Richard Edwards – Director of Investor Relations
Tom Tiller – Chief Executive Officer
Mike Malone - Chief Financial Officer
Bennett Morgan - President and Chief Operating Officer
Greg Badishkanian - Citigroup
Ed Aaron – RBC Capital Markets
Bob Evans - Craig-Hallum Capital
Tim Condor – Wachovia
Michael Millman – Soleil Securities
Polaris (PII) Business Update Call January 16, 2008 11:00 AM ET
At this time I would like to welcome everyone to the Polaris management discussion. (Operator Instructions) Mr. Edwards, you may begin.
Thank you, and good morning everyone and thank you for joining us this morning. The purpose of this call is to give Tom an opportunity to comment further on this morning’s announcement that he will be stepping down as CEO of Polaris by the end of the year.
Tom has about 30 minutes of prepared comments and then we will take any additional questions you may have.
We will not be discussing 2007 year end results today, other than to reaffirm our previous guidance for the full year 2007. All the specifics for 2007, as well as our 2008 guidance, will be communicated on a conference call we have schedule for January 29 at 9:00 Central time. We ask that you hold any specific questions about the 2007 results or 2008 outlook for January 29.
I will now turn it over to Tom.
Thank you, Richard and good morning, everyone. Thank you for being on the call. We also have here on the call this morning Mike Malone, Chief Financial Officer and Bennett Morgan, our President and Chief Operating Officer. The rest of us are in Minnesota, Bennett is out at a sales meeting in Arizona.
After careful consideration, a lot of thought and extensive discussions with the board of directors, I’ve decided that 2008 will be my final year with Polaris. As many of you are aware, I have an employment contract with the company and as a mechanical matter, I’ve decided not to extend my contract, which runs through December 31, 2008.
I would imagine that for many of you, this news catches you by surprise; after all, I am a young guy in good health and I love running this company. In many ways, having this job is the dream of a lifetime for me and the decision to leave Polaris was one of the most difficult decisions of my professional career.
So why am I leaving? In short, it’s because I think now is the right time for me, for my family and for Polaris. To really completely understand that answer though, to such a simple question, probably will require that you understand a little bit more about me as a person and my thinking and Polaris as a company and our competitive advantage. I’ll try to share some of that thinking in a minute.
But before I get into all of that, you should first know that Polaris is in good shape. There is no unannounced crisis or ticking time bomb here. We are in a tough market environment, as most of you know, but Polaris is performing well and innovation is at an all-time high.
You may have noted in this morning’s press release, we reaffirmed our guidance calling for a 12% to 14% increase in earnings per share in 2007 and we expect 2008 to be another good year. We will talk more, as Richard said, about the 2007 results and 2008 guidance in a couple of weeks. Today we are talking about this transition.
There was not one triggering event that resulted in my decision. I didn’t just wake up one day and decide to walk away from one of the greatest jobs in the world. Rather, it was a result of a careful examination of the beliefs that I hold about successfully leading any company -- and in particular this great company – a lot of soul searching and even some waffling. To be truthful, I agonized over this decision.
But it goes back to the beginning. When I first talked to my predecessor, Paul Wendel, about coming to lead Polaris, the idea we shared was that it would be for a considerable period of time; not for a year or two, but not for the rest of my life, either. Neither the board nor I ever expected for me to retire from Polaris.
I am a naturally curious person and I enjoy the fresh challenges and changes that life brings along. If you go back to 1998, after 15 years and 12 moves with GE, my wife Michelle and I had had plenty of change. I had seen the whole world, worked in three different industries and implemented enough Jack Welch initiatives to sink a battleship.
At the time, professionally, I was looking for a great place to work and the chance to lead a company. From a family perspective, Michelle and I were looking for a place to set down roots and raise our young family. We found the perfect combination here at Polaris and in Minnesota. It was a great decision for us.
But if you look at my professional life, I have enjoyed a fresh challenge about every seven years or so and I knew from the outset that someday a change would happen here too. From a personal perspective our children, two of the three boys that we have, are out of the house and the third is now a sophomore in high school so we are getting a little further down the road there. The chance for a fresh opportunity and the chance for some change, that’s really why the decision makes sense from a personal point of view.
From a company point of view, I believe that consistent leadership is very, very important. If a company is changing their CEO every couple of years, probably there is a problem, especially in a company like ours, it is difficult to establish a clear strategy and then take the necessary steps to execute it successfully in just one or two years.
On the other hand, in today’s world with the all pressures placed on public companies and their CEOs I think it is difficult to be effective in the job for 20 or 25 years; at least it would be for me. Moreover, in the specific case of Polaris, we are an innovation driven culture. Just look at 2007 with the Razor and the Vision and the 800 RMK snowmobile and all the new engines, the pace of change here is accelerated. That innovation develops from a certain type of environment; one that is stable, but one that is fresh -- if that makes any sense at all -- and that environment comes from the people of Polaris.
The depth and talent of both the management group and the broader Polaris team are both deep and strong. Our success comes not from one person but from a team of 3,500 employees, more then 1,700 dealers, some great suppliers and includes excellent support from our communities and our shareholders.
Our senior leadership team is comprised of young, talented, aggressive and experienced people who love this company and love this industry. They know how to deliver and they have demonstrated that ability for many, many years. Every single member of the Polaris team is a shareholder. They have a vested interest in seeing this company win for the next 50 years, just like we have for the last 50 years. It is a proven, winning formula.
The board and I have been discussing the possibility of me leaving for some time. Like any good company, we have had a succession plan in place for many, many years. In the early years of my tenure, I did it primarily in the event that I died unexpectedly; but in recent years, we have begun preparing for my eventual exit, not knowing the specific timeframe of the decision.
I was clear with the board that I would leave Polaris at some point, and they were clear with me that they wanted a great succession plan in place before I left. The board and I, helped by our Vice President of Human Resources John Corness, have worked hard to develop and deliver that succession plan.
Several years ago, we decided that as a matter of good governance we would look both inside and outside the company for a successor, regardless of who we had inside at that time. We hoped to go through this process only once about every decade or so, so it’s very, very important that we do it right. We ultimately must find the very best candidate on Planet Earth; that means looking under every rock.
I feel good about where we are in the succession process. More than two-and-a-half years ago, based on his outstanding performance, we put Bennett Morgan in the President and Chief Operating Officer role, which gave Bennett the ability to demonstrate his leadership and performance in a big job. Bennett has done an excellent job and with more than 20 years with the company, he may very well be the best person on Planet Earth to lead Polaris; but we won’t know that for sure until we evaluate the best external candidates through a comprehensive search.
Many of you have conducted searches, and you know they can take some time. This is a great job and I expect we will identify a number of excellent candidates, but it will take some time to evaluate them and ultimately to choose a successor. It is important for you to know that we will take whatever time is necessary to find that person. We are not in a hurry to make a rush decision.
In the meantime, I am not going anywhere. I do not have any outside job offers, nor am I going to entertain any. Until we have a successor in place, I will be 100% focused on doing two things: continuing to run this company to the very best of my ability and helping the board define the best possible successor. I would not anticipate any major changes to the way we’ve run the company for the past ten years. We will be aggressive and push like hell and probably make a mistake or two, but we will stay after it. After I step down -- and only after I step down -- Michelle and I will develop our future plans.
While I am not, as they say, burned out in this job -- I’m fresh, I’m energized, I’m happy doing this job -- it is fair to say that I am looking forward to life beyond that of a public company CEO. In terms of the timing of the transition, we expect the successor to be named later this calendar year, but I have told the board that I am willing in terms of the timing of my departure to do whatever is helpful during the transition.
If we were to come to a decision sooner and it made sense for me to leave the CEO position sooner than the end of the year, I would do so. On the other hand, if the search ran long for whatever reason, I am happy to lead the company for as long as it takes to complete the search. If that takes three months, six months well into next year, whatever, it doesn’t matter.
There are at least two personal reasons for this approach. First, as most of you know I’m a substantial shareholder in the company and I have a vested financial incentive for the continuing success of Polaris well beyond my tenure.
Secondly, and perhaps even more importantly, I simply love this company and our people and I’m very grateful to have been given the chance to lead it. Polaris is like one of my kids. Taking this approach is simply the right thing to do. When Hal left, he left me a great company and I’ve tried hard to make it better so I think its only right that I do the same thing for the next person.
In terms of being on the board of directors and remaining involved with the company, I’ll give you our current thinking, but some if this is dependent on the thoughts of the next CEO. Naturally I’ll stay on the board while I am the CEO and our current thinking is that I’ll probably stay for a couple more quarters beyond that to help with the transition. What I’ve told the board of directors is that like with the timing of my departure as CEO, I want to do what’s best for the company. If the board wants me to leave the board after the transition, that’s fine with me. That approach is what most governance advisors recommend, to have the old CEO go away quickly and completely to allow the new CEO room to operate.
On the other hand, ten years ago Hal Wendell stayed on our board for a number of years and even today remains one of my best and most trusted advisors. That worked well for us, so it can work the other way too. I will make the same offer to my successor to be involved as little or as much as he or she wants. We will simply wait to see what will work best in this particular case once we have made a succession decision.
Finally, while all this can be a little bit daunting, I am optimistic that it will, in the end, work out just fine. I am optimistic that this can be a positive change for our company. Why? Well after all, we have done this successfully before. Compared to ten years ago when a snot-nosed 37-year-old kid showed up from GE knowing nothing about our industry we have a much, much stronger management team, we have a stronger board, a clearer direction and we are a bigger and stronger company. We have a solid plan and a succession process to ensure an orderly transition.
It is now up to us to execute that plan and we will give it our very best shot. With that I would like to take any questions that you may have related to today’s announcement.
Your first question comes from Greg Badishkanian - Citigroup.
Greg Badishkanian – Citigroup
Congratulations and best to you Tom on your next venture. You are going to be leaving over the next year. In terms of your shares, when do you think you will sell those shares? Is that going to be some time afterwards or a continual process throughout?
Thank you, Greg, I appreciate the kind words. In terms of my shares, as I said in my prepared remarks, I am a substantial shareholder and expect to remain so. We do have a 10b51 plan that is out there and it's been out there for a number of months and remains out there
I do not anticipate during my tenure to exercise any additional options or sell any additional shares beyond what's in that 10b51 plan and expect to remain substantial shareholder for the foreseeable future, well into the next person’s tenure.
Greg Badishkanian – Citigroup
Looking at your successor, you wanted a fresh set of eyes every decade. What are you looking for in terms of their vision as well as their experience and background?
That’s a great question. We spent a lot of time, Greg, on that process as a board. We spent the better part of the last year working on a specification for a person. Many of the things that are the things that probably every company looks for in a CEO, you want somebody with a very high level of integrity; you want somebody with a demonstrated track record of accomplishments; somebody who is a great leader. All the things that probably every company looks for.
There are some unique things here as well I talked in my prepared remarks quite a bit about our culture and really what has allowed Polaris to create shareholder value over the years. I believe it is two things: it is our innovation and it is our high quality, low cost operations. Our employees are very, very passionate about our products and they are very dedicated to the success of the company. Those two things more or less have driven the company, really forever.
When you look at a product, this year the examples manifest themselves differently each year but if you look at this year, the Razor for example; people are very excited about the Razor, investors are of course and our customers are. That is one example of a long, long list of innovations that have come out of the company.
We are looking for a leader that can lead the company through the environment that we expect over the next decade or so. We just finished a strategic planning process with the board this last summer, what we expect the company to look for so we have a very clear idea what the environment might be and what our plan will be. We are looking for somebody that can help lead the company there while at the same time nurture very carefully this culture.
I would not anticipate someone would come in and make change for change’s sake; I would not anticipate that, that’s not what we are looking for from the board. Certainly there will be changes in areas of emphasis as there would be with any new leader, whether that’s Bennett or that is somebody from the outside but I would not anticipate a radical change in direction. That’s not what we are looking from a board perspective.
In terms of the functional background and that kind of thing, we are very open to looking at candidates from different industries and different front end of business, back end of the business, that kind of thing.
Greg Badishkanian – Citigroup
Finally, are you planning to sign any type of non-compete or is that your intention not to enter work with a company that does compete directly with Polaris?
I already have that as part of my agreement, but from a practical perspective, Polaris is a huge part of my life and I would not ever do anything in my lifetime to do anything to compete against this company.
Greg Badishkanian – Citigroup
That is what I thought. Congrats on a great ten years with the company and good luck again. Take care.
Your next question comes from Ed Aaron – RBC Capital Markets.
Ed Aaron – RBC Capital Markets
Best wishes fro me as well.
Thank you Ed.
Ed Aaron – RBC Capital Markets
Tom, you have talked recently about this long-term road map for the company that you think involves Polaris evolving into more on-road, more international, more outside the power sports industry. Do you think that the next CEO, would it be fair to characterize it as the next CEO is somebody who is going to need to lead Polaris through some period of structural change in the business?
I don’t know if I would use the word structural change, Ed. I think that this company has demonstrated the ability to adapt and change probably faster than any of our competitors; we actually like it when the environment changes. If you think back over the last 20 years or so, we were a snowmobile only company and then we got into ATVs, we are in the watercraft business, we got into the utility vehicle business, we went into the motorcycle business, we built a financial services company, we globalized the business. We like an environment that changes because compared to many other companies that are out there that might be very vertically integrated, that might have strength in just one particular area, its quite difficult for them to change.
I suspect that the environment will continue to change in ways that we can predict and also probably in ways we can’t think of right now. As long as we have this culture that I spoke of earlier, I suspect that this will remain a very adaptable organism. I like the idea of an uncertain environment in terms of our competitive position.
More specifically to answer your question, our basic road map will be to continue to transform the core part of our business, this whole notion of operational excellence that we have been talking about for the last year or so and we will continue to talk about as we go forward, the whole idea is to transform the core as the snowmobile and ATV part of our business has gotten tougher, its clear that we need to operate in different ways. We can do that and continue to have both those businesses be very attractive businesses, but we can’t operate them exactly the same way that we did five years ago or ten years ago.
So we will transform the core part of our business, but we will also explore lots of growth opportunities. We have talked a little bit in the last year about this $200 million worth of growth in 2007 that came out of the Victory and the Ranger and the international and the military and we do have another adjacent market opportunity that we are taking on. You can expect to see more of that as we try to globalize the business more, get more on-road, get more global; you will see more efforts, I suspect, in that area.
Ed Aaron – RBC Capital Markets
Out of my own curiosity, I have always thought that there would be a possibility that you would move on at some point, but I would have always assume that it would be because you wanted to go be the CEO of a bigger company, which you are capable of doing and just from your comments, it sounds like you actually don’t have a whole lot of interest in running a bigger public company.
I appreciate the question, Ed, it is a fair question. As I said, I don’t have any outside offers and I am not going to entertain any outside offers while I am running Polaris. Michelle and I have talked a little bit about it but we really don’t know what the next chapter of our lives will bring. At this point, if I wanted to be a public company CEO today, I am working for the absolute best company for me, for my set of skills, for my interest, where we want to live, all that sort of stuff. As you might imagine, I have had some opportunities over the years to go do some different things and there is really no interest. This is the perfect company for me.
I did a lot of work in trying to research whether to come here or not and I felt like it was a great match for me and I just love it. That makes a little bit bittersweet for me in terms of walking out, but its also time, I think. We approached this thing in more or less five-year blocks from a board perspective. Could I have stayed another year or two or whatever? Sure. That wouldn’t have made a big difference one way or another.
What I was pretty clear is I didn’t want to stay another ten, or probably even another five. You can burn out in these jobs; you see people that do it, sometimes they know it and sometimes they don’t. It's obviously a pretty demanding job and I feel like I have most of my faculties today and I want to continue to do that and continue to do the very best job that I can do and go out working hard and trying to do a good job.
Your next question comes from Mark Mulholland.
Tom, congratulations and thank you for the work you have done. I don’t know if you are entertaining or if the board is entertaining it, but has there been any consideration about Polaris going private at this time?
No, we certainly are not here to announce anything like that. We intend to remain a public company; obviously as circumstances change and that kind of thing I would never rule anything out, but that’s not something we are actively looking at, at this point, Mark. We intend to remain a public company and we are certainly looking for someone who can be successful in the public market environment.
Is this a reason for you to just exercise six days a week?
Yes I am looking forward to having a little better balance in my life, Mark, and part of that is exercise.
Your next question comes from Bob Evans - Craig-Hallum Capital.
Bob Evans - Craig-Hallum Capital
Good morning, Tom. I remember, as you said, when the 37-year-old snot-nosed kid arrived and wrote something on the back of an envelope on the five-year plan and you did it. Sorry to see you leave, but congratulations and thank you for everything.
Well thank you, Bob. I appreciate the kind words and appreciate all your help and support and enjoyed working with you and will enjoy continuing to work with you for the remainder of the year.
Bob Evans - Craig-Hallum Capital
All of my questions have really been answered but I hope beyond ‘08 I hope we can still get together and I’d love your perspective on things.
Your next question comes from Tim Condor - Wachovia.
Tim Condor - Wachovia
Tom let me also offer congratulations. Polaris was a great company when you came there and you definitely took it to the next level.
Thank you Tim. I appreciate that.
Tim Condor - Wachovia
A couple of things here. It doesn’t sound like any definitive timetable for a successor, but realistically would you anticipate something, a successor being named before the end of the year?
Along the lines of a previous comment, maybe you can work in a few more Yankee games into that schedule.
On your way out, how is your remaining stock handled as far as does it all vest? Will you be on the board past the end of 2008?
I see quite a few questions in there. In terms of when do I expect a succession to take place, as I said it’s a little bit uncertain. Actually the reason for the announcement today is that we are just beginning to contact external candidates. What we didn’t want to have happened was that we contact some people and word gets around, the market, or somebody contacts somebody internally and says, did you hear, they’re looking for a CEO and all that sort of stuff.
It’s a little unusual that you would announce something this far in advance, but what we didn’t want to do is have any rumors out there so now everybody understands what’s going on and why and all that sort of stuff and the process will start.
I don’t know how long it will take, Tim. The last time it took two-and-a-half years, the process to find me and now I am hopeful it won’t take two-and-a-half years but as I said in my prepared remarks, I am willing to adjust my timing either way. I am not going any place so I am happy to do that and that will part of what I’m doing to help make this smooth transition.
But if everything went according to plan I would expect that it takes some time to identify the candidates and interview them and go through all that and we have a pretty important decision to make. If that happened in the fall timeframe and then we had some period of overlap perhaps, depending on the specific situation, that would have you towards the end of the year, sometime in the fall timeframe but it could be a little sooner or a little later depending on how things go.
That’s why we expect it to be done this year but we’re not 100% certain. The key, key thing is that people understand that we’re going to try our best to do this right and not really be driven by the calendar. There’s no need to; we have a very good management team in place and I’m not going anywhere so we have the luxury of being able to do that. We are going to take advantage of that luxury for sure. It is not like I got hit by a bus or that kind of thing, so that part should be good.
One thing that I didn’t mentioned in the prepared remarks that might be important for you guys and we may have to remind you of this in a couple of calls, you should not expect any updates as we go through the process. We are not going to issue a report that says we interviewed 17 people this week and we liked four of them. This is going to be a little closer to the way they select the pope, okay? The cardinals will go in a room and out will come the smoke and you will know we are done.
So we will be pretty quiet about that and that’s not because we don’t want to be open and all that; we do, we try to share everything material about the company but at least on the outside side, most of the people we talk to I suspect will have jobs and its kind of confidential on their sides so for obvious reasons, we will be pretty quiet about all of that. Just to underscore that point.
In terms of my options and all that, we will be filing some documents on all that, Tim, as we go forward but the deal that we have with the board is if you look at my last contract, actually my last round of options vest 12/31/08 so assuming that I stay here until then, that will be the case.
I will continue to hold shares and at some point well down the road perhaps I will sell some of those shares. I have a very substantial percentage of my net worth in Polaris stock but I expect to be a substantial shareholder, one of the largest individual shareholders, for the foreseeable future.
The board has set it up so that there is a pretty strong financial incentive for me as a shareholder for this process to go well. That is what we want to see here. There are no golden parachutes, golden handshakes, no $5,000 shower curtain deals. I expect you will see all the documents on that but there is nothing goofy going on there.
As I sit on the board, I will stay on probably my guess is a couple of quarters after the transition. So if we made that transition in the fall I will probably stay on maybe thru the annual meeting in 2009 if the new CEO finds it helpful for me to stay on the board, that is something I would consider.
If the board felt that it was better if I left, I am happy to do that. It is really going to be determined by the board and my successor. I want to be helpful to that next person however I can do that.
Your next question comes from Michael Millman - Soleil Securities.
Michael Millman - Soleil Securities
With the possibility -- or some of us think the possibility -- that there could be a pretty serious recession this year, it seems that it might be an unusual time to leave, given the turmoil that might cause, unless of course you believe that in fact we are not likely to have a recession this year. Maybe you can comment?
That is a good question, Michael. As I said in my prepared remarks, this wasn’t something that we decided in August with the credit crisis or with the latest economic forecast or something like that. This was really going all the way back to the beginning; the idea was that I would stay for a considerable period of time. We approached it in basically five-year blocks. The first five years it was, can he do the job? Will it work? And all of that; that seemed to go pretty well. The next five years was, has he run out of ideas, or is there a fresh approach?
Really the question for me was, do I want to stay here 15 years, 20 years? I came to the conclusion that I didn’t. That I wanted to explore some fresh challenges. I felt that despite the economy, the economy is going to go through cycles, all right? We are going to have recessions, we are going to have expansions and it is going to snow and it is not going to snow, interest rates are going to be up and interest rates are going to be down; we are going to go through those kinds of things.
I felt that the company is in a very strong position. We are going to come off from a very good year in 2007 with earnings per share up 12% to 14%. There is no other company in our space that I am aware of with performance like that. We have just some terrific new products and more to come in 2008.
Probably most importantly, I felt like the team was ready. We have a very good number two person in Bennett Morgan, he has demonstrated his ability over the last two-and-a-half years. Most of you know Mike Malone, he has been in the CFO job for a long time. We have, at every position, a really strong group of people. So it is not one person and it is not the economy.
The issue is, is it the right time for me, personally? My judgment is that it is. And is it the right time for Polaris that can get another leader that can lead the company for the next decade or so.
After a lot of thought and a lot of discussion with the board, we came to the conclusion that it was and so that is why we are going forward in that. It doesn’t have anything to do with where we are in the cycle or what ATV retail is doing in Kentucky, right? It is driven by a long cycle decision, not a short cycle decision.
Michael Millman - Soleil Securities
Asking specifically, if indeed this year turns out to be ugly economy-wise, would you think it would make sense to see that through? Or would you likely see that through?
I think that Polaris will be successful in 2008. As I mentioned, we will go through the quantification of that and all of the rationale and all of that sort of stuff. Obviously we are aware that the economy is in a tough patch right now, that the ATV market is sluggish and all of the various forces that are acting on our business.
You can’t run a succession process based on what is happening in the economy. We will make the transition when we find a candidate or determine that Bennett is the best person on Planet Earth to lead the company for the next decade through good economies, bad economies and all of that sort of thing.
I am not going to leave the company in a difficult situation; I am not running away to anything, I am not going anyplace. As I said in my prepared remarks, I am going to do everything in my power to help make this company while I am the CEO, and after I am the CEO however I can best do that. But we are going to move forward with a succession.
Your next question comes from [Michael Crissacolieu].
Good morning. You have reaffirmed guidance for ’07, is that correct? And no change to the three-year plan, Tom?
We have reaffirmed guidance for ’07 and we have not made any changes to our direction, goals, anything of that type.
Has the board approved the ’08 budget yet, or is that about to happen?
We will have a board meeting next week in Arizona where we will go through the 2007 results and the 2008 budget, and then the following week we will have our earnings announcement and present it to you guys.
Can you say for the record, is there any dissention or regret at the board’s level about the aggressiveness of the accelerated stock repurchase? Buying back stock, basically 30% higher?
No, there is no regret about that at all. I think everybody thought that was a good move and I continue to believe it will be a terrific investment over the long run. As you may be aware, we’ve bought back the stock for years and years and years and years and sometimes the market is up and sometimes the market is down. There are a lot of factors right now that are way out of our control that is weighing on consumer durables generally, and whether you are talking about Harley or Brunswick or Winnebago or Artic Cat or Polaris, the same basic forces are acting upon them.
We feel very good with the way the company is performing right now in that environment. We are bullish about the future. Frankly I think $36, $38 a share is a goofy price for Polaris for a company that is growing EPS 12% or 14%; the market doesn’t agree with that right now. The board and I definitely feel that way and we are going to continue to buy back the stock.
Fair enough. Just a final question and segue; my understanding is you had established a price floor of $50 for selling stock under your 10b51 plan. For the record, are you saying you are not going to change that price level in terms of selling stock under that plan?
That is very close to what it said, and I will have to make sure I get the numbers exactly right. There are about 500,000 shares involved. There were three separate groups, 100,000 shares at $50; there was another 200,000 shares I think at $53 and then there was another 200,000 shares at $55. I think that is the right number. I am not changing the 10b51 plan. We will allow the 10b51 plan to run its course.
Thank you and best wishes for the future.
I want to thank everyone for participating in the call today. As a reminder, we will be releasing fourth quarter and full year 2007 financial results the morning of January 29, 2008 and hosting a call at 9:00 Central time that same day. We look forward to talking to you again at that time. Thank you for listening. Good bye.