Good day, everyone. Welcome to the Diebold Incorporated’s third quarter financial results 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 the Vice President and Chief Communications Officer, Mr. Kristoff. Please go ahead.

Thank you, Jessica. Good morning, everyone; and thank you for joining us for Diebold's third quarter conference call. Joining me today are Tom Swidarski, President and Chief Executive Officer; and Leslie Pierce, our Corporate Controller and Interim Chief Financial Officer. Just a few notes before we get started. In addition to the earnings release, we have provided a supplementary presentation on the Investor page of our website. Tom and Leslie will be walking through this presentation as part of their opening comments this morning, and we encourage you to follow along. We have included non-GAAP financial measures throughout our presentation this morning. Specifically, I refer you to slides 27 through 37, which provide our rationale for the use of non-GAAP measures, as well as GAAP to non-GAAP reconciliations. A replay of this conference call will be available later today from our website. And as a reminder, some of the comments today may be considered forward-looking statements. Internal and/or external factors could significantly impact actual results, and as a precaution, we refer you to the more detailed risk factors that have previously been filed with the SEC. And now, with opening remarks, I'll turn it over to Tom.

Thanks, John. Good morning, everyone. Like many of our peers in the financial self-service and security industries, we continue to experience headwinds in our core markets. Similar to our peers, we had setbacks in both order entry and revenue during the third quarter. It is important to note that we face very difficult comparisons to the third quarter of 2008, which represented the highest quarterly earnings per share in the company's history. In spite of that, we still performed very successfully in other areas. I am encouraged by the progress we’ve made on various key business improvement initiatives under our direct control such as working capital management, which has resulted in significant increase in our free cash flow. Since our last call, we executed on a number of key strategic priorities for the company. As we announced yesterday, we feel very fortunate to have added Brad Richardson, our new CFO, to our management team. Brad's diverse experience and expertise in working capital management, international business operations, and sound financial reporting practices will be invaluable for Diebold moving forward. More importantly, Brad's experience in transforming an organization, its processes and infrastructure in a very rapidly changing market environment is relevant to our current needs. He has a collaborative style that I feel will resonate with our leadership team, associates, shareholders and customers. Brad will begin his new role later this month, and we look forward to having him participate in our year-end earnings call. On September 2, we finalized the sale of Premier Election Solutions, our US election systems business. Early in 2006, we identified this business as non-core to our company and have been pursuing opportunities to divest it since that time. Similar to our decision to close our manufacturing facility in France, this divestiture process was long and extremely…

Thanks, Tom, and good morning everyone. Before we discuss our third quarter financial results, as with past calls it is important to note that we have restructuring charges, non-routine income and expenses, as well as impairment charges in our financial results. We believe that excluding these items gives an indication of the company’s baseline performance. As a result, many of my remarks will focus on non-GAAP financial information. For a reconciliation of our GAAP to non-GAAP numbers, please refer to slide 27 to 37 in the supplemental material provided on our website. In addition, all results of operations reported today, including prior periods reflect Premier Election Solutions as a discontinued operation. Now let us turn to our financial results. First, I would like to refer to slide 14, which focuses on the third quarter revenue. Total revenue decreased $224 million or 26% in the third quarter, which included a net negative currency impact of 2%. Product revenue was down 40% and service revenue was down 10%. About two thirds of the decrease in product revenue is largely due to lower demand across all our core markets, with the remainder of the decrease due to the Brazilian elections revenue not repeating in the third quarter this year. The drop in service revenue was mainly attributable to the in sourcing of a large Brazilian government contract, we discussed during the previous call as well as lower installation volume. Looking at our financial self-service business on slide 15, revenue decreased $130 million or 21% in the third quarter. This decrease was attributable to lower demand across all geographies with EMEA especially affected. Now turning to slide 16, our third quarter security revenue decreased $37 million or 19%. Security revenue continues to be adversely affected by significant weakness in the U.S. financial markets, mainly…

Thanks Leslie. Jessica, we like to open the caller now for our first question.

(Operator instructions) Our first question comes from Kartik Mehta with Northcoast Research.

Good morning Tom. I just want to make sure I understood some of the statements you made about 2010. You said you anticipate moderate growth, would that have included any Brazilian election business you might get in 2010 or was that kind of growth based on what the market is right now and if you get the Brazilian business that will change?

We are looking at that as modest growth including the Brazil election business Karthik. So while we don't know exactly what the Brazilian piece is, we have confidence in our group in Brazil. The way we have delivered that in the past and think that we are well positioned there, even though there is no guarantee. So our expectation is we will have modest growth and some of that is the Brazil piece. Depending upon the size of that the Brazil piece would influence kind of our expectations on growth. So we still as I mentioned there, don't have clarity the way the RFP is written today, and as I mentioned at the award will be in the first quarter of next year, and it a winner take all scenario. But the way it is awarded and we have reviewed that, at least 80,000 terminals over a two-year period. So again depending on the assumptions that I have made there, we’ve learnt a lot more because I think we have to respond to the bid at the end of this month, and we will be actually doing that in person. We will get a lot more insight there. So while we have seen little bit more of stabilization in terms of the overall market, when you balance security and self-service, you would say security basically flat, may be a little moderate growth in self-service, and hopefully something from the Brazilian elections the way I'm looking at it.

And Tom, just as a clarification, you said the last order first for 60,000 units, and now it is just one year, right. So this would be 80,000 over 2 years?

Yes, but the way it is awarded it is at least 80,000. So again not having the opportunity of actually present this and have a dialogue, which is going from the RFP and we will learn a lot more at the end of the month when we actually go and submit the bid and have the face-to-face meetings.

Would you expect the margins for that business to be any different than they were last time? I know you said there was one other competitor in the marketplace, but I don’t know how the bids work in Brazil, and is there any chance of the margins being different or if we could look at the last to get a sense of what is a kind of impact could be to earnings.

There will be a significant difference between this time and last time. Last time we ended up in the bid process as a sole provider. This year we know of at least one other significant player on a world scale that will be there. I think the second thing was last year there was a significant movement in terms of currency. So after we took the order by the time we fulfilled it, currency had I think an impact like 12% or 14% kind of range which happened to work in our favor, which again was just more fortuitous than it was actually having the ability to impact that. So I think those two factors alone would suggest that this would be materially different. The other thing I would point to is unlike the last bid in this case, they have specified a specific price point and they've also specified specific specs, and by that I mean this time there is capability of biometrics. They also have a specific printer they were looking into. So the functional requirements are much higher, and the price point is lower. So I already know that the -- I would expect margins to be significantly less than last time, but I think from an overall standpoint, I am still expecting they would be accretive compared to all the businesses we are in but nowhere near where they were last time.

And then Tom, you talked a little bit about just looking at 2010, what could hurt obviously pension expense, when you are looking at operating income, but as you look, you are going to obviously have cost savings this year. Your plans have cost savings next year. Based on kind of where the markets are, would you anticipate operating margins to continue improving next year if the markets stay where they are?

Yes, I would expect we improve operating margins next year, and I would expect that if we get the leverage from increased volumes to make a material impact in terms of the margins. But as it stands today, our outlook is not aggressive in that regard from a standpoint that the markets are still relatively weak. And orders take three to six months before the revenue. So even activity that is taking place today generally is going to revenue sometime in 2010 time period, but our expectation is going into 2010 to improve operating margin.

And one last question Tom, you talked a little bit about the regional banks and community banks, and their looking at deposit automation, which we are not seeing any spending, do you anticipate that when the community banks do come back in the market that all of a sudden you could see a big boost in spending or do you think when they come back, it will be kind of business as usual, and we will see some spending start, but it will be at a little bit slower pace?

Well, I think two things to that Karthik. First of all, I think a lot of the reason and maybe we haven't talked about it much before, or maybe we did a little bit at the Analyst Day, was the infrastructure needs to be there for the small regional community banks to move. The big banks control the core processing, they control the network processes. So with an ATM, it is connected to a processor and that is connected to the core system, and until all those pieces are in place the real benefits of what you get from the process automation from a small guy is not necessarily realized. But what I'm seeing now is pretty solid plans for most of the processors and most of the networks of being able to handle deposit automation and handle it in a way that is not an emulation of depositing in an envelope, and it is an emulation of being able to clear the check and handle the cash directly, which would be a big boost forward to the business case for regional small community banks. I think again because there are so many processes out where, and there are so many pieces of the infrastructure that need to be in place, I think this is a gradual movement, but I would see that next year we see more activity in that regard, but really 2011 and 2012, I will see there would be significant pickup in that space in the US.

Thanks so much Tom.

Okay. You are welcome.

Our next question comes from Matt Summerville with KeyBanc. Matt Summerville – KeyBanc: A couple of questions. Good morning. First, Tom can you give a little more detail as to what kind of transpired in your order book in EMEA or what customers have been seeing in the last 3 to 4 months, kind of why the third quarter was so bad, and then all of a sudden you are kind of seeing a pretty nice pickup here in October, and I guess then the follow on to that would be how you feel about that sustainability?

Okay. You know, regarding EMEA, it is almost regarding all of the numbers. You know you have activities that take place in the quarter. Unfortunately customers don't really care about our quarter type of reporting results. They care about going through their processes and the diligence that they need to make those decisions. So I take some comfort that October looked solid, but you look back in October, you look back in the third quarter and the second quarter, you say, “Hey, it is weak,” and kind of almost have to look at over the course of the entire year to say, “How do we improve, and do we do overall.” So the third -- the fourth quarter orders we took in October, many of those were in the very front end of the month, thus we have visibility to that, which makes us feel a lot better about things that we are being promised from the market that actually came to fruition. They could have just as easily been a week earlier and the third quarter might have looked a little bit different than it does, but as such our fourth quarter comparisons are going to look good as a result of timing. The other thing that I would point to there, the good news for me it wasn't just one or two individual orders; it was from the Middle East. It was a little bit from South Africa. It was a little bit from Western Europe, and that to me was a good signal for the first time for us in the European marketplace to say there is some breath there that makes you a little more comfortable than it was just one significant order. So as I think about it, I think about it while I'm thrilled this happened in October, I need to send this trend happen and see what the whole fourth quarter looks like, and then look at it in comparison to the whole year, and it still will be a weak year, and what we do in the fourth quarter even though the fourth quarter should show a significant pickup compared to last year, EMEA specifically. Matt Summerville – KeyBanc: Can you give a little more color on what your small bank customers in the US are seeing right now about their capital deployment plans in 2010 in light of everything that is impacting that specific customer base? In terms of their propensity to buy new ATMs versus go that integrated services model, and I guess where are you with the sales cycle in that regard?

Okay, I think overall I would say that the trend continues the lengthening of the sales cycle is evident. And it is either simply because the regional banks are hesitant or there is always a cloud that we thought was going to pass relative to the FDIC assessment that is back on the horizon or all the other issues that they are facing, it seems like people remain hesitant. Now in that hesitation it has given us a real opportunity from the integrated services standpoint, and specifically within the regional banks in the US. As I alluded to on my opening comments, we have had more activity in terms of RFPs and responses, and we had symposiums across the United States, where we had got a lot of momentum in that regard. And we have seen a lot of that turn into some activity here in 2009, but the way that those were booked in the five-year contract, which is good, but they only recognize certain parts of the revenue here in 2009. So, I would say, I like that for our future ability to be able to deliver solutions and it seems like the message is being received well, but because these decisions end up 5 year contracts, they are much broader decisions than buying a piece of equipment or you know one piece of integrated service versus the holistic approach and as such it takes time to get through the processing and you pitch it at the very highest levels of the bank. So, in that regard, I am confident in terms of our ability to deliver integrated services, and I think that we have seen continued weakness relative to the regional bank space just in general. It has affected the security business more than it has self-service. So, when you look at our guidance in terms of -- from a revenue guidance standpoint, you see where security is down double-digits, you see self-service down single digits, and when you look at that year-over-year and in comparison to our peers, we think we are in pretty good shape in that regard, but from the regional guys, specifically in the US, I still see continued caution out there, and I see that for the next several months. Matt Summerville – KeyBanc: With regards to the security business a couple of questions there, first, how much in terms of revenue do you think contractually that you have I think you're called out government do you believe has been pushed from 2009 to 2010. That's the first question, and then the second question you know, in your -- I forgot what slide it was on, 12 or 13, your comments regarding your viewpoint for 2010. Do you see the security business growing, do you see another big leg down and involved in that in your thought process there, how do you view new branch construction?

Okay. I'll try and answer all those Matt. If I miss one piece please come back to it, but in terms of 2010, I see security having bottomed out and being at basically flat. I'm not optimistic to say that there is going to be a huge rebound next year. I don't see that happening given the branch growth or the lack of branch growth and the lack of renovation, and because the financial sector is so big for us the fact that you know, it is going to be -- it's the big driver. If that would increase by 5% or 10% you know, it'll be a whole different picture there in the security space but it's not. It's relatively flat and you know, physical security will be down, electronic security will be up. You know, when you mix that together you know, that looks like a very flat picture. I would expect government and commercial pieces to grow for us next year, but they're not big enough pieces to have the overall impact you know, that I'd like them to have long-term, but I see some opportunities there in several of those would be major opportunities that again like the post office will be multiyear kind of contracts. So we’d be building a nice infrastructure or base model for those businesses long-term. Retail, we continue to see it being very tight. You know, and we've seen a lot of hesitation there and we've seen some of our, you know, some retailers closing facilities that have an impact on us. So when I mix all that together I come to a very flat scenario for security business in 2010. Matt Summerville – KeyBanc: Thanks a lot Tom.

You're welcome.

Our next question comes from Gil Luria with Wedbush.

Yes, good morning. You mentioned a little bit the national banks in the US. To the best of my understanding, Bank of America is going to be down rolling out its deposit automation ATMs this year, and then obviously they're a big part of that national bank picture with Chase and Wells. Can you -- should we expect that you know, a third of that business is going to drop off next year since only Wells and Chase will continue and Bank of America is going to drop off, just within national banks in the US, those large banks?

Yes, Gil, let me answer it this way because I don't know individually each of the -- or be able to comment on each of the banks, but we look them as a whole group of them. We have about what we would call 15 major players. Certainly, the top three players who have deployed quite a bit you know, would see a drop-off and in some cases may be market drop off, but we’ve other players who are just coming in to the very beginning stages of the deployment. You know, when you mix those pieces together I wouldn't say we be down 30% some. I'd say that we'd be down even in the teens or maybe the 20% level for just that group in and of itself.

Got it, and then your orders, you characterize them in the press release on a year-over-year basis. Could you tell us by the major geographies what your orders look like Q3 compared to Q2?

Let me see. Yes, when I look at orders relative to Q2, I would say that you know, by and large you know we were down slightly, Q2 to Q3. Some of that has to do just simply with timing of the way certain things happen, you know, as we mentioned. I think China end up moving, we ended moving some of China into the second quarter that was originally scheduled in the third quarter, both from a revenue and an order standpoint. But overall, you know, when you look at it you would say we were down sequentially from Q2 and then our expectation is Q4, we would, you know, be in the other direction that would be up relative to Q3 on a significant basis from an order entry standpoint. And certainly, Europe getting out of the gate the way it did in October is a good boost in that regard and you know, we get a lot more visibility as we go through that but you know, again, I am expecting that you know, the US you know, remains about the same way it has been. It's not been very robust but as we compare now to the fourth quarter of last year, the fourth quarter of last year is when we first started to see the major impact of the financial downtown from our standpoint. So the comps become a little bit more favorable in that regard whereas for up to quarter three of this year our comps were very difficult because we had made a very, very strong first three quarters of order entry and revenue last year.

Got it. In terms of your -- the Brazil election business, could you characterize for us the competitor there. Is this a large corporation that maybe makes ATMs. Is this just a small upstart? Is there somebody formidable?

Yes, this is a formidable foe that's not in the ATM space but it's in the what I call the security space in the election space worldwide. So this is someone that has done other countries and is now kind of turned their sights relative to Brazil, and, you know, we consider it a very formidable foe and with the resources to do supply chain with the resources to you know, deal with significant outsource manufacturing and have the competency to do that. So, I think that is the one that I'm certainly aware of. There maybe other players in that region that you know, show up but I'm not sure anyone else really is going to have the technical capability to meet the kind of specs that we are seeing coming out of this.

Got it. Then a couple of financial clarifications, so, in terms of the change in guidance, it went from 170 to 190 that included US elections to 175 to 180 that does not includes US elections and got a $0.05 benefit from the exclusion of US elections. Is that right?

That is absolutely correct.

And then one last thing, 2010 tax rate, can you at least give us a range of where we should expect that given tax rate has been although unpredictable?

Yes, I think we're talking -- I'm looking at Leslie here to make sure, if I am incorrect, you will correct me. But I think we are talking about the mid-twenties for next year 2010.

Yes, low to mid 20.

Great, thank you.

Our next question comes from Reik Read with Robert Baird & Company. Reik Read - Robert Baird & Company: Hi, good morning. Just a follow up on the Brazilian elections business, I mean your kind of suggesting that that's in your guidance which suggests that you feel you got pretty good position there, Tom. Can you talk a little bit about why you feel you have that position against, what you're talking about is a formidable foe?

Sure, and let me kind of be clear Reik, we really haven't given any guidance for 2010. I think what I was trying to do is frame up some of the big pieces of 2010 in terms of headwinds and other things to consider as we, you know, as we frame up 2010 guidance, but I'll give you my perspective as to kind of the landscapes and this is such a significant opportunity that has had you know, had such an impact in 2008 that I felt is worthy of talking for 2010 unlike maybe other just regular opportunities. This is the size and importance. The reason I feel good about our positioning there was two fold. Number one, over the past three election cycles that they've had in Brazil, we been a significant supplier. They have used another entity in one of the elections, but I think our performance allowed us to get the entire business from the last time we did this in 2008. Second, the requirements that they have for the turnaround time means that you need to have the capability of both project management and the manufacturing capacity as well as the ability to integrate to be able to do that in a pretty nimble fashion. So while you can contract out the manufacturing at some point, you've got to have the capabilities and resources to actually do the integration, and we have both the manufacturing and integration capabilities sitting right there in Brazil that we do every day on self-service side and have done this for the Brazilian government as well. I would say the third thing is the engineering specs for this is not just taking 2008 and doing the same terminal again. They had new levels of security for this. They have added…

No, I think they -- I would say they have integration capabilities, not necessarily manufacturing. Reik Read - Robert Baird & Company: Okay, and then just going back to the integrated services business, it seems like you're having a pretty good ramp in terms of number of people that are starting to move towards that. Can you talk a little bit about how quickly you are actually adding new customers and what the level of service offering uptake is you're putting those folks online?

Yes, and I don't have specific numbers that I can point to other than the broad one to say we've added about 1000 you know, over the course of this year and that's you know a 1000 not institutions but a thousand devices, and generally what happens with these contracts is people may give you 50 or 100 and you know, you end up moving them onto your system you know, over the course of 3 to 6 months and then from that integration process then they have a host of services that they are selecting. So, you know, the opportunity here is not only get a sticky relationship but then to be able to up sell and as we've seen to date, you know, we've had pretty good success when we have someone on for our 12 to 14 month period to be able to sell them a third or fourth service. You know, not everyone takes everyone of those services coming out the gate, but as you start over their operations and they are looking at your reporting and your controls in the audit process, you know, they get a little more comfortable. So we’ll feel good about that. I think we've added about you know, 20% somewhere in that range to the base compared to last year, and so we feel good in terms of the ability to sell it. We feel good in terms of our ability to deliver it and have a value there, and you know, for us we think is a big value proposition in a competitive opportunity that we are going to drive very hard in the future and this is not just something we're doing in the Americas, although in the Americas we have better infrastructure to be able to do it, but we have a bank in China, we've got banks in India, we've got banks in the European Union. So those are just smaller operations than we have in the Americas. Reik Read - Robert Baird & Company: And outside of Brazil, which I know has always been a larger region for these types of offerings, how quickly does it become really material. Is it -- does it happen in 2010 or just because a longer cycle here. It's more of 2011 and beyond story?

No, I think the real impact is down the road in terms of you know, as you get your building on those revenues. You know, the real revenue is down the road but the opportunities are right now, I mean we got several in Colombia that we're working on and I go through each of the you know, Latin American countries and Mexico, and I think we've got some real some real viable opportunities right in front of us to expand this outside of Brazil, outside the US, outside of Canada in a meaningful way, although I don't think it'll have a material impact on the revenue that they experience next year, it will down the road. Reik Read - Robert Baird & Company: Okay, and then just one last question on the pricing front. You mentioned that you guys are maintaining discipline. Does that mean today that you're having to walk away from business or has the actions that you've taken in shutting down some facilities allow you to deal with those price exceptions more directly, or does that take some time still?

No, I think a couple of things. One, relative to you know, pricing. The other, I mean is impactful in terms of the real significant opportunities, whether it be self-service or on the security side. I mean you find yourself in those kind of discussion, we analyze them on a case-by-case basis. We have a process where they bubble up with good visibility to them, but I would say yes, there have occasions where we’ve walked away, where we don't think that you know, the pricing made sense and, you know, for us it's not a matter of you know, you're losing opportunity as a matter of what the impact is on your existing base, in the existing relationship that you have and honoring those you know, appropriately. I think we continue to feel that we've been in a very good competitive position when we look at our revenue for self-service. I mean if you compare that to the competitor across the globe, you know, while our revenue you know for the year. Our guidance is down you know, 6% to 8% when you compare that to others we feel, you know, we've held more than held our own there. So we think that our behavior has been the appropriate behavior. We evaluate it every time because you know, you imagine there is a country or there is service manager or sales manager, who wants to win every deal but for us it's a matter of you know, having the discipline in place and we feel good about what we're doing. Reik Read - Robert Baird & Company: That is great. Thank you.

(Operator instructions) Our next question comes from Zahid Siddique with Gabelli & Company. Zahid Siddique - Gabelli & Company: Hi good morning. A couple of questions, first, Tom on the share buyback any changes to your view on that, or your position?

No, Zahid. It is basically the same and that's you know, I think while it's difficult not to go out and buy the stock right now, we think the depressed level, liquidity is still the priority. I think that served us well in terms of the credit facility renewal as well as the balance sheet, and that's the current approach. Zahid Siddique - Gabelli & Company: Okay. Could you comment a little bit more on how you made the decision with regards to the CFO position, you know what kind of lead you to make that final decision?

Yes, we -- you know this has been a pretty long and arduous process. I mean it has probably being under way for five months, and we had an opportunity to really look and talk to quite a few folks. I know, I personally, I think met with eight individuals and we had select members of our senior team interview, you know, our top -- I think four of five candidates here as well as in their locations. Certainly the head of HR, Sheila Rutt, talked to many more folks and screened you know, through many. I think the things that led us really to Brad at the end of the day were a multitude of things, both professional as well as personal. Brad and his wife have family in the Northeast Ohio region, and it fits both from a professional and a personal standpoint, which was important to us. Second, you know, his background both at BP Amoco as well as what he has done at Modine was a nice blend of both the financial discipline, but also an operational side and a solid blend in terms of international operation. So Brad was running an operation down in Venezuela, and he also spent time in London. I think those are both important for us as a global player, and someone that's played both an operational role and finance role. And I think lastly the thing was he had done quite a few things from a strategy standpoint that I thought was important that you know, we have the very strong finance team, and as I mentioned before Leslie stepped up and did a fantastic job, but we were surrounded by folks within the finance group that I think were solids. So I'm not looking for someone to come in and have to run each of the finance operations. I'm looking for someone to take our operations forward and more importantly have an impact on the overall company operations and from a strategy standpoint, I think he's the right guy at the right level of maturity to play that role. Zahid Siddique - Gabelli & Company: Okay, and finally with regards to M&A activity, do you see you know, any increase within your industry or are you looking for any type of acquisitions, or do you think you're pretty complete from a portfolio perspective.

I think in that regard we, you know, I would say there is probably certain pieces of technology that are of interest to us, and certain geographies that you know, as we enter we may need a distributor or an acquisition to help you know, on the service side or something, but I would view most of the things that we currently are looking at and you know, you end up with only one of the 10 you really seriously consider would be what I'd call bolt-on to our existing strategy. So, very focused on self-service or something in the security space to help move us in the current course and speed, nothing outside of that. Zahid Siddique - Gabelli & Company: Thank you so much.

Our next question comes from Ted Wheeler with Buckingham Research.

Hi, good morning. Thanks for taking the call. Two questions, if I looked at the South America revenues that you, you know, periodically disclose I guess on an annual basis, what would be the mix of those now that would be in the integrated services format?

Ted, I'm not sure that it would be anything significant in today's makeup and you know, when I think about that I'm thinking really everything outside of the US, Canada, and Brazil when we talk about the Americas. How are you defining it first of all?

I mean, you give revenues on America's and you give revenues on North America. So I guess if you pull those apart, you'd get some window on North America. And if I looked at the mix there, I just was wondering you have been on the scene for quite a while, and I just wondered how much of those revenues is now under the integrated services format?

Yes, the biggest piece was always Brazil. I thought Brazil really was not anything up to this year. I mean obviously we are looking to grow that and the one impact on this year from Brazil is one of the big government banks in sourced what they are outsourcing to us. So, that had a material impact on us here in the short term, but the important piece is the competency and capabilities were taken to the other countries there and seem to have good receptivity. I mentioned, you know Columbia in particular, but I could mention a number of other countries there. So my expectations would be much like it is for the rest of the operation that you know, we are going to continue to drive service and services and that's going to be the bulk of what we do five years down the road and Latin America has both the capability, the competency, and the market has the appetite for it. So I feel good about Latin America in that discussion.

And if we were to just look at the ratio between product and services revenues, I guess in Brazil it would be more meaningfully towards services.

Correct. That's right, and that's kind of the model that we're driving to. You know at any point in time, you know you may have a huge product order or whatever, but you know, over time we're saying you know, we want to wait 60% to 65% to service and services is the goal.

Oh, that's -- thank you for that color, and one other just maybe housekeeping question. After two years in a row of I guess a different seasonal pattern in China with '08 and '09 being front-end loaded, do you think that's more normal or are we going to go back to a more normal sort of backend loaded seasonality as we look at next year?

Yes, and believe me we’ve had these same discussions internally to try and make sure we understand. From what we are gathering in the marketplace and the big driver of this in most cases happens to be China. From what we are gathering from the conversations we're having with the banks is going to be back-end loaded or more traditionally back-end loaded as we have seen in the past in 2010.

Great, thanks.

You're welcome.

Jessica I think we have time for just one more question.

Thank you. We will take our last question from Matt Summerville with KeyBanc.

I have a couple of quick ones. First, in terms of cost savings, I think Tom you mentioned you're on track to get $35 million in 2009. What would be your thought then on 2010, and kind of how you are framing up your general outlook for next year, and then Leslie just to make sure I'm clear what would be your fourth quarter tax rate for 2009?

Yes, I can take that tax rate. Basically the tax rate in the fourth quarter would be about the same that they have year-to-date through September, which is approximately 18%.

Okay, and that relative to the Smart Business continuation, while we don’t have clear visibility right now. I would say it will be in the range of $35 million to $40 million next year is the reasonable target.

And does that include while you're in the process of doing in Lexington?

Yes, absolutely. That's correct.

And then last question. You mentioned in the prepared remarks that you have a line of sight to remediating the six issues you guys have had from an accounting standpoint, if you will. I was wondering how much cost has been associated with that in '09 and is there another layer here that goes away next year?

I'll let Leslie talk specifically about you know, the remediation efforts. There is cost associated with this, but the flip side is we've added capabilities and we've added controls in place that remain with us. So I'll let Leslie answer in terms of where we're at in remediation and in our desire to really have all of those addressed by the end of the year, but Matt I don't think there is going to be a significant amount relative to the control process that we put in place because those are going to help us be a better organization and individuals that we've added are going to remain with us as we continue to improve that.

That's correct. We probably have about $3 million to $4 million in cost for '09 in this effort. We will continue some level of the effort into '10 as we sustain things that we've built and we'll continue with further improvements accompanying with our IT initiative that we've got underway. So there'll be some level of cost going into '10.

Thank you.

This concludes today's question-and-answer session. At this time, I'd like to turn the call back over to Mr. Kristoff for any closing remarks.

Thanks Jessica. I'd like to thank everyone for joining us this morning on the call, and as always if you have any follow up questions please feel free to contact me directly after the call. Thank you again.

That concludes today's conference. Thank you for your participation.