Good morning, ladies and gentlemen. Welcome to the Masco Corporation 2008 Second Quarter Conference Call. As a reminder, today's conference is being recorded and simultaneously webcast. If you have not received the press release and supplemental information, they are available on Masco's website along with today's live presentation under the Investor Relations section at www.masco.com. Before we begin Management's presentation, the company wants to direct your attention to the current slide and note at the end of the earnings release which are cautionary reminders about statements that reflect the company's view about its future performance and about non-GAAP financial measures. After a brief discussion by management, the call will be opened for analyst questions. If we are unable to get to your question during this call, please call the Masco Corporation Investor Relations office, at 313-792-5500. I would now like to turn the call over to Mr. Timothy Wadhams, President and Chief Executive Officer of Masco. Mr. Wadhams, please go ahead.

Thank you, Nicole. And thank all of you for joining us today for Masco's second quarter earnings call. As Nicole mentioned, earlier today we issued our press release and some supplemental information. As a result of internal processing improvements effective with this quarter's call, we are modifying our approach to the conference call. To that point, we no longer have provided you with what we used to call 'Business and Financial Highlights' and we are not going to read a prepared script for this call. Instead, we provided in our financial information, a couple of pages of what we call 'Key Financial Data'. And today our presentation will be in a PDF slide presentation format. Hopefully you've been able to access that on our website. This is the first time we are using this format. And any feedback that you want to provide are certainly welcome as we try to continue to improve the process to provide you information. And with that let's move to slide number three, and I'd like to point out that with me today... joining me today are Richard Manoogian, our Executive Chairman and Donny DeMarie, our Executive Vice President and Chief Operating Officer. So again if you could move to slide 3 please. Net sales from continuing operations were down 15% in the quarter. Earnings per share $0.20 in the second quarter of 2008 as compared to $0.49 in the same quarter of 2007. Gross margins for the quarter were down 230 basis points to 26.5%. SG&A expense including General Corporate expense as a percent of sales increased to 18.3%, up 110 basis points. General Corporate Expense was down 30 basis points to 1.3% of sales. Working capital as a percent of sales was up slightly during the quarter to 18.1%. We did return a…

[Operator Instructions]. And we will go first to Michael Rehaut with JP Morgan.

Hi. Good morning everyone.

Hi Mike.

Good morning.

The first question relates to your operating margins and certainly the macro conditions, the higher raw material costs, to name just a couple, are kind of really impacting the numbers this year. At the same time, I am sure perhaps the extent of how much they've come down, perhaps is not or has not necessarily been in the game plan maybe as you looked out a couple of years ago into what a trough might be or it's to the extent we're at or near a trough. I was wondering if you could help me particularly with the cabinet installation services and other specialty. If you could give me a sense of... if there's a plan in place over the next couple of years to kind of get those margins back to a double-digit level or whatever level that your plan might call for. If you could kind of share that with us, if there are... and as part of that if there are restructuring actions or sort of incremental actions that you haven't already taken that would allow those units to return to a greater level of profitability? That's my first.

Okay, thanks Mike. Before I have Donny comment on some of the things that we're doing in those segments, I guess what I would say is that... part of your comment was that, we may not have anticipated margins this low and this kind of a trough. And I guess one thing I would say as I'm not sure that anybody would have anticipated this kind of a trough. If you look at our business overall and go back to 2006, for example, and if you go to the mid-point of our guidance for this year, sales roughly from 2006 would be down 20% plus and that equates to about $2.5 billion. And on an operating profit basis when you look at contribution margin as we've said in the past which kind of range between 30% and 35%, we've had a substantial decline. And obviously, we worked really hard to offset them. I think we have done some pretty good things to mitigate that. Having said that... so I guess what I would say is I am not sure that anybody would have anticipated that kind of volume decline, number one. And number two, we continue to believe that when we get back into more normalized environment from a business standpoint, that we can give the margins back into the mid to low teens kind of area. But having said that maybe Donny can talk a little bit share with you that some of things we're doing on the cabinet side and the contracting service side to really kind of look at the footprints as we look at our capacity management.

Thanks Tim. Mike, we're really across all of the businesses. We're continuing to reduce our cost structure. We're really driving lean manufacturing principles. We're in the process of evaluating all of our facilities, really with the focus on achieving what we're calling flexible, but also scalable manufacturing capability and supply chain. The one constant is change. And what we need to learn, we need to be able to maximize our returns at both lower volumes without compromising our ability to serve a more robust demand whether that comes from the macro environment or increases in market share. One specific example, if you look at our cabinet facilities, we are adopting common box architecture. We believe we'll do with a better box but allows us to produce any box at any plant which makes our capacity much easier for me to flex up and flex down without adding some of the fixed costs penalties though we had today in the supply chain. If I switch over and deal more specifically with the installation questions. Really we've done a nice job on the installation side of continuing to reduce our cost. And really the next phase of that for us is really optimizing our product portfolio. And what we're focused on there is what's really emphasize those products where installation... where those products accretive to the overall results of the installation segment. So, we'll be getting out of some products, but we don't believe that the installation of those product is a value-add. And we'll be optimizing the products and really growing at a more focused and accelerated rate. Those products were... our margins tend to be better. We'll be moving the dedicated cabinet facilities back to the builder cabinet group. We believe that gives them opportunity to focus more on the actual cabinet installation as it relates to their other channels to market. And paint is another product that... we've mentioned earlier that given the economy we're going to stop the rollout. And what we've really challenged the paint people to think about is, how do we expand that to include more of the existing pro-contractors and really a broader effort to leverage the existing channel with what we believe is a better product for the pro-painter as well as a better homeowner solution. So, as we look at our business design, there is all kinds of things we can do. But those are a couple of examples in two of the categories you mentioned?

The other thing I would add, Mike and you were asking more segment specific. But, as we indicated in the slide presentation, we've taken out another 6,000 heads, this year. And again just in terms of trying to react to and right size as quickly as we can response to the environment. One thing I would mention is that in addition to the some of the business shoot into the activities that Donny talked about, we have done some things at the corporate office level. Over the course of the last couple of years and more recently here just at the end of April, we've reduced about 80 positions. We have instituted a wage fee here at the corporate level and also we've done some restructuring of executive compensation. That includes reduced base pay and with more emphasis on variable compensation tied to performance, which we certainly think is a positive step and one that will help us manage this corporate cost structure. And our estimate is that over the course of the last couple of years, given the actions that we've taken that we've either been able to reduce or avoid about $40 million of cost. So we're really trying to look at everything across the board, across the company as aggressively as we possibly can and obviously with the velocity of the sales change that we're dealing with, that certainly is a challenge. I would mention that just as a data point for folks, we did see a significant decline in general corporate expense this quarter. There is some severance in there but the other thing that we benefited from was a reduction in stock-based compensation. So I thought I'd point that out just so folks are aware. That's tied to our stock price and really reflects Phantom shares and or stock appreciation rights that effectively get marked-to-market at the end of each quarter.

So, I appreciate all that detail, Donny and Tim, I just guess before I ask my second question just so I understand, some of the incremental cost savings and actions that you've done this year like the 6,000 employee headcount and I'm sure some of the facilities that you've closed, occurred this year. Can you give us a number in terms of what the incremental benefit might be in '09 because I assume that it has happened throughout this year and on an annualized number it's different than what might we have seen in the numbers this year?

Yes there would be a difference Mike. But other than what I could give you relative to the Corporate Office, I don't think we have any quantification of that at this point in time.

Okay. Second question is just on balance sheet and a lot of focus, a lot of questions that we've got have been surrounding the dividend and you addressed that in your comments. But just wanted to get a sense of where you're comfortable on a net debt-to-cap ratio. In the second quarter you're at 45%, which is actually slightly below where you were a year ago, but certainly cash inflow continues to be under near term pressures. So is there a number that you don't want to go above and would you shift your priorities more towards that reduction in near term given the continued tough conditions?

Well Mike, gross debt-to-cap is about 51%. And I think that's flat with the last year and pretty much in a range that we've been running over the last several quarters. A couple of things on debt, we do have $100 million of debt due in September of this year, which we plan to pay out of corporate funds or cash flow if you will. The next debt requirement that we have is 2010, when we have about 300 million of floating rate, rate that due, which we'll probably refinance. The only significant debt we have due is not until 2012, and that's about $850 million. So I think, I think we did a pretty good job of taking advantage of market conditions and timings in terms of issuing some of debt that we issued over the last three or four years and I would attribute that to luck as opposed to anything else. But having said that, we've got it spread out pretty good and we've got relatively favorable interest rates. I think our average interest is about 6%. We wouldn't anticipate leveraging up at all. I think that we're relatively okay with the 51%. Our rating is important to us. We're currently BB plus. So, I think in terms of going forward or BBB plus excuse me, but I think going forward we probably would, would want to stay relatively in that range. And as we've mentioned many times, we're not real capital intense. Over the course of the last five calendar years, we invested about $1.5 billion in CapEx, another $300 million roughly in displays and as we've said many times, we think that our capacity is structured at this point where we can very effectively serve a market that it would be in a 1.5 to 1.8 kind of range in terms of housing starts and a market that might show a 4% growth in home improvement related expenditures which has been sort of the traditional growth rate over time. So we don't see a lot of major capital required going forward. So, I think from the balance sheet perspective, we're pretty comfortable with where we are at this point of time; we don't really see any issues going forward.

Alright. Thank you.

Thank you, Mike.

And we will go next to Budd Bugatch with Raymond James.

Good morning, Tim. Good morning, Richard. Good morning, Donny. Yes on Friday when you talked a little bit about gross margin and the loss leverage of sales volume and the increasing material energy cost etcetera. Could you parch that any way Tim, for us as to what were the more important factors and being down $300 million, year-over-year on gross margins... gross profits under the $192 million in this quarter?

Yes, I think Budd, the major issue there is the overhead side of things and in particularly the fixed over head side.

So that's the--

A little bit in terms of freight and logistics from a distribution standpoint. But the biggest issue we face at this point is really on the fixed overhead side.

But that's all revenue based, right?

In terms of the decline and volume?

Yes, the leveraging. Yes.

That increase cost absolutely.

Yes, okay. And are you behind or ahead in pricing versus costing.. cost now?

I think at this point and if you forget the early period when we, as we said many times you go back to 2005, when we got the first wave of commodity costs and probably didn't react as quickly as we should have. I think at this point we're in reasonably decent shape. We've got a little bit of catch up to do in certain areas but we're certainly pursuing that. And given this last wave of commodity cost increases, which we've seen, which would relate to particle board for example. Finishing related costs as it relates to cabinets hardware, brass to a certain extent, installation, we certainly... components driven by petroleum that might go into paint and/or windows, resins, glass, those types of things. Obviously we've got that certainly in the cross areas at this point in time. And we'll be working to offset those through working with our suppliers, price increases productivity. So, I think we're in relatively good shape, little bit to catch up. But that's not anything that I would say that's abnormal anyhow there is always a little bit of a lag when cost bump up.

Sure.

I think we're in pretty good shape there.

Okay. And related to that fixed cost issue by taking the outlook for the charges up to $0.8 to $0.9 somewhere where that is after tax, what's the geography of that and what additional actions might you see to account for that rationalization charges?

As I mentioned relates to severance ERP implementation as well as plant closures, and most of the increase would be on the severance plant closure side that supposed to the ERP implementation side.

So some additional of rationalization of manufacturing footprints.

Yes, for example in the quarter for example, in the quarter we had about a $5 million severance at the corporate office and that was into anticipated when we gave the initial guidance back in February where we taught would be $0.6 to $0.7 and again That's kind of tough to estimate but what we were really trying to give you a heads up on is the fact we would be up may be a Penney or two.

What is the pre-tax Tim, number on that tenure if you have got back to on that?

Well $0.8 would be approximately, $48 million for the full year number and were about $24 million at the six months period.

So that's the pre-tax side as the $48 million.

That would equate to $0.8 roughly.

Just to other quick questions your free cash flow you also finding that is cash from operations minus CapEx or is it cash from investing which would include the --?

That's cash from operations less capital expenditures.

So, the CapEx for the year is what now?

We originally read 230 but it's now down to $210 million [ph]. And we originally add depreciation and amortization at approximately $260 million [ph] and that number is now down to around $250. So, there's been a little bit of movement within the components but not a lot.

So, that would imply cash from operations of somewhere about $850 million to get to that $640 million [ph] number?

Yes.

And my last question is, you mentioned that stock-based compensation for general corporate expense that number of $35 million before charges or after charges that's a pretty severe reduction. What's the continuing number for general corporate expense going forward or does that stock-based compensation issue continue?

No, I wouldn't expect that would necessarily continue but it depends on what happens to the market price of our stock. If stock goes up, there could be a little additional cost in there. If it goes down, there could be a little bit of a reduction but I'm thinking that number is about $160 million roughly on a full year basis.

For the GCE. Excluding stock based comp.

That would include stock based comp.

And, can you quantify, with the stock based comp impact was in the quarter?

It seems like few but I don't, I think it was about $14 million.

We'll get it when the queue comes out. Thanks, Tim.

13 million or $14 million, yes, it's in the queue.

Thank you, Sir.

And, will go next to Peter Lisnic with Robert W. Baird.

Hi, good morning it's actually John for Pete.

Hi, John

Just looking at I mean It sounds like the biggest thing hand driving margins right now, the overhead absorption but the commodity cost picture if you look at where people were forecasting things in April when you gave your guidance we'll have to know [Ph]. Commodity costs have come up a bit and you guys kind of reiterate at your guidance. Just what is the positive offset or is it just kind of the increases in margin are enough to make you change your range right now?

Well I think in part we anticipated, for example, oil was trending up at that point in time. It is back now probably to a level where it was back in late March and April. But I think we anticipated a little bit of an uptake and we also anticipate that we'll be able to offset that with either through working with our suppliers, productivity, or working with our customers in terms of price.

Okay. And then I guess switching gears for the second one. Just the comments or two you had in your, the presentation about kind of price concessions, is that largely within installation or is that in other segments as well?

Yes, I'll let Donny talk a little bit about that. But that's primarily in the installation area.

Yes, that primarily in fact all of our businesses' tied to new home construction which would be our installation businesses, our windows business and builder cabinet group. We also are seeing in the form of price concessions, we're seeing higher promotional costs at retail. So, the fact is really our retail cabinet margins we're seeing higher promotional activities that are really being used by the key retailers to try to drive store traffic.

Okay. And it's more on the retailer level. It's more of the actual retailer's driving it as opposed to competitors coming in and trying to get volume for their plants, so to speak?

We're seeing increased promotional activity of which I think the source is somewhat undefined. I would think at some point its competitors offering promotional activities that we have to meet for competitive reasons and on the other hand it's working with our partners to really figure out ways in which we both can increase store traffic and potentially raise our revenue.

Okay. Thank you. I'll get back in the queue?

And we'll go next to Ivy Zelman with Zelman and Associates.

Hi, good morning, everybody.

Hi Ivy.

Hi Ivy.

Tim, you mentioned you think there is going to be a slight up take and other obviously on the cost side initiatives, working with the suppliers, etcetera. Can you elaborate? I know you mentioned that you're using starts $902 million I think you said for the back half of the year. Can you also, I know you mentioned Europe, maybe help us more specifically on your outlook for Europe? And then sort of a contingency plan assuming that the market weakness is actually unfortunately worst. And what the impact you think would be with respect to it, any change and expectations on cash flow and on dividends or do you feel like there is, little if I could erode your opportunities or your I guess change in guidance going forward?

Okay. In first part I think of your question was raw materials. And yes, we have seen a little bit of a tick-up, as we mentioned. And again it's kind of across the board. Particle board for example, plywood, a little bit of an increase there, finishing cost as it relates to cabinets, hardware as it relates to cabinets, all of those have ticked up a little bit. Insulation--

Actually Tim, I am sorry, I thought you were--

I'm sorry.

I thought you were saying that... you thought... I apologize, when you said tick-up I thought tick-up in the market getting better. I apologize.

No, no. I meant in terms of increasing costs.

Okay.

Yes, That's what I meant, I'm sorry. Just in terms of--

But do you, do you have a view on the second half of the year if its going be sequentially equal to the first half or it will be worse in kind of just a more specific outlook and then a contingency plan if it gets a lot worse from whatever your outlook is?

In terms of the raw materials? Or just in terms for the business in general?

No, overall. Yes business total, forget raw materials, sorry.

I apologize. Yes, no I think in the second half that, it's been tough in the first half and I think our feeling is that where we're at relative to guidance, mid or low double to mid teens is probably where we are going to end up. I don't see it getting a whole lot worse in the second half at this point. I think potentially some of the stimulus that the government is trying ought to have a little bit of favorable impact but again that's really hard to say. I think it's worse right now than a lot of people think. But I think our feeling is that it ought to probably stay about the same but Richard may have a comment on that in terms of his view.

I think Ivy our general feeling is that business conditions in our markets are worse than most people feel and if anything continues to deteriorate further and we put into our guidance an assumption we don't see any significant improvement in those markets in the next six months and there might even be some further modest deterioration.

Europe, Ivy, as probably you did mention Europe in your opening question and Europe is probably the one area that is may be a little more uncertain than anything else because we've seen some just very dramatic declines just in the last couple of months there.

So if I hear you guys correctly, it's possible if you get sequentially worse but sort of factoring in pretty much of similar, sort of same type of environment but not materially worse, I guess if that is correct, Richard maybe you can comment assuming your stark forecast is off by 20%. Does it change your thoughts about being, I guess aggressive with cash and buying back stock or any thoughts the dividend or cash flow and would it, in a contingency scenario would it change or not relatively to --?

I think it won't have a dramatic effect on our perception of the cash flow balance sheet for the rest of this year. One reason that even if housing starts took another lag down, there is a lag effect before that translates into our business of one to two quarters. So, I think the bigger question Mark is that '09, and is '09 possibly going to be worse than '08. And there are some people, you might be one of them who feel the risks are on the downside in '09. And I would say to you that right now all things being equal, I would agree with that but I think if other actions aren't taken the risks are greater on the downside than the upside for even '09 and we're planning all of our cash flow strategies and our dividend policies and other things, on the assumption there might be some further deterioration in '09. Having said that my own philosophy is also that I think things are going to be so bad that we will see more positive action taken by the government and that might require a new President and new administration but talking to people in Congress and other people, I'll be very surprised that things deteriorate that we don't see much more positive action in '09 and a lot of that directed to specifically to the housing industry, as one of the key areas that need help and one of the areas that could stimulate the economy near term. In my own mind I think '09 could improve from '08 but it's going to take new actions to make that happen and we haven't factored that into your planning.

And, one last question just to sneak in because you brought it up Richard. Maybe you Tim want to comment on the current stimulus package that the President is supposed to sign in days. Is any thought if you think that will have a positive impact or more negligible could hard the market?

I think the current housing bill has a limited impact in terms of changing the outlook for '09 or even the balance of '08. I think the one thing it does do is probably prevents a greater disaster from happening related to the GSEs. But in terms of stimulus, I think it's more than disaster prevention than significant stimulus. I think it's going to take I think it's going to take significantly more action to really cause a stimulus.

On whether I know or might it has a positive impact on consumer confidence in terms of any action they take which might give the consumer may be reengaged a little bit but I think that the tough call.

Right thanks guys.

Thank you Ivy.

And we will go next to Susan McClary with UBS.

Good morning.

Hi, Susan.

I was wondering if you could just give us some color on what just being in terms of the financial help us some where you build your customers.

Yes on the builder side, sure we had I think in the quarter about $4 million of bad debt expense. And that was I think on top of about two in the first quarter. So year-to-date were at about 6 million, we have... $9 million, so were at about 9 million... I guess we have six in the first quarter and three in the second quarter. So we're at about $9 million year-to-date. That's about half of what we anticipated in our planning for the full year. Last year, you might remember in the fourth quarter we had $12 million or $13 million and ended the year of $22 million of bad debt expense. This year in the forecast we had as we indicated earlier about 20. So we're about halfway there. And Don and Johnny, Donny and John, got it mixed up. John's our CFO are doing a good job by staying on top of the builder's segment, reviewing the receivables and an ongoing basis. Don, you might want to comment on that a little bit.

Yes, sure. John and I spent a lot of time really looking at our top 100 builder customers and really to help in those accounts and managing that receivable. The business units are really good and I got here as the receivable but we are relatively start receivable days and as a receivable turn that credit gets through evaluated on a continual basis. So we are not continuing to extend credit where the customer is no longer credit worthy. So, although it's a difficult environment I wonder that we really have to spend a lot of time on. And we believe that that it's not going to get any worse than what we projected at the beginning of the year related to our exposure.

Yes, we don't have a lot of concentration, Susan with any one builder. We've got a pretty diverse spread, if you will, relative to the receivables.

Sure. Are you seeing anything now in terms of some of the smaller private guys and any kind of incremental business, may be over the last few quarters?

I think if anything, credit is a little bit of a challenge for them, but Donny may have little more additional perspective.

Yes, I think they're struggling to get credit, an access to credit. But then we certainly haven't seen any uptake. We are seeing bank up these [Ph] but it --- I can't tell you that there has been any real consistency whether the size has not been a consistent factor. So I haven't seen any worse than what we have seen probably, a trend back for two or three quarters now. And I can't really give you a common threat because it just doesn't exist.

Okay. Thank you.

: Yes. And any exposure there would be very minimal given the size of the builders you're talking about.

Right, okay. Thanks.

Thank you.

And we will go next to Nishu Sood with Deutsche Bank.

Thanks. Hello everyone.

Hi, Nishu.

Hi.

I wanted to ask first Tim, you were talking earlier about being scaled for say in the U.S. from $1.5 million to $1.8 million starts or so, with the reductions, the 30% reduction in your North American work force, the 11 plant closures, I would have thought that by now your capacity would have been for a much lower level of starts, say in the low ones. So I just wanted to dig down into what you mean by that when you're saying you are scaled for 1.5 to 1.8. Is that just a case of there's that latent capacity and maybe how Donny was talking about you can scale up easily. What exactly do you mean by that?

By what we... I think if you go back, we had about a $2 million start year like back in '05-ish and obviously we had to address the market place of that point in time and had capacity and we were stressed a little bit at that point particularly on that cabinet side. What I was really referring to is that we have the capacity in place and again as you know we're operating relatively inefficiently Donny talked a little bit about the cabinet business and some of the things that we're looking at there to scale down. But a lot of what we've done is, we've taken shifts out and in order to try to meet the decline in environment that we're in today, what I am really referring to is that, we don't have to handle a lot of brick and mortar, when the market gets back up to a level of 1.5 to 1.8. Again, we are not exactly sure when that is. But we think we can handle it and what I was really trying to get across is the point that we don't need a lot of capital to do that.

Alright. So if it you are not too focused, too much on a downside but if it, it takes a long time to get back up to that 1.5 to 1.8. Are there, what additional incremental action does that imply that you would need to take beyond work force reductions and 11 plant closures you have already done?

Well, I hear it gets back to some of the comments Donny made a little earlier in terms of trying to work some flexibility into our business model and the new construction site, Donny, if you want to maybe?

That's exactly right. We have to have flexible solutions that are both scalable up and down but not only within our factory but also our supply chain. And we really have challenged everyone to think about capacity differently. Let's not plan to a start number. Let's really plan for the fact that starts are going to be cyclical and we're going to have years around a million housing starts and we are also going to have years around 2 million. And how do we think about our capacity from a standpoint of? How do we flex up and flex down? You know, what we don't want to do is save a dollar today and then ultimately spend $2 or $3 a couple of years from now bringing capacity back up. So I really ask them to think it about it almost from a whole different paradigm. It' really driven some great, really some great initiatives and we talked about a little bit earlier about the cabinet side. I think it' important we talked about what we are going to do but I also think it's important to talk about what we are not going to do. Because they haven't had a chance to talk about us. What's really sacred and one of the things we're not going to do is we're not going to limit our investment in innovation. We're going to continue to invest heavily in innovation. We've got a great pipeline full of exciting new products. We're introducing our diamond fuel technology from delta faucets, which is really an innovative no-lead solution that we think will be a game changer in the category. And our bird lighting control system, our radio frequency, energy harvesting lighting system that we'll bring it out, introduce their PCBC, we're also investing heavily in our brands. We have the premier brands in our category and we're in step up our investment in our brands that now to continue to drive our market share and we're expanding internationally. We have BEHR Paints in China through The Home Depot and Hansgrohe who has built a repeatable and successful process totally new and emerging markets. So there is lots of things we can do on the way down but we are really excited about the things that we have gone that really lead us to believe in very bright future and excited about all the initiatives and opportunities going forward.

Go it. And just a follow-up question on your key retailer sales the trends there over the last two quarters seem to have deviated from the sales of the retailers themselves being little bit worst at negative 10 I think in negative 30 this past quarter. Show me then get [indiscernible] why that might be a sudden and inventory issue is that perhaps those the categories that you are selling being hit harder then just the sales overall that this retailers what's driving that.

I think is broad based in terms of categories and I think it related to consumer components there could be a little bit of inventory balancing there that might be impacting also a little bit we don't usually get hit with that as much as other people do. But I think it is just really the consumer pulling back at all price points including some of the lower ticket items.

Yes, I think there is a mix issue on the cabinet side. We really have increased sales in our, in fact, assembled product but that's been more than offset by sales in our premium product line, our special order premium product line. So have a little bit of a mix issue there that effects the overall retail sales as well.

Okay. Thanks a lot.

Nicole, I think we will cut the questions off here and I do have a couple of closing remarks I would like to make.

Okay go ahead.

Again I would like to thank all of you for joining us today and as we mentioned we continue to aggressively manage our cost structure and we worked hard over the past several quarters to offset the impact with the current economic environment on our business. While these actions have been and continually very difficult we expected additionally actions to address current market conditions will be even more challenging as we balance what we can do to mitigate the impact of the current market conditions on our near term results and the implications these actions may have our long-term performance, although the company expects to next several quarters to be very challenging the company is confident that the long-term fundamental through the new home construction and home improvements markets are positive. In these challenging times we are extremely proud of the Masco team world wide as they focused on driving solutions for our customers and value for our shareholders we continued to invest in innovations product developments and expansion in the geographies technology upgrade and process improvements pushing hard to take advantage of this cycle. We are putting particular efforts to strengthening in our all rate powerful brands we will leverage our environments reliving program and focus on sustainability in green solutions in our products and service offerings there is a of excitement in Masco, and we'd like to share that with you at the 2009 international builders show in Las Vegas. Our both will showcase our brand supported by new products and innovative customer solutions. On Wednesday January 21, we will host an investor even which will include management presentation. In addition we are partnered with professional builder magazine to design and build a green show house, which will re-build to the highest level of our environment through living program, certified green. This home will feature many of Masco's brands and sustainable products in a smart system based approach from consumers aware of what is possible today Masco branded solutions. This is a green coming out party. More information to follow and we hope that many of you can join us. Thank you, again.

And that does conclude today's conference. We appreciate your participation. And you may now disconnect.