Good morning. My name is Michael and I will be your conference operator today. At this time, I would like to welcome everyone to the Flowserve Q4 2009 Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question-and-answer session. (Operator instructions) Thank you. I will now turn the call over to Mr. Paul Fehlman, Vice President of Financial Planning and Analysis, and Investor Relations. Sir, you may begin your conference.

Hello everyone and thank you for joining us. Welcome to Flowserve's 2009 Earnings Conference Call. Today's call is being webcast with our earnings presentation via our website at flowserve.com. Simply click on the Investor Relations' tab to access the webcast and the accompanying presentation. Before we get started with the presentation, I want to point out a couple of important items. First, for those of you that have accessed today's call through our dial-in phone number and also wish to follow on with the earnings presentation slides via our website, please click on the click here to listen via phone icon at the bottom of the event details page. I'd like to note that our webcast will be posted on our website for replay approximately two hours following the end of this call. The replay will stay on the site for on demand review over the next few months. Joining us today are Mark Blinn, President and CEO of Flowserve; Tom Ferguson, President of the Flow Solutions Group; and Tom Pajonas President of the Flow Control Division, as well as Kyle Ahlfinger, VP and Chief Marketing Officer; Dean Freeman, VP, Finance and Treasurer; and Dick Guiltinan, VP of Finance and Chief Accounting Officer. Following our commentary, we will begin the Q&A session. Regarding any forward-looking statements, I will refer you to yesterday's earnings release and 10-K filing and today's earnings presentation slide deck for Flowserve’s Safe Harbor Statement on this topic. All of this information can be found on Flowserve's website under the Investor Relations section. I encourage you to read those statements carefully with respect to our conference call this morning. The information in this conference call including all statements by management plus their answers to questions related in any way the projections or other forward-looking statements are subject to Flowserve's Safe Harbor. Now I'd like to turn it over to Mark to begin the formal presentation. Mark?

Thank you, Paul. And good morning everyone. 2009 was a year where economies around the world faced change and uncertainty. In the beginning of the year it seemed that everyone paused. In the face of this global uncertainty along with the changes we made through our realignment efforts, the employees of Flowserve to remain focused on taking care of our customers and improving execution, all of which resulted in strong earnings and cash flow. Earnings per share for 2009 was $7.59 or $8.47, when you exclude the realignment charges of 68 million. Bookings of 3.89 billion were down 24% year-over-year or 20%, excluding the impact of currency. And operating cash flow for the year was 431 million resulting in a year-end cash balance of $650 million. With respect to our markets in 2009, we saw lower volumes, particularly in large projects and pressure on pricing. And while we did not see many large project cancellations, these projects during the course of the year were pushed out to later periods as customers and evaluated pricing and refined process specifications. At a time when many companies pulled back on investments, we continue to invest in key growth areas such as aftermarket. We opened nine QRCs around the world, and we created our integrated solutions group designed to expand our aftermarket engineering and technical service capabilities. We invested in localization by building capacity in the Middle East, India, Asia, Mexico and South America. And we opened more engineering centers in India and China. We invested in expanding product technologies in nuclear power, subsea and desalination. We also took action to continue to position the company for the future, including the realignment initiatives and the creation of our Flow Solutions Group, which Tom will discuss later. I am very proud of what our employees…

Thanks Mark, and good morning. I would like to take a few moments to discuss our key industries in our aftermarket business. First let us look at slide seven which shows a comparison of our 2009 versus ’08 bookings splits by our key industries, along with the percentage split between original equipment and aftermarket. The main points to take away from this view are the increased percentage from the power and water industries, as well as the improved contribution from aftermarket, all focus areas of growth over the past few years. Turning to slide eight, this provides an overview of two of our key industries, oil and gas and chemical. Both of these industries have been adversely impacted by the global financial crisis, and the recession that followed throughout 2009. In oil and gas, several major projects were delayed from their original schedules. The delay of these projects was driven by the desire to take advantage of lower commodity costs such as steel, of the need to re-evaluate the return on investment for the project or simply to synchronize the planned increased capacity with revised timing of growth and demand. Based on conversations with our customers, we believe these projects will continue and may begin releasing orders in 2010. Long-term demand forecast for both oil and natural gas remained favorable with recovery beginning in 2010. Some forecasts show a stronger demand growth for oil in 2010 due to the continued economic growth in the developing markets such as China. The forecast in investment in these markets include upstream, midstream and downstream operations. Refining operations in the mature markets continue to face challenges from operational economics, as well as overcapacity situation. No new capacity is forecasted in the mature markets in the near future. The majority of spend will be in…

Good morning. I am Tom Ferguson, president of the newly formed Flow Solutions Group. For this call, I will briefly discuss the Flowserve pump division and the Flow Solutions division for 2009. We integrated both to create the Flow Solutions Group effective January 1. Let me start by saying that we were pleased with the pump division's performance for the year. Our focus on our end-user customers, operational excellence, and our strategic growth initiatives continue to provide a platform to drive solid sales and income performance. We saw continued challenging end-market conditions, which were reflected in our year-over-year bookings performance, primarily in the large original equipment projects. We were pleased with our aftermarket business, which was relatively stable in the face of declines in customer maintenance spending and also lower commissioning [ph] tied to new units. By using our global opportunity management and sales approval tools, we continue to drive our project performance disciplines and avoid taking projects that do not meet our strategic or financial performance objectives. Our customer focused end-user strategy allowed us to sustain strong customer satisfaction survey metrics, and helped us maintain 93% on time delivery to our customers’ requested date. Pump division bookings in the fourth quarter of 520 million were down 67 million or 12% versus Q4 2008, and down 16% on a constant currency basis. Full year bookings of 2.2 billion were down 833 million or 27% and down 23% on a constant currency basis versus last year. Sales in the fourth quarter of 753 million were 72 million or 10.5% versus Q4 2008, and up 3.9% on a constant currency basis. Full-year sales of 2.65 billion were up 135 million or 5.4% versus 2008, and up 10.4% on a constant currency basis. Adjusted operating income in the fourth quarter of 134 million…

Thanks, Tom, and good morning everyone. My name is Tom Pajonas, president of the Flow Control Division. I'm pleased to say that the division continued to perform well in Q4 of 2009. Bookings in the fourth quarter of 291 million were only down to 8 million or 2.7% versus 2008, and down 7.7% on a constant currency basis in a very challenging environment. Sales in the fourth quarter of 310 million was down 36 million or 10.4% versus 2008, and down 15% on a constant currency basis. We responded to the market downturn by rescaling and realigning our business activities in the first-half of 2009. Accordingly, the gross margin was up 130 basis points to 37.7% versus last year's 36.4%, while SG&A percentages decreased to 19.9% from the prior year Q4 of 22%. Operating margin in Q4 was 18% versus the prior year Q4 of 14.8% or a 320 basis point increase. Adjusting for realignment charges, operating margin was 19% in Q4 versus the prior year of 14.8% or 420 basis point increase. Strong gross margin performance, particularly in the nuclear power and the oil and gas business grow the overall operating margin performance. Operating income, when adjusted for realignment was up 15% over prior year Q4. Looking ahead to the current market trends, the nuclear market is active, as all major players including the Westinghouse, Areva, GE-Hitachi, and Korea Electric Power are pursuing various opportunities in China, India, the US and the Middle East. The recent announcement of the US government’s proposal to provide an additional 36 billion of nuclear loan guarantees should have a positive impact on the US nuclear business. Flowserve is positioned very well in the worldwide nuclear market to capitalize in this growth area. The fossil power market is also active with players partnering such…

Thanks Tom. As we discussed earlier, we are pleased with our results for the year, which demonstrates the strength of our global platform and our backlog, the success of our aftermarket focus, and our continued execution of realignment efforts, all driving stronger earnings and increased margins. Turning briefly on slide 18 to our consolidated financial results, fourth-quarter bookings of $939 million were down 8.3% reported, and down 13% on a constant currency basis. Sales of $1.2 billion were up 2.6% reported in down 3.4% on a constant currency basis. Gross margin reported was down 110 basis points to 34.1%, and that included around 180 basis points of realignment expense. SG&A as a percentage of sales went down 90 basis points to 20.9% in the fourth quarter, including about 120 basis points of realignment expenses. The result was that operating margins were down 10 basis points to 13.5% on a reported basis, and excluding realignment expenses, we will call our adjusted basis for this call, the operating margin grew 290 basis points to 16.5%. Our reported earnings were $1.96 per share or $2.41 per share on an adjusted basis, which represented a $0.38 increase over the prior year. Looking at the full-year results, bookings of 3.89 billion were down 23.9% reported, and down 19.7% on a constant currency basis. Sales of 4.37 billion represented a 2.4% decrease reported, but an increase of 2.2% on a constant currency basis. Reported gross margin for the full year rose 20 basis points to 35.5%, and included around 90 basis points of realignment expense impact. SG&A as a percent of sales improved 50 basis points versus 2008 and also included around 60 basis points of realignment expense. The result is that full-year reported operating margins improved 60 basis points to 14.4%, and adjusted operating margins…

(Operator instructions) Your first question comes from Scott Graham with Ladenburg Thalmann. Please go ahead. Scott Graham – Ladenburg Thalmann: Yes, good morning. Really a couple of questions here. The first one on the aftermarket bookings in the Pump Division, and I know that the commissioning spares had an impact, but I'm wondering if you were able to pull that out, what would you say were your organic aftermarket bookings in the Pump Division in the fourth quarter?

You're talking about – I am looking at Tom, you're talking about pulling out the commissioning spares. Scott Graham – Ladenburg Thalmann: Yes, if there's any way of doing that, just to kind of give us an idea of how much the OEM is in fact affecting the aftermarket?

I think – this is Tom Ferguson. It was probably a split of 50-50 of the net reduction between commissioning spares and organic, mostly impacted by normally customers, especially the refineries have some budget money at the end of the year to spend and this was one time. We're just going to see that. So I'd say we actually probably grew our market share of the aftermarket, but it was a split between organic falloff and commissioning spares. Scott Graham – Ladenburg Thalmann: Okay, fair enough. So I think I heard you saying, Tom, that organic did in fact decline, even when we put aside the commissioning?

Yes, just slightly. Scott Graham – Ladenburg Thalmann: Okay, okay. The backlog in the quarter, now as obviously a late cycle company, first the bookings go then the aftermarket goes. Is there anything that we should be reading into the aftermarket – I'm sorry into the backlog number – if I said aftermarket, I apologize, the backlog number in the fourth quarter, which was down more than any other quarter on a year-over-year basis this year; but that's kind of expected, right?

Yes, I mean, a couple of things happened in the fourth quarter as you saw very large shipments traditionally that is our largest shipment quarter. The other thing is you had the mark on the currency as well. If you think about where the euro moved, we have to – we marked that backlog. So you got those two factors that drove the backlog, and then overall that's, you know, the book-to-bill it will drive it as well, but keeping in mind over really now the last five quarters bookings have been relatively steady at the plus or minus billion dollar level. Scott Graham – Ladenburg Thalmann: I get that. Okay. And I understand that the backlog has been contemplated in the guidance. I guess my last question would be on the use of cash, where I know you have professed a desire to really build out your QRC structure over time. I see you added four in total in 2009. What would be the plan for QRCs in 2010, even directionally, if you could tell us that? And can we expect you guys to think about another share repurchase once you've utilized the first one in full?

Yes Scott, it was nine QRCs in 2009. I think the plan going forward part of what Tom talked about with the Flow Solutions Group is, there is a number of things that are going on is one to further leverage the QRCs that we have across really all of our offerings, and which is something that we've been doing. But you know, we unlike kind of a retail shop, and we’ve talked about this before, we put QRCs where our customers need us and there are some that we are working on that are very strategic right now that we can comment on going forward, but we're going to continue to add QRCs where our customers require that. The opportunities, we talked about this before. If you look at our QRC network it is very developed in, for example, the Gulf Coast region in the United States, really across all of our offerings and all of our divisions and products. We are not there at that level that we need to be certainly in Asia, portions of South America, even in Russia and other areas of the world, so in the Middle East for that matter. So, we have plenty of opportunity to go ahead and add them. I think you know, general message right now is if you think of all that has occurred around integrating into the Flow Solutions Group and some of the realignment, it's required a lot of focus and energy. At the same time we're going to go ahead and push these things forward on the QRCs side. So we will continue to invest. Scott Graham – Ladenburg Thalmann: So you think that if we – I know there was a lot going on in 2009, to be sure, within the company, and obviously within the world. So would you consider, Mark, the 2009 add really at the lower end of what you would want to do that we should see on an annual basis an add of maybe double that number?

Well, again, it's not like a retail sector, but the fact that we added nine QRCs in a year of great uncertainty should indicate to you our commitment to it. I don't want to come out specifically with a number because it's just not as meaningful and as much as you know, we're going to invest or our customers need us to be. Let me also answer your other question. On the share repurchase program, you know, we're amidst our second program. I am not saying that surely calling there is going to be a third, yes or no, but we do find that that is a good way to return cash to our shareholders. So it is something that's ongoing. We have 94 of capacity in our existing program, and beyond that I don't want to comment at this point. Scott Graham – Ladenburg Thalmann: Understood, okay. Thanks a lot.

You're welcome.

Your next question comes from the line of Hamzah Mazari with Credit Suisse. Hamzah Mazari – Credit Suisse: Good morning. Can you guys hear me okay?

Good morning. Yes, we can hear you. Hamzah Mazari – Credit Suisse: Okay. Just a question on how to think about the margin profile on your new bookings, you called out negative pricing already. You know, but you're getting more nuclear orders. I think nuclear is probably higher-margin business for you guys, and how much of sort of a high-priced backlog have you already gone through?

Well, I mean in general Hamzah, the pricing pressures we talked about last year are going to impact overall margins in backlog, specifically as it relates to projects. Having said that as we’ve talked about a number of times the margins in aftermarket and there is backlog of aftermarket business are relatively stable. So those are sort the general themes as you think about our business and, you know, and so that's part of why we respond around the pricing environment in terms of taking costs out, driving improvements in our operating platform, supply chain to continue to drive margin improvement, but all other things being equal, pricing and projects being competitive is going to impact your backlog. I think the other thing you call that as important as well is you know, focusing on where we participate in the nuclear is that is true. Typically that is higher-margin business. If you think about the critical application, the criticality of the application often corresponds to the margin somebody can command despite the fact that it's certainly a competitive environment. Hamzah Mazari – Credit Suisse: Okay. And then just on your cash position on your balance sheet, you talked about use of cash, how much cash are you generally comfortable with carrying on your balance sheet? You know, Last year, obviously, things were a lot more uncertain. Going forward, you guys have a little more visibility. Bookings are sort of stable, in sort of the plus-minus $1 billion level. How much cash do you expect to carry? It doesn't take a whole lot of cash to build out a QRC network, you know, relative to what you have.

Yes, to your point I think this year versus last year people perceive cash differently. The reason – I don't want to just say how much cash do we feel comfortable because that presumes that whatever is in excess of that I'm willing to just invest for any reason at all. I think the approach is we want to be very disciplined with our cash. It does not burn a hole in our pocket sitting on our balance sheet over a period of time, and as we look forward we want to make sure we have the flexibility to do all the things we wanted to do. As we’ve talked about over the last three years we like being able to invest in our business organically, be able to take advantage of inorganic opportunities and as we talked about before, those markets have been very volatile over the last couple of years. We hope to see them stabilize over this period of time, and then you know, return cash as appropriate. So we're very – we're certainly pleased with our cash balance. We are pleased certainly with our capital structure profile at this time, but what I don't want to suggest is just because we have a balance over X is that we're going to go spend it tomorrow. Hamzah Mazari – Credit Suisse: Got you. And then just last question. How much visibility do your guys have in the extent of timing of project delays? You said – you mentioned that you expect most of these delays to be booked and not lost. How should we think about how much visibility you have into that, and sort of the timing of that? Any color you can give us there would be helpful.

This is Tom Ferguson. We through our sales and operations planning process we look forward about 18 months, but you know, when we see things move they can move by you know, a few weeks or a couple of months, pretty easily just on the customers’ approval process, and as they're making the final decisions in some cases on who the engineering contractor is going to be, and then, you know, once it gets to that point, you know, we can be fairly accurate within about a 90-day period, but there has just been a lot of movement and a lot of budgetary, you know, I won't say budgetary issues but it's just customers looking at their budgets and looking at when they're wanting to spend and being a little more cautious. So let's move things out and they've looked at some technical specifications, you know, two, three, four times where it's usually they are doing one or two reviews. So it's that kind of thing, but we actually look at projects pretty far out.

Yes, I mean, a couple of overarching themes to what Tom talked about, one is as you saw with the pricing environment, you know, customers for them it has paid them to wait to see how those things pan out certainly in a competitive environment. Keeping in mind that the commissioning times of these projects are still out there and so they are going to – what they're going to do is put for shorter delivery period. I think the second thing Tom talked about is, and I mentioned in my comments was around the process condition specifications. If you think about it, if you let in order out with all of those really tight what it will do is result and change orders and that can certainly be costly for the customer and the engineering contracting firm. The other thing out there, you know, as we look out there, you know, we don't presume anything. I mean we have to remain competitive in this environment out there. So you know, we always keep that in mind that's certainly why you know, we always remain guarded with our comments around going forward is it is certainly a competitive environment where you know, willing to compete and certainly compete out there is strategic and financially appropriate. Hamzah Mazari – Credit Suisse: Great, thank you very much.

You're welcome.

Your next question comes from the line of Charlie Brady with BMO Capital Markets. Charlie Brady – BMO Capital Markets: Hi, thanks. Good morning, guys.

Good morning Charlie.

Good morning Charlie. Charlie Brady – BMO Capital Markets: With respect to the order you guys booked this morning for that large pump order, was that an order that you had originally anticipated would fall into Q4 and got pushed out?

This is Tom Ferguson. Yes, that was definitely one we were tracking for the fourth quarter that moved a little bit, but it is very highly technical equipment that was being specified. So this is one that you know, pretty easily moves month to month and can push over a quarter and that's exactly what happened in this case. Charlie Brady – BMO Capital Markets: I mean that would account for almost half of kind of a delta from while you are coming out of Q3, what your expectation would have been. I'm just wondering for the other $30 million, $40 million, whatever it was, how much of that push out is likely do you think at this point to hit in 2010?

Well, you know, Charlie having gone through what we did around the fourth quarter and that delta pushed, you can understand why we're not going to comment certainly quarter-to-quarter at this point, for what Tom talked about the more technical opinion [ph] has become, these things can certainly push out. I think our general comment was we did see a number of projects push out of 2009 to 2010 and we will just leave it at that. Charlie Brady – BMO Capital Markets: Okay. As we look at the mix of aftermarket and original equipment bookings in the pump segment, it looks as though there's about a four, maybe five-quarter lag between when the bookings switched to when that gets reflected in the sales. And you had – this quarter now is the fifth quarter where you've got well into the 40% on aftermarket bookings, which would imply that starting in 2010, we ought to see a meaningful shift towards that aftermarket in terms of sales on the pump side. I'm just wondering, does that – given what you're seeing out there from your incoming orders and your customers, does that make sense, does that still hold true?

That's – this is a thing we talked about a couple of years, and as you look I think on one of Paul’s slides, you can see the bookings and the sales kind of how they rolled out over the last couple of years, and we talked about this a couple of years ago, a lot of those bookings for a longer lead time. So you're seeing the smoothing effect of really global capacity and I'm talking not only manufacturing capacity for flow control companies, but the supply base as well. So what you saw a couple of years ago when you had you know, the auto growth that you saw as they were quoting longer lead times. So at the end of the day the questions we're talking about three or four years ago is do you have enough capacity in your suppliers. That's in fact how they played out is that'll tend to smooth things over time. So that's an affect what you're seeing. Underlying that is what we see is stable aftermarket business. The one other thing to remind you of when you look at year-over-year, the comments really about year-over-year after market is you basically had a pause in the first two months of the year last year. You don't really necessarily you know, catch that up during the course of the year. So when we looked at our aftermarket last year it was stable, it's grown steady over the last couple of years especially on a currency neutral basis, and what you see around that is there is no run rate to original equipment business which is good business and then on top of that, you have these large projects, which tend to be very lumpy. So that's a good way to think of our business. Those large projects, the duration of those will depend mostly on what's going on in the worldwide supply environment which we certainly talked about a couple of years ago. Charlie Brady – BMO Capital Markets: Can you comment, in the backlog, how much of that currently is aftermarket?

We don't break it out specifically. To say, it's not an insignificant amount. I don't want you to think of all of it is projects, but that is predominantly project work. Charlie Brady – BMO Capital Markets: Okay. And then just switching gears, on this new reporting structure, and the integration of the pumps and the seals, try and help me understand maybe a little more granularity on internally how that's going to work. This has been tried in the past, these two divisions. It has met internally, I think, with maybe a bit of resistance. It sounds as though now the culture is clearly different from what it was several years back. Maybe you can just talk about how that gets integrated from both sides of those divisions?

Well, actually I'm trying to refer back if this has been tried before. If you followed us years ago, I can say from my history lesson, some of the things we did were not anything like this. Bottom line is as you look back this business right now, the FPD, FSB, in the former nomenclature, integration really has occurred over the last couple of years in North America. And so we have a proven model around where you really focus on the aftermarket strategies and leveraging your capabilities. And at the end of the day these two divisions over the last couple of years have been in different states of what I'll call efficiency. You see the margins in the seal business and Tom had great knowledge of that because he ran it up until 2003. We're very strong in the pump business. What's improving is we were improving execution and really driving the benefits of the acquisition we made. So now they get to a point at the end of last year where we can leverage the North American model that we've seen and then you know, reconfigure and integrate these to the way we really think about these businesses, one around the engineered side, focused on being proximate to the customer and driving aftermarket, and on the industrial side really leveraging global processes, global supply chain management, and systems. We think it brings a much better focus. Charlie Brady – BMO Capital Markets: One more and I'll hop back in the queue. This $20 million incremental you're taking in 2010 for realignment and restructuring, what's the expected savings coming out of that, and what do you realize on that in 2011?

Yes, Charlie, as you can see in our disclosure, you know, we've only put in our disclosure the plans that we've approved in place, and the reason around that is because approving a plan has certain accounting significance. What you can see from there clearly is that we have some additional capacity that is in the works for the lack of a better term, but what we talked to you about right now in terms of savings and opportunity are for the plans that are in place. Charlie Brady – BMO Capital Markets: Okay. Thanks very much.

Your next question comes from the line of Mike Schneider with Robert W. Baird. Mike Schneider – Robert W. Baird: Good morning.

Good morning Mike. Mike Schneider – Robert W. Baird: Maybe first, just going back to the aftermarket issue, so in constant currency aftermarket was down about 1.4%, and I'm curious what you think the market was down, and what I guess economic indicator you would use to support that, is it industrial production, is it capital spending or utilization rates, whatever it is. And the obvious inclusion is just trying to determine how much share you are taking with this aftermarket strategy?

I think the – this is Mark, and let me give you my general comments. I think the only third-party indicators that you can really use for us in terms of execution are going to be the mature market refineries spend and chemical spend budgets throughout there is probably an indication for what happened to our markets. As far as the emerging and the emerged markets, what you saw and that's what we saw very good success. That's more around – that's establishing our footprint and our capabilities there. So – and I honestly couldn't tell you what market indicators but there tend to be fairly robust market indicators for certainly like refineries spend and chemical market spend. Mike Schneider – Robert W. Baird: Well, and most of those, at least European and U.S. indicators are down at least high-single digits if not low-double digits. Is that kind of the frame of reference you guys use to assess what type of market share you're taking, at least in those mature markets?

Yes. Mike Schneider – Robert W. Baird: Okay. And then just in terms of the end markets specifically within aftermarket, you gave the growth of different markets, but I'm curious if you have a view as to what specific applications or end markets where you think you've made the most strides in your aftermarket strategy?

This is Tom Ferguson. We've – it's somewhat across the boards but our focus of course between pumps and seals is we are very heavily focused on the refinery and chemical markets, but the aftermarket in power is a major source of opportunities for our QRCs, and I'd say it's pretty much across the board, whether it is parts, repairs and almost all markets we believe we've grown and taken some share and then in the developing areas you know, where we've put new QRCs you know, throughout Asia and more in Latin America and throughout the Middle East. Those are all areas where we didn’t even have the capability to service anything other than the parts business for that installed base, and so over the last three or four years you know, the expansion accuracies has allowed us to get repaired service business that we used to not even participate in.

Mike, I would add to that. This is Tom Pajonas from the valve group. I would say on the power side, certainly the nuclear aftermarket has been robust for us. So over the last certainly six months to eight months with the amount of build going out there, we should see that progress very nicely and on the control valve side, the oil and gas control valve aftermarket business has been a bright spot for us also especially as we drop in more QRCs around the world in the Middle East and Asia-Pacific.

And that's a good point Mike. Just to follow-on, I mean, you know, oftentimes we talk about the pump aftermarket business. One of the areas of focus for us this year around our strategic initiatives is accelerated investment in the aftermarket capabilities for our valve business. Mike Schneider – Robert W. Baird: And then taking onto that, the CapEx budget for this year, $110 million to $125 million, at least on the high end is nearly at the rate of 2008, which would have been your peak in CapEx spending. I'm curious there aren’t lots of companies, especially long cycle companies that are increasing CapEx budgets this year; where specifically is the incremental money being spent, either by geography or physical plant? And then secondly, should we view in hindsight now the $108 million of last year as what most would call maintenance spending for you? Thanks.

No. I mean, we, you know, last year we deployed $108 million we built at our facility in the Middle East, and in India. So I think it was pretty much steady as it goes. If anything that might have kind of curbed the spend last year would have been the timing of some projects for example. This year we will spend the bulk of our – the expense relating to this project this year around building at our facility in Brazil, and you know, that's going to be the first basically new plant that we built in a long time. So you see that impacting our CapEx for this year. So I think it's – to your point I think what we've done has been deliberate and very consistent in our view is that as long as we can see through uncertainty in terms of our balance sheet, this is a great opportunity to invest. You know, we think organically and inorganically it presents a great opportunity when you have a strong balance sheet because we are very focused on growth. Mike Schneider – Robert W. Baird: Thank you, again.

You bet.

Your next question comes from the line of Jamie Sullivan with RBC Capital Markets. Jamie Sullivan – RBC Capital Markets: Good morning. Thanks for taking my questions.

You are welcome. Jamie Sullivan – RBC Capital Markets: On the – I guess on the bid pipeline, the projects in your bid pipeline, I just want to confirm that a lot of the delays, it's more of a timing issue, still no cancellations, you know, no – nothing going to competitors, a lot of the nature of the delays are kind of similar to what we saw in this morning's announcement. Is that fair to say?

Let me see if I can part your question out, I mean we still see a lot of these projects going forward but we're not you know, we're not going to sit here and suggest that some of the projects we like to have don't go to competitors, because they do for any number of reasons, but, you know, the – as we talked about the opportunities are certainly still out there. Jamie Sullivan – RBC Capital Markets: Okay. And I guess just moving to the realignment programs, I think you've talked about $110 million in projected savings. Can you remind us, how much did you get in 2009? And how much would you expect in 2010 from those programs?

Jamie, it is Paul. In 2009, we saw $33 million of savings, 2010 from everything that we've identified so far we expect $95 million of savings, and so the $110 is an annualized run rate that comes in its full stride right after that. Jamie Sullivan – RBC Capital Markets: Okay.

And we've commented on this before for certainly the expanded realignment efforts. We expect to see those come towards the back half of this year. I think to Paul's point, you know, often these things; these are programs that take a while to implement. So you don't go from one day to the next on these. Jamie Sullivan – RBC Capital Markets: Right, okay. And then can we take by your reiteration of the guidance, it means that you're – you're comfortable with the currency fluctuations that we've seen in February thus far?

Yes, I mean, from what we've seen so far but it has been very volatile. We'll have to certainly keep an eye on that. Jamie Sullivan – RBC Capital Markets: Okay. And then just last question real quickly, are there any restrictions on the share buyback blackout periods? Can you just remind us there?

Yes. I mean, a company has a number of restrictions in terms of buying back. It has to respect and honor the blackout period. There is also actually, believe it or not, rules around the volumes that it can acquire in any given day because they're all promulgated externally. Jamie Sullivan – RBC Capital Markets: Okay, thanks.

Your next question comes from the line of Karen Finerman with Metropolitan. Karen Finerman – Metropolitan Capital Advisors: Hi, guys.

Hi, Karen. Karen Finerman – Metropolitan Capital Advisors: Hi, what do you think of as the right tax rate to use going forward?

I think, yes, I think what we talked about is around 28% on our tax rate for this year, and if we haven't been, I'm talking about it now. Karen Finerman – Metropolitan Capital Advisors: Okay, 28%; got it. Thank you.

Your next question comes from the line of William Bremer with Maxim Group. William Bremer – Maxim Group: Hi, gentlemen.

Good morning Bill. William Bremer – Maxim Group: Can you just give us a little color possibly on the strength that we're starting to see in liquefied natural gas? What's your capacity there, what are some of the opportunities, and if could, maybe on a geographic region base?

This is Tom Ferguson. We – you know, we have a very good solid product line to service the LNG market and also the gas to liquids market, and we're seeing you know, good activity in Southeast Asia, Australia and throughout the Middle East as well. So I mean, there are opportunities for LNG and gas to liquids, you know, in those higher growth areas, (inaudible). I am sorry. William Bremer – Maxim Group: And correct me if I'm wrong, you guys play on both sides, the front end and the back end of that, correct?

The liquefaction and the regasifications, yes. William Bremer – Maxim Group: Is there a difference of margins on the front end or back end? Can you give us some insight there?

I mean I would say from LNG side, I mean, it's all very critical application. So we have a pretty good basis on both sides, and certainly the majority of the EPCs around the world are very active on LNG. So as Kyle has mentioned before, it is one of the promising markets going forward. Clean, so it meets the environmental requirements going forward in the future, high efficiency when it is burned, and as the infrastructure gets built up in the various regions, it will be used more and more for you know, natural gas or heating and commercial and both residential also.

You know, as we talked about before Bill, in liquefied form is the only cost-efficient way to transport it over, I think it is 1500 km and if you look around the world, the mature markets are net consumers, and they have the existing infrastructure to transport it within their regions, and a lot of the emerging or emerged markets are the next suppliers. So you know, and right now that's the only way to move it over to that distance. So as you can see is, yes I mean the sense generally is that consumption for natural gas is going to go up over long periods of time. We do have a supply base certainly here in the United States, but you know, it'll be the markets. LNG will allow the markets to be more efficient by being able to transport it efficiently across long distances. William Bremer – Maxim Group: Thank you, Mark, I appreciate it.

And there are no further questions at this time.

Okay. Thank you, operator. I would like to remind everyone that this webcast will be available on our website for replay in approximately 2 hours. And thank you for joining us on the call today.

Thank you, ladies and gentlemen, this will conclude today’s conference call. You may now disconnect.