Welcome to the American Greetings Corporation fiscal second quarter 2010 earnings conference call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Gregory Steinberg. Please go ahead sir.

Good morning everyone and welcome to our second quarter conference call. I’m Greg Steinberg, the company’s treasurer and I help manage our Investor Relations. Joining me today on the call are Zev Weiss, our CEO; Jeff Weiss, our COO and Steve Smith, our CFO. We released our earnings for the second quarter fiscal 2010 this morning. If you do not yet have our second quarter press release, you can find a copy within the investor section of the American Greetings website at www.investors.americangreetings.com. As you may expect, some of our comments today include statements about projections for the future. Those projections involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. We cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements. If you would like more information on our risks involved in forward-looking statements, please see our annual report or our SEC filings. Previous earnings releases as well as our 10-Qs, 10-Ks and annual report are available on the investor section of the American Greetings website. We will now proceed with comments from both our CEO and CFO followed by a question-and-answer session.

Thank you Greg and good morning everyone. Today I’ll cover three topics. First I will share my thoughts on our fiscal 2010 second quarter including some of our new product offering. Second, I’ll provide a brief update on the integration of Recycled Paper Greetings and Papyrus, and finally, I’ll share a few directional comments on our outlook for the balance of fiscal year 2010. Steve will then present more details behind our second quarter financial results. I’m thrilled with our quarterly performance as our $0.59 of earnings per share is a record level for us in the second quarter. In addition, our year to date cash flow from operations, less capital expenditures of almost $70 million has exceeded our expectations. I believe that the strategic investments we have made over the last several years to enhance our leadership position in a greeting card category have contributed to the improvements in our performance. We’ve devoted more time and effort needed to develop new products so that consumers can find unique and fresh offerings that resonate with them when they shop the greeting cards aisle. While we are constantly introducing fresh and new products, I’m particularly excited about the innovative ways we have found to utilize technology in our greeting cards. Over the past couple of years, we have added music to greeting cards, but that was only the beginning. We have now expanded our use of technology to encompass additional formats to further engage the consumer. Specifically, we have developed greeting cards that we affectionately refer to as Talking Heads. This patent-pending product encourages the consumer to pull down a flap that looks like a person’s chin and hear a humorous message. We have also introduced recordable reading cards that allow the consumer to personalize the greeting card by adding their…

I have three components to my prepared remarks today. I will start with some comments on a few large items that impacted our consolidated results this quarter. Then, I will share a review of our reported segments. Finally, a quick walk through a few key components of our financials. We will then open the line for questions. Our consolidated revenue of $356 million was down about $29 million or 7.6% from last year’s second quarter revenue of $386 million. However, included in our reported revenue this quarter was the adverse impact from foreign exchange of $14 million versus the prior year’s second quarter. So, holding aside the foreign exchange impact, revenue is down about $15 million or 4%. About $4 million of the $15 million decline was the result of the net revenue lost due to the combination of the divestiture of the retail business offset by the revenue pickup from the Recycled Paper and Papyrus acquisitions. Holding aside the impact of foreign exchange and the net impact of the acquired and sold businesses, revenue is down $11 million or about 3%. Our operating income of $38 million was $34 million higher than the operating income of $4 million in the prior year’s second quarter. However, this year’s operating income included a benefit of $7 million associated with a legacy corporate owned life insurance program. Focusing on operating income and holding aside the insurance benefit, our operating income improved about $27 million versus prior. This positive variance of $27 million is mostly within the North American Social Expression businesses and is therefore best explained at the segment level. So, let me now shift the second component of my prepared remarks which will be review of the reported segments and how they differ from the prior year’s results. Note that we…

(Operator Instructions) Your first question comes from the line of Jeff Stein with Soleil Securities.

First of all, if you could just talk a little bit about where the upside is coming from relative to your internal forecast because clearly in the first quarter, you had great improvement gross margin, not quite as good in Q2, I guess probably because of the Canadian issue you had in Q1 last year, but it seems that on the selling, distribution, and marketing line there is some geography issues with regard to the disposal of retail and acquisition of RPG and Papyrus, but away from that, where is the upside relative to expectations, and then if you can also address the issue on your free cash flow revised guidance, is most of the improvement that you’re seeing relative to where you thought, is it mainly net income related or are there also some working capital and tax issues that had not been contemplated previously?

Jeff, I would say that when you look at the performance relative to expectations, I think it would be pretty much what you’re probably thinking. In terms of sales, it’s a bit better than we expected, and if you look it from a year over year perspective, they’re hanging in there very nicely, and in this environment, that’s pretty good especially given some of the things we were seeing towards the end of last year, so I think we are very pleased with that, and we think that a combination of product work that we are doing in our core lines as well as the innovation products is really helping us on a topline basis, and then from a bottom line perspective which is probably what’s generating the impact, it is the cost savings some of which when you think that perhaps things are going to be a bit softer, you really watch your cost, and when the revenues come through just fine, you get the extra benefit of the gross margin, but if you’re watching your fixed cost as well, you get basically a double benefit, and I think that’s what’s going on. The group is doing really a great job on the product side, and they are watching their costs really hard, and the combination of the two is the having the effect on the earnings, and I think that’s a big part of what’s driving the cash flow. There is some benefit. Obviously, you look at what’s happening year to date, we’re hoping that there will be some benefit on the balance sheet side and on the tax side, but the net income is clearly going to help the free cash flow as well.

Would it be fair to say that of the $50 million bump that you are providing from a guidance standpoint and cash flow, most of that will be net income related?

A large portion of it is Jeff. Not all of it. There are some tax benefits to the upside. We’d rather not comment on the specifics behind taxes and working capital and deferred cost, but net income clearly is a significant boost to free cash flow. We’re picking up a bit from taxes.

Steve, where do you see the tax rate for the year?

We haven’t forecasted publicly. There is a combination of different activities for tax planning. They are still in the works. It is likely to be lower than our statutory tax rate of about 38.5%, but we don’t want to predict the exact figure.

And at this time with no further questions in the queue, I’d like to turn the conference over to Gregory Steinberg for any additional or closing remarks.

Well, that does conclude the question and answer portion of our conference call today. We look forward to seeing you or speaking with you again at our third quarter conference call which is expected to occur in late December. We thank you for joining us this morning, and that does conclude today’s call.

This concludes today’s conference, we appreciate your participation.