Coster - JP Morgan Chase & Co, Research Division: All right, got it. The -- also OEM business. Can you just give us some sense of the shape of the ramp there and what the contingencies are regarding that ramp? I imagine it has to do with also OEM product introductions and car models and so on. Clifton A. Pemble: Yes, that's right. We do see, as we've said in the past, that the OEM business is a long gestation business in the way that it develops. We've seen some good gains in the past year with our new programs at places like Chrysler and Suzuki. Going forward, the growth is contingent upon some of the newer programs, as well as winning new programs. But we would expect it to be -- to develop somewhat on a long-term basis. Paul Coster - JP Morgan Chase & Co, Research Division: All right. And finally, your latest thoughts on acquisitions, please. Kevin S. Rauckman: Well, the acquisitions has been a key strategy of the use of the cash. This has either stabilized or grown over time. We have, across various segments, continued to look at opportunities, so that is still a part of our strategy in terms of the use of cash. Of course, we can't comment on anything -- on any specific deals. But there have been ideas brought to us across the various segments that we serve. Paul Coster - JP Morgan Chase & Co, Research Division: I mean, there's no specific preconceptions around it? There's not necessarily market share or accretion or whatever? It depends on the technology, it depends on the specifics of the situation? Clifton A. Pemble: I think it definitely depends on the specifics. And I'd say if we're going to lean in one way right now, we'd be more focused on the technology that can help us be even more competitive in the various end markets that we serve.

We'll go next to Mark Sue, RBC Capital Markets. Mark Sue - RBC Capital Markets, LLC, Research Division: As the segment contribution changes, I'm trying to get a sense of what the new band might be for operating margins on a going forward basis. Can we see a lift, for example, back to the high 20s at a corporate level? It does sound much of the heavy lifting for the new products, such as Vector for Aviation is somewhat behind us. So -- and you're not investing in the PND side. So I'm trying to see what the steady-state OEMs might be or if the band actually tightened. Kevin S. Rauckman: I think what we talked about this year now with our updated -- or slightly updated guidance, we're at the higher end of our earlier range, which is a 20% operating margin. And quite frankly, when we look at a couple of years, this is an area that we need to continue to challenge ourselves and do a good job. A lot of this will depend along what the growth rate on the top line is of our traditional segments. So if PND continues to come down, can we offset that with additional growth of each of these other segments? And if we see that growth with new product introductions and the like, then that can really help us with an operating margin. But are we going to get to a high 20s? I think that's too aggressive. Can we see expended operating margins over time? I think we'll provide some more formal guidance as we go into next year. Mark Sue - RBC Capital Markets, LLC, Research Division: Okay. Likewise, Kevin, if I am recognizing that there are shared overhead expenses by segment by division. When we look at the cash flow and the concentration of cash flow generation from the Auto/Mobile business now, how does that look like in the future over the next year or so, with that cash flow concentration from one segment to the others? Kevin S. Rauckman: Well, I think that's one thing that we are pleased with in the results today because despite the fact that the PND has declined, we're still growing market share, and we're also still generating a lot of cash out of the Auto/Mobile segment. So I think you will likely see similar numbers. We were at 18% operating margin on Auto/Mobile during the period. I think -- will we be able to maintain that? Maybe not quite that high, but we do have strong margin contributions from each of the other segments, which will help the overall cash flow of the business. Mark Sue - RBC Capital Markets, LLC, Research Division: Okay. So overall, do you feel that the other segments will generate more cash in the future and I think that's [indiscernible] on PND? Kevin S. Rauckman: Yes. You've been seeing that in the trend on operating income contribution. I think you'll continue to see that as we go forward.

We'll go next to John Bright, Avondale Partners. John F. Bright - Avondale Partners, LLC, Research Division: Cliff and Kevin, I'm going to try to tie a lot of these questions together. The first one, Kevin, on your calendar '13 guidance, you're not changing any of the composition of the ranges between the segments. Is that correct? Kevin S. Rauckman: That's correct. We still feel pretty comfortable with the earlier ranges that we laid out. John F. Bright - Avondale Partners, LLC, Research Division: Secondly, you were talking about the new categories in the product launches. R&D certainly is up. Are you managing your sales and marketing G&A well? You targeted -- you talked about targeting adjacent market opportunities. Can you give us -- I know it's tough, any flavor for how meaningful this would be? Or how would you think about that? I think you've already addressed timing. Clifton A. Pemble: Hey, John, I would probably characterize in the way we planned our guidance that these things are incremental to our overall business. John F. Bright - Avondale Partners, LLC, Research Division: All right. In Aviation, I think, in the slides or in the prepared text you talked about growth in -- '13 and '14 will be driven by OEM. What does this mean related to the aftermarket? Clifton A. Pemble: We're seeing some incremental improvements in the aftermarket during the course so far of 2013, although it's been at a lower level than the contributions by OEM in new platforms that we've had in this segment. I think it's a little tough to call, because Aviation has been one of the slowest markets to respond to gradually improving economic conditions, but we would anticipate that aftermarket would continue to incrementally grow over the course or the remainder of 2013 and into 2014. John F. Bright - Avondale Partners, LLC, Research Division: All right. The R&D, a pretty good pickup this quarter. Kevin, the run rate for R&D? Kevin S. Rauckman: Run rate for the remainder of the year? Is that what your question is? John F. Bright - Avondale Partners, LLC, Research Division: Yes. Kevin S. Rauckman: So we run at around 14% of sales, and we're expecting that our R&D will still be somewhere in that range between 14% and 15% of sales for the full year. So we expect maybe a little bit of an uptick for about -- but in some areas, like Cliff mentioned, Marine, we're pretty much at a level where we feel like we can manage that business without any other increases. So again, overall, I would say, R&D will be between 14% and 15% of sales for the full year. John F. Bright - Avondale Partners, LLC, Research Division: Final question. You're -- again, you're managing this transition, I think, well. There seems to be light at the end of the tunnel. Given your expectations that Auto/Mobile will be less than 50% of revenue in -- for calendar '13, should investors view calendar '13 as a free cash flow trough and there's a potential for total revenue growth in calendar '14? Kevin S. Rauckman: I think that's a very difficult answer for us to give at this point. We had earlier stated that our free cash flow will be somewhere around 525 for the year. We have -- we really don't come off of that number. The question is, is that a trough? I mean, it's hard to tell. We'll -- again, we'll be able to update you, all, as we get through the back half of the year to see if we feel 2014 and beyond will have a pickup from there.

We'll go next to Simona Jankowski with Goldman Sachs. Simona Jankowski - Goldman Sachs Group Inc., Research Division: You had some fairly good upside in ASPs, and I think you attributed to that to mix and the benefit from deferred. Can you just give us a bit more detail on the mix side, in particular in terms of what drove the upside there? Kevin S. Rauckman: Well, I think -- I would think, in general, the PND ASP really didn't move much. We've seen just a very low-single-digit decline, which is really helping us because then when we have product mix from our traditional segment that is improving, the prices on many of those, like Marine and Aviation, have impacted ASPs. So that's probably all there really is to talk about in terms of the ASP trends within the business. Simona Jankowski - Goldman Sachs Group Inc., Research Division: Okay. And then you talked quite a bit about the adjacencies you're investing in, in Outdoor and Fitness. But can you address a little bit more broadly this whole category of Fitness bands and watches? There has been a lot of attention in that category, a lot of upcoming products there from Google, Apple, Sony, startups like Pebble, et cetera. How do you view that strategically? And recognizing it's not necessarily directly competitive, but to what extent do you think it might be substitutive? And how do you guys intend to respond to that? Clifton A. Pemble: Well, Simona, I think speculation around smart watches has been going rampant. And definitely, the market is starting to see some products out there and some functionalities that we can expect going forward. I would view Garmin as kind of an early mover in the whole area of wearable devices. And so for us, we feel that we have some things that we can bring to that kind of market but in our own special way, so it is an area of interest for us. Simona Jankowski - Goldman Sachs Group Inc., Research Division: And the last question on the Aviation segment. Obviously, we had some issues cited both at Bombardier and most recently, at Cessna, related to the ramp of the G5000. That didn't seem to impact your guidance for this fiscal year. Was that because there was an offset to that, to the upside? Or was there just kind of no negative impact from those couple of issues and delay in the ramp of the programs? And then just looking longer term, are there any implications from these couple of issues either for your competitive positioning or the required level of investment? Clifton A. Pemble: Yes. I think that, definitely, we -- the delays have probably muted a bit the OEM revenue that we had been anticipating for the year, although it's still within our guidance range for the segment. I would say that for the delays and our ability to win new business, definitely, it's not what we had anticipated in terms of when we started these programs, but we feel that, on a comprehensive basis, the OEMs will make selections based on a number of factors, and our equipment does bring a huge value proposition to the market. So we think that's going to be a big driver. And we feel like we've learned a lot in the process of doing these new programs, and so we should be able to execute new programs much more efficiently. Simona Jankowski - Goldman Sachs Group Inc., Research Division: And in terms of the level of investment, would that go higher partly in response to these issues? And do you think that there is further investment necessary? Clifton A. Pemble: Well, we definitely ramped up additional investments over the course of these programs beyond, probably, what we anticipated in the beginning. So we're already seeing the effects of that. We would expect to see the investments continue to grow over the next year just from the same point of year-over-year comparables. But I think, at some level, we'll reach what we feel is a good level for the level of business that we have.

We'll go next to James Faucette, Pacific Crest. James E. Faucette - Pacific Crest Securities, Inc., Research Division: I just had a few follow-up questions. First, can you talk a little bit about the strength that you're seeing in the Outdoor segment? It seems like we were anniversarying some pretty meaningful product launches flash [ph] from last year, but continue -- you guys continue to do well. And it sounds like you're expecting to take a bit more of a step-up as we go into the latter part of the year. Just looking for a little color on how you're seeing the outdoor market developed for Garmin right now. Clifton A. Pemble: Yes, James. The outdoor market, I think, has been driven by a couple of things. One is the golf market, where our products have been very popular, particularly at the beginning of the summer season and kind of the moms and dads and grads gifting season. And also, the dog tracking and training area has been an area of growth for us. So these 2 areas really helped drive growth in Outdoor. And our traditional product in the segment continued to be reasonably steady, so that's really the color behind what's going on in Outdoor. I think going forward, again, we're continuing to expand the category, so we will anticipate in the back half of the year that the growth will continue. James E. Faucette - Pacific Crest Securities, Inc., Research Division: That's great. And then when you look at the Marine segment, you talked about having missed an important window in the earlier part of the year, with a little bit of weight delivery but are catching up now. How are you feeling about that -- the product cadence within Marine is? Is this something where we should continue to see annual product introductions will continue to be important and you're targeting hitting the window better? Or are these longer life products where you don't feel like that's as important as it maybe has been in the last few years? Clifton A. Pemble: I think my answer would probably be a little bit of both. We know that the product life cycle in Marine is definitely longer, and it typically tends to be in the 2- to 4-year time frame. But with that said, it is still very important when you introduce the new products to introduce in the timing of the season, so that you can take advantage of when people are buying and quipping their boats in the spring. James E. Faucette - Pacific Crest Securities, Inc., Research Division: And then last couple of quick questions. Can you just comment quickly on what you're seeing in terms of pricing of PNDs? You've been pretty clear about what you expect unit volumes, but in the past, you've talked about stabilization. I'm just wondering if that's continuing. And then also, could you remind us where you maybe at in any current buyback program approvals? Kevin S. Rauckman: Yes. So I just mentioned earlier, as James said our -- we do not see much PND price compression. In fact, we're looking at this very small single-digit decline so far this year, and we had that also in the second quarter. So that's really our expectation, even as we go through the back half of the year as well. And then on the buyback, we mentioned that we bought $13 million of stock. In fact, we have $300 million approved by the board that will get us through, not only this year, but the end of 2014. So we really just kind of got going in the second quarter, with some additional buyback and we'll continue that as we progress.

We'll go next to Jonathan Ho, William Blair. Jonathan Ho - William Blair & Company L.L.C., Research Division: I just wanted to get a little bit more color around the fleet management opportunity that you guys had talked about and maybe where you're seeing traction and potentially maybe some color on the distribution model there? Clifton A. Pemble: Yes, Jonathan. The fleet opportunity is something we view as incremental in the overall PND area. Over the course of the last few years, we have offered both hardware and software solutions to our PNDs that allow other fleet solution providers to integrate our PNDs into their overall solution. And so our most recent entry into this is an evolution of that, where we've taken what was a hardware interface between our product and the equipment that's onboard the vehicle and made it a wireless product that eliminates the need for additional equipment in the vehicle. So it's a step -- additional step into that market. But again, it's something that we would view as incremental and not material to the overall size of the PND market. Jonathan Ho - William Blair & Company L.L.C., Research Division: Got it. I just also wanted to get an update in terms of what you're seeing in terms of component pricing, whether the volume declines have had a material impact there or whether that's just been offset by natural declines. Clifton A. Pemble: I think our component pricing, we feel, is progressing as we anticipated. We typically anticipate about a 4% reduction in component cost. We're not seeing any pressure due to the reduced volumes. Our volumes are still very meaningful, and so we have many suppliers who are willing to compete for our business.

We'll go next to Andrew Spinola, Wells Fargo. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Cliff, I was wondering if you could comment a little bit on the heads-up display. It seems like there's been quite a bit more press than I would have expected on that product. I think it's in the market already if I'm not mistaken. I was wondering if you could comment on just sort of the interest in that and the possible sort of benefit you could get from that product. Clifton A. Pemble: Yes. I think we were also pleasantly surprised by the interest in that product as well. We do view that product as an incremental opportunity in the mobile space. I think that the, excitement aside, we probably view it as being a more limited type of upside versus if you read into all the new stories. You might think that it's going to be huge. But that said, it's not yet in the market, it will be soon. But we'll be delivering probably in the next 30 days or so. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Got it. And then on the announcement in Marine this morning with Volvo Penta. Could you give us some sense of -- are there OEM wins already in place? Or is this -- how is the revenue going to be realized with this relationship? And could you maybe remind me on what the OEM content of Marine revenue is right now? And do you think that this announcement, which I think is one of your bigger relationships, should accelerate the growth in that revenue line going forward? Clifton A. Pemble: Yes. Our OEM mix in Marine has been a small portion. We've never broken it out, but it's a smaller portion of our overall Marine revenues. We would expect the relationship with Volvo to increase that proportion and thus, grow our sales. Volvo is very strong, as you know, in propulsion, and these systems are variations of our glass cockpits, which allow display of engine information, as well as the integration of systems on the boat. So we feel like there's a unique value proposition here with Volvo and they then take this system and their propulsion equipment to OEMs, which is a selling opportunity. So the revenue model is really like a B2B type of approach, where Volvo is taking the product and then selling it into their customers. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Got it. And one last question for Kevin. The Auto margin, I think, was better than I was looking for. And it seemed like there was some cost restraint in the quarter. And I'm just wondering, because I haven't seen the breakdown yet, did you pull back on advertising in the quarter? Or is there something else that maybe went on? Kevin S. Rauckman: Well, yes. We did have both SG&A reductions and also, advertising. And advertising, as we said in our formal remarks, had a lot to do with the volume of PND. So that definitely did sell -- sustain our strong double-digit operating margins within Auto/Mobile, yes.

And we have no further questions in the queue. I'll turn the conference back over to Mr. Kevin Rauckman to offer any additional or closing remarks. Kevin S. Rauckman: Well, again, we want to thank everyone for their interest in the company. We really appreciate the interest and also the questions, and we look forward to updating everyone again in the next quarter. Thank you very much.

That does conclude today's conference. Thank you for your participation.