Operator: Good morning, ladies and gentlemen. Welcome to the Masco Corporation 2010 Second Quarter Conference Call. As a reminder, today's call is being recorded and simultaneously webcast. If you have not received the press release and supplemental information, they are available on Masco's website along with today's slide presentation under the Investor Relations section, at www.masco.com.
Before we begin management's presentation, the Company wants to direct your attention to the current slides and the note at the end of the earnings release, which are cautionary reminders about statements that reflect the Company's views about the future performance and about non-GAAP financial measures.
After a brief discussion by management, the call will be opened for analyst questions. If we are unable to get to your question during the call, please call the Masco Corporation Investor Relations office at 313-792-5500.
I would now like to turn the call over to Mr. Timothy Wadhams, President and Chief Executive Officer of Masco. Mr. Wadhams, please go ahead.
Timothy Wadhams - President and CEO: Thank you, Cindy, and thank all of you for joining us today for Masco's second quarter 2010 earnings call. I am joined today by Donny DeMarie, our Executive Vice President and Chief Operating Officer and John Sznewajs, our CFO.
If you would please flip to slide number 3; net sales in the second quarter of 2010 increased 2% compared to last year's second quarter. Income from continuing operations was $0.01 per share compared to $0.19 per share on an as reported basis.
I should point out that foreign currency did cost us about 1% in terms of the sales change, and I want to talk about earnings per share and margins on a reconciled basis and we’ll do that in just a couple of seconds.
We did execute a new credit agreement in the second quarter, a line of $1.25 billion. We also retired $59 million of debt and we ended the quarter in a very strong cash position with $1.4 billion of cash at June 30, 2010.
If you please flip to slide number 4; I want to take a look at margins without some of the restructuring charges that occurred in this year’s second quarter as well as last year’s and looking at gross profit, on an as reported basis, our gross profit margin was 26.7%, down 30 basis from 27% in the second quarter of last year.
However if we adjust those gross profit margins for rationalization charges, and obviously, we’ve got a much more significant rationalization charge this year given some of the things we’re doing with our cabinet business, gross margins would have been on an adjusted basis for both years 28.4% versus 27.4%.
In addition at the bottom of the slide in terms of operating profit, if we add back rationalization charges in both years, and again these are the total rationalization charges. The rationalization charges that were reconciled for gross margin are those charges that affected cost of sales. Also add back one-time charges from the second quarter of 2009. Our operating margins on a comparative basis would have been 8.3% versus 7.3%. Again, with both on an adjusted basis, both gross margin and operating margin up 100 basis points.