Good morning. My name is Melissa and I will be your conference operator today. At this time, I would like to welcome everyone, to the ITT Corporation Second Quarter Fiscal Year 2008 Earnings Conference Call. All lines have been placed on mute to prevent any back ground noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]. Thank you. It is now my pleasure to turn the call over to your host, Tom Scalera, Director of Investor Relations. Sir, you may begin your conference.

Thank you, Melissa. Good morning and thank you all for joining us to discuss ITT second quarter 2008 results. With me this morning are Chairman, President and Chief Executive Officer, Steve Loranger and Chief Financial Officer Denise Ramos. Steve will start today's call with some highlights from the quarter, Denise will then provide a detailed business review of the Q2 performance and the 2008 earnings outlook. Steve will then give an overview of some strategic developments and awards at that time. Today's call, as always will end with a Q&A session. I would like to highlight that this morning's presentation, press release and all non-GAAP financial measures provided during the call can be found on our website at itt.com/ir. In addition, let me remind you that any remarks that we may make about future expectations, plans and prospect constitute forward-looking statement for purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in ITT's annual report on Form 10-K as well as other public SEC filing. This conference call is being webcast and a replay will be available later today on our website. And now let me turn things over to Steve.

Thank you, Tom. Good morning and like wise we appreciate you all joining us for another very solid ITT earnings report. Our strong results reflect our now five year history of sustained premium organic growth. And now, this is coupled with substantial acquisition benefits. Today, ITT has a wider range of businesses that are focused on growth in markets that are less exposed to macro economic conditions. Everyday our customer focus teams are addressing enduring global needs such as clean water, security and infrastructure development. We have a wide sweep of highly engineering product installations and our consistent performance demonstrates that these value creation strategies are definitely working. Turning to the second quarter results, the execution of our strategy drove another record quarter with significant growth in the following major categories. Total revenue grew 38%, segment operating income grew 40%, earnings per share grew 38% and we have record free cash flow of $411 million, which represented a very nice 104% to net income conversion rate. But more importantly these results also came with some very nice program gains and strategic accomplishments that we are going to deal about throughout the call. In addition, for the second consecutive quarter we are pleased to announce an increase to our full year EPS guidance. The strength of our first half performance and our outlook in key markets gives us the confidence to deliver a $0.09 increase from our mid point of out previous guidance. This increase will raise our full year EPS raise to 411 to 417. And this mid point of our new range reflects a 46% EPS growth compared to the prior year. In the quarter, Defense Electronics [ph] and our Fluid Technology teams delivered a record revenue quarter, that exceeded $1 billion for the first time in previous history.…

Thanks Steve. Now starting on slide 2. Once again our broadly diversified portfolio has delivered another strong quarter. In Q2, all reported metrics grew in excess of 38%. Dedicated teams, all across ITT delivered record second quarter results in revenue, operating income, earnings per share and free cash flow. Consolidated revenues grew 38% in this quarter with 7% organic growth and that was driven by 10% growth of Fluid and mid single digit growth at Defense and Motion & Flow Control. Consolidated organic orders improved 19% in this quarter, lead by 26% growth at Defense and 18% growth at Fluid. Segment operating income, increased 40% and that was due to net cost productivity across the businesses and incremental contribution from the EDO and IMT acquisition. Second quarter segment operating margins improved 20 basis points to 13.4%, net favorable net productivity, pricing and pension was more than offset the 100 basis point negative impact from acquisitions and foreign exchange. Material cost increases in the first half of 2008 were more than offset by pricing and productivity in the Fluid businesses and by productivity at Motion & Flow Control. The second quarter EPS was $1.19 improved 38%, compared to the prior year and was $0.90 higher than the mid point if our previous guidance range. This was primarily due to stronger operating performance in our base and acquired businesses. Record second quarter year-to-date pre tax flow of $411 million represents 104% conversion of net income. This strong 2008 pre-tax flow performance reflect higher earning, lower pension contribution and improved working capital performance at acquired EDO businesses. Turning to Fluid Technology on slide three, Fluid's 10% organic revenue growth reflected balanced global performance. Both the North American and the European businesses grew 7%. Total international growth of 12% was driven by gains in…

Thank you, Denise. Turning to slide seven, we received many positive comments from all of you on our Defense outlook last quarter. So I would like to take another opportunity to highlight some more strategic developments in this section. What's important to note in that... in this field is the substantial progress we are making to reposition our different segments for future needs by expanding from core, capturing adjacent opportunities pursuing international growth and addressing the critical needs around global security. So from the top on the chart, we are very pleased to announce that we are now the official members of the Joint Tactical Radio Systems program. This is the opportunity that we mentioned on last quarter's call, which was just finally announced last week, and we couldn't be more pleased with our increased JTRS participation. This agreement capitalizes on Side-Hat technology and it's going to allow the more than 250,000 EMD SINCGAR radios to communicate and interoperate with JTRS ratings. This solution will provide a smooth transmission while both systems are in use. At this point, this is a development and agreement with General Dynamics. So we don't have specific revenue value, but it does validate four things we have been emphasizing for a number of years. First, the incredible value of the installed SINCGAR base. Two, the value of the Side-Hat type solution. Three, the value of our Soldier radio wave form development work and finally, the tremendous value of our proven and successful communication systems team. These principals and most notably, the technological innovations around Side-Hat and the Soldier radio wave form, essentially it may have a valuable gauge of interoperability to take advantage of the installed base and new technology. While we are working towards leveraging this technology and the installed base with the JTRS…

Thanks, Steve. Melissa, we are now let us start with Q&A session. Question And Answer

[Operator Instructions]. Thank you. Our first question is coming from John Inch with Merrill Lynch. Please go ahead.

Thank you, and good morning.

Good morning.

Good morning. So to start with fluid, what are you guys seeing with respect to municipal in Europe. Obviously, it seems this quarter that European economies have sort of turned down more quickly. How are you guys thinking about the municipal business in Europe looking [ph] at happened to your municipal segment.

Sure. Let me start with that, John. So on the international municipal, when we look at the international municipal in total, we grew about 7% in the quarter. And we said we grew about 7% in U.S. also. And so when we think about that, going out into the future, we continue to see in the back half of the year that it might be slightly lower than what we saw in Q2, but we've not seen any significant slowing at this point in time.

Are you planning for material slowing Denise, say rolling into 2009. And again, I think people are less concerned about today, versus what could be on the comp.

Yes.

Yes, John good morning. We are watching that very carefully. And as Denise said we did see a slowdown in the second quarter, but we are cautious in the future, but keep in mind that the bulk of the municipal segment that we serve is funded by the receipt of people penning [ph] their water bills and that's a more enduring revenue stream in the municipal segment than in the current class of tax collections. And, so in that case we think that there is some what of a floor on the municipal, and we expect 4% to 6% growth range in the second half.

Okay, I know it's not big, but still it seems... I know it's not big in China, but are you still seeing advanced order activity in China. There seems to be a little bit of that going on, I think ahead of the Olympics, are you benefiting from that in anyway?

Yes, we've certainly seen some project orders. We received some very nice mining orders, obliviously we had a significant contribution with respect to their preparing for the Beijing Olympics. We'll be the proud supplier of the pumps that provide [ph] the stadiums as well as the high across the work [ph] but beyond that, I would say we are not seeing any intense stimulus of pre-orders.

Yes, John, that's not been a significant part of our sales in China. It contributes and China is actually growing about at 12% rate and so we have got a lot of other areas in China, that have been growing. So that's not been a huge significant impact to us to date.

Okay. And then just lastly a capital allocation question. I don't know if you buyback stock this quarter, you didn't in the first quarter, but in that period paid back a couple of hundred million of short-term debt. Steve or Denise, could you could update us on your thinking with respect to share or purchase capital allocation future, I mean that sort of thing?

Sure, we do have a very balanced capital allocation strategy that we have articulated in the past that has to do with strong dividends, faster than our earnings growth rate after the share repurchases, dividends and then acquisition. We did repurchase $50 million in the second quarter. Now towards the end of the second quarter, so that will actually settle out into the third quarter. So we did enter into the market and again we repurchased shares again. So we will continue with a very balanced capital allocation program that we have in place. We will continually monitor cash flow and another things going on in the business and then enter the market appropriately.

Thank you.

Thank you. Your next question is coming from Shannon O'Callaghan with Lehman Brothers. Please go ahead.

Good morning.

Good morning, Shannon.

Hey, a question about what's going in Fluid with some of these project wins internationally, I mean, can you talk about some of the... I guess the footprint moves you made there in trying to build a bigger position in China and some those places. I mean would you try to squeeze [ph] project wins to just strong markets in areas like mining and other things or I mean you are actually, are these some of the fruits of the international footprints shifts you have been doing?

They are not directly correlated Shannon, but they are indirectly are... but they are indirectly. We are certainly seeing more project decisions coming through in areas that are around emerging demographics for the water infrastructure, around mining and around oil and gas exploration. But on top of that, as I would say that's more market based. We are positioning globally to be able to enjoy stronger contribution in the future. We look around our new facility in Saudi Arabia with our industrial products as a regional distribution of engineering center. Likewise, I am pleased to say that we have now manufactured our very first water pumps in India as our team in Gujarat got a brand new factory off the ground. And then finally, we have a focused global effort, notably in China and India to bring all this together. So hopefully, these infrastructure and facility repositioning moves are going to enable a sustained growth because of our local presence. So all in all, we are going to... at least our 25% growth in fluid technology in these emerging markets in this.

Okay, great. On EDO, I mean the raise last quarter, you credited the couple of cents to better EDO performance this quarter, another couple of cents. I mean can you break that down a little bit, I mean, are the CREW deliveries still expected to be the same number? Is it better? I mean you mentioned the 9% growth in the rest of the business. So there is a better growth there, better cost performance, what's driving these incremental beats from EDO?

It's little bit about in there, in the first quarter when, when we saw some additional CREW deliveries point this [ph], so a part of it is little bit on the top line, but also the margin performance, that we've had is stronger than what we had anticipated. So we are doing very well, just from a productivity perspective.

Okay, and just on the international radio point. We've seen, we had Iraq and Saudi Arabia, I mean a lot of it, sort of cost written in the Middle East, I mean are there more opportunities over there that you're looking or beyond that region. I mean how are you currently thinking about the international radio opportunity?

There are several opportunities with a number of our airlines. We're working, obliviously we are leading [ph] decision in Bulgaria and we also had active marketing relationships going on in Spain now. So there's a number of other countries that we're working on. So we expect this to be a substantial area of growth for radio and in some cases electronic work there and some cases Night Vision product lines.

Okay. Great, I'll get back. Thanks guys.

Thank you. Your next question is coming from Deane Dray with Goldman Sachs. Please go ahead.

Thank you. Good morning everyone. Denise, can I start with you first please. Could you take us a little additional color on the pricing dynamics during the course of the quarter, out of that 7% organic revenue growth how of that was priced and then, if we could go through the individual segments? You called out Fluid is getting price. So can we start there please?

Of course, when you look at the 7% revenue growth, roughly about 1% of that or so was price. And most of that price, their price increase has occurred within the Fluid technology business and that's because mostly Fluid tends to be more consumer oriented and cyclical, a little bit harder to push through price increases. But in the Fluid area, we have been effectively in deals that pushed in some of those prices and in fact we are looking at additional price increases that will benefit us in the back half of the year with that.

Can you quantify further for Fluid in particular, what you got in price, because it sounds like you did that to offset foreign exchange.

Yes, on a margin basis, Deane, is that what you are asking?

Sure.

Yes, on a margin basis, it's was about a 140 basis point on a year-over-year basis.

Good and then how does that stack up against your raw material cost heads then. Are you net pricing, able to offset that where you stand in that based upon the latest spike?

Well, for fluid technology, our material increase impacted us about 80 basis point from a margin perspective. Now, we were able to offset most of that, with additional supply chain agreement. That supply chain initiatives that we have underway through global strategic sourcing group that we have there. So we were effectively able to offset most of that. In addition to that though, we are continuing to get the benefit from Lean and Six Sigma and we will continue to get benefit from prior restructuring that we have done. So, when you netted all that out, that's really what helped us deliver the kind of margin improvement that we saw in fluid technology in Q2. Now, as we get in into Q3 and into Q4, the full impact of raw material will be impacting us and that's partly because we've had some agreements in place that have mitigated some of the extent of some of those increases in the first half. So we'll be seeing more of that closely in the back half of the year.

Okay, and just last question Denise, well [indiscernible], can you comment on the debt structure. There was previously a fair amount of commercial paper being carried. What's the expectation of how you want to structure that going forward?

We still have a lot of commercial paper that's been our primary vehicle that we have been funding ourselves with. We are looking at terming out some of that in the fourth quarter. And so what's Don Foley and his team at Energy... he would be looking at that in the back half of this year.

What's your expectation in terms of how receptive the markets are to ITT, is that today and will there... versus previous issues?

We have had very strong indications on that. And we think that we would be able to price it pretty aggressively in the market place.

It will be straight that, or anything different.

No, in fact we are looking at probably five year and ten year through that.

Great, thank you

Thank you. Your next question is coming from Michael Schneider with Baird. Please go ahead. Michael Schneider - Robert W. Baird & Co., Inc.: Good morning, everyone.

Good morning, Michael. Michael Schneider - Robert W. Baird & Co., Inc.: I guess, first on the guidance, congratulations on a great quarter and as it is the case, always want more. The organic growth forecast is 6% to 7% to me, some what contradicts what orders have done through the first half, orders are up at least, roughly 15% organically. And then, you have got I&C [ph] which will contribute to organic growth or twice the average in the fourth quarter. How do you reconcile the fact that orders in I&C [ph] are running at twice year organic growth forecast for the balance of the year.

Let me comment on that. So, we did see very strong order growth in Q2. Now a couple of things that, we need to think about with that. One had to do with when we look at WWW and we look at Fluid Technology in total, we have a lot of projects. And as I indicated in my opening comments, many of those projects will not be delivered until 2009. The other thing as when we look at the organic growth rates in the back half of the year, and yes, we brought them down from where we were in the first half of the year. In Fluid Technology, we are concerned about what will happen in the commercial markets on a global basis, would be somewhat cautious and in the municipal market in North America. And you have got the marine market, that wasn't challenge with for a while now that that we are now beginning in more softness in Europe around that. So we've brought down the growth rate in the back half for the year, but still when we look at it from an organic perspective, we are looking at about 5% to 6% organic growth rate in back half of the year. Michael Schneider - Robert W. Baird & Co., Inc.: And when you say brought it down, you actually didn't lower your forecast, these are same, versus the first half growth rates?

That is correct and the other thing I will add is half our business is Defense and from a Defense perspective we are still looking at strong growth rates in the back half of the year of about 8% to 9%. Michael Schneider - Robert W. Baird & Co., Inc.: Okay. And then EDO, you mentioned that you expect more orders in the second half, follow on orders, is that what drove the $0.02 or the next $0.02 increase in the EDO accretion or do you not have that baked in to your forecast yet?

No, it wasn't really on the top-line, that we brought that through to the bottom-line. It really had to do with performance around the cost structure with CREW products. So that's really what resulted in that incremental performance out of CREW.

And Michael, let me add then with respect to the orders. What we are seeing this year is precisely in line with what our acquisition model was played around. We are seeing some visibility of the additional orders as you referred to. Which are in the final stages of negotiation, we should be in a position to announce them shortly. But that's giving us a visibility into 2009. Which I think we can safely say, it looks like 2009 is going to be about and assume orders what we are seeing in 2008, good solid CREW 2.1 production. Michael Schneider - Robert W. Baird & Co., Inc.: And then just one short one. On R&CW, you mentioned that global residential is down 3%, the markets you serve are probably down high single digits. It's not even low double-digits. How is it that you guys are only down 3%?

Remember that we've got about 40% of our business is after-market. So you have to take that into consideration and then we've also come out with some new products in that area that kept us strong, more than the market.

We do like to take credit, we maintained very strong customer relationships. We've got premium brands and we are investing in new technology. We also have a very nice selling and marketing distribution capability in the business. So we believe it's our opportunity and we seized on it to actually exceed market GDP performance. We have been doing it for some time and some of the strength of our business management is enabling us to feel like we are going to do shift [ph] market just due to strong operating performance in next several years. Michael Schneider - Robert W. Baird & Co., Inc.: Thank you.

Thank you, you next question is coming from Jeffery Sprague with Citi Investment, please go ahead.

Thank you, good morning, everyone.

Good morning.

Good morning Jeff.

I wonder on, SINCGAR and Side-Hat, congratulations, you guys have been working on that for a long time, does that in any way affect the near term demand for kind of base SINCGARs kind of freezed demand here in the near term while you move forward with development of that or should SINCGAR kind of continue to march as its been recently?

Clearly the latter Jeff. They're independent activities, we think the SINCGARs, basic needs is going to be unaffected by JNS [ph]. What we're pleased with is despite some slight declines in the US SINCGARs that's being equally offset in some cases, slightly more than offset with our international SINCGARs. So we see the base underneath the total international and domestic SINCGARs to be solid for the next several years.

And then just on EDO, so CREW shipments for the year, still in that 7700 or you are running a little bit better than that based on the performance?

No, it's exactly in that range and we are flexing up and down on a monthly basis, responses to the customer requirement. But we're going to net out the year right around 7,700 here. We are on plan, operating margins performance on unit is excellent and they are operating in a high quality fashion in the field.

But we should think about it not being equally loaded, right? Q2 would have been kind of the strongest quarter of the year or is that?

Yeah that's correct. Q2 was the strongest because that was based on some catch up work that we were doing and meeting the customer's requirements. So it will come down in the back half for Q3 & Q4 and again as we said kind of level loaded at that time.

And I guess just finally from me on the Modern Waste Water projects that's kind at a 16% order growth and Denise just said a lot of that will go to '09. Can you just give us a little more complexion, on kind of... or detail on the complexion of those orders, is it kind of traditional water, waste water, is there some movement on advanced water treatments, water quality type deals, any additional color there would be great.

Jeff, it's a nice mix of our total water waste water component but what we are seeing is more activity in the traditional previous technology, in Kuwait as an example we picked up a $6 million job for pretreatment with our Leopold filters for desalination plants. We picked up an ultraviolet job also in the Middle East, that was around water reuse. And Hong Kong is an example, another nice UV job for several million dollars and another word, Australia that's really just around water waste reuse from the transport. So we are seeing a nice mix, but based on our focus on centers of excellence and distributing our traditional treatment technologies through our very large flight channel, we are starting to see some nice progress on these projects.

Okay, thanks a lot.

Thank you, your next question is coming from Steve Tusa with J.P. Morgan. Please go ahead.

Hi, good morning

Good morning Steve

Good morning Steve.

Just a quick question on the aerospace business, it's small for you guys but very good growth in the aftermarket there, what are you guys looking out for as some of the capacity comes out of the system?

Well we're watching that very carefully, of course we do have positions on commercial and business jet aircraft. And so as you would, well as you are looking at that market reducing some downward pressure in that regard. But keep in mind on the flip slide, this is a business that has very, very high aftermarket in the installed base, very nice operating margin, plus we have proprietary new technology in our fuel boost pumps that's responding to new FAA regulations which would then give fuel for retrofit for spark resistant or actually spark proof boost pumps that's going to be independent of any dynamics in the market. So we do see a little top line pressure, but all in all it's going to be solid business in the future.

Okay and then just sticking with most well [ph], any areas that are more prone to raw materials, increases in the raw materials there you'd call out

Absolutely, our friction materials business, utilizes a lot of copper and in some designs, a lot of molybdenum and we've seen dramatic material cost headwinds there. Responding to that we're very aggressive on the engineering side, we've recently introduced uni-pad technology, that roughly has twice the life of existing pads, which it essentially penetrates relating to a lot more material cost per unit pad. We also are continuing to advance on the molybdenum fluid technology. So we're working that, but to your point, we have tremendous pressure in that business, which is why we put a lot of emphasis on productivity and material cost savings.

Great, thanks a lot.

Thank you. Your next question is coming from John Baliotti with FTN Midwest Securities. Please go ahead.

Hi, good morning. Steve, I was wondering if you kind of look higher opportunity. The integration of your two recent deals in Flow and IMC and EDO and Defense, I assume it will be going well. If you look at even the reported margins, given the absorption of businesses, I think we are better than we were expecting. And I am just curious on that in terms of the new products and the combination of the platforms. Do you look at those as internally, are they on pace with what you are expecting? Have they exceeded your expectations at this point?

At this point in time we are assuming to see this... our acquisition modeling in terms of synergies. One another thing we are proud of that with respect to the integration is the last couple of years, we have really fine-tuned our acquisition integration capability and we fine-tuned the deploying of our ITT management system. And as you know at the heart of these management systems is strategic planning around new technologies. So, in collaborative way and I have referred some of these in the call that we are seeing joint activity now. We have some wonderful opportunities in intelligence. In space, in electronic warfare and as I mentioned in railway and in some cases in aerospace technology, where together with both our IMC businesses and EDO businesses we've been able to generate some product technologies in a couple of cases, new sales that have exceeded our expectations. So we think in both acquisitions, not only did we get off to a good start in terms of the mechanical element of acquisition integration, but also the strategic component of getting teams rallied around some tremendous growth opportunities. So, so far so good?

The other thing, I would to it that is with working capital when we looked at EDO, we saw that they had very high working capital. And so employing that the flow that we have here and how we our JITC [ph] management system. We knew that there would be opportunities that would help drive down working capital in that business. And we are very happy to say that we are seeing the benefits of that in Q2.

This is not too much of a surprise given that you are strongly doing businesses of less visibility like... like may be say friction where you probably don't have the secular trend that you do in some of those other businesses and yet you are still putting up the growth, you always in profitability and so that obviously gives you a good experience base to go from. I was wondering just overall in terms of the core businesses, you talked about another integration of different platforms and given the headlines that are out there, are you may be positively surprised that the adsorption also of new applications or if you try to pick more of what you will hear in media, you feel like everything is kind of go as planned. In terms of the things like in dewatering or areas like that some of these contractual winning based on base businesses.

The way we would think about that John is when we see through our value-based management and defined, attractive business segments, we're only focusing on how to get [ph] is that first and foremost are providing essential technology for a very global need. When you drive that around areas in motion, in fluid technology and global warming and around global safety and security. This gives us the inherent market capability where we have attractive growing segments that are in sensitive to cycles. And then we are applying our high technology voice of a customer kind of an activity to be able to then outperform. So, I guess from our standpoint to step way back, we see a portfolio that is operating in a balanced area and enduring needs coupled with some reasonably good application of technology and customer focus that the medium has outperformed. So I am not sure that's responsive exactly to the question you are asking but I am going to say our strategy is working, and we're not surprised we're out performing the market.

Good, that's what I was getting at, thank you.

Thank you our final question is coming from Scott Davis with Morgan Stanley. Please go ahead.

Hi, good morning everyone. I recognize that most of my questions have been answered, but I was hoping Steve if you could give us a little bit more detail on your early kind of vision or goals for joining the JTRS team and is this ultimately... I mean if you think about the range of outcomes are you thinking that ultimately there could be licensing arrangements, is it manufacturing relationships anything... any more color there would be helpful thanks.

Scott, I think all of the above. Let me take a step back and say that the way we think about it is several years ago, the U.S. government identified an exciting new technology platform around new communication systems, know as JTRS. It was lot of new technology, but it was also complex, it was expensive and with big undertakes and it never a fully recognized or dealt with the necessary benefit of the installed base. So being one of the incumbent suppliers on this huge installed base, we have always felt for the last several years that ultimately we need to bring the existing technologies together with the future technologies. And so the U.S. government and all the suppliers and the various customers are still working through how they can execute this program. But one thing for sure is there's always going to be a connection to the installed base. And advancement such as our soldier radio waves form that allows interoperability, in fact think of that really as essentially the windows of our communication capability that enables the translation between distant technology and future technology, is a very, very valuable asset. How this is going to play out in the future, no one will know, but we certainly believe that we are going to get our fair share of both technology development and production opportunity as this program unfolds. Another, another big way of looking at it is that the supply base for the U.S. military is actually fairly small. There's three or four key suppliers in every critical technology, we obviously are one of the strongest suppliers for the U.S. government communication technology and as is few of our competitors. I think it's all in out best interest to make sure that these... that all of these companies get a chance to thrive and participate in future investment.

Okay fair enough. Denise just wanted to follow up a little bit on the price cost issue and trying to quantify it a little bit. I mean given that you are mostly on a FIFO accounting how much of that concern is it walking the 3Q to some of the higher cost inventory is going to start to pull through.

When you think about FIFO you know remember half of our business is defense, and then of course that cost profit is not impacted and then on fix pricing for that, we tend to have longer term supply agreements there because you know the sales projection was that. Then when you again factor it down and look at the commercial side of the business, our inventory turns, about every two months or it turns within the quarter, so we're really not concerned about that issue.

Okay, thanks guys.

Thank you very much Scott. So with that we appreciate your interest. We're thrilled with the quarter and simply stated I think it reflects the hard work, the dedication and professionalism of the ITT team. We're proud of our team's efforts and we know that our future success is certainly not guaranteed by our past. And you've been assured we're going be working hard, turning our attention to third quarter and the years beyond. So we appreciate your support and will talk to you next quarter, thank you.

Thank you, this concludes today's ITT Corporation second quarter fiscal year 2008 earnings conference call, you may now disconnect.