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 - Executive Officer

Yair Reiner - Oppenheimer & Co. Inc., Research Division Andrew Spinola - Wells Fargo Securities, LLC, Research Division Mark Sue - RBC Capital Markets, LLC, Research Division Simona Kiritsov Jankowski - Goldman Sachs Group Inc., Research Division Jonathan Ho - William Blair & Company L.L.C., Research Division Charles L. Anderson - Dougherty & Company LLC, Research Division John F. Bright - Avondale Partners, LLC, Research Division James E. Faucette - Morgan Stanley, Research Division Tavis C. McCourt - Raymond James & Associates, Inc., Research Division Benjamin James Bollin - Cleveland Research Company Brad Erickson - Pacific Crest Securities, Inc., Research Division Jeremy David - Citigroup Inc, Research Division

Good day, and welcome to the Garmin Ltd. Second Quarter 2014 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Kerri Thurston. Please go ahead, ma'am.

Thank you. Good morning, everyone. We'd like to welcome you to Garmin Ltd.'s Second Quarter 2014 Earnings Call. Please note that the earnings press release and the related slides are available on Garmin's IR site at www.garmin.com/stock. An archive of the webcast and the related transcript will also be available there. This earnings call includes projections and other forward-looking statements regarding Garmin Ltd. and its business. 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 filed with the SEC. Presenting on behalf of Garmin Ltd. this morning are Cliff Pemble, President and CEO; and Kevin Rauckman, CFO and Treasurer. Also joining us today is Doug Boessen, who will become CFO tomorrow. Doug has been with us since June 2, allowing for a smooth transition to date. In addition, Kevin is committed to providing ongoing support as needed throughout 2014. Doug and I will be traveling periodically throughout the remainder of the year, providing him the opportunity to meet many of you. At this time, I'll turn the call over Cliff. Clifton A. Pemble: Thanks, Kerri, and good morning, everyone. As announced earlier today, Garmin reported a second consecutive quarter of strong performance, with growth in revenue, operating income and pro forma EPS. Consolidated revenues increased 12% year-over-year, with aviation, fitness, marine and outdoor contributing 55% of total sales and 66% of the operating profit in the quarter. Gross margins improved to 57% from 55% in the prior year due to the amortization of previously deferred revenue and improved segment mix. Operating margins were 28%, an increase from 24% in the prior year. This resulted in operating income growth of 29% on a consolidated basis. These strong results generated $1.02 of pro forma EPS in the quarter, representing an increase of 34% over 2013. Before discussing segment results, I wanted to briefly mention the subsequent event that we announced this morning. Our board has approved an intercompany restructuring transaction that will result in greater access to historical earnings and will allow us to efficiently repatriate future earnings to fund dividends, share repurchases and acquisitions. This restructuring will trigger onetime payments covering taxes on intercompany transactions and withholding taxes as we repatriate a portion of our cash through our Swiss parent company. Kevin will provide more context in his remarks. Looking first at the fitness segment. Revenue grew 79% on a year-over-year basis, with growth driven by new products across multiple fitness categories. We delivered gross and operating margins of 65% and 42%, respectively. This generated operating income growth of 112% in the quarter as operating margins expanded by over 650 basis points due to strong sales. We have a host of new products that are performing well across a variety of categories and price points. This includes vívofit, which has had a strong start in the rapidly growing activity tracking category. In the running category, the Forerunner 15, 220 and 620 are all contributing to strong growth. In the cycling category, the Edge Touring, Edge 1000 and Vector are the primary growth drivers. The diversity of features, form factors and price points that are driving growth affirms our strategy of innovating across a broad portfolio of offerings. With that in mind, we continue to invest aggressively in fitness R&D, with the commitment to explore, develop and deliver superior products and services that our customers desire. In aviation, we posted revenue growth of 11%, driven primarily by new and existing OEM relationships. Gross and operating margins improved to 74% and 29%, respectively, due to positive sales mix and improved operating margin leverage. Operating income grew 38% in the quarter, ahead of revenue growth due to the margin improvement. I'd like to highlight that the business jet shown on this slide is the recently certified Citation X+ with the Garmin G5000 integrated flight deck. Cessna began deliveries of this aircraft in the second quarter, and we are pleased to be the avionics provider for the fastest civilian aircraft available in the market today. As we continue into the back half of 2014, we will focus on a number of additional certifications. These include the Cessna CJ3+ and Alpine Edition CJ2+, which are expected to be certified in 2014. Longer term, we see new revenue contribution from the Cessna Latitude, the Bell 505 and the Bell 525. These are complex projects that necessitate a high level of R&D investment. And finally, I think it's important to note that we continue to face a challenging environment in the small business jet industry. Despite soft market conditions, our innovative products and market share gains have allowed us to deliver ongoing growth. Turning next to marine. Revenue grew 1% in the quarter due to the strong comparable from the second quarter of 2013. While we didn't achieve significant revenue growth, strong gross and operating margin improvement driven by new products allowed us to deliver 23% operating income growth. As announced previously, we completed the acquisition of Fusion Electronics in the third quarter. Fusion broadens our product portfolio, generating additional synergies for our customers in both OEM and aftermarket applications. We continue to face weak market conditions that are slowing the growth trajectory of our products. Long term, we believe there is upside potential for the industry, and we will be well positioned when the market improves. Turning next to outdoor. Revenues declined 1% in the quarter compared to the strong performance in the second quarter of 2013. In addition, gross and operating margins declined in the quarter due to inventory reserves and increased advertising associated with our action cameras. During the quarter, we introduced the Approach S6 for the golf enthusiast. This new golf watch delivers unique metrics and training features, such as swing tempo and swing strength. We expect this product to be well received by the golf community. Finally, in outdoor, I wanted to mention that we are reducing our full year revenue guidance. This is the only segment in which we do not expect to meet or exceed our original forecast given at the beginning of the year. The change has been necessitated by slower-than-expected uptake of our VIRB action cameras. While our initial entry into the action camera market delivered less than we expected, we remain committed to growing our market share through advertising, improved retail presence and ongoing product innovation. In the auto/mobile segment, revenues increased 2% in the quarter as PND volumes declined less than expected and were offset by amortization of previously deferred revenue and growing OEM revenues. In addition, gross and operating margins remained strong at 48% and 21%, respectively, leading to a highly profitable segment in which we continue to build market share. As we've mentioned before, we expect the PND market to continue to decline at a rate of approximately 15% to 20% on a global basis, consistent with the guidance we issued at the beginning of the year. While we're not prepared to change this outlook, we are encouraged by market trends in some geographies. We will continue to manage the category appropriately to maximize long-term profits. Finally, having passed the halfway point for 2014, we're updating our full year guidance. In light of our solid performance in the first half of the year, we are increasing our revenue range to $2.75 billion to $2.85 billion, representing full year revenue growth in the mid to high-single digits. We've raised our margin expectations for both gross and operating margins based on the positive segment mix and leverage of our operating expenses. We also anticipate a reduction in our pro forma tax rate due primarily to a more favorable mix by tax jurisdiction. As a result, we are increasing our pro forma EPS guidance to $2.95 to $3.05, representing full year growth in the mid-teens. So before wrapping up my comments, I want to note that this is Kevin's last conference call as the CFO of Garmin. We've communicated in the past that Doug Boessen will assume CFO role tomorrow, but Kevin will be onboard throughout the remainder of the year to assist with the transition. I want to thank Kevin again for all of the many contributions he has made to Garmin over the years. All of our stakeholders, our customers, employees, our suppliers and shareholders have been positively impacted by Kevin's contributions. So Kevin, we will miss you, but we always -- also wish you well as you move on to the next phase in your journey. So with that, that concludes my remarks. Next, Kevin will walk you through additional details on our financial results. Kevin? Kevin S. Rauckman: Well, thanks, Cliff, and good morning, everyone. I'd like to begin by reviewing our financial results then move to summary comments on the balance sheet and then cash flow statement. We posted revenue of $778 million for the quarter, with pro forma net income of $200 million. Our pro forma EPS was $1.02 per share, excluding the $20 million foreign currency loss. Our revenue represents an increase of 12% year-over-year, as previously highlighted by Cliff. Gross margin was strong at 57%, a 210-basis-point increase from prior year, driven by favorable segment mix and amortization of previously deferred revenues. Our operating margin was 28%, an increase of 370 basis points from the prior year. This is the result of the gross margin favorability of 210 basis points, as well as operating expense favorability of 160 basis points, though total operating expenses increased by $12 million or 6%. Our effective tax rate decreased to 12.8%, leading to pro forma EPS, which is adjusted for the foreign currency loss of $1.02 per share, representing a 34% increase year-over-year. We shipped 3.8 million units during the quarter, up 6% from 3.6 million last year, and our total company average selling price was $203 per unit, up 6% from $192 in Q2 2013, driven primarily by segment mix and reduced revenue deferrals. Overall, our revenue and EPS performance exceeded expectations for the quarter. Next, you can see how our second quarter revenue breaks down by segment. We experienced growth in 4 of our 5 segments, with fitness and aviation leading the way. I'd like to highlight the charts on this page, which illustrate the auto/mobile segment, representing 45% of our total revenue during Q2 2014, down from 50% in the prior year. Fitness grew to 19% of revenues in the current period compared to 12% in the prior year. These charts illustrate our profitability mix by segment, with our non-auto/mobile segments delivering 66% of our operating income in the quarter, up from 63% in the prior year. Looking next at year-over-year gross margin changes by segment. Our auto/mobile gross margin increased to 48% from 45% in the prior year due primarily to amortization of high-margin deferred revenues. In addition, we posted gross margin improvement in marine and aviation. Our marine margin improvement was primarily related to product mix shifting towards new products and increased ASP. Aviation marine -- aviation margin improvement was primarily due to increased software sales. And our fitness margin was stable at 65% in the quarter. Outdoor gross margin declined to 61%, driven primarily by inventory reserves. Our total operating margin improved to 28% due to the increased gross margin and revenue growth outpacing the 6% growth of operating expense, which I'll highlight next. As previously mentioned, Q2 operating expense increased by $12 million or 6% on a year-over-year basis in Q2, while decreasing 160 basis points as a percentage of sales. R&D increased $2 million year-over-year while declining 120 basis points to 12.7% of sales. We continue to invest in innovation and grow our engineering workforce with increasing resources focused on compelling new aviation, fitness and outdoor products. Our advertising spend increased $5 million over the year-ago quarter and represented 4.5% of sales, a 30-basis-point increase. The additional spending was focused in fitness and outdoor to support new product categories. And we will continue to manage operating expenses by segment to match the market opportunities presented by our diverse products. SG&A was up $4 million compared to the year-ago quarter, decreasing 80 basis points as a percentage of sales to 11.9%. We continue to manage these costs to align with the changing dynamics of our business. Next, moving to balance sheet and cash flow. We ended the quarter with cash and marketable securities of over $2.8 billion. Accounts receivable increased year-over-year and sequentially to $497 million due to our double-digit revenue growth. Our inventory balance decreased to $430 million on a sequential basis as we reduced inventory slightly exiting the seasonally strong second quarter, yet we maintain inventory levels large enough to support key new product categories. We continue to generate strong free cash flow across our business as cash from operations was $164 million during Q2 and CapEx was $21 million. Our free cash flow generation was $143 million in the quarter. We also repurchased $129 million of company stock during Q2 and still have $79 million authorized to repurchase through the remainder of 2014. Our effective tax rate for Q2 2014 was 12.8% compared to 16.5% in Q2 of 2013. The decreased rate was primarily driven by favorable income mix by taxing jurisdiction, partially offset by reduced by Taiwan tax incentives and the expired R&D credit. We now expect our full year rate to be 15.2%. Regarding restructuring, Cliff briefly touched on our intention to move certain U.S. subsidiaries out from underneath our Taiwan subsidiary. This restructuring will occur in the third quarter, resulting in cash tax payments of approximately $300 million over the next 12 months. We're performing this restructuring to allow for 2 primary benefits. First, it will allow us to repatriate some of our existing cash that's been permanently reinvested. Secondly, it will allow us to repatriate future U.S. earnings to our Swiss parent at a rate that does not negatively affect our effective tax rate. And finally, as Cliff mentioned, we're updating our full year 2014 guidance, given current trends across our segments. Cliff reviewed the total company guidance. So here, we provide additional detail on revenue by segment. At a high level, we have increased our expectations for auto/mobile and fitness, while outdoor expectations have been reduced and marine and aviation are unchanged. The improvement in auto/mobile is a result of better-than-expected industry volumes in the first half, as well as improved auto OEM revenues. Business revenue guidance is being raised due to the continued strength we are seeing across our product portfolio, but particularly with the vívofit activity tracker. Offsetting these positive trends, we've reduced our outdoor forecast due primarily to VIRB underperforming our expectations to date. This concludes our formal remarks. We now will move to a period of Q&A.

[Operator Instructions] And we'll take our first question from Yair Reiner with Oppenheimer. Yair Reiner - Oppenheimer & Co. Inc., Research Division: First question, on the -- Kevin, we'll miss you. In terms of the questions, first, on the restructuring and the repatriation, you have a lot of cash that's sitting on the balance sheet where you can get to it. It's just been piling up. What is the motivation for restructuring now and trying to get, I guess, the incremental $750 million back to where you can use it? Kevin S. Rauckman: Yes. Thanks, Yair, for the positive comments. I think the key point on the restructuring in terms of now is we've accumulated a sizable amount of cash in the U.S. that just cannot be efficiently repatriated. So we've commented on the fact that this transaction really allows us to take care of that problem in the future, and it gives us the flexibility to have additional cash, as we said, for dividends, buybacks and acquisitions. And the other point here, as I said, if we didn't do something in terms of a transaction, this problem would continue to grow. So as our cash accumulates, so does the cost of moving or repatriating that cash up to our parent company. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Does this, in any way, signal a willingness on your part to return cash more expeditiously to investors? Kevin S. Rauckman: I think it really just gives us, again, flexibility. We're not prepared to talk about any other increases at this time. But as you've heard from us in the past, we have consistently grown the dividend. We've been more aggressive recently on the buyback, and this just gives us, again, added flexibility. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Okay. On the automotive piece of the business, it looks like maybe PND volumes were down mid-single digits in the quarter compared to the 15% or 20% that you've guided for the year. Why do you think the quarter shook out differently? Was there channel inventory building? Did you gain share? Have you seen anything in the end markets that suggest that maybe the market is stabilizing faster than you expected? Clifton A. Pemble: Yair, this is Cliff. The market itself has performed pretty much as we had predicted, so there's really no change in dynamics there. We have gained some market share, particularly in North America, which has helped offset some of that. But our volumes are down more than what the revenue implies. The performance beat in the overall category is due to growth in OEM revenues, which were healthy, as well as the effective deferred revenue on the margins and the revenue.

We'll take our next question from Andrew Spinola with Wells Fargo. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Kevin, just a couple more questions on the tax restructuring. First, I know you said that this year it's going to be 15.2%. But does this, in any way, impact your tax rate on the operations on a go-forward basis in '16 and beyond? Kevin S. Rauckman: No. We're expecting that, go forward, we would be neutral, if not better, on the overall tax rate as we go forward both into 2015 and 2016. So that's another benefit. To be able to do this restructuring right now at this point is to allow us to have some benefit in the future. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: And just to clarify, is that neutral to better than the 15.2% or on the 17%, I think, previously? Kevin S. Rauckman: Yes. I think we haven't given or don't plan to give guidance in the future, at this point, but it should be on the lower number. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Got it. And then, does this, in any way, change the restrictions around your ability to repurchase shares, i.e. can you possibly bring the ownership stake of the founders above that 45% that you've typically been comfortable staying below? Kevin S. Rauckman: Yes. It really doesn't change that because that's a consistent law that's there in terms of the -- what you call the CFC rules, so it's 10% U.S. shareholders. So that still is in place. But I think, again, we've been more aggressive in recent quarters to go ahead and buy back just due to the fact that we have some overhead there to be able to give us some flexibility to buyback. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Got it. And just last question, pretty specific. On the inventory reserve for the action camera, do you have an amount on that and/or what the impact was on the operating margin in outdoor for the quarter? Kevin S. Rauckman: We would just say our overall gross margins in outdoor were a little bit below last year, and the primary reason is because of the inventory reserves. So it would have been more in line with what we've seen in the past on the reserves that we put in place.

[Operator Instructions] We'll go next to Mark Sue with RBC Capital Markets. Mark Sue - RBC Capital Markets, LLC, Research Division: Maybe check on -- firstly, on fitness. If you can give us a sense of the sustainability of gross margins in this segment, considering that the competition seems to be intensifying as we look at what is becoming a very crowded segment for the back half. And then in outdoor, we understand that VIRB is not doing well, but it wasn't a meaningful part of revenue. So is there anything else weighing on the segment on a year-over-year basis? Kevin S. Rauckman: Well, I'll first address the margin sustainability on the fitness side. We've been very pleased with the fact that we're in the mid-60s on gross margin on our fitness business. And if you look at a typical seasonality, not just on fitness, but across our business, we're expecting to have some decline in gross margin as we go through the holiday selling season. So we do special promotions and pricing activity with our key retail customers, and we're expecting to do that with the fitness business as we go through Q4. Mark Sue - RBC Capital Markets, LLC, Research Division: Okay. And the outdoor segment, maybe just on what's -- what else can be done there. And I think, if I look at the action camera market, will advertising be enough to drive growth there? Is the product competitive enough? Do you have a sense of maybe the price elasticity of the demand for action cameras? And are there other things that you can do to stimulate demand? Clifton A. Pemble: Yes. Mark, in terms of outdoor, there's a lot of moving pieces there. Some of the traditional segments of the market are mature and have been in some slight decline in recent years. So there's some pressure there. We also had a very strong comparable last year, particularly in the golf area, as there was a lot of promotional activity around the S1 watch. So we have been tracking softer in the golf category because of the heavy promotions from last year. In terms of the action camera market, we've noted before and everybody realizes that it's a market with an entrenched competitor, so definitely, we view this as a marathon activity as opposed to a sprint. We believe it will take some time, focusing on both product innovation and also increasing our level of advertising promotions and in-store exposures so that we can build share over time. Mark Sue - RBC Capital Markets, LLC, Research Division: Okay, that's helpful. Kevin, in capital returns, you already have 100% of your free cash flow committed to dividends and share repurchases. Does the restructuring give you some thought of maybe doing a big ASR? Maybe, Kevin, that will be a great going-away present for investors. Kevin S. Rauckman: Mark, you're funny. That's good. I think, again, we would not commit to anything specific. In terms of a dividend, the board takes an action on that once a year, so you would expect to hear from us as we close out 2014 and get into 2015 in terms of what our future dividend is. I did say that we've been more aggressive on the buyback, and I think we could continue to give back to shareholders through that means. And then, finally, I mean, we've talked about acquisitions, but this does free up some additional cash at the parent company that will allow us to be a little bit more open to buying back companies -- or excuse me, buying companies as we go forward.

And we'll go next to Simona Jankowski with Goldman Sachs. Simona Kiritsov Jankowski - Goldman Sachs Group Inc., Research Division: I just wanted to first clarify that the inventory write-down you took in outdoor was just specific to the VIRB. And then, another question on that product was, if you can update us on where you are in building out the channel there. I think it initially started with more of a focus on big-box retailers in the online channel, but was curious how far you are at this point in terms of expanding into outlets like ski shops or surf shops, where you haven't had much of a presence historically. Kevin S. Rauckman: Well, first of all, on the inventory reserve, yes, it was exclusively for the VIRB, just given our reduced forecast for the year. And then, I'll let Cliff answer on the outdoor market. Clifton A. Pemble: We're still continuing to build out the retail channel in VIRB and specifically focusing on increasing our presence at the retail level, both at big-box stores, as well as specialty stores where we're very strong. Simona Kiritsov Jankowski - Goldman Sachs Group Inc., Research Division: And then a question on the fitness segment. Can you comment on how much of the strength in the quarter for vívofit specifically was due to channel fill versus sell-through? And any visibility you have into channel inventory levels would be helpful as well. Clifton A. Pemble: There was still some sell-in taking place in early second quarter. But as we close the quarter, we feel very comfortable with where the inventory in the channel sits, and we feel like the reorders are where we expected them to be at this time. We -- like any kind of consumer category, we expect that the back half of the year is where a lot of the volume will be driven, so we're preparing for that. Kevin S. Rauckman: I also wanted just to quickly point out, in the fitness market, while the vívofit has done well both in sell-in and sell-through, our other fitness categories, both running and cycling, delivered part of that growth as well. So it wasn't just a one-product strength. We've seen strength pretty much across the entire fitness segment. Simona Kiritsov Jankowski - Goldman Sachs Group Inc., Research Division: That's very helpful. And then just one last question on the PND segment. I wanted to see if you can comment just more broadly, if you have a view on why the market as a whole has been doing a little better than expected initially. And also, just on the modeling side, what was the contribution of deferred to your EPS in the quarter? Clifton A. Pemble: I think, Simona, the market really, we view, is performing largely in line with what we had predicted. We're still going through a period of secular declines. Some geographies are doing better than others, and we're performing better in some cases because of market share gains. So we really don't view it as a significant trend change. In terms of effective -- of EPS, we believe there's about $0.07 on a year-over-year basis.

We'll go next to Jonathan Ho with William Blair. Jonathan Ho - William Blair & Company L.L.C., Research Division: Just as a follow-up to that question around the PND side. You've said that some geographies are doing better than others. I mean, is this a reference to the European declines slowing? Or in terms of this quarter, you're seeing some improvement in some geographies relative to others? Clifton A. Pemble: I think, in Europe, it's true that some countries have been performing better than others on average. And we really don't see a significant change in that trend, but there are still some areas, particularly areas within Europe as well as North America, where the declines are still more steep than the average. Jonathan Ho - William Blair & Company L.L.C., Research Division: Got it. And then, in terms of the marine business, how should we be thinking about sort of performance in the back half of the year? I know it's typically a little bit more of a first half of a -- typical product seasonality. Can you maybe give us a sense of what your thoughts are there in terms of the growth drivers? Clifton A. Pemble: I think our new products will still be the primary growth driver into the back half of the year. There will be some promotional activities going on in the back half towards Christmas. And also, OEM customers tend to start ramping up their product lines midyear, leading up to the end of the year. Kevin S. Rauckman: And as Cliff and I both talked about, Fusion is a part of our marine growth in the back half of the year, too, so the acquisition that just closed at the end of June. And we expect to get some revenues as we conclude the year this year. Jonathan Ho - William Blair & Company L.L.C., Research Division: Got it. And just the last one for me is -- you guys talked about sort of the intensifying competition in fitness. How much have you sort of factored that into guidance? I mean, are you operating under the assumption that things get more competitive, about the same level as what they are today? I just wanted to get a sense of how you're thinking about that relative to guidance. Clifton A. Pemble: Well, we absolutely feel like there'll be increased competition into the back half of the year. The activity tracking market in particular is very competitive. We expect existing competitors to introduce new products, and expect new competitors to come on the market. So that is factored into our overall outlook.

We'll go next to Charlie Anderson with Dougherty & Company. Charles L. Anderson - Dougherty & Company LLC, Research Division: My best wishes, Kevin, and welcome, Doug. So I wanted to start with geographic mix. So I noticed that you had a lot of growth in APAC and Europe in the quarter, and I think that influenced the tax rate. Can you talk maybe a little bit about how you're building distribution for some of these new categories? And is that influencing the growth to a great degree that you're entering some geographies where you weren't before with products where you weren't there before? Clifton A. Pemble: Well, I think it's mostly around just the overall market performance in those areas. Keep in mind that APAC is where a significant amount of our OEM revenues are recognized, so as a result, some of that growth is due to that. And we are doing better in places like China as well, which is driving some growth. But Europe is just generally doing better than what it's done in the past few years. And particularly in our outdoor and fitness areas, Europe has delivered good growth for us. Charles L. Anderson - Dougherty & Company LLC, Research Division: And the second question for me is on vívofit. I wonder if you can maybe give us a flavor of where you are today in terms of distribution, maybe in sort of door count. You don't have to give me a number, but just to compare where you are today versus where you expect to be by the end of the year. Clifton A. Pemble: We feel like we're very well positioned, where we had hoped to be at the beginning of the year. We feel like we have almost every major big-box and specialty retailer committed to the product line in the category. So at this point, I feel like we've accomplished what we set out to do.

We'll go next to John Bright with Avondale Partners. John F. Bright - Avondale Partners, LLC, Research Division: Cliff, let me follow up on that last question regarding the vívofit. If you felt like you're -- you've accomplished what you wanted to do, we've changed guidance. And I think, largely related to the VIRB -- if I said vívofit, I apologize saying it, largely related to VIRB. Maybe you can talk about -- I don't think you'll probably talk about your own competitive shortcomings. Maybe you can talk about what your competitor is doing well, albeit very early in this market entry. Clifton A. Pemble: Yes. I think the last question was about vívofit, so I think my comments were around what we set out to do in vívofit we have accomplished. I think we've been very transparent about the fact that we have not met our expectations on VIRB. And I think the reasons for that are well known. We believe we have a superior product with great technical features, very competitive, and customers that are picking up the product really love and appreciate what it does. But it is a market that has a very strongly entrenched competitor, and in any situation like that, it is challenging to capture market share. So we know that's the position we're in, and that's what we've been saying. John F. Bright - Avondale Partners, LLC, Research Division: My mistake, pardon me. The OEM contribution in the PND segment this quarter, how meaningful? Kevin S. Rauckman: Well, I think, we never give specific numbers on the subsegments, but it was double-digit growth. And that was a nice increase for us during Q2. John F. Bright - Avondale Partners, LLC, Research Division: Okay. And I know this question was somewhat asked a second ago, but I want to try it a different way, Kevin. Is there any -- I guess, people are trying to get at why now on the restructuring plan? Kevin S. Rauckman: Well, let me try to reemphasize the fact that we needed to be able to move cash to the parent company, and the cost of doing a transaction, whether it's today or a year in the future or 2 years in the future, was going to continue to grow. And this, again, gives us the ability to kind of correct the one inefficiency in our structure that we've had actually since we created the company in 1989. So this has existed from the very beginning. We've always been a foreign-owned company with global businesses around the world. And this just takes, again, the one inefficiency out of the equation and gives us the ability to move forward much more effectively on repatriating earnings.

We'll go next to James Faucette with Morgan Stanley. James E. Faucette - Morgan Stanley, Research Division: Before I forget, thanks a lot for all your work, Kevin. Good luck. Just a quick question on auto and PNDs. Cliff, you talked about that PNDs had performed a bit better or basically in line, at least from a unit perspective, with your outlook, but autos have been better. Can you give a little color what's going on in the in-dash market relative to your expectations? Is the mix better? Or are you seeing higher attach rates? Just looking for a little color on kind of what's helping things go better in that segment than expected. Clifton A. Pemble: Well, we're seeing growth across a number of product categories that we offer in OEMs. We have a very strong relationship with BMW on the motorcycle side. That has contributed to growth. We have a relationship with VW that has been driving growth in that particular car segment. And we're also seeing increases from both our relationships with Chrysler, as well as Suzuki, and then, finally, new deliveries with Daimler. James E. Faucette - Morgan Stanley, Research Division: And so relative to your expectations and planning though, is -- are you seeing better volumes from any of the -- from those or -- I mean, in terms of absolute numbers? Or is it the attach rate within those that's going better? Clifton A. Pemble: Well, we've seen better performance in some of those customer accounts than what we expected, although we would expect that, that will probably level out towards the back half of the year. So some of our growth projections we've done internally in the -- in this particular category were front-half loaded. James E. Faucette - Morgan Stanley, Research Division: Okay. And then, just a couple of housekeeping questions. First, on the lower tax rate that you're anticipating for the full year. I guess it's been implied, but I just want to make sure I'm understanding correctly. That -- is this primarily the result of a greater percentage of revenue and earnings coming from overseas, firstly? And secondly, do you anticipate that, that kind of geographic mix will persist? Kevin S. Rauckman: Yes. Actually, it's a couple of things. It is the fact that our European and Asia Pacific businesses did well. It's also the specific segments that we see growth in. So I think you know, James, that our aviation business is actually owned in the U.S. company, and all of our consumer products are owned, from a technology perspective, outside the U.S. And so when we have businesses like fitness do very well, most of those profits come out a little bit lower tax rate than our average tax rate on the company. And that's what drives down the rate, it's when we have strong performance in those segments. James E. Faucette - Morgan Stanley, Research Division: Great. That's really helpful, Kevin. And kind of last question, the tax payment of $300 million roughly, can you give us an idea of expected timing of that payment, first? And second, is that -- are you treating that tax payment as kind of a onetime event? And hence, is that excluded from your EPS guidance and outlook? Kevin S. Rauckman: Yes, absolutely. We'll be -- we'll give more detail in our third quarter because we are expecting this transaction to be posted to our third quarter earnings. It is onetime in nature, and we will pro forma that onetime tax payment out, as we go through the next year. So part of the tax will be paid in -- I'll just confirm, part of the tax will be paid in 2014, but a large piece will also be paid in 2015 as well. James E. Faucette - Morgan Stanley, Research Division: Okay. And I know I promised that's the last question, but this is really my last, last question. Is the -- you mentioned that you have $79 million in buyback authorization remaining. Can you remind us, can that be -- can a new authorization amount be introduced or that increased, really, any time? Or does that need to happen in a board meeting kind of once a year, similar to dividends? Kevin S. Rauckman: So we've always -- in the last several years, we always had an authorized buyback plan in place. So if we were to burn through the $79 million, I think you would expect that our board would approve another plan, but it will always have that flexibility to buy back in market -- as market conditions allow us to. James E. Faucette - Morgan Stanley, Research Division: But in terms of timing, you can do that kind of whenever you see fit? Kevin S. Rauckman: Yes. We don't have to -- there's no timing constraint there.

We'll take our next question from Tavis McCourt with Raymond James. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: Kevin, I wish you best of luck. Two questions. First, I think you may have answered this a bit, but in relation to the OEM business, so a lot of the growth this year is front-end loaded. But should we think about that portion of auto/mobile as it leads to the point now where it's kind of consistent year-over-year growth, do you have that much visibility, and just a little bit lumpy quarter-to-quarter? Or could we still see years that are flat to down based on wins or losses? And then within that auto/mobile segment, can you at least comment on what you think the global PND sell-through trend was in Q2, roughly? Is that still in the down 15%, 20%? Or do you think that has improved as well? And then, final question. In the press release, Cliff, you mentioned, in the second half of the year, increased advertising to support new product categories. Just wanted to confirm that -- whether or not that was new product categories that already exist but are new in the last year or if we should expect new product categories that have not been launched yet for launch later this year? Clifton A. Pemble: Yes. So we'll try to tackle all the questions there. In terms of the OEM outlook, we're not prepared to give guidance in that particular subsegment. But I would say that it is a smaller percentage of revenues in the overall auto/mobile category. And consequently, even though it can perform well, it's probably not going to move the needle without some help from other areas, which is what we've talked about with the deferred revenue piece. The deferred revenue piece, we've kind of reached a point where it has had a maximum contribution there, and going forward, that will change because of the way that we've deferred revenue over the past 3 to 5 years. So the segment itself could again turn negative. We would probably expect that as the PND volumes continue to decline. In terms of the global trends, again, I think our outlook there is that the market would be down in the 17% to 20% range, and that's consistent with the underlying trends we see in our business when you strip out the effects of the added market share gains that we've had. And finally, in terms of increased advertising, we're planning to promote heavily our already announced products in the market this coming fall, so that is primarily where we're focusing our energy. In terms of new things, we always have new things that we're doing. We're not prepared to talk about those right now, but we do have a pipeline of innovation that we're cultivating and will result in new products as well.

We'll go next to Ben Bollin with Cleveland Research. Benjamin James Bollin - Cleveland Research Company: Kevin, good luck. Couple of questions. The first, could you talk to the TAM or your thoughts on market sizes when you look at wellness and action camera? And any thoughts on the relative growth rates of those industries? And then, the second, any updates on timing or availability of vívokí and whether or not that is reflected in your updated fitness targets? Clifton A. Pemble: Yes. In terms of total addressable market on activity trackers, last year, we estimated that market to be about a 5 million unit market. It is in a stage of hyper-growth, so we would expect that to roughly double this coming year. In terms of the VIRB action camera, last year, a very similar story in terms of numbers, about 5 million units. And the growth last year, I believe was probably close to double. We expect that market to moderate somewhat this coming year due to the various maturity levels of the market in the channel and the competitors that are there. But it's still very healthy market. In terms of vívokí, one of your questions, that product is scheduled to be released in the later half of this year. That product, though, is targeted more towards B2B opportunities. So at this point, it doesn't really factor in, in terms of a big needle mover. Most of our outlook in fitness is driven by all of the new products and particularly vívofit, which is doing well.

[Operator Instructions] We'll go next to Brad Erickson with Pacific Crest Securities. Brad Erickson - Pacific Crest Securities, Inc., Research Division: Just a couple of follow-ups. First, given the nice growth in the OEM revenues during the first half, can you give us an update on that part of the business' profitability maybe relative to the segment overall and how we should be thinking about that going forward? Kevin S. Rauckman: Well, actually, we did see -- because of a nice pickup in auto OEM revenue, we did see that we've made money in the quarter. If you look past -- back in the past several quarters, we've been investing heavily in the R&D side, and sales were not at a level where we were making money. But we did make operating profits -- a small amount of operating profits in Q2, so that was a nice trend change in our business. Brad Erickson - Pacific Crest Securities, Inc., Research Division: And any comment on kind of how we should be thinking about profitability in that going forward? Kevin S. Rauckman: Well, again, we won't give details from underneath the auto/mobile segment in general. But I think we're still on a period where we're exploring and trying to win new business there, so I wouldn't expect a significant change. We've said that, at scale, if we could -- if we can get to a much higher scale, we would expect that, that operating margin would be close to 10%. We're nowhere near that, and that would be more of a longer-term goal than a short-term goal. Brad Erickson - Pacific Crest Securities, Inc., Research Division: Got it. That's helpful. And then, I think you've talked in the past something around -- and I apologize if I'm off on this number, but 100 new products or somewhere along those lines in 2014. Given you guys clearly have the drive to continue to innovate and come out with new products here, have you accelerated the number of new product launches you expect or changed those plans at all since the last quarter? Clifton A. Pemble: I think in a simple word, yes, we've accelerated, and we are driving growth through new product introductions.

We'll go next to Jeremy David with Citi. Jeremy David - Citigroup Inc, Research Division: I have a couple of fitness-related questions. First off, great growth this quarter. Fitness revenue was up $67 million year-over-year. Can you guys give us a feel for the contribution of different the product lines here? Kind of maybe you could rank order vívofit versus the cycling products like the Edge 1000 or the Forerunner watches? Clifton A. Pemble: Yes. I think, as we mentioned earlier in our comments, that the growth in fitness was broadly distributed across several product categories. We don't split out details on each product category. But we were pleased with the growth that we saw in vívofit, obviously, but also, in the cycling area, as well as the running area, we saw significant growth. Jeremy David - Citigroup Inc, Research Division: Okay, great. Great to see that's broad based. On vívofit, I think you said earlier this year that you have aspirations to get to high-single-digit market share this year. Have your aspirations changed materially at this point? Clifton A. Pemble: Aspirations -- I'm sorry, we probably missed -- aspirations for what kind of market share? Jeremy David - Citigroup Inc, Research Division: For a high-single-digit market share? Clifton A. Pemble: Yes. I think in terms of that, we feel like we've already achieved that. We probably estimate that we have about 10% at this early stage, which, again, we feel like it is a strong start to that particular category. Jeremy David - Citigroup Inc, Research Division: Great. And finally, 4Q -- you had a great fitness revenue in Q2. Should we expect for Q3 typical seasonality in fitness or maybe a steeper decline than usual because of the channel fill you saw on Q2 on all these new products you're shipping? Clifton A. Pemble: Well, I think there's a lot of dynamics there because of evolving new products. So we probably can't offer details in terms of what we expect on the overall trends other than what we provided, which is, for the year, we feel like the category will be up around 50%.

And we'll take a follow-up question from Yair Reiner with Oppenheimer. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Just -- I don't want to beat the restructuring question again, but just can you give us a sense of how much of your free cash flow previously was tied up? And what percentage will be more difficult to repatriate going forward? So kind of what's the delta between the earnings that you have access to now versus before? Kevin S. Rauckman: Well, I think, without giving all the details you're asking, I think, if you look at our U.S. earnings, we had growing U.S. earnings because of the strength of all segments but also, in particular, our aviation business was continuing to grow double digits. And so it was a sizable amount of earnings as opposed to our total free cash flow numbers of approximately $600 million that were -- we would never -- we were never going to repatriate until we took this action of restructuring. So that's really what it [indiscernible] is to be able to take a significant part of our cash and allows us to move it to the parent to give us opportunity to use it. Yair Reiner - Oppenheimer & Co. Inc., Research Division: I guess my question though was about the go forward. How much of -- maybe I'll ask it a little bit differently. How much of your earnings going forward will still wind up being in jurisdictions where repatriation is going to be difficult? Kevin S. Rauckman: I think I didn't really answer -- understand your question. But it really frees up pretty much everything in the future as we go forward because we have no limitations of a very high tax rate, withholding tax rate. And we can move that up very tax efficiently in the future. So again, it would solve the one issue that we've had in the past and not really tie up anything with trapped cash, so to speak.

With no additional questions, I'd like to turn the call back to management for any additional or closing comments.

Thanks, everyone, for joining us today. And we will look forward to follow-up calls with many of you and speaking to you and seeing you at conferences over the course of the next quarter. Thank you.

And that does conclude this call. Again, thank you for your participation.