Good day, everyone, and welcome to the Itron Inc Third Quarter 2009 Earnings Conference Call. Today’s call is being recorded. For opening remarks, I would like to turn the call over to Ms. Deloris Duquette. Please go ahead, ma’am.

Good afternoon, everyone, and thank you for joining us today. On the call today, we have Malcolm Unsworth, our President and CEO; Steve Helmbrecht, our Chief Financial Officer; and Marni Pilcher, our Director of Investor Relations. Today, Steve is going to start the call with an overview of the quarter and the year so far; and then Malcolm is going to discuss the stimulus announcement yesterday, his initiatives for the year, and give you a feel for what we think the rest of the year and 2010 will look like. After that, we'll take your questions. Our earnings release includes non-GAAP financial information that we believe enhances your overall understanding of our current and future performance. We also have supplemental slide deck, which is intended to augment our prepared remarks, as well as provide a reconciliation of differences between GAAP and non-GAAP financial measures that we will talk about today. You can find this supplemental information on our corporate website under the Investor Relations tab. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in today’s earnings release, in the comments made during this conference call, and in the risk factor section of our Form 10-K, Form 10-Q, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements. And with that I would like to turn the call over to Steve, Itron's CFO.

Thank you, Deloris. Our financial results for the third quarter were impacted by many of the same factors we saw in the first half of the year. Volatility in foreign exchange rates, the economic slowdown, the credit crunch in various countries, and delayed orders in the U.S. due to uncertainties surrounding the stimulus bill. It was a tough quarter, but we also saw encouraging indicators during the quarter particularly, a firming up of our AMI delivery schedules and an increase in our 12-month backlog. That gives us confidence going into the fourth quarter and in 2010. Before I go into more detail on our finance results, I want to call out a couple of items in the quarter that had an impact on our earnings both positive and negative to bring to your attention. We redeemed our remaining $109 million in senior subordinated notes, during the quarter at a price of approximately $102. And in the new area of domestic and foreign income taxes, our low effective tax rate was due to higher income and lower tax jurisdictions coupled with an increase in foreign tax credits which positively impacted our non-GAAP EPS by about $0.14. In total these one-time items basically offset each other, but I didn’t want to point them out as I think it helps to clarify results for the quarter. In addition, we incurred foreign exchange losses of $4.4 million in the quarter due to the appreciation of the euro and depreciation of the dollar and about a dozen countries in which we transacted business. The losses were caused by material purchases and associated product sales in different currencies. So with that I’ll talk about our operating results. Third quarterly revenues of $408 million or 16% lower than the third quarter of last year. Of the decrease…

Thank you Steve, and good afternoon everyone. Rather than starting with the review of the quarter, I thought I would start by talking about the stimulus awards that were announced yesterday. Since I’m sure you’re all interested in any information that we can share. Obviously the announcements of the award are beneficial to Itron for several reasons. The most obvious benefit is that several of our current AMI customers will receive awards, which will most likely increase shipments to them in 2010 above what they have previously expected. As well it should be beneficial because of other customers that are in the pipeline. We can't discuss these opportunities by name either because the utilities have not been public about their chosen vendor or because the utility is still finalizing their vendor choice. And one last benefit of the award announcements, that there is finally clarification, which should help stabilize the market and enable customers to return to more normal ordering patents even if they were not successful in obtaining grants. So, with that let's talk about the quarter, as you can see from our quarterly results. The third quarter was about what we expected. Currencies are beginning to stabilize somewhat. However, the dollar is still stronger than it was last year and continues to have a negative impact on the financial results of our international segment. Our North America business continues to see the impact of the economic slowdown and delayed shipments caused by expected stimulus dollars, both in our water and our electric business. As you recall, my primary focus for 2009 is AMI. We are on track with our customer's projects, and are prepared to deliver OpenWay units in the fourth quarter and in 2010 that support our customer's deployment schedules. Although with yesterday's announcement, several of these…

Operator, we are ready for questions.

Thank you ma'am (Operator Instructions). And we'll take our first question from Steve Sanders with Stephens Inc. Steve Sanders – Stephens Inc: Hi, good afternoon, everyone.

Hi, Steve.

Hi, Steve. Steve Sanders – Stephens Inc: I'm going to ask a two part first question and then a one part second question, if I may.

You may… Steve Sanders – Stephens Inc: If you can just clarify how aggressive the DOE will be on the pace of spending of the stimulus money and kind of related to that Malcolm to your point about the enhanced pipeline because several utilities got money, but they have not selected vendors yet. How long do you think it takes before they need to make a decision to stay on this DOE spending space? And then do you have a follow-up.

We probably think between anywhere from one to three years somewhere in the middle I guess Steve. Steve Sanders – Stephens Inc: Okay, and so the utilities you've got significant grants and have picked vendors would you expect them to make a decision and a matter of months or could it take quite a bit longer than that, what is your thinking on that?

I would say months. I think that’s a lot of the works already been done, so I would say months. Steve Sanders – Stephens Inc: Okay, and then I think regarding the margins, in prior quarter you talked about gross margins in North America getting back up into the high 30s or better range during 2010. I just wanted to see if you could either put a finer point on that or maybe talk a little more about your comment regarding the cost outs during 2010? Just give us a little additional information on the gross margin picture in North America.

You know what we have introduced that first, really the second version now of our OpenWay meter. We expect that we will probably introduce our next version sometime later in 2010. And obviously once the volume starts to grow, we're going to leverage on that on those overhead expenses and we'll get better absorptions, so we should see the margins improved.

Yes. Steve, we're obviously not giving a timeframe for being back to what we were say in 2008 but certainly that’s the goal that we'll look for, whether you can achieve that in 2010 as Malcolm said with that the introduction, later in the year. That’s probably unrealistic next year but as you ramp that gets better. Steve Sanders – Stephens Inc: Okay. Thank you.

Okay Steve.

And we'll take our next question from John Quealy with Canaccord Adams. John Quealy – Canaccord Adams: Hi, good afternoon.

Hi, John. John Quealy – Canaccord Adams: Hi. First question, with regard to the margins in international about anywhere 5% down local currency in the quarter it looks like, but yet margins did quite well. I realize mix is in there, how do you think about that moving forward given that commodities, the easy compares go away on the cost side of it, and then have a follow-up?

So, obviously on the cost side of it, one of the things we're obviously trying to do is renegotiate commodity prices. We've seen some of those impacts, but we have probably seen it's going to be fairly flat between years, to be quite honest with you, John. John Quealy – Canaccord Adams: And then a follow-up two parts, one international and one domestic. Do you see a convergence of the traditional AMR buyer into the AMI buyer and obviously we're seeing that in the production numbers in North America, but can you comment about that movement? Do they want to see millions of smart meter end points deployed in two to three years before they look for a, perhaps, less premium price product with these in functionality to move forward? If you could give us a little bit on that appreciated.

Are you saying international or are you saying domestic? Sorry. John Quealy – Canaccord Adams: Both actually.

John Quealy – Canaccord Adams: And, I'm sorry, just the last one on domestic. If you look year-on-year in the domestic metering business, volumes are down on the production side anywhere from 40% to 50% depending on how you are counting them. What do you think about that level of degradation moving into 2010 on the legacy product line, very clearly OpenWay seems to be sopping up that and more, but what your thoughts about that level of degradation that you've seen moving forward?

Let’s see on the metering side, on the electric metering side, we're probably seeing 10% to 20% degradation over the next couple of years.

And one of the things, John, just to frame it, in 2008, we did have those AMR contracts John Quealy – Canaccord Adams : Yeah.

That we were shipping against so you get a decline from that, but don't overlook the part that the economy has driven in the degradation in year-to-date shipments, and the effect of stimulus that has sort of been delaying purchases. So yes, we would not expect as much of a degradation next year obviously

Right. John Quealy – Canaccord Adams : Great. I appreciate it. Thanks.

Thanks.

Thanks, John.

And we'll take our next question from Sanjay Shrestha with Lazard. Sanjay Shrestha – Lazard Capital Markets: Great. Good afternoon guys. Malcolm I just want to make sure that I got this right. You said that some of this large deal-related stuff probably will end up taking anywhere between one to three years before they become a real contract and you guys get to recognize revenues off of it?

No, that's the funding, Sanjay. Sanjay Shrestha – Lazard Capital Markets: Sure. Okay, okay. So with that sort of backdrop, that right guys? So when we think about 2010 certainly the 12-months backlog trend looks pretty good, but is it one of those situations where AMI benefits, but not until the second half and to the first half of the year with an ongoing sort of slowdown on the AMR side. We are probably looking at ‘10 being a better year, but probably it can more Q2 versus second half of the year? Is that the right way to think about it?

We've got the schedules that we got from our customers. Sanjay Shrestha – Lazard Capital Markets: Okay.

And they start moving in right to beginning really of 2010 with a pretty steady ramp all the way through from Q1 all the way to Q4. Sanjay Shrestha – Lazard Capital Markets: Okay, okay, so its, okay, okay. And that’s great and one last question then guys in terms of sort of the selection criteria and at the Phase 1 being sort of oversubscribed here. Is it fair for us to think about the fact that ‘11 and ‘12 even with and without the significant uptick in the international business. You guys are looking at a pretty substantial growth opportunity. This strictly driven by the North American sort of smart meter rollout?

Yeah. I would say, you know some of these public filings and you have seen the deployment plan, so you can see the level of activity that we’ve in North America for the next couple of years. And we do believe that probably by 2012 some of it in '11, we are going to start seeing some ramp up in Europe. That was going to be as we have said 2012 and start kicking in. Sanjay Shrestha – Lazard Capital Markets: Okay, that’s great. Thanks a lot.

Thanks Sanjay. Sanjay Shrestha – Lazard Capital Markets: Yeah.

And we'll take our next question from Stuart Bush with RBC Capital Markets. Stuart Bush – RBC Capital Markets: Yeah. Hi, good afternoon guys. Can you give me some color on if we look at the existing AMI contracts that you have with CenterPoint in Detroit, they were originally on three to four or five year shipment schedules, with the new DOE funding. Should we expect that to be shortened to two to three years, when we tried to think about volumes that would impact upside in 2010?

Yes, Stuart, Center Point in particular have actually said, publicly that they'd go from probably from the five year deployment period to three years. Stuart Bush – RBC Capital Markets: And so would we think of it sort of as a normal ramp up in those three year period now instead of five year?

Well definitely be Center Point, there is no question. I think few other projects that we have got defined contracts with Southern California Edison, I can't remember exactly what that is, but that’s not going to change and then San Diego has going to be finished. I believe by 2011 and 2012. Stuart Bush – RBC Capital Markets: Okay and then my follow up is on the Q4 outlook you mentioned that Q3 would likely be the bottom. I know you will be helped by, some of these AMI shipments, but on the legacy business are you expecting a stabilization at least in the fourth quarter as utilities now that the stimulus money is out due decide to spent out their budgets on that side of the business, or do you expect further decline that sequentially in that business?

Well, one of the things that we talked about was that once the stimulus money has now been released, it may have eased off some of the pressure of holding back. So probably it's going to be a pretty flat with AMR, I would say for the next quarter with what we've had. Stuart Bush – RBC Capital Markets: Okay, great. Thanks for giving me good color. Bye.

Okay.

And we'll go next to Michael Horwitz with Robert Baird. Michael Horwitz – Robert W. Baird & Co., Inc: Hi everyone. Thanks for taking my call. I want to get at the same question, maybe a little bit different way. If we look at the way, the money was handed out yesterday and you have the big, the top 15 and you have some exposure there, but then you have quite a few smaller utilities that historically, you probably wouldn’t have thought would be thinking about AMI, but because of the government was given out money, they did and some of them are going to deploy. So does that cause them to further, not order some of your more core products. And then on the flip side, there is quite a few endpoints and large utilities that didn’t get any money and does that delayed their decisions around moving to an AMI solution as they watch some of their brethren in the industry do an accelerated deployment.

Let me think, one of the things that we did we certainly helped and we said this publicly we probably helped 25, 50 issues utilities going forward, some of those are small one as well. A lot of these are in these groups and as far as what they do, they will choose whatever, AMI solution will go towards. Will they actually reduce or delay their opportunities for going forward. I'm not sure and I don’t think they will. I think they will but we've talk to them obviously our competitors have talked to them and I think they will start to move forward. I think they will start to do something and some of these larger utilities that they didn’t get any funding, we’ll have to wait and see on that one I think, some of them thought they would get money or they didn’t or they didn’t apply. So we’ll see it. Just in a mixed bag really. Michael Horwitz – Robert W. Baird & Co., Inc:

I'm not certainly what you mean by a consolidation. Michael Horwitz – Robert W. Baird & Co., Inc:

We basically provide a complete solution for everybody. We have a one solution, which we can provide to these utilities and I'm not certain its going to be lots of consolidation personally. I think now with having one solution to provide to these customers I think we are fine going forward to be honestly. And as far as the balance sheet, I’m going to let Steve just talk about anything on the balance sheet. You seen anything anxious, Steve?

I think relative to your question about that certainly something we have taken a consideration as our ability to finance consolidation like that. As Malcolm says and we are comfortable with our strategy right now and go with the alone in organic growth. Our use of capitals has been primarily internal in R&D spending. We think that’s been the right strategy. We'll continue to focus on that. And that we publicly said in the past that we wouldn’t role out some tuck-in or other smaller opportunities and we’ll certainly continue to scan the horizon for that as appropriate. Michael Horwitz – Robert W. Baird & Co., Inc: Great, thank you.

And we'll take our question from Paul Coster with JPMorgan. Paul Coster – JPMorgan: Thank you, with Europe in mind, do you think there is any risk that will encounter the same problem that we've seen here in North America where utilities basically freeze in spending as they evaluate since the state grants in the like to some there AMI programs in 2012?

We may have seen a little bit to that. Utilities over in Europe they have no choice, but to replace their meter to be quite honest with you. There maybe a slight delay in making decisions, but they really do have to replace those meters on a periodic basis, so I think there maybe a slight air pocket, but we're not really seeing that much of it, to be honest with you. Paul Coster – JPMorgan: And that’s because their electromechanical? Malcolm.

And no they just have the requirements what we call MID that they have to change out their meters quite strictly actually at a particular period of time because of degradation of performance, so they have to replace them. Paul Coster – JPMorgan: Okay, good. And then the other question I had was regarding the competitive landscape I think you partly answered it, but many people are little bit concern as the communications vendors are going to be capturing on much of the functionality associated with communicating within home devices, and providing sort of information services to the consumer in particular is that true? What's the generally your perception, as your positioning in that value added segments of the smart grid?

It's a really great question. And one of the things that we have done as we have tested our solution to completely have an end-to-end solution that completely allowed the utility to do 15 minute interval data, monitoring and at same time that will go inside the home and we got specific home area network partners that we are working with, you can do all these in home devices so, as far as we're concerned we offer and we're not afraid we also complete end-to-end solution inside the home and of the grid. And I'm completely happy with what would the solutions that we have and it's some of our competitors have got different solutions and no, I'm not worried at all. Paul Coster – JPMorgan: Okay. Thank you.

Okay.

And I'll take your next question from Jason Feldman with UBS. Jason Feldman – UBS: Good afternoon.

Hi. Jason Feldman – UBS: So just back to the margin topic for a minute and the gross margins for North America, certainly understand the volumes are down substantially from last year. But relative to the first quarter or second quarter is not all the different, but there has been the substantial drop-off. Is it really just always in the severance cost obviously in the quarter, is it really just product mix that's driving in.

Yeah Jason, obviously we had a bigger portion of our North America this year to be that AMI revenue and so really it's a mix within the quarter that's not necessarily apparent. Jason Feldman – UBS: Okay. And in terms of cost-saving measures. You clearly have been reducing headcount I've talked about some other cost-containment measures. Given the expected ramp up and I know you said you didn’t want to cut too deeply because you've see the growth coming where you cutting and what are the kind of cost-containment measures you taken.

It's we've cutting G&A areas, where we can. We have some policy changes with specific things you can touch in consolidation I’m trying to think, but travel plans all of those areas that you are not going to touch any of the skill sets that we have got from our folks. And as far as the headcount is concerned, we really do have a flexible manufacturing reflect our headcount where we need to mostly if we ramp up. We get additional volumes will flex it with direct labor people, but we've really try to reduce our spending in the areas of G&A Jason Feldman – UBS: Okay and last quick thing. I mean currency looks like it probably it will be finally turning to a tailwind next quarter, monitoring the revenue line is pretty straightforward, but based on the locations of your production relative to sales, should there will be some margin impact, one where the other that we should be thinking about as well?

Not that we can think of right now, no.

No, not significantly no. Jason Feldman – UBS: Okay. Thank you.

Thanks.

We'll take our next question from Scott Graham with Ladenburg Thalmann. Scott Graham – Ladenburg Thalmann & Co.: Yes. Good afternoon, good evening actually right now. Just a three questions for you. I'm sure I've just overstating the obvious here $0.45 a share of the non-GAAP number. It does in fact include $0.06 from the extinguishment right, so…

Yes. Scott Graham – Ladenburg Thalmann & Co.: Operating is higher than that. Right, okay.

Yes. It includes that $0.06. Scott Graham – Ladenburg Thalmann & Co.: Yes. Kind of the just piggybacking off this is the last question, admittedly GAAP-based, but still North American operating income number was a loss on that basis. And what I'm wondering here is, from a costs reduction standpoint and I realized that we want to be careful with the skill sets and what have you, but are you contemplating rationalization in non-AMI areas. So if we're going to have an AMI ramp obviously there is going to be some cannibalization of other areas. Are you contemplating anything for our facility or even get call it even a production line rationalization in facilities for some conventional meters AMR meters that will probably not be needed going forward?

That is a good question. We always look at that on a constant basis. We really only have four factories in North America. We have an electricity-metering factory in South Carolina, and that is transitioning over from our traditional AMR meter products over to our AMI products. We have a facility in Minneapolis, South Minneapolis that actually focuses on battery technology for our gas and water products. And then we've got a gas meter factory in Northern Kentucky. And then each one of these three have dedicated to that their products. And we're seeing as we go forward that the consolidation and the things that we’ll probably go down. We could have a reduction of hand health technology, mobile solutions, which is not really a big factory, we outsource some of that. So I think from North American standpoint, we will continue, we've really won't see much consolidation to be honest with you, and much rationalization going forward. Scott Graham – Ladenburg Thalmann & Co.: Okay.

We've already done it. Scott Graham – Ladenburg Thalmann & Co.: On the severance last question. How does that split between North American in international?

Of the $2.2 million? Scott Graham – Ladenburg Thalmann & Co.: Yeah.

Most of that was North America. There was I would say, 400,000 round number that were international. Scott Graham – Ladenburg Thalmann & Co.: Great, thanks.

You are welcome.

And we'll take our next question from Elaine Kwei with Piper Jaffray. Elaine Kwei – Piper Jaffray: Hi, thank you for taking the question. I was wondering if you give a little more detail on the bookings number, whether that includes any AMI or if it's all AMR meters versus modules and then also North America versus international?

Just in North America, we did have one AMI booking project in the second and third quarter, which was Glendale. Elaine Kwei – Piper Jaffray: Okay.

And rest of it was our traditional business. And with regards to international it’s a pretty usual mix of electricity gas and water orders, which is pretty typical of what we've been receiving through the last couple of quarters. Elaine Kwei – Piper Jaffray: Okay, great. And in the last couple of quarters, we've heard you say that decline in the AMR business had in quite been offset yet by the ramp up in AMI and are we seeing it get to that point in Q4 then functional plan where the growth in AMI will start to offset AMR, the decline in AMR?

On the electric side, absolutely, yes. We start to see the decline in AMR and the ramp up in AMI for electricity products. Elaine Kwei – Piper Jaffray: Terrific. And just last question, in terms of the AMI marketplace out there. Are the projects with your large contract, I think at the point where, other utilities are potentially looking to them as a reference point?

Absolutely I mean. We have had our customers have had significant amounts of attraction in talking at these conferences, as I said they had visits from different parts of the world and different parts of the U.S. as well. So it's when you visit some of these metering conference is both in as I said in Europe and also in South America. These guys are worldwide customers now. We have worldwide customers visiting the locations in North America and also are at our booth in some of these international locations, so it is very worldwide, very, very worldwide too. Elaine Kwei – Piper Jaffray: Okay, great. Thank you so much.

You are welcome.

And we will go next to Jeff Osborne with Thomas Weisel Partners Jeff Osborne – Thomas Weisel Partners: Great, thank you. I was just wondering if you could help me understand the difference in the margins of within the North American segment. You've talk about this mix shift, but is there a way you can just have rough numbers on the either growths or operating basis to help flesh out what the deviation of the core businesses versus the year Gen 2 AMI.

No, we really don’t break that up Jeff. Jeff Osborne – Thomas Weisel Partners: Okay, since again into that one can you talk about the Gen 3 AMI version that you'd mentioned from mid-to-late 2010. What some of the cost improvements are that you will be implementing in that product?

One of the things that we do on a constant basis is review these designs. We've been doing this business a long time, and we always focus on reducing the cost of these products no matter what improve the quality, improve the cost and function and reduce the cost and improve the functionality. So one way to reduce the cost is with acetic developments and so that’s one of the reasons we've said it's going to be in the latter half of the year 2010, so with basic developments and few of the cost reductions as well. Jeff Osborne – Thomas Weisel Partners: Great. I assume we can quantify either from a basis point margin standpoints or dollar value or a bomb any of it reduction.

No, we don’t give that information out. Just that it'll certainly improve the margins on that project and product. Jeff Osborne – Thomas Weisel Partners: Understanding. Thanks much.

You're welcome.

(Operator Instructions). We’ll go next to Carter Shoop with Deutsche Bank. Carter Shoop – Deutsche Bank: Good afternoon.

Hi, Carter. Carter Shoop – Deutsche Bank: My first question relates to AMI revenue in the quarter. I think, for the second quarter, you've mentioned that it was $10 million to $12 million. Could you comment on how much you generated from AMI revenue in third quarter?

Yeah, it was close to $20 million, Carter. Carter Shoop – Deutsche Bank: Okay. And then going back to gross margins, I hate to kick a dead horse here.

Why not…

That’s okay, John. Go ahead. Carter Shoop – Deutsche Bank: I guess, I'm going to that. If you back out the severance and you assume all of that was in COGS, it still looks like gross profits in North America are down about 10% versus only about a 4% decline in sales, and after you back out that restructuring, is there anything else going on there that’s what discussing or again is that exclusively the mix shift between AMR and AMI?

Well, actually a couple of things, I am not quite sure where you get that the 10% decline, what I might reiterate is that when we recast our North American business at the beginning of the year and put our gas and water meter business in there, it did bring down our overall gross margins for North America. So really if you would have looked last year Q3 where they were in that 37% range, so we absolutely have has degradation since then, no doubt but it's not 10 point. Carter Shoop – Deutsche Bank: I apologize, I was talking about the sequential change.

That’s okay, they were 35% last quarter. So at anyway there is a bit of the severance in cost of sales, some of the non-operating expenses that’s the bigger components are the AMI shipment at that low gross margin and lower production volumes. Carter Shoop – Deutsche Bank: Okay. And as AMI shipments ramp in 4Q and that mix shift continues. Do you expect gross margins to improve on a sequential basis in North America? Gross margins to improve on a sequential basis in North America?

Carter Shoop – Deutsche Bank: Okay. Can you comment on your outlook for the tax rate in 2010?

Yeah, this is Steve. We expect the tax rate next year will be higher driven by higher income and tax jurisdictions particularly the U.S. and the absence of that foreign credit catch up. We're still working on that. We would expect that to be back in the mid to higher 20% range, next year. Carter Shoop – Deutsche Bank: Great, thank you.

Thank you, Carter.

And we'll take our next question from Mark Rogers with Gagnon Securities Mark Rogers – Gagnon Securities: Thank you. I was just wondering, Steve, you mentioned that you are spending your cash internally on product development and I know you have a pretty significant AMI IP fully enabled meter that you’re rolling out in 2010. I'm not seeing significant ramp up though in product development spending, so is there a way for us to track the investment that you're making in this new product offering?

Let me just comment on that. We have spent a significant amount of money over the past three years developing the solution and what we’re finding is now that a lot of it now is completed. We will see, obviously, we're going to see kind of not necessarily huge ramp up, it will not be, but we've got some things that we got to do, IP, firmware, all those kinds of changes that we’re going to be make into the products. So I don’t really see a huge amount of development because it's already been done. As I said, the [ASICs] that we are developing and a few others, they're part of the expenses, but we don’t see a huge increase in any R&D requirements. We need a little bit of the ramp, but not much. Mark Rogers – Gagnon Securities: Okay and then a question on stimulus money going to utilities. Let’s just use CenterPoint as an example. They talked about on their call, a potential tariff-free determination based on basically they are not spending nearly as much as they thought would on their AMI project. So the Texas PUC might come back and say it's not fair to the customers, you need to renegotiate that rate base increase. Do you see this being a potential for delays in projects for utilities that had a rate basis established for a project without stimulus funds and now they have received stimulus funds, so the rate base needs to be negotiated?

I don’t really want to talk for our customers, but I don’t think so. Mark Rogers – Gagnon Securities: Thanks.

And we'll go next to Michael Horwitz of Robert Baird. Michael Horwitz – Robert W. Baird & Co., Inc. : Hi, thanks for taking another question. I've always been wanting to clarify some, so I thought this might be a good venue to do it. When I think about improving margins overtime for AMI and you talk about cost improvements, but I also want to understand a little better over the long-term. I think that you and some of your competitors have said that the AMR-type margins probably aren't available in the AMI opportunity. And my other curious question is this, when you do a big AMI deployment and there's likely to be technology bumps in the road for any new technology at this scale. How does that affect margins? So not just your manufacturing of the equipment? How does your margin get affected as you deploy and do you share that paying with the utility?

Well, let me just tell you how long we introduced, am I going back to – I can do this for both electricity and gas modules. If you take a look at when we introduced the [centron], a number of years ago, we have continually made changes to the design and that is something that's an evolution, and you continue to make changes and continue to reduce cost. As volumes go up eventually you will do the absorption rate et cetera. But from a product standpoint, you are continually making these changes. And so, do I see that we'll be the same margins with AMR as AMI? That's the goal, of course, I mean we have a product that we spend a lot of money in R&D and I expect some of those benefits to happen over the next few years. So, yes, I do see that some of those margins will be continuing to improve but at the same time we've got mix of services as well as the installation as well. So, overall it depends on exactly which particular product you're talking about. So that answers your question now. Michael Horwitz – Robert W. Baird & Co., Inc. :

This is Steve. Let me address that slightly from a finance perspective. Michael Horwitz – Robert W. Baird & Co., Inc. : Great.

What we doing is, we've talked there's a lot of test and piloting over the last couple of years, and the cost associated with that have been flowing through the R&D line, not your cost of sales in sense that we've been out testing that and been working on that in our strategy has been to focus on quality, focus on making sure that works before we deploy in scale out in the field. So that we don’t want to see margin degradation from quality related issues in the future. So our focus has been on the R&D spending. Back to my original answer about the focus on the development of the product really testing and working very closely before we begin to deploy that scale, for the very reasons you are talking about. Michael Horwitz - Robert W. Baird & Co., Inc.: Okay, that's helpful. Thank you.

And we'll take our next question from [Tom Whitley] with Shenkman Capital.

Good afternoon. Just two things on, mentioned your balance the need for cash if it's taking close the covenants. So I was just wondering is there a minimum amount of cash you'd be comfortable with on the capital balance sheet going forward?

Yes, we are comfortable that our cash is split between domestic and internationally, and we are comfortable with $75 million plus or minus that can change a little bit, but in terms of our working trade working capital requirements as a level necessary to run the business and we will continue to focus on that as well.

Okay, and just with the cash on hand and the cash flow, do you feel comfortable over the next six to 12 months with the covenant levels that you amended them?

Because I mentioned we have a 4.1 times a ratio at the end of September versus 4.75 times that does that down. It will continue to evaluate a variety of operations and funding scenarios to maintain and fund and grow our business and we look at the very scenarios in order to achieve that.

Okay. Thank you.

Thank you.

And we'll take our next question from Stuart Bush with RBC Capital Markets. And Mr. Bush, please go ahead your phone line is open. You would check your mute button. Stuart Bush – RBC Capital Markets: Yes, can you hear me now?

Yeah. We can, Stuart, yeah. Stuart Bush – RBC Capital Markets: Hi, sorry. A follow-up question for Steve on the tax issue. If you can just clarify what the tax credits where, I mean I noticed that the international business did not change significantly sequentially. So with that just a different jurisdiction where you got tax credits and how do we think about that tax rate going into the fourth quarter? And then I missed your response to what tax rate you anticipate for 2010 if you can just repeat that?

Sure. As I mentioned before we saw significant increase in foreign tax credits in the quarter and reflected in that low rate that was from work we've been conducting over some period of time to look at the benefits of taking foreign tax credits versus deductions and as we filed our return and completed that project, we identified the credits to be much more beneficial for us and we've been really tied that into the integration of the international group and that is they translated into the lower rate for the full year and remainder of this year we expect a 5% to 10% rate as appropriate for the whole year and then my prior answer was to a question about 2010 that we expect that rate will be higher because we see that higher income again for the tax rates particularly in the we're going to see growth there and we don’t expect a similar the foreign tax catch it or benefit in the next year as we would expect that to be more in the mid-to-higher 20% range next year. Stuart Bush – RBC Capital Markets: Okay, great. Thanks for that.

And that does conclude today's conference and that does conclude our question-and-answer session. I would like to turn the call back to over to you Ms. Duquette for any closing remarks.

Okay, thank you everyone for your participation today and as always if you have any follow-up questions feel free to give us a call. Thank you, operator.

Thank you, ma'am. there will be an audio replay of today’s conference available this afternoon. You can access the audio replay by dialing 1-888-203-1112 or 1-719-457-0820 with a passcode of 5642738, or you can go to the company’s website at www.itron.com. And that does conclude today's call. Thank you for your participation.