Texas Instruments, Earnings Call NUGGETS: Utilization Rates, Expecting Strong Q3
James Covello – Goldman Sachs: In terms of the utilization rates that you are expecting as you go through the third quarter, I guess that would be the first question and the follow-up just so then I can go away after that is, is there ever a cost benefit analysis that would make sense to shutter some of the strategic capacity. In other words, if the expectation is that it’s going to stay dormant for an extended period of time when it makes sense to shutter it and then bring it back online when the utilization picked up?
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Kevin March – SVP and CFO: Jim let me just start on the utilization to third quarter, I think implicitly — we don’t want to forecast that but implicitly with the revenue guidance being flat and inventory being at desired levels about 101 days right now, I don’t expect our utilization level to the going up at this stage and the fact it might even decline a little bit as we go into the quarter. As to the second question on the cost benefit of shutting down strategic capacity, you may recall that back in January, we did announce the closure of two older factories that from a cost benefit standpoint, the economics of upgrading or trying to improve those factories to compete with some of the newer factories we brought on line just didn’t pay, so the decision was to go ahead and wind the operations in those factories down. That’s one factory in Houston which we expect to close by the middle of next year and another factory in Hiji, Japan which we expect to close by the end of next year.
Expecting Strong Q3
Stacy Rasgon – Sanford C. Bernstein & Co, LLC: First of all, just looking at the outlook, so flat revenue guidance, EPS up a little bit. It sounded like you said utilization down which might imply the gross margin may be down a little bit, so as the EPS savings here, all OpEx or some of the gross margin or is it split between the two and could you give us maybe some color on that drivers between gross margin and OpEx in the Q3?
Ron Slaymaker – VP, IR: Stacy, just for correction purposes, at the middle of our guidance range our revenue is flat and our EPS is also flat at $0.38 on a GAAP basis.
Stacy Rasgon – Sanford C. Bernstein & Co, LLC: On a pro forma, it sounds like a little higher though.
Ron Slaymaker – VP, IR: Because we have inside of that flat GAAP EPS. The charges the charges will – think of it more rounding up to $0.07 as opposed to rounding down to $0.06 in the quarter. Do you have any other…?
Stacy Rasgon – Sanford C. Bernstein & Co, LLC: On that first question, then does that imply sort of gross margin and OpEx kind of flattish to Q2?
Ron Slaymaker – VP, IR: Kevin?
Kevin March – SVP and CFO: Stacy, I think when you build your models and make the adjustments for the various things you were just talking with Ron about, I think the suited gross margins are probably going to be a little bit better. We’ll have a bit of a better mix we would expect in 3Q, recall the seasonality of our calculator business for example. Third quarter tends to be the strongest quarter and that has pretty good margins. As Ron mentioned we’ll see the baseband drop to probably about $50 million coming off of $90 million last quarter and so the remaining revenue that will fill in that gap had slightly higher margins. So between those things I think you will see the margins probably up a little bit quarter-over-quarter.
Stacy Rasgon – Sanford C. Bernstein & Co, LLC: For my follow-up, you mentioned limited visibility in September in regard to your customers. What kind of September outlook, do you actually have baked in right now to your flat guidance and where could this go if we had a normal September as we seem to have like a normal July and August orders right now?
Kevin March – SVP and CFO: Stacy, normal seasonality for us in third quarter is to be up – on average, seasonality is to be up 6% quarter-over-quarter. So, one could say that if in fact September fills out at a more normal fashion, we might see growth rates approaching that sort of number, but as Ron mentioned and as we’ve been talking about in the press release, given the profile of the backlog that our customers have scheduled on us, we clearly have less demand scheduled in September right now than we would normally have at this stage in the quarter and that caused us to be cautious on our guidance because this will not apparent to us why that is the case. Again, is it because customers fear they’re in demand or in fact, they just have increased confidence that if their demand goes up, we have adequate inventory that we can leave short lead times.