at Merrill Lynch Retailing Leaders and Household Products

UNIDENTIFIED SPEAKER: Good afternoon. Our next presenter is Tiffany & Co. Tiffany, as you know, continues to be the premier global jeweler. We appreciate management taking the time to come here today to give you an update on the Tiffany story. With us we have James Quinn, President of Tiffany. We also have Mark Aaron, Vice President of Investor Relations. With that let me turn it over to Jim. Thanks again, guys, for coming today. JAMES QUINN, PRESIDENT, TIFFANY & CO.: Thank you Mark. Tiffany recently reported its annual results, so this is a good time to highlight the strategies that we believe will generate improved performance in 2005 and beyond. Before continuing please note Tiffany's Safe Harbor slide. Throughout Tiffany's 168 year history, our Company has been renowned for its extraordinary product offerings. Indeed we define our Company's mission simply and succinctly, to enrich the lives of our customers by creating enduring objects of extraordinary beauty that will be cherished for generations Gucci Rings. Jewelry represents more than 80% of Tiffany's worldwide sales. Our products range from our iconic diamond engagement jewelry to innovative contemporary designs in gold, to our silver jewelry classics. Exciting and original new jewelry designs are at the heart of Tiffany's growth strategies. In the past several years, we have introduced a number of highly successful jewelry collections including Jazz, Hearts, Bubbles and Legacy collections executed in platinum, diamond and colored stones. So let me begin our presentation by highlighting these collections because often unlike fashion apparel and accessories, they are intended to last beyond a single season and the typify the timeless and enduring values that drive Tiffany design. Tiffany is about things that last. Tiffany's most visible and successful introduction in 2004 was the launch of our Atlas collection with its iconic motifs interpreted in 18k gold, and gold with diamonds and silver, and spanning a wide price range. In 2004, we also introduced the Rose and Wild jewelry collections in platinum and diamonds. The Cushion jewelry collection also proved to be highly successful, and Paloma Picasso's Groove collection in sterling silver with rubber was well-received among our younger customers. Beyond those named jewelry collections there are hundreds of additional design introductions and extensions every year. To put this effort in a macro perspective, new products represent somewhat less than 10% of our total sales in any given year. But the rate of introduction in the fashion gold and silver categories is considerably higher with more than -- approaching 40% while the more classic categories such as engagement jewelry typically have a low rate of design introductions. This Spring we will focus on promoting Tiffany's new Celebration rings. Rings are our most important category and the Celebration marketing effort is designed to speak directly and forcefully to the self purchase female customer. In fact, one of the many initiatives we will be using to support the campaign is a promotional insert in the May issue of InStyle magazine which has a circulation of almost 3 million readers. Let me read the ad copy that speaks directly to this woman. There are times to celebrate. Some are so obvious, others are personal. Maybe you've had a dream come true, maybe you're just plain lucky or you've earned this feeling. These are moments to remember. A Tiffany Celebration ring captures those feelings with perfection for all time. Also new this Spring is the Marquis set collection. Our designers created the look of fancy shaped diamonds by setting small round diamonds into a fancy shaped outline. The effect is modern and elegant. 1837 is another Tiffany icon celebrating the year of our founding. It is both stylish and recognizable and the success of the 1837 silver locket motif has led us to introduce this design in 18k gold. Later this year for the first time in Tiffany's history we will introduce designs in titanium bonded with sterling silver. We are also actively expanding our watch collection which has been successfully anchored by the Tiffany Mark collection. Last year we added the boldly masculine T-57 sports watch, a new interpretation of our Atlas design for watches, in addition to our very successful assortment of cocktail watchesgucci silver rings.