Please standby. We are about to begin. Good day everyone. Welcome to the Mattel's Second Quarter 2007 Earnings Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Mike Salop. Please go ahead, sir.

Thanks Martha and good morning everyone. Earlier this morning, we issued a press release which detailed Mattel's second quarter 2007 results. On the call today, Bob Eckert, Mattel's Chairman and Chief Executive Officer, will give a few brief remarks and Kevin Farr, our Chief Financial Officer, will provide more detail on the financial results of the quarter. After Kevin's comments, we will open the call to your questions. Before we begin, let me note certain statements made during the call and the question-and-answer session that follows may include forward-looking statements about management's expectations, strategic objectives, anticipated financial performance and other similar matters. Such forward-looking statements may include comments regarding performance of our brands and product lines, new product introductions including toys and DVD movies, brand strategies, international growth opportunities, American Girl retail expansion, profits and margins, supply chain efficiencies, capital spending, income tax provisions, and our capital and investment framework. A variety of factors, many of which are beyond our control, affect the operations performance, business strategy, and results of Mattel and could cause actual results to differ materially from those projected in such forward-looking statements. Some of these factors are described in our 2006 report on form 10-K filed with the SEC, and Mattel's other filings made with the SEC from time to time, as well as in Mattel's other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so. Information required by Regulation G regarding non-GAAP financial measures is available on the Investors & Media section of our corporate website, mattel.com, under the subheadings Financial Information and Earnings Releases. Now I'd like to turn the call over to Bob.

Thank you, Mike and good morning. Although the first half is relatively small of course, I am generally pleased with the performance of our portfolio as we head into the all important fall season. In the second quarter, continued strength in Fisher-Price in our international business helped drive top-line growth, which is especially encouraging given the entertainment property comparisons with last year. While CARS continues to perform well for us, last year we benefited from strong shipments of both CARS and Superman released in the quarter. Barbie also was a contributor to our growth in the quarter with strong international performance, more than offsetting a modest domestic decline. The U.S. Barbie business did improve relative to the first quarter partially driven by gains in our collector business. Our overall revenue growth was complemented by strong gross margin improvement resulting in a solid increase in profitability for the quarter. While the first half results were good, we all know that the bulk of the toy business happens in the back half of the year, so I want to take a few minutes to remind you some of Mattel's key opportunities we see coming in the fall. Earlier this year, we launched barbiegirl.com, the first global virtual online world designed exclusively for girls. Today, almost 3 million girls have registered at the site. Additional exclusive content on the site can be unlocked with the Barbie Girl device when connected to a girl's computer. The sleek handheld device, which serves as a music player and fashion statement launches at retail this month. We're excited about this on-trend opportunity to engage girls with the next generation of fashion play. Our Barbie entertainment franchise has produced nine extremely popular direct-to-DVD movies each reaching number one on the Nielsen Top Kid Video charts. In this fall…

Thank you, Bob and good morning everyone. My remarks regarding the second quarter financial performance will begin with a discussion of worldwide gross sales shown on exhibit 2 of today's press release. Total worldwide gross sales for the second quarter were up 6% over the prior year, including a 3 percentage point benefit from changes in currency exchange rates. U.S. sales were down 3%, while international sales were up 18% including a 7 percentage point benefit from foreign exchange. On a regional basis, sales in Europe were up 14% including a 6 percentage point benefit from changes in currency exchange rates. Sales in Latin America were up 34% including a 7 percentage point benefit from foreign exchange. Sales in Asia Pacific were up 11% including a 6 percentage point benefit from foreign exchange rates. I will now review our core categories and brands. Mattel Girls & Boys Brands. Worldwide sales from Mattel Girls & Boys Brands were up 5% including a 4 percentage point benefit from changes in currency exchange rates. U.S. sales declines of 8% were more than offset by strong sales in international markets, which increased 15% over the prior year and included a 7 percentage point benefit from foreign exchange. Worldwide Barbie sales were up 6% including a 4 percentage point positive impact from changes in foreign exchange. Barbie sales in U.S. were down 5%, while international Barbie sales were up 13% including a 6 percentage point benefit from changes in currency exchange rates. Our Barbie Reality and Barbie Collector businesses continue to do well on a worldwide basis, but these performances have been partially offset by some challenges in our Barbie fantasy product lines particularly in the U.S. Worldwide sales of Other Girls Brands were down 1% including a 4 percentage point benefit from foreign exchange…

Thank you. [Operator Instructions]. We'll go first to Sean McGowan with Wedbush Morgan.

Hi, thank you. Good morning guys. A couple of questions, two quickies and then one that might be a little bit more explaining, was CARS actually up in the quarter Kevin?

Yes, it was up in the quarter.

Right. And it's... but it started shipping in the second quarter of last year?

That is correct.

Soundspretty good. Okay. Second thing any visibility at this point as to what the other income line... net of all that's in that will look like for the balance of the year, or should we expect that to be pretty much awash in that zero or will that be a contributor?

We don't give guidance Sean, as you know. So I can't make predications for the balance of the year, but it was... not significantly up this quarter versus last year.

Okay. And the last thing that if could just explain a little bit more about the tax, what's going on in that... in this quarter and what the implications are for the balance of the year, and what do you think the tax rate will be for the full year and the quarters?

Yes. In the second quarter the tax rate was negatively impacted by a change in New York State tax law. That prompted us to make some adjustments to our deferred tax assets, which impacted our tax provision that was a $5.3 million charge in the quarter. However, the full year of 2007 results will continue to benefit from the positive impact of the tax increase, the Reconciliation Act, which was signed in the law in May of last year. And this Act will benefit us and it did benefit us in 2006. It benefits us again in 2007 and 2008. With respect to the full year tax rate, as you know we don't give guidance, but with respect to the tax rate we expect that to be in the 24% to 25% range. However, as you know we are continuing under audit around the world and our 2007 tax rate could be positively or negatively impacted by the results of routine audits by the governments around the world.

Right. That's very helpful. If you look at that $5.3 million in the quarter and take that out, it looks like the rate was in that 24% range right, so is that... does that mean that for the subsequent quarters you will show that 24% to 25% range, or will the rate be really reduced so that the full year rate is 24%, 25%?

We're getting into that level of detail, but I think for the full year, you could use that methodology.

Okay. Thank you

We'll go next to Michael Savner with Banc of America Securities.

Hi, good morning. Thanks. A few questions. First, that two part on Barbie. Can you just Bob, maybe go over your conviction level that the Barbie kind of recovery and structuring is progressing as you'd hope? Obviously we're still comfortably negative in the U.S. in the first half, but obviously you've got a couple important rollouts for Barbie in the second part. So, to what extent, does that recovery you think it really accelerate in the second half or is it probably a slower, more gradual process? And then the second part of the Barbie question. Internationally, some of the strength you are seeing, is that coming from new market opportunities or is it coming from certain geographies internationally that are doing better than expected? And if so, can you give us which ones are doing better?

I guess Michael, I'd start by saying, we use the term comfortably negative, which doesn't particularly work for me. It's one or the other. But overall the trends are pretty similar to what we saw in the first quarter, that is, international growth offsetting the domestic decline. From the international standpoint, the trends are solid across the board by market and by segment. And domestically while we're still down versus year ago, we did improve a bit sequentially. The year-on-year decline continued to be concentrated in the fantasy segment, which is Fairytopia and Princesses. This year's spring key doll just didn't work as... as well as last year's Mermaid line. The reality segment, which is beach dolls and fashion fever and basic Barbie still doing fine, and I think that's important particularly in light of the... what I would say was the modest shelf space decline this spring overall versus year ago. The collector doll business is up, behind High School Musical and Wizard of Oz and the Birdstone [ph] dolls and that's offsetting the decline domestically in MyScene. And as you mentioned, it is the second half of the year business both we and retailers feel good about the line. Island Princess is out there just beginning now, the basic Barbie business looks good. And as I mentioned in my comments Barbie Girls is off to a good start online. We are now linking Barbie Girls with barbie.com. Our capacity is building nicely, and we just started shipping the MP3 fashion device, which allows deeper play in the Barbie Girls website. So I don't know how the trends will end up in Barbie. I continue to feel good about where we are strategically but we've got some work to do still in the U.S.

Thanks Bob, that's helpful. And then a quick balance sheet question. It looked like day sales outstanding appeared to be at the highest level since the middle of 2002. How should we think about that? What might be driving that increase anything... just anymore color would be helpful?

As I mentioned in the comments the increased receivables is really attributable to increased sales built in the quarter and lowered levels of factoring. During the quarter factoring decreased by $81 million and excluding factoring, our days sales outstanding was unchanged compared to the last year. We don't believe there is any issues with the collectible only [ph] receivables.

Well, thank you

We'll go next to Tony Gikas with Piper Jaffray.

Hi, Good morning guys. Few questions, Bob you sound pretty optimistic on the business. And what gives you most excited about the back half of the year? Is it new products flow, consumer trends, retail programs, shelf space, maybe you could comment on a few of those. Second question, it appears that the input costs have been relatively stable, any expectation there for the back half of the year. You probably have pretty good visibility on that at this point. And then I have a couple of follow-ups.

Tony, I'll start and then turn over to Kevin. As it relates to the environment, you are right. I've probably been more optimistic since the second half of last year than I have been in several years. The toy business did well in the back half of last year. As you know better than many of us, it is a strongly seasonal business, and we ended up with good momentum coming out of last year. And I haven't seen anything to change that going into this holiday season. I think we are particularly well aligned with retailers right now, and we have good strong programs coming up for the fall. Obviously, that has to turn into consumer sales. But at this time of the year, we are at our... our highest level of anxiety. If somebody once told me was the pre-fall jitters. We are making all this inventory and starting to move the inventory from our warehouses into retailers' warehouses and it's a big pile of goods that has to be sold for Christmas. So the anxiety meter seasonally is about is about as high as it gets right now. And I haven't felt or heard anything that makes me have more anxiety than normal, and that's a good sign. So generally speaking, I feel good about the business.

And Tony, let me back up on gross margin and talk about again the improvement in gross margins this quarter, then answer your question on what the outlook is on costs or input costs for the balance of the year. Our margins have improved year-over-year for the fourth consecutive quarter demonstrating our commitment to improving margins, despite continued cost pressures. There's a few things behind the gross margin improvement. We took a modest price increase with the 2007 line. And in the second half of 2006, we shifted our distribution centers to regional full mix warehouses and implemented software to optimize their transportation network, resulting in administrative and logistics savings and the benefit of those actions are reflected in our second quarter 2007 results. And foreign exchange and royalty expense were more favorable during the quarter. As we look through the balance of the year, sustainability of these improvements will anniversary some of the above actions as the year progresses. So year-over-year impact on pricing and supply chain savings may be less pronounced. And then with regard to looking at the input costs in the back half of the year we continue to... continue to have input cost pressures, particularly on resins and zinc. And as you know oil prices seem to be having an upward trend again, but resin prices haven't really fluctuated much and still remain high relative to prior year levels. And then I think we still face input cost pressures on China labor as well as the Chinese currency. So, looking at the back half of the year, we expect about the same what we see in the first half of the year.

Okay. Couple of quick follow-ups. Maybe just a comment on the share repurchase, why there was no repurchase during the quarter, stock has been off about 10% in the last few months. And then last question, just any competition trends that you could talk about particularly in the girls category, both U.S. and international.

Tony, this is Bob. We don't comment on the timing of specific share repurchases particularly kind of on a prospective basis. But consistent with the last several years, we'll continue to execute under our capital investment framework. We'll be disciplined and opportunistic as we deploy capital to create shareholder value. You know since 2000 we generated about $5 billion in cash. We strengthened the balance sheet by reducing debt and increasing our cash balance. We spent over $900 million of CapEx investing in our business with toy [ph] and American Girl stores and the like. We've executed the strategic acquisition of about $200 million for Radica and that was in the October, the fourth quarter of the last year. And as Kevin mentioned in this past quarter, we invested $79 million for the acquisition of Polly Pocket!. We have returned since 2000 about $2 billion to shareholders, $900 million of that's been in dividends and $1.2 billion in share repurchases. So if you look at it from that standpoint, represents about 15% of shares outstanding. So while we don't comment about the specific quarters and I tell folks every time I can't, not to put too much weight into what do we do or don't every 90 days. I think if you look at our long-term period here, we've been consistent with the investment framework we announced in February, Kevin, of 2002.

2003.

2003.

Competition trends and maybe the...

Competition trends in girls... I would say Littlest Pet Shop is doing well at retail. I would say the Webkinz concept is still doing very well, it's not a global concept. It's confined to some markets including the U.S. and Canada. But I think that phenomenon is real and we'll continue to do well. And so from a girls standpoint those are probably the two things I'd say.

Okay, thanks guys.

We'll go next to Dean Gianoukos with JP Morgan.

Hi, just two questions. First, when you said strength sort of across the board in Europe and internationally, is that... is there anything you are doing differently or is that just market strength? And then secondly, what is driving such strong performance in Wheels? And I guess are you a little bit surprised given all the action figure competition and all the movie properties etcetera?

Well, in general Dean, we're seeing markets growing outside of the U.S. and we are gaining share in growing markets. And that's been a pretty consistent story now for several years. We are up to about... I think at year-end last year about 45% of our business was done outside the U.S. And that's up from about 29% of the business in 2000. So we have made good progress. We've had a consistent strategy and it's not any particular product line or any market that is driving our improvements overseas. As it relates to the Hot Wheels, I do feel good about the improvements and the innovations we have made in Wheels. I think I have talked about that for the last couple of quarters now. We have been working very hard on our Hot Wheels business. It is building some momentum, and Matchbox although off a much smaller base is one of our fastest growing brands right now in the portfolio. So all in all I feel good about our Wheels business. That was a growing segment for the past year or more since we introduced CARS. And I do believe that our Hot Wheels business was impacted by CARS. It wasn't as significant as I expected, and it's starting to come back. So I feel good about our Wheels business.

What about when you look at Transformers, Spiderman, and Fantastic 4 and things like that? I mean how are you doing so well I guess with all these stuff out there on the shelves?

Well there is some very exciting stuff. I happened to think this Transformers product looks terrific on the shelf. So, we will have to see how that plays out. At some point in time, there is competition on a share of wallet basis if no other things. So, I don't put that much stock in any 90 day period one way or other. But I feel good about where we are in our Wheels business and the innovations we have in it.

Okay. Thanks a lot.

We'll go next to Linda Bolton-Weiser with Oppenheimer. Linda Bolton-Weiser - Oppenheimer & Co.: Thank you. I guess in terms of the Radica sales they just declined a little bit sequentially from about $19 million to $17 million I think in the second quarter. Is there any significance for that and can you just update us in terms of the integration of Radica?

Yes. I don't think there is any significance from that, from the fact they went from $19 million to $17 million. I think from an integration point of view it's going very well. We have substantially integrated the business globally, and I think in the second half we are very excited about the fact that we now begin to distribute around the world, Radica's product line. Linda Bolton-Weiser - Oppenheimer & Co.: Okay. And just then in the entertainment segment, is there anything else beside Superman being in the prior year period and then declining? Is there anything else from here that declines given the CARS was up?

Well there is... in that segment Linda there is probably 15 or 20 different things around... around the world, and on the toy aisle CARS does continue to do well. Ratatouille I would definitely recommend as a movie. I thought it was a terrific film, but as we've said all along we don't expect a lot of toy sales resulting from Ratatouille. The movie business for us is probably more about next year where we have Speed Racer, we have a Batman movie. And we have announced a partnership with DreamWorks on Kung Fu Panda. So, this is a relatively light year for us in entertainment and next year should be a little bit stronger. Linda Bolton-Weiser - Oppenheimer & Co.: Okay. Thank you.

Thanks Linda.

[Operator Instructions]. Now we'll go next to, Margaret Whitfield with Sterne, Agee. Margaret Whitfield - Sterne, Agee & Leach: Good morning everyone. You mentioned Barbie shelf space was down somewhat in Q1 or Q2 rather. I wondered if you have any comments on how the fall planograms were looking whether or not Barbie will hold their space for the fall season?

I don't have the specifics yet Margaret, but I feel pretty good about Barbie for the fall, shelf space and promotionally. We did have some good momentum in the key season second half of last year and I am expecting to be rewarded a little bit for that or at least not punished, not a reduction. So, I think we... without getting too specific and I don't want to get ahead of myself because you really... if you remember really know until you go out and look at the shelf, and I happened to be out this past weekend and retailers are not fully set up for the fall. So they are just getting there now. But, in general I would say I feel pretty good and encouraged by the support we have from retailers for Barbie this fall. Margaret Whitfield - Sterne, Agee & Leach: I have seen a Smart Cycle for one at retail, I wonder if you have any early read on some of your holiday toy lines?

We do. It is very early, but again encouragingly I haven't heard anything that, that gets us too anxious for this time of the year. It is very early. Some of these products are only in a handful of stores but I think the early reads are in pretty good shape. Margaret Whitfield - Sterne, Agee & Leach: Apart from Smart Cycle any products you think will perform well?

Yes, I've got a whole list, but I think of the... however many thousands SKUs we'll launch this fall. I'll probably be right on a few and wrong on many. Margaret Whitfield - Sterne, Agee & Leach: Okay. And any specific plans in terms of how you're going to launch Barbie Girls, any marketing that you can share?

Not a lot, it's... we've been struggling with keeping up with demand for the site. So, one of the things that we have not done much of for example, is promoting Barbie Girls on barbie.com which is I think last month... I might be wrong, but I think it was the second most popular website in the world for girls. So, we haven't even taken advantage of the easy opportunity that is to pipe people from barbie.com into Barbie Girls. You can't do that today. We do now have the capacity to link them, and I think you'll see more things like that this fall. Margaret Whitfield - Sterne, Agee & Leach: Any reason why CARS rose over last year, which was so strong? Did you have better placement, new product or what were some of the reasons for that?

Margaret, we are in stock now. We were out of stock early and often, and we chased that product line unfortunately all year last year. And as I visit stores I know many of you go to stores, I think we are in stock this year. We are not in stock on every SKU and every store but demand continues to do well for that product line and I think we are filling the demand today. Margaret Whitfield - Sterne, Agee & Leach: Okay. Finally, I didn't hear this, you've said, you have Barbie rose over the first quarter, I heard collectibles, did I hear gains mentioned as a factor?

No, probably collector and maybe the reality segment... Margaret Whitfield - Sterne, Agee & Leach: Okay.

kind of the basic Barbie. Margaret Whitfield - Sterne, Agee & Leach: Right. Okay. Thanks and good luck.

Thanks Margaret.

We'll go next with John Taylor with Macaw.

Hi, actually Arcadia. Let's see two questions first is that I wonder if you can talk, Bob a little bit about Latin America, amazing growth down there, is that sort of... are there certain countries that are driving at, certain product lines maybe gives a little color on that? And then Kevin, I wondered if you could talk about the SG&A creeping up as a little bit as a percentage of sales and whether you're feeling confident, you've got your arms around everything there maybe whether that reverses as we go into the back half? Thanks.

Yes. JT I'll talk about Latin America, and then Kevin could talk about SG&A. Our trends in Latin America have been consistent really for each quarter in the first half. It's... essentially every market down there is growing at double-digit rates. The one market I would highlight that has been a real star force on the last, I am going to say 18, 24 months Kevin, is Brazil.

Correct.

We've built a very nice business in Brazil. We have always done well in Chile and Argentina, and Venezuela. Mexico has been one of our star performers for the last four or five years, and it is obviously the larger market for us. But if I had to pick up something to give credit to right know is what we've done in Brazil. We've got a very nice business down there.

And JT on SG&A, SG&A expenses were up compared to last year due to a variety factors with the most significant drivers being new investments in the business, foreign exchange, higher employee-related costs including stock-based compensation and the inclusion of Radica. And over the past few years we've undertaken measures to improve our overall performance including centralizing back office functions, upgrading our systems, improving processes to make us more efficient. These initiatives are generating savings for the company but they're being offset by cost pressures and investments in growth. If you look at it on a annual basis, we have been running a bit over 20% on net sales. It's been fairly consistent over time but for different reasons. So, I don't think when we look at this quarter that SG&A is out of control, I think we've been strategic with regard to investments. We've had the negative impact to foreign exchange and then obviously we also have the acquisition of Radica.

Yes. I was wondering if could maybe focus a little bit on that... those offsets to the gains kind of thing whether there was anything specific to. I mean you could talk about related the investments in the business you're making or maybe quantify what the FX impact might have been something like that?

Yes. We really don't get into that level of detail JT but I think as, as I have mentioned when you look at order of magnitude I think the biggest thing is with regard to investments in our business both with product development investments and expansion in international markets and then foreign exchange were probably the two factors that impacted us the most.

Okay. Back to your comments about Brazil and Latin America in general, are there any brands that... you used to make some product I guess very much different in those markets than it is globally. I mean is it heavily weighted towards anything?

No, we've got a terrific Hot Wheels business in Brazil right now, a nice Polly Pocket! business. The one product line that is unique to Latin America is Max Steel, an entertainment property that played out here, Kevin three or four years ago?

Yes.

Sort of that came and went in the U.S. and Europe. For whatever reason Max Steel not only caught on in Latin America but it's stayed strong. We have done lot of direct-to-DVD entertainment which is done well. It's one of the top-selling male action brands if not the top selling male action brand in Mexico and all of Latin America. So that's the only product line that's really fundamentally different between Latin America and the rest of the world.

Thank you. I've forgotten about Max.

I think you might.

We'll go next to Gerrick Johnson with BMO Capital Markets.

Hi. Good morning. You recently announced a new DC Comics licensing deal with Warner. Can you share with us some details like duration and costs on that?

No, we certainly don't share costs although our principle on all entertainment properties is as we look at conservative revenue assumptions and discounted cash flow analysis and make sure as best we possibly can. But this is going to be good deal for our shareholders, and we certainly feel that way about our DC. Kevin, it's a multi-year deal probably three or four?

Yes. I think it's probably three or four and it's extension of our great partnership with Warner Brothers.

Okay. And I am not sure, if I heard a domestic a Wheels number, but can you give us that... that number?

You didn't hear domestic Wheels number. Did you Kevin, was it down? I think it was down 1% that might... No, I have might have just been... I might be wrong. Hang on... let's... we will look it up for a second.

Okay.

Wheels was minus one. That's correct Bob. Total Wheels in the U.S.

Okay, thank you.

And we'll go next to Tim Conder with A G Edwards.

Thank you. A couple of questions, number one could you remind us when in the second quarter of last year you started shipping your CARS products? And then Bob, I think when we were up in Easter where you mentioned that what was important about CARS and the strength of the tale here or not, would be helped perform here in the second quarter. And it sounds you are more optimistic now given that it performed well in the second quarter against Spiderman, against the initial shipments of the Transformers. Is that a fair statement?

Well I'll start by saying, we shipped CARS, my recollection, Kevin, is the entire quarter of the second quarter last year. And at least in the handful of stores that I regularly visit, that's the unique one where we were starting to have stock out problems even before the movie hit. And the movie did very well at least from a toy standpoint. So we felt good about it for a long period of time. And you are right I think that the real acid test on CARS and whether it's an evergreen property is sort of between now I guess and the end of the year. There's certainly some great competition out there for boys toys right now. But CARS is probably a little bit younger than some of the other lines that are being featured today, and we will have to see how it plays out but so far so good.

Okay. And given that it appears that it will definitely be more evergreen somewhere what your competitor has done with one of their marquee products. Are you going to start giving us on a quarterly basis what CARS was as far as the percentage of revenue?

I can't imagine doing that. We won't know until future quarters come along. Check back in 90 days Tim.

Okay. Running on a historical basis, I mean you mentioned again that CARS was up in the quarter on a year-on-year basis. Can you give us the actual dollar amount?

No, we don't break out brand item levels. Although I think I have said certainly at the year-end call last year that CARS was a really nice property for us. It's a home run, the best entertainment property certainly since I have been here for seven years. And again as you know we did talk about during the quarter we did well this quarter as well.

Okay. And relating to the input costs that Kevin you were commenting earlier and with the price increase now you're seeing part of the benefits of that also. In the back half of the year here, given what's in place for what the customers scheduled to be shipped and planned and everything and contracted in do you anticipate at this point the price increase and everything else fully offsetting those input cost increase for the back half of the year?

We don't give guidance as you know and it's difficult to determine what's going to happen in the back half of the year. So we see that we could have the modest price increase this year. It was lower than the price increases that we took in 2006 and 2005. And we still are going to face cost pressures. We will see as the quarters play out whether that price increase was enough to offset the cost pressures.

But I mean, aren't the majority of those input costs already locked in though for the back half of the year?

We are still producing in... we are at peak production here in the next couple of months, and we still buy-in raw materials to meet that production requirements. It is with regard to third party vendors more or less built in, but we will continue to face cost pressures as we look at the balance of the year.

Okay. So you still have about 90 day window on what you purchase for your factories. Correct?

It depends upon what materials you are talking about. So we make thousands and thousands of SKUs, so we do buy everyday to be able to fund production.

Okay. Thank you.

And we have a follow-up from Linda Bolton-Weiser with Oppenheimer. Linda Bolton-Weiser - Oppenheimer & Co.: Thanks. We saw the BarbieGirls.com MP3 players and Toys "R" Us, and didn't see it in the store, the Wal-Mart store we checked. Is it in Wal-Mart or how much of the distribution it has taken place in Wal-Mart?

Linda, I have not seen it anywhere at retail including Toys "R" Us yesterday in the particular store I was there. So, I don't think it's... it certainly isn't widely available at retail in any of the major customers yet. We just are jumping it, so maybe that inside into the improved supply chain at Toys "R" Us that they received it and got on the shelf so quickly. I will tell you the Toys "R" Us stores look terrific to me right now, and going back to one of the comments that I've made on the retail environment Toys "R" Us I think is doing a terrific job, and I think we are well aligned with them, but just going... just shopping their stores and seen how they're presenting toys to me is a big improvement. Linda Bolton-Weiser - Oppenheimer & Co.: Yes.We did see it on Friday in Toys "R" Us, but it looks like.... just got there?

Did you buy it? Linda Bolton-Weiser - Oppenheimer & Co.: No, we don't shop when we check.

Is that against... do you have to disclose or something if you buy it? Is that part of the analyst certification that you buy our toys that somebody seeks our business and they buy our products? Linda Bolton-Weiser - Oppenheimer & Co.: First, I don't have any girls.

All right. Thanks Linda. Linda Bolton-Weiser - Oppenheimer & Co.: Okay.

We'll go next to Sean McGowan with Wedbush Morgan.

A follow-up on Dora, can you tell us if you're seeing anything broad in that license or is just... do you think this is a one quarter aberration decline in Dora?

No, I think Dora has started to wane, clearly more in the U.S. than we've seen in some of the international markets where it's a newer property. It's been generally offset by Go-Diego-Go and Backyardigans as those are starting to build momentum. But I don't think it's just a one quarter phenomenon that Dora is not as prominent as she once was.

Okay. Thank you.

Thanks Sean.

And it appears, we have no further questions at this time.

All right, thanks Martha. Thanks to everyone. There will be a replay of this call available beginning at 11:30 A.M. Eastern Time today. The number for the replay is 719-457-0820, and the passcode is 4856439. Thanks for participating in today's call. Have a good day.

And that does conclude today's call. We do appreciate your participation. You may disconnect at this time.