Good morning. My name is Christie and I will be your conference operator today. At this time, I would like to welcome everyone to the Flowserve Third Quarter 2008 Earnings Conference Call. All lines have been place on-mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions]. Thank you. I will now turn today's conference over to Mr. Zac Nagle, Vice President of Investor Relations. Mr. Nagle, you may begin your conference.

Thank you, operator. Good morning everyone and thank you for joining us. Welcome to Flowserve's third quarter 2008 investor conference call. Today's call is also being webcast along with our earnings presentation on our website at flowserve.com. Just click on the Investor Relations tab to access the webcast and the accompanying presentation. Before we get started with the presentation, I'd like to highlight a couple of important items. First, we schedule the duration of the call for a full 90 minutes or we typically not need that much time, we're happy to go beyond our typical hour to cover prepared commentary and any subsequent Q&A. Second, for those of you who have accessed today's call through our dial-in phone number and also wish to follow along with our earnings presentation slides on our website, please select the Click Here to Listen via Phone icon on the Event Details page. I'd also like to note that our webcast we posted on our website for replay approximately two hours following the end of the call. The replay will stay on the site on-demand for the next few months. Joining today are Lew Kling, President and CEO of Flowserve; Senior Vice President, Chief Financial Officer and Latin America Operations, Mark Blinn; and Vice President and Chief Accounting Officer, Dick Guiltinan. Following our commentary, we'll begin the Q&A session. Regarding the forward-looking statements, I'll refer you to yesterday's earnings release and 10-Q filing and today's earnings presentation slides deck for Flowserve's Safe Harbor statement on this topic. All of this information could be found on Flowserve's website under the Investor Relations section. I encourage you to read these statements carefully with respect to our conference call this morning. The information in this conference call including the initial statements by management plus their answers to questions related to projections or other forward-looking statements are subject to Flowserve's Safe Harbor. Now I would like to turn things over to Lew to begin the formal presentation.

Thanks Zac and good morning. It's a pleasure to welcome you to our 2008 third quarter conference call. I am pleased to report that the third quarter was another terrific quarter for Flowserve with continued strong execution and outstanding financial results. These record results again demonstrated the improving operational excellence, continued strength in our end markets, strong leverage in our income statement and the successful execution of our key strategies. This resulted in strong organic growth in bookings and sales for both our original equipment and aftermarket portions of our business, as well as solid year-over-year gross margin and operating margin improvement. When looking at the year-to-date our strong financial results for the third quarter have increased our confidence and our ability to continue to deliver strong earnings and cash flow in the fourth quarter. As a result, even with the adverse impact from the strengthening dollar, we expect our full year earnings per share to be at or around the high end of our previously announced range of 720 to 750 per share. It is also worth noting, that a long term benefit of a stronger dollar also improves the competitiveness of our non-U.S. operations which represent approximately 70% of our global business. During next two slides, I will touch on some of the significant company highlights for both the third quarter and the year-to-date, as well as the primary performance metrics achieved during this quarter. Equally important to the reported financial results of what we are seeing in the major markets we participate in, oil and gas, power, chemical, and water. I will spend a considerable amount of time on these topics, since I know it's on the minds of many of our investors. We'll also look at some commentary about our target global markets from numerous external…

Thank you Lew and good morning everyone. As Lew mentioned we are very pleased with our third quarter and year-to-date results. As we've seen strong orders in sales growth and strong margin improvements. This morning, before I review the financials, I'll cover a few topics and highlights relative to our business today. I'm going to spend a little more time on these current issues and more importantly how we're positioned. The first topic is the credit market. The world is seeing unprecedented times, in the global financial markets and it's important to note that Flowserve has a durable capital structure. And I'll review that in a moment. We're also continuing the monitor customers, financial relationships, counter parties and suppliers and we have not seen any problems. A consistent team, we have discussed for many quarters is the strength in our aftermarket business. We've seen strong execution on our aftermarket strategies reflected by 17% year-to-date growth in Flowserve aftermarket business including 20% growth in the Pump Division. As we look at cycles, aftermarket provides a sustainable high margin earnings strength. We've also seen strong operating margin expansion of 340 basis points, driven by operational excellence, a mix to higher end products, improved pricing and volume leverage, resulting in gross margin improvement of 220 basis points. We've done this, while remaining focused on cost containment, resulting in a reduction in SG&A as a percent of sales of a 140 basis points year-to-date. With respect to tax, we have seen that benefits of tax items of $0.22 in the quarter and $0.38 year-to-date and we now estimate our full year tax rate of approximately 25%. Another business indicator which has remained strong over the last four quarters is cash flow generation and the third quarter was no exception with the generation of $173…

[Operator Instructions]. Your first question comes from the line of Michael Schneider of Robert W. Baird & Co.?

Good morning guys and congratulations on a great year so far.

Thanks Mike.

Thanks Mike.

Maybe first we can just talk about the mix in pumps because I guess even I understand of that the six point shift now towards project activity versus half the market, can you give us a sense of is this weight or is this mix sustainable in the Q4 or in the early '09 or is there some reversal that we should expect now as the cycle gets longer?

Well, as is we talked about before Mike, one of the big things that's impacted shift is our tremendous success in growing our aftermarket business. But as we talked about over the last couple of quarters and even in the last year, you've seen the bias relative to current mix to more original equipment. And so and that persisted again year-to-date and even in this quarter because we had 69% original equipment in orders in 31%. So that should indicate that there is still going to be a shift mix relative year-over-year. Having said that, I think one of the important things to note is that we continue to drive gross margin improvement, so as we talked about before original equipment is good business, so we look at in terms of absolute growth and each one of them in terms of original equipment in aftermarket.

Okay. And in fact on that topic of the gross margin benefit I think historically you said each point shift translates into about a 30 point change in gross margin. And year-to-date now are we seeing a one point shift and yet gross margins are up 300 basis points. So I'm curious how is that relationship held, just so we can get a sense as we model now at some point I guess in '09 the reversal of this mix shift. Does that reversal still hold such that, the aftermarket growth is percent of mix for each one point, we're going to see 30 basis points of gross margin benefit.

One... that is kind of theoretical application and one of the thing that has changed since we talked about that year ago is that the margins in our original equipment have gone up. And a lot of that, as we talked about is certainly pricing, but also if you look at this business over the last five, seven years, we've seen more of a migration to our higher end products, that what Flowserve offers and those tend to commend higher margins and also lead to more aftermarket opportunities. So, the 30 basis point holds roughly, it will tend to shrink down as original equipment margins to go up, often we talked that aftermarket margins are fairly stable. So, it's a good proxy for modeling, but it can certainly change relative to how many specialty pumps we may ship in the quarter and again we're seeing more and more of those.

And have the aftermarket margins risen over the last year 18-24 months?

Well... as I said they've been pretty consistent. We've see a little bit of pricing in certain parts, but service tends to hold fairly stable through the cycles, but nothing really noteworthy in terms of price increase to talk about.

Okay. And then I'm just curious, when I look at your pump and valve market sales figure its historically and I'm referring specifically to slide 20, if you look at the aftermarket it goes back to I am sorry 2004, I am curious about what the aftermarket did, at least the other data sources you use, going back to '98, '99 and then 2000, 2001, did it decline or is that all project mix that declined at least in the two or three years?

Mike its difficult really to use that data going back to that period of time because, we were not even closer of as it is today that was prior to the IDP acquisition. I can tell you... I can give you some anecdotal information, one the aftermarket strategy was much more of a break fix at that point in time. And also as I talked about, it was tend to be a higher concentration of more process pumps and product pumps we've seen a migration of more higher end products over the last couple of years. So I am not sure that information would be really relevant. What we can say is and we talked about this before is through cycles aftermarket tends to remain fairly firm. There are commission spares that sometimes during the project the aftermarket that go with the new project but for the most part, if you think about what can occur in the down cycle as they still need to maintain the facilities in a state of repair. And those will certainly be opportunities, where they are going to look for efficiency; if you think about the immediate profit pool that operators can go to, as he is going to try to maintain and increase the efficiency in his existing facility. And the other thing is, if you look at it... they will be looking for ways to get rid of fixed cost and that provides certainly the opportunity to outsource their service to us. I think a lot of those things combined with our execution, improved execution over the last couple of years, really makes us a different aftermarket business than you would have seen in 1999.

So in fact all those factors both internal and external and especially now the large install base that you put in place over the last two years shouldn't I actually argue that aftermarket say for the perceivable future continues to grow even your project activity rolls over substantially because now your servicing are significantly larger install base and your servicing more effectively?

We continue to execute and take care of our customer, yes.

Okay. And then final question on the tax rate, so 25% is the Q4 number I am sorry the 2008 number. Can you give us some sense, is that rate changed meaningfully in 2009 or is that a sustainable rate?

Well, we talked about that before, in the last call our structure rate was rising approximately 29% and that we're going continue to invest in planning opportunities. We haven't given any further guidance beyond that so that's where we're at this point but I will tell you, we're going to take advantage certainly of being a global international company, continue to invest in tax planning and with a focus of driving that down as we have a over the last couple of years.

Well I guess the core question is have you as result of all the activities during 2008 reduced your structural tax rate or are these just all one time settlements with different types authorities overseas?

We are where we were last quarter at this point; we haven't provided any additional update. Our structural rate is approximately 29%.

Okay. Thank you.

Your next question comes from the line of Charley Brady of BMO Capital Markets.

Hey thanks, good morning guys.

Good morning.

To start with, where you were in terms of capacity and particularly in Latin America you talked about that actually its down there oil and gas market, may be need some capacity, where you are on that and just in broad terms what you're doing and these are coupled with that capacity right now?

Let me answer the second question first. We do feel comfortable with our capacity not only because of the physical capacity that we have worldwide but how we're managing it, we're managing it on a global basis. On your first question around Latin America, you're right there is a lot of opportunity there. Flowserve has been there for a long time so that... we're not a new entrant into that market, but we're investing in capacity down there. First of all, we talked about this we're going to build a new facility in Brazil, outside of Rio de Janeiro. We have a facility there right now that is servicing our customer but in talking to our customer we see a lot of opportunity going forward, so we have committed some capital to build a new facility. I think equally important is around Brazil and another parts we're investing in QRCs because they have a lot of infrastructure that is being serviced by local machine shops and that's an opportunity for us. So we are investing in capacity down there, so we're going take advantage to the opportunity in Latin America.

Just going back on prior question on the gross margin increases in the phase of significant swing to the OE mix, how much of that is out of price and how much of that is just coming from internally generated better operational manufacturing?

Charles we don't break that out specifically, but I think if you look at the contributors, certainly prices provided benefit because that tends to almost flow through except for the commissions you paid to your selling organization. But we've seen a substantial benefit from operational excellence and where that really shows is you've just seen regardless of mix, you've seen good gross margin improvement really across all three of our divisions. So that's been a consistent theme. Also you see things in terms of the products that we're putting out there, we've migrated our products to some of the higher end products available out in the market. Remember in the second quarter we talked about some specialty pumps that we shift and how that impacted gross margins. So... and also we get volume leverage as well. So all those are contributing factors, but I think price is not necessarily the number one contributing factor. When we look at it we think operational excellence and where we're taking our products, is really what's driving the margin improvement.

Thanks.

Your next question comes from the line of Amit Daryanani of RBC Capital Markets.

Thanks, good afternoon guys.

Good afternoon.

I guess just a question on the cancellation side, I realized you guys talked about, not seeing the extraordinary cancellations but are you seeing OEMs maybe pushing out the deliveries schedules at this point?

We really haven't seen very much of it, we're hearing some anecdotal terms if they're if some possible delays, but as far as cancellations are concerned, we're really not seeing anything out of the ordinary, as I said, there is just some talk out there but really nothing that we can put our finger on at this point in time.

Alright. And then I guess, just looking at in terms of the capital usage going forward, you guys seem to be fairly comfortable with the amount of debt that's on the book, you should generate good amount of cash going forward? Can you just talk about what do you perceive to be the biggest priority of the cash usage, given that, I think you're about half way through the 300 million buyback program you guys have?

Yeah Amit, it's interesting how time change right because three weeks ago the order of the day was having as much cash on your balance sheet as possible, and that is the priority to us. I think it's important to note that we look at this company and our balance sheet really in the interest of our shareholders, so we want to make sure we have adequate capacity to whether whatever happens in these credit markets. But that aside and we'll continue to deploy our capital as we have in the past. We'll look at opportunities to return value to the shareholders, we bought a $100 million of share back... million dollars of shares back during the third quarter, we think that's a good way to return value to our shareholder. We've committed to the dividend, you see a lot of company's now that are pointing those down or taking them off, we've committed that because we believe in our cash flow. Also keep in mind we've been investing increasing amounts in our business in capital expenditures. You saw $36 million in the quarter; I talked about our investment in Latin America next year. We're building out our facility in the Middle East, standardizing our machinery, so we have good uses for cash. What we typically do is we'll talk about that cash and how we plan to use it going forward at the beginning of the year, but for this year just to highlight what we did, as we went off factoring program use cash, we topped up our pension plan which is good going for employee morale, so we think we've invested it wisely.

Fair enough. And I think your market... sorry I understand that, the fact that you guys bought back stock in this quarter, was about $125 per share and the stock is trading almost more than half of that right now. So I was curious of the priority to buyback stock at this point was bigger than keeping cash in hand given the uncertain macro environment.

Well couple of things Amit is the drop in the markets has been fairly precipitated over the last couple of weeks and keep in mind our window closed for repurchasing shares September 15th which is our blackout period. So we don't have the opportunity to do anything as afterwards. But even when we bought those shares back during that period of time, we looked at our cash flow generation opportunities and felt very comfortable with repurchasing those shares under our program. And again we feel very comfortable with our cash position right now.

Got it. And then just finally, could you just maybe talk about here what percent of your build in material is procured on a global basis, where do you see that percent trend over the next 12 to 24 months and also how much of the production is on the low cost regions today?

If you look at the ordered this different divisions all have a different amount. We don't really put out all those numbers, but I can tell you that in the valve side, we're probably on north of 30% in low cost areas. And a little bit lower in the pump and seal side. So we're doing a significant amount of low cost purchasing and remember most of our small parts sub assemblies a lot of that we actually build in places like India and China then we'll it ship it back into Europe and U.S. or we'll do final assembly in the low cost countries.

And we've talked about the investment in Latin America, we have facilities in Mexico, Argentina, Brazil and we see that as an opportunity to be a low cost source region over the world as well. And that's why we're making investments.

Got it. And then just a final question maybe I'll hop off after that. I think last quarter you guys at least talked about the bookings in the second half of 2008 on the pump side would be higher in the first half, given the strong bookings growth Q3, are you still comfortable with that statement?

In terms of the back half of the year? Yeah, we made the comment if you remember, in the last quarter we talked about pump bookings and the reason is just to remind you that we're not a quarter-to-quarter business, as I illustrated in my comments. We had 35% organic growth this quarter versus 7.5. So looking forward we were confident with our bookings the only thing I will say is what happens to the currency, we have seen dramatic moves in currency and that does impact our reported bookings but not necessarily our organic booking. So that's one thing that we just don't know what's going to happen to the currency because we've seen a significant move in the last two weeks.

Got it, thanks a lot guys.

Your next question comes from the line of Scott Graham of Bear Stearns.

Hey, good afternoon yeah.

Hi, Scott.

I am trying to make my questions brief and possibly get back in line. Would you guys be able to split for us on the bookings in the backlog particularly the bookings, the percentage of bookings that are actually aftermarket, I assume its pretty small but nevertheless?

You mean the back log or the bookings we kind of laid out for the Pump Division and year-to-date our booking growth has been 17%, so we do have that data. In terms of... if your question is with the backlog what percent of that is? You're right, there is aftermarket order, there are aftermarket orders in our backlog but a predominant amount of that backlog is original equipment orders.

So predominant to find as 90% plus?

I don't have that numbers specifically. And we don't provide that specifically.

And the bookings, the answer is kind of the same, yes.

Yeah, in terms of booking you can see the mix, for example in the pump business, you can see for the quarter, it's been 64, 36 is the mix I am sorry on booking 69, 31 and basically two-thirds year-to-date are original equipment one-third is aftermarket. In the seal business we have seen a little bit of a shift in their bookings to more original equipments based on their strategy, but they've historically held at about 75% aftermarket and 25% original equipment. And just to breakout in the Valve Division, the breakout is as we've reported is usually about 85% original equipment, 15% aftermarket, but as you know some of that original equipment in that 85% is really aftermarket. It goes to distributors, where they just replace the valve and it has aftermarket response times and aftermarket pricing to it.

Understood, that's helpful thanks. You have both manufacturing and quick response centers around the world that appear to be finding more and more opportunities that continue to drive your bookings and sales. Relative to the previous question about uses of cash because I think we're all pretty much modeling the same thing that, in the absence of another share repurchase program, you guys are going to have a significant amount of cash on your books by the end of 2009. So I'm wondering lets say that there is another share repurchase authorization, is there a real CapEx opportunity here to increase the number of QRCs are you considering that, or are you considering an investment in the pension plan to lower your pension quarterly expense, maybe if you can give a little bit more granular Mark to move on what those uses maybe even if you could itemize the uses of cash and prioritize?

Yeah and as I mentioned earlier Scott, this is typically something that we do on our year end call, but let me just talk generally at this point. That we'll always look at our pension plans I think you mentioned that, we did certainly top it up in the U.S. pension plan this year, but with the way the markets have responded, all assets have been have depreciated in price. So we'll certainly take a look at that going forward. We had the event of going off factoring in a sense and we're pretty much done with that, but looking forward we're going to spend a lot of money in capital this year. If you look at our investments in Dubai, in Saudi Arabia next year, we're going to spend the money to put to build our Brazilian facility and build out some QRCs, I do think there still plenty of opportunity for us to build out our QRC network. Keeping in mind that this is not like a retail chain where we build it and then try to seek customers. We work very closely with our customers to determine where the best place to put two ROCs around the globe is, but yes we do have opportunity to continue to invest, we've not completed our share repurchase program. So, I don't even want to talk about the second one until we've completed this one, but we'll be thoughtful with our cash going forward. And as always we'll take a look at how we return cash to our shareholders. But you've made the point and historically we generated a lot of cash in the fourth quarter, that's typically historically been when we generate the lot of it and that's what typically precipitates the conversation in the beginning of year, how we intend to use our cash that year.

Okay. Last question is along the lines of the, the strength in the dollar, is there really two parts of this question number; one is, are you actually seeing anything yet maybe on a short cycle stuff that suggest that lower local currency valuations or actually helping you competitively, is that something that you guys are starting to maybe measure a little bit. And then secondly, I know the mark-to-market was for the third quarter, what I'm obviously trying to do here, I suspect others are is to understand the translation piece of the $0.60 would it be fair to say that the mark-to-market in the fourth quarter will be roughly the same in the same vicinity as the third quarter and the rest is translation?

So, let me get to your second question first and then I'll we'll go back to your first one. In terms of the currency we didn't provide... we indicated an impact, an estimated impact of $0.40 in the fourth quarter. And basically what we did there was we went back and looked at our guidance on the last call and said, what would the impact have been based on what we saw on the currency in Q3 and what we are estimating in Q4. And for example the average we used is 127 for the Euro and it might be there today and it might not. So as soon as we get that estimate, its changed. But I think we didn't want to go in the much further detail in terms of above or below the line. You can see the mark going from 141 to 127 is approximately to your point or what it was in Q3. And in terms of the translation benefit you can see the benefit that we saw above the line in the first half of the year and try to estimate what it will be in the last half of the year. I think, the important point on currency is, that is something that is driven basically a translation, benefit the first half of the year and we'll have an impact in the back half of the year and also a mark on our hedge. The cash flows are hedged, that's important from an economic standpoint. And I think another thing in terms of if you look at our guidance we've been able to counter that impact with operational performance and a lower tax rate. And again... what was your first question?

Thank you for that. I suspected the same and I appreciate your granularity on that. The second question was simply, are you guys in fact hearing from your operating units that pay Hey the strength in the dollar thing is really helping us out.

Well, the change has been very, very recent, but I can tell you what we heard as the dollar was weakening with really no one [ph] side this was back last July, we actually saw some of our facilities that were starting to put currency contingencies in their bid in our European facilities because their costs were going up at such a rapid rate, they didn't know where there are going to be during the bidding process. So that's what kind of gave us the indication, that whenever these currencies move real fast, it changes things and we can respond and what we did see was that it put a lot of pressure on our bidding process in our European facilities as they became very expensive in terms of the cost structure, similar to us traveling over to Europe is as a tourist everything got very expensive there real quick.

Understood. Yeah, thanks very much. Good presentation.

Thank you.

Thank you.

[Operator Instructions]. Your next question comes from the line of Neil Khamsari [ph] of Sam's Capital Management.

Hi congratulations on a good quarter.

Thank you.

I just had a sort of a big picture question, could you expand a little bit on how you're positioned in these emerging markets relative to your competition in China, India. You spoke little bit about Latin America, Middle East, but how you're positioned relative to your competition in these markets?

If you take a look at India, we have nine factories in India plus some QRCs, most... some of those are joint venture factories in the valve area, where we have a joined venture pump facility. We have our own pump facilities, we also do in fact most of our design of seals in Chennai. So we have facilities in Bangalore, Chennai and Coimbatore. So compared to our competition, I think we're in outstanding shape in India. In China we're a little bit late getting into. We let other people get in there first, even though we've been in there probably for about 40 years, but not with manufacturing capability. So we let our competitors get in there, make the mistakes that we all make when we first enter into a country. And then we went ahead and build Greenfield facilities about a year and a half ago in the pump, valve and seal area. They are now only fairly four facilities, we also have a number of QRCs and we're planning to put a number more of QRCs into China. So right now I think we're very competitive in China, we're seeing a lot more business in fact business that we never saw when we were importing into China. In most of these countries India, China especially in Brazil, you have to be part of the economy, you have to have factories and people on the ground to really see all the large projects. They all want a certain percentage of internal workings in all their projects and now we are in all these areas, we have factories on the floor and we are very competitive.

In Latin America as Lew mentioned, we've been there for a long time, but its fair to say over the last 10 years, we'd going to lost our number one position in that region and that's why we're making the investment, because we think with our model we have the opportunity to take it back, so that's an area of focus for us.

Another question, this is on... you mentioned that there's been migration to high end products. What portion of your overall sales is... the sort of high end or specialized pumps there need the big three or four you're the big three or four competitors versus more commodity type products where there is hundreds?

Sure. And well we don't break out the specific in terms of percentages of our mix, but I can tell you generally it depends on which competitor you look at. Some of our competitors offer a high-end high energy pumps that are have sophisticated engineering but it's generally fair to say, really in all off our divisions we've been migrating our products to more of what we call the Tier five or the higher end product line. And the reason that we do that is you get paid for the engineering, you get paid for the capabilities and more importantly they really lend themselves to your aftermarket strategy. What we've done with some of our more process pumps at even though they require engineering and they do drive the aftermarket is that's a lot of the product where we moved the manufacturing or the sourcing to low cost parts of the world.

Last question, in terms of your software capabilities with some of these advanced solutions, how does that... how accepted is that as a total life cycle cost perspective from a customer standpoint. And again how long have you had sort of those tools for your customers?

That's a great point because I think in the comments earlier I talked about historically we operated in our more break fix model. And if you think about the really the purchase decision, the purchase decision was more around the capital, the cost of the equipment and then there was break fix strategy that was behind it. Where the customers have migrated is? Is right to your point to focus on total cost of ownership and what they want is they want quality, they want precision and they want responsiveness. If you think about what a system or software system can do for us, it really enables us, it allows us to engineer 24/7, it allows us to move specifications immediately to a QRC or a manufacturing facility. More importantly, it allows us to give the customer real time what they want and if you think about that these pumps, seals, valves are very highly engineered if you're off by a little bit you can substantially decrease the effectiveness or the efficiency of the piece of equipment. So I think they're seeing that, I made my comments earlier about efficiency. We see a lot about Greenfield projects out there, but you also see a lot of spend that's been driven in what I call Brownfield and that's where we're looking to make these facilities more efficient. As Lew talked about, they are un-equated [ph] and they are running less than optimal and that's our opportunity to go in and drive real value to the customer by increasing the efficiency.

And just to follow on that, how would you compare your software capabilities relative to on ITT or Sulzer or whoever?

Well, I am not really too familiar with their software capabilities to be honest with you but I can tell you, I think our capability is that we are driving and we are continuing to make investments will really position us well relative to our competitors but more importantly in the eyes of our customers.

Okay. Thank you very much.

Your next question is a follow up from the line of Scott Graham of Bear Stearns.

You have a slide in your presentation... where you talked about be prepared and I'm wondering what happens, what's the first and second levers that you pull here, when you do see the OEM bookings slowdown and you realize that operational excellence maybe needed to accelerate and other things need to happen. What are some of those first levers that you pull?

Well when we are watching, and we're continually watching, we've been doing it for years of what's going on out there, but if you take a look at leverage we have they are really listed on the chart, having multiple shifts as an example versus building brick and water, if you have to you can back off on a third shift, you can back off on a second shift. Those are important ways of removing people if that's really needed. We also have the ability to move equipment because of our processes that we have when we win a job, we can move equipment from lets say our facility in U.S. to Europe, or Europe to Asia or around the world and build it in a different location. Having temporary employees, when you have a downturn a possible downturn that's one of the original places or immediate places that you turn to, if you want to reduce your cost, but all three divisions, constantly watch costs around the world. It's not something that you just sit there and wait for a phone call saying Oh, oh things are bad what we do is monitor on a continuous basis, we make changes on a continuous basis and that's why we used the word be prepared, because we are and have been.

One thing to add to that Scott is, as Lew mentioned earlier in his comments these markets don't go away. So what we do is we drive to deliver incremental value to our customer in terms of the products that he has in his facility, but also as we've talked about the aftermarket business. We continue to grow that aftermarket business because, we're present, we're proximate to the customer, it generates sustainable earnings, but more important when that project does come up, you're there and you're ready.

The other thing is of course, we really want to drive increased market share, if when things start to go down, if they do start to go down, the ability to get market share is extremely important because you can go in there and if you are delivering on time which I've talked about many, many times, you're delivering a product that works when it gets there and you have that worldwide network to support the products, you can truly go after other business that your competitors have and drive market share up.

That's great. Thanks a lot guys.

[Operator Instructions]. There no further questions at this time. This concludes today's conference call. You may now disconnect. .