Good morning and thank you all for patiently holding. I would like to remind all parties that your lines are on a listen-only mode until the question-and-answer segment of today’s call. At this time I will turn the call over to Ms. Martie Zakas. Ma’am, you may begin.

Thank you, Laurel, and good morning everyone. We thank you for joining us today as we discuss Mueller Water Products results for the 2008 fourth quarter and full year. We issued our press release reporting earnings for the three months ended September 30, 2008 yesterday afternoon and a copy of it is available on our web site. Mueller Water Products had 115.5 million shares outstanding as of September 30, 2008, which is comprised of 85.8 million Series B shares and 29.6 million Series A Shares, which are both traded on the New York Stock Exchange. Last week we issued a press release announcing that our board of directors authorized a proposal to convert our Series B common stocks into our Series A common stock. We will discuss this proposal in more detail during the call. With us on the call this morning are Greg Hyland, our Chairman, President, and CEO, and Evan Hart, our CFO. In our press release and on this call we referenced certain non-GAAP financial measures, which are derived from GAAP financial measures. These non-GAAP measures are provided because they are used as a standard metric by the financial community. We believe these measures will assist us in assessing the company’s underlying performance for the period being reported. There are limitations to these non-GAAP measures, and reconciliations between GAAP and non-GAAP financial measures are included in the supplemental information within our earnings release. On today’s call we will make forward-looking statements in accordance with the Safe Harbor Provision of the Securities Litigation Reform Act of 1995. Remarks containing words such as expect, believe, anticipate, and project, constitute forward-looking statements. They are not guarantees, and such statements involve risks and uncertainties that could cause actual results to differ materially from these statements. Please see our Form 10-K for the fiscal year ended September 30, 2007 and supplemented by our quarterly reports on Form 10-Q for a discussion of these risks. We will file our 10-K for 2008 by the end of this month. This morning’s call is being recorded and webcast live on the internet. The archived webcast along with the corresponding slides we are presenting this morning will be available in the Investor Relations section of our web site www.muellerwaterproducts.com for at least 90 days after the presentation. The slides related to this morning’s call are available on the web site to help illustrate the quarter’s results. In addition, we will be filing a copy of this morning’s call’s prepared remarks on form 8-K. After the prepared remarks we will open the call to questions from our dial-in participants. I will now turn the call over to Greg.

Thank you, Martie, and good morning everyone. We appreciate you joining us this morning as we discuss our results for the fourth quarter and full year of fiscal 2008. I will begin today with a brief overview of the quarter. Evan Hart will then follow up with a detailed financial report, after which I will update you on key drivers influencing our business, our outlook for the first quarter, and an overview of full year fiscal 2009 as well as how we are managing through this economic downturn. We will then open the call up for your questions. Net sales for the 2008 fourth quarter increased 4.6% to $496.9 million and increased slightly for the year to $1.86 billion. Income from operations in the fourth quarter was $48.1 million, and net income was $17.6 million, or $0.15 per diluted share. The operating income margin in the fourth quarter was 9.7% and adjusted EBITDA margin was 14.6% for the quarter. The actions we have been taking throughout the year continue to yield positives in the third quarter and again in our fourth quarter. We implemented higher sales pricing in the second and third quarters, primarily to offset increasing raw material costs. In the fourth quarter for the first time this year, this higher pricing more than covered these higher raw material costs for the company as a whole. We also realized additional benefits from the cost reduction and savings initiatives that we have been implementing since 2006. During the fourth quarter we achieved $12.7 million of operating cost savings and for the full year we achieved $43.2 million in operating cost savings year-over-year, which included savings associated with the closure of the Burlington ductile iron pipe manufacturing facility as well as ongoing lean manufacturing efficiencies and the headcount reductions from the third quarter. We once again had strong quarterly cash flow and generated $93.9 million of free cash flow for the year, which was 177% of adjusted net income. In today’s market we have been somewhat effected by the current financial turmoil. In particular as it impacts our customers near-term buying decisions. We have not been impacted by the credit liquidity issues facing some companies today due to our debt restructuring in May 2007 coupled with our strong free cash flow. Furthermore, our credit agreement does not mature until May 2012. As we have demonstrated in the past, we will continue to take the actions necessary to address the near-term slow down in some of our markets while ensuring that we remain well positioned for the long-term promising prospects in the water infrastructure industry. I will now turn the call over to Evan Hart who will discuss our financial results, including our debt and liquidity position. I will then come back to provide and outlook for the first quarter and an overview of fiscal 2009.

Good morning everyone. I will now provide a more in depth review of the financials. I will first review the consolidated results and then discuss segment performance. Consolidated net sales of 496.9 million in the 2008 fourth quarter increased $22 million year-over-year due to 49.6 million of higher pricing across all business segments and volume increases at Anvil. This was partially offset by volume declines at Mueller Company and U.S. Pipe. Gross profit was 122.4 million in the 2008 fourth quarter, an increase of 4.2 million compared to 118.2 million in the 2007 fourth quarter. Gross margin was 24.6% compared to 24.9% in the prior year period. Gross profits increased primarily due to higher sales pricing of 49.6 million which offset 36.3 million of higher raw material costs and purchased components. Volume decreases of $11 million, other production costs of 5.4 million, and startup expenses of 4.3 million associated with our new automated ductile iron pipe operations were partially mitigated by operating cost reductions of $12.7 million. Income from operations was 48.1 million compared to 50.7 million in the 2007 fourth quarter. Fourth quarter 2008 operating income and adjusted EBITDA margins of 9.7% and 14.6%, respectively, compare with the 2007 fourth quarter margins of 10.7% and 16.2%, respectively. The margin declines were principally from higher raw material costs, reduced volumes, higher selling, general, and administrative expenses, and start-up expenses associated with our new automated ductile iron pipe operations, partially offset by higher pricing and operating cost savings. Selling, general, and administrative expenses were 73.9 million in the 2008 fourth quarter compared with 67.5 million in the 2007 fourth quarter. The year-over-year increase is largely attributable to higher sales commissions and other personnel related costs of 3.4 million and 600,000 of administrative costs associated with the realignment of Canadian distribution operations.…

Thanks, Evan. As I said in my introduction, we benefited during the quarter from a number of the actions we have been implementing throughout the fiscal year. We realized higher pricing in all three of our business segments, both year-over-year and sequentially. In fact, the fourth quarter was the first quarter in fiscal 2008 that prices increases in total more than covered higher raw material costs. We continued to benefit from our cost reduction actions. In total operating cost savings were $12.7 million year-over-year and our interest expense also declined. These factors contributed to a 20.5% increase in net income and a 15.4% increase in DPS for the quarter despite an $11 million decline in volume. Now turning to first quarter of fiscal of 2009, the two primary issues that will negatively impact our performance are a significant decline in bookings and the high cost of raw materials currently in our inventory that will flow through cost of goods sold. In September we saw a significant fall-off in orders at our U.S. Pipe and Mueller Company business units. September orders for these two business units were down 47% and 20% respectively, year-over-year. For October U.S. Pipe orders were down 46% and Mueller Company’s were down 42%, declining even further from September. These downturns in orders will impact our first quarter 2009 shipments at both of these business units. Consequently, the volume will be down significantly at U.S. Pipe and Mueller in the first quarter. We are hopeful that this will be an issue for this quarter only since we believe that recent market activity has been primarily driven by the liquidity crisis as municipalities are delaying spending and our distributors are cutting back their inventories in a response to municipalities’ actions. The second issue that will negatively impact our first…

Thank you. (Operator instructions) Our first question today comes from Kevin Maczka. Your line is open, and please state your company name, sir.

Kevin Maczka, BB&T Capital Markets. Good morning, everyone.

Good morning, Kevin.

Good morning.

A question on the municipal customers that you are talking about. They are obviously pulling back projects, delaying projects, responding to the environment. And obviously the longer term need there is much better than their current funding environment. And I am just wondering what ultimately makes that change? And you know we are talking about an increasingly challenged environment in terms of commercial construction outlook and financing. I am just wondering what ultimately makes that change, where their funding is more in line with their need.

Well, you know, Kevin, we have throughout 2008 we continued to see an increase in municipal spending on repair and replacement. In fact we were realizing the spending and it was pretty consistent we think with the need. In fact, if you recall a year ago when we referenced the AWWA survey that a year ago that survey was calling for a 17% increase in year-over-year spending. We said we thought we would see 10, 11%. And actually we think probably for the year we did see that type of spending. In fact, I reference what happened to our orders at U.S. Pipe in September where they dropped 40% year-over-year and another 46% in October. Interestingly, in July and August of this year our orders for U.S. Pipe were up 11%. So we saw, I guess in essence, we hit the wall or our market hit the wall in September. And I think that that’s not—we believe that it was related to the liquidity crisis. From what we currently hear on this in the marketplace that municipal financing became very, very scarce to non-existent and we think that the markets, even the municipal markets now are generally experiencing a liquidity crisis. So I think what we saw come September was clearly a reaction to what was happening the overall, the bond market. And we believe that, as we said, once that starts loosening up—we would expect that it would loosen up—but we know that the markets are in some turmoil like we have never seen. But when that starts loosening up, and again I think it is important to point out that generally water systems, municipal water systems have some of the strongest ratings. We think they will see the money first. But what we have seen in the last two months we think is a reaction to the liquidity crisis. What we think will get it back to moving to perhaps at least seeing it at if not completely the growth we were seeing, at least start seeing some projects free up. We think is just a loosening up of the credit crisis and bond money again becoming available for municipalities.

Okay, Greg, and on the pricing side you took a lot of different price increases in fiscal ’08 on a lot of different product lines. But now with volumes down so sharply and commodity costs coming down so sharply, just can you give a little more color on why you are so confident that you can maintain those price increases because I thought I heard you say that you had one recently that was not so successful.

Yes, if you look at up until the one for U.S. Pipe in mid-August, the price increases we announced were accepted in the marketplace. To the best of our knowledge our competitors also increased prices. And I would say as, you know, we all fought very hard to get those price increases. We were well behind the curve, the catching up to higher raw material costs. In fact as we have said, this was the first time that we got into positive territory. That we would expect that everyone is still somewhat behind and so when I said it is our intention to keep those prices, I am not sure we will get any new price increases in 2009. That certainly is I think very questionable. But we are going to fight hard to at least to get the carry over pricings from the price increases that were implemented and realized in the marketplace in 2008. That remains that I think your question is valid. That remains probably a variable that we have to wait to see how it plays out. But at least our expectation is that we were so far behind in raw material costs that it will be important to try and maintain those. But it is a variable that, as I said, we will have to see how it plays out.

Okay, Greg. Thank you.

Thank you.

Our next question comes from Judy Merrick. Your line is open and please state your company name.

Thanks, this is Judy for Keith Hughes at SunTrust Robinson Humphrey. And you did a good job of kind of outlining in the Anvil section your outlook for non-residential spending. But it seems like they have had two good quarters, a little better than we expected. Was there anything in the mix in the past quarters that was kind of a positive there?

You know, Judy, what we really have been seeing contributing for the last two quarters to Anvil’s margin improvement has been the pricing that we have been able to get into the markets. I think that on the Anvil business that we were ahead of the curve. So I think the real contribution—we did see some growth, year-over-year growth in volume, but the real contributor was the pricing that we were able to get through in the marketplace. We will see a little bit of that margin deterioration, as I referenced, in the first quarter. Because we will have some of the higher raw material costs now flowing through cost of goods sold. But we would still expect to at least more than cover those increases with the pricing that was implemented. But the real contributor to the margin expansion at Anvil for the last two quarters has been the pricing that we have been able to realize in the marketplace.

Okay. And was there anything you saw in the mix that helped lead to the strong volumes in the last two quarters?

Nothing that I would say that was mix related. Again I would say it was just more of the pricing that we were able to get in the marketplace and the more than offset raw material cost made a very positive contribution to margins. We will see that deteriorate a little bit in the first quarter.

Okay, great. Thank you.

Our next question comes from Michael Schneider. Your line is open, and please state your company name.

Hi, it’s Mike Schneider from Robert W. Baird and Company. Good morning.

Good morning, Mike.

Maybe first we can just start with the pricing again. Have you seen any deflation in the municipal pricing on some of these project quotes that are being submitted? I realize volumes are down and bids are probably being delayed. But I’m curious if deflation has hit that sub-segment yet?

Mike, you know, we would most readily see that in our pipe business. And actually if you look at through the quarter, the first quarter, we are up slightly, probably about 150 basis points in pricing over what we realized in Q4. Maybe not quite that much, sorry—but we are up maybe about 10 to $15 on average per ton in our first quarter versus on what we averaged in the fourth quarter.

And these are the public bid projects, correct?

Yes. Primarily what is going through there. The pipe would be, that was for shipping in municipalities.

Okay. And I understand orders collapsed during September, October. Did the amount of project quotes out there as well dry up or get significantly delayed?

Well, the project quotes—again when you look at for totals for the fourth quarter, we were down about 12%—6%, sorry, for the fourth quarter year-over-year, but most of that happened in late August and then September. So we really did see it hit when we got into September. Actually the tons that were quoted were down 12% for the quarter year-over-year, and we saw that much more heavily weighted to that decline in September.

Okay. And then I’m just curious, in pricing by segment. If we look at Mueller, I believe last quarter you had signaled that the backlog in July reflected 12 to 14 points of price at Mueller Co., and in last quarter only four of that had been realized. So it seems to me there was another eight to ten to come through, but yet this quarter only seven came through. Is there more pricing that yet flows in the Mueller Company backlog?

Yes. We would expect. We would expect to see around that 12 to 14% flow through in the—and it’s our intention to hold on to that in at least the first two quarters on a carry over basis for fiscal year 2009.

Okay. And then switching to costs. Your purchased components contracts are significant in some cases more than just the raw materials. Can you describe, for example, just what those contracts read in terms of pricing, resets, are they monthly, are they annual contracts, and how quickly will you be able to realize and pressure your suppliers for price decreases?

Yes. Let’s see. It is best for me to look at it on business units. We do not have very many annual contracts. Probably the biggest annual contract that comes to mind is for coke and that resets in February and then everything we are hearing is we are still seeing coke prices increasing. Now I am not so sure given what has happened to the steel industry if that may change between now and February. But on the coke, as I said, we think in those negotiations that our supplier may still have the upper hand. When you look at scrap steel at U.S. Pipe, we tried to keep the minimum inventory. We buy that on probably a monthly basis. So we would expect, as I said, we would expect to start seeing those lower costs flowing through our cost of goods sold on scrap steel for pipe beginning in the second quarter. We do have, as I said, the variance in our inventory. Since we are on a FIFO accounting basis that will flow through the first quarter. For our Mueller business, because in addition to scrap we do buy pig iron that I think that right now we have orders and committed to pricing that should flow through I would say probably in February. So I would expect that come February that we will start seeing lower prices on raw material costs flowing through Mueller. Your point is a very good one. We have asked every one of our purchasing people out of all of our business units to go through every one of their contracts and where we have the opportunity to renegotiate those contracts. But for the most part our big purchase items, scrap steel, brass ingots, and pig iron—on the scrap steel, that is on a month by month basis. So we are pretty good there. On brass ingots, again that is on a month to month, four to six weeks turn-around. So we should start seeing those costs fading. On the pig iron, that is probably about a three or four month out. So again we would expect to start seeing the real, the positive impact on our margins in the second quarter on the reduction we are seeing in the declining raw material costs.

Okay. And then the reduction in force that occurred at Mueller, what is the projected annual savings from that? And would it kick in as soon as the March quarter?

Let me say that a lot of the reduction in force at Albertville, at our hydro plant, was a response to what we have seen in the last two months on orders. So that would not be a savings that we would expect to see on an annual basis because it would be our expectation that when we see orders rebound that we will be bringing back certainly a portion of those positions that we laid off or terminated. But on an ongoing quarterly basis, with that number of people gone, it would be about a million, a million-four for savings and we would probably start seeing that in the second quarter. A million-four per quarter of saving in the second quarter because we certainly would have some severance costs associated with that that we would incur in Q1.

And in fact will there be a charge and expense run through the P&L in Q1?

Well, there certainly will be severance costs relative to—we are still looking at all of the potential actions. We don’t know if it will be a restructuring charge or just a period cost associated with each business.

Yes, we are currently evaluating that and we will make a final assessment as to the final accounting treatment.

Okay. But could you put some range around the dollar amount?

Mike, I think at this time it may be premature for us to do so.

Okay. And then on the start up of the mini-mill, 4.3 million on the call last quarter—you had responded to my question saying that the start-up expenses in Q4 would be comparable to Q3 at about 1.4 million. Can you give us some sense as to why the significant increase from that forecast and I guess what the expenses are projected to be in Q1?

Yes. On the fourth quarter we had expenses associated with weight control. We had some additional training of new employees. Efficiency and scrap loss. And what I think is the one area—we have always said that it would probably take us six months until we start seeing the savings that we projected. On the back end of the ductile iron pipe manufacturing process, is a process where there is cement lining put in each piece of pipe and that has not yet been working. So we ended up shipping a far fewer tons of pipe than what we expected. So we did not have the opportunity to spread these costs over greater shipments, so consequently they became a period cost charged to start-up. So I would say the real issue was related to the reduction in volume that we actually shipped because of the failure to put the lining in the pipe properly. It’s a problem with our supplier, our supplier is on site. We’re not being charged. They’re eating all the expense to get this up and running. It seems to be a, it was a programming issue. But, you know, unfortunately if we have those costs there that get spread over to our what we produce and what we ship and our production was below what we expected.

And has that process been resolved?

Yeah even better, but I think that your other question is that we would expect that we could be 750 to a million dollars of additional expenses in Q, in the first quarter.

On top of the 4.3 or absolute dollar amount?

No, absolute start.

Okay. And then final question, just on the balance sheet, so if Q1 is obviously going to be a very tough quarter and you’ve indicated it’s going to be below, well even the toughest quarters of the first half of ’08. Does it raise any either Q1 covenant challenges or as that rolls through the trailing 12 month calculations, does it pose any problems as you get into later ’09 by your modeling?

Well our modeling is going to be—for, it is, our covenants are a rolling four quarters. If you look at our last 12 quarters that, for covenant purposes, our EBITDA was around 270 million. We need a 180 million of EBITDA to still be within our covenant. So, we have a lot of head room. So we would not see you know, given the performance for the last couple quarters, we’ll have that performance with this for at least, you know, the next two and three quarters. We feel reasonably confident. We think that what’s happening certainly in the first quarter is a reaction to a tsunami in the credit market. Tough to say that if what we saw or what the economy saw in September and October, if that lasted for 12 months, we have a lot of head room but it would but I guess it’s safe for me to say who knows. But if you look at where we have been, the performance for the last several quarters, how that performance stayed with us. As I said, 270 million versus a need of 180 million, we have a lot of head room.

Okay, thank you again. I’ll get back in line.

Our next question comes from Christopher Glynn; your line is open and please state your company name.

Oppenheimer. Yeah just on the forward outlook for price, like the confidence on holding it, just want to get into maybe some of the differences by segments. Maybe Mueller Co. where you’ve traditionally been in more of a leadership position versus realizably more equal playing field at U.S. Pipe. Are you thinking about the—what are some differences in the way you’re thinking about the sustainability of price in the face of declining raws, maybe comparing the segments.

That’s a good question and I think you’re right. I think that we probably have our greatest confidence in being able to hold on to the price increases that are under our Mueller branded products. Primarily our valves and hydrants. I think that in the past we’ve seen a little more volatility in the pipe business. Again, the pipe business and I would expect that our competitors saw all the same, that the raw material cost ran away from us so I’d say significantly in the first three quarters of our fiscal year that we were all in a catch up mode. But I think if we’re, if we could see a little more variability, it could be the on the pipe side and certainly you know competitive market conditions will influence the—influence what happens. But again, I would suspect that the—given the performance of the pipe business in fiscal year 2008, that we need higher pricing to catch up.

Okay. That makes a lot of sense. And then, just on the competitive pricing and developing a little more diverse customer base, more by product line, what’ll actually get so far out ahead there and what are the customers doing on that end. Or the competitors.

Yeah, it was, you know the competitors; we were all seeing a rise in raw material costs. Competitors, our competitors were also implementing price increases. That doesn’t say from time to time on a particular project, you know, that we, it may be a—there may be a competitor that decides to go ahead and reduce prices to a very specific project. But generally I would say that given what happened in the market place, that probably the—several of our competitors also are out ahead of what was happening to raw material costs. But, then again, with the anvil business, if you look at how we’ve repositioned that business over the last couple years, that we closed some factories, we pruned some products. We moved some sourcing off shore. Some of the products that we’ve pruned were those products that we were clearly very well down in the market in terms of market share. Some of the products that we kept that we are the market share leader that gives us the opportunity I think to be a little more disciplined in our pricing. I just think, again, it was very good anticipation of what was happening to raw material costs and staying ahead of it. At the very same time that there was—still we saw very solid demand in our fiscal year 2008 on the commercial construction side. So, when the market demand was still pretty good, that I think that making sure that there was a steady supply was very, very important and I think that permitted us to be very proactive and aggressive in our pricing.

Okay and then could you just review the impact of the sourcing component of costs on your margin there and any subsequent plans to roll further into the sourcing dynamic.

Yeah, it is, if you look and we’ve mentioned, we’ve talked about the anvil business in the market for you know certainly for the last year or so. And saying that we had seen a trend where more where the greater percentage of the market or the product that was forced off shore were growing at a faster rate, not only for us but the market total, than domestically produced products. That actually has a negative impact on our margin because the product that we source off shore are sold at a lower price in the domestic market and there are two prices, there’s a domestic produced product price and there’s an off shore source product price. That goes out at a lower price and that actually is a negative on our margins. We don’t have all the data but we suspect in 2000, in our fiscal year 2008, given the increase in raw material cost around the world, higher transportation costs, a weaker dollar and labor costs, primarily in China increasing, that while we still expect that off shore source products did grow, but probably not at the same rate we’ve seen the last several years. So, that was a positive for our domestic produced products. But in the future, we would expect it if a greater percentage of our sales come from products that we source off shore at anvil, then it will negatively impact our margin.

Okay. Thanks for the help.

Thank you.

Our next question comes from Joel Tiss. Your line is open and please state your company name.

Good morning, Buckingham Research. How are you guys?

Fine, Joel. How about you?

Alright. I just wondered a little bit more if you could give us any sense of how much of the inventory right sizing or how much of the volume drop off is from inventories getting better versus maybe customers waiting for better prices or more of a reflection of end markets slow down.

Joel, you know, we just got through a couple months I think unlike most any of us have seen in terms of the general economy. We thought that our distributor inventory, especially on the Mueller side, may have been a little inflated in the fourth quarter but that’s only because the pull forward in Q3 to beat the price increases. So, we said all along, on the last conference call, that we would expect to see volume decline in Mueller as these work through. I think that what we have seen is primarily a reaction to the liquidity crisis. We’re a municipality just puts plans today—have already drawn up. They’ve put them on hold and distributors absolutely are managing very, very conservatively and I would say they’re de-stocking. So, I would—I don’t believe that we had a real imbalance in field inventory up and through September. But I think when we saw that fall off that the whole channel is getting very, very conservative. Your question about projects being delayed until prices coming down. I would say that we could be seeing some of that. We don’t think that’s the primary driver. I think it’s the primary driver was, again, just what happened in the liquidity. But I think that the channels will fight very hard to keep those price increases including our distributors because we really you know, we felt the pain when our raw material prices were going the other way.

Right. Okay. And then just on the share count, I think Martie said 115.3? Was that at the end of the quarter or was that the average for the fourth quarter?

That was at the end of the quarter.

Okay, so we should use that as a proxy for 2009?

Yeah.

And Joel, it was 115.5 million.

Okay. I was pretty close. Alright, thank you.

Thanks Joel.

Our next question comes from Brent Thielman; your line is open and please state your company name.

D. A. Davidson, good morning.

Morning.

Greg, I don’t believe this has been asked yet, but I just want to get your thoughts on a potential infrastructure stimulus package and how that might impact your business and outlook.

Yeah. Good question. Obviously very, very timely that we think that there is greater attention being paid, the infrastructure at the federal, state and local levels. I think certainly that there is the possibility of water infrastructure finance being included in the second stimulus bill currently being considered by the existing congress. I think that we’ve heard, I think during the campaign, the Democrats maybe even being a little stronger in this camp of increasing spending on infrastructure to help stimulate the economy. That we would certainly expect and this is based on probably more of what we’re reading rather than any specific insight, the roadways and bridges with benefit by the spending. But we would expect to see that flowing through to water infrastructure. We think there’s a great deal of focus on the federal level on environmental issues related to waste water spending and the public health issues related to clean drinking water. In addition, the U.S. Conference of Mayors, for instance, has just issued an analysis that estimates that every dollar of water and sewer investment by the government would generate an additional almost nine million, I’m sorry, $9 in private output in other revenue. So, we would expect that water infrastructure might be the benefit—you know, could very well be the beneficiary of not only a stimulus package but further action on the federal government in the—sorry in I think probably sometime through 2009. It is interesting to point out that on two ballots yesterday, there were two state wide referendums related to upgrading water infrastructure in Pennsylvania and Maine. I think in Pennsylvania the voters were asked to approve a 400 million dollar referendum specifically to upgrade the state’s water infrastructure. I think that we saw that that was passed by 62% of the voters. I think Maine were, they were asked to approve something similar though obviously a lot smaller. And I think that on the Maine referendum, it included federal matching funds. And that one also that also passed and I think it included for instance, the matching, it was $5 in federal matching funds for every $1 spent at the state level. So, I think that the, everything that certainly that we have heard, everything that we’ve read, I think the way the election turned out, I think it’s pretty reasonable to expect that we could see within the next 12 months spending and water infrastructure benefitting from the freeing up of federal funds.

Okay, that’s very helpful. Thank you. And then I guess, and not to harp on this, but how confident are you that you will see the benefit of lower raw material costs just given how weak the current environment is, difficulties working through existing inventories? I guess the question being, you know, does the environment need to get a lot better before it gets worse to get you there?

I’m sorry, would you repeat that please?

Yeah, in terms of getting the benefit of some of those lower raw material costs in Q2, if you work through existing inventories, I guess in order for you to get there, does the environment right now need to get a lot better before it gets worse?

Relative to raw material costs or pricing?

Relative to raw material costs.

No, you know, we think that certainly when I quoted—some of the prices that I quoted that we’ve seen for instance a U.S. Pipe going from $533 a ton in July to $210 a ton in October. I think that that could be, we think that that could be more of a temporary imbalance. That scrap brokers got caught with scrap and they needed, you know, they need to unload it. I think that there’s a chance that now they’ll manage probably their inventory a little closer. We can see prices coming up from that 210. But generally, if you look at what we average with our price of raw material average in 2008, right now we’re pretty confident that we should, we will see lower raw material costs throughout 2009 once we get through what’s in inventory in the first quarter. So, I think right now that we’re pretty confident, at least on scrap and brass ingots, that we will see lower cost and that will be a benefit for us through the last nine months of fiscal year 2009.

Okay. And then just on anvil, with the strengthening of the U.S. dollar relative to some foreign currencies. Are you experiencing any increased foreign competition in that business?

I think it’s been too close, it’s been, we haven’t had enough time to see that. I think if you look at our shipments in the fourth quarter, we certainly didn’t notice that. But certainly as I said in a previous answer that we also source our products from there so we certainly can compete. So, it could impact margins but I would say that right now, there hasn’t been enough time for us to see that impact in the market.

Okay. Thank you very much.

Thanks.

Our next question comes from Ryan Connors; your line is open and please state your company name.

Sure, it’s Benning and Scattergood Securities. Good morning.

Morning Ryan.

Just had a couple of questions. First of all, just back on the competitive environment for a moment. I noted that a lot of your competitors and U. S. Pipes competitors in particular have also been kind of taking actions to sort of right size their businesses in this environment. We’ve seen layoffs in the last couple weeks from both Sipco and McLane. And so I’m wondering you know, it does seem like the market overall is moving to cut capacity and costs. And so a couple of questions on that. number one, you know, given that most of those competitors are privately held, unlike yourselves, and therefore maybe under a little bit less pressure to take those actions in real time, do you think that your competitors are lagging U.S. Pipe in terms of you know, right sizing their businesses? Or do you think that you know, the market is all moving you know, at the appropriate pace. And then like, sort of following up on that, you know, what impact do you think that has on industry wide capacity and pricing, not only in this—you know, as we move into 2009?

Yeah, good question. I think that probably in the—that some of our competitors may have lagged U.S. Pipes in taking out the capacity. Again when I think of—you specifically mentioned Sipco, I know Sipco you know, is a—is owned by a trust that was set up by the founder for its employees. So, I think that Sipco will obviously look at every other opportunity, every opportunity to cut costs before they will start getting the layoffs. So, certainly they announced layoffs in the last, as you pointed out, in the last several weeks. I’m not sure about some of our other competitors; I think that we took a very aggressive action when we closed Burlington a year ago. So, I think by virtue of that action, we probably were ahead. But I do think it’s indicative of specifically what’s happened, the loss of the markets, in the last two months as I referenced earlier. So, I think that the industry, we’ve, everyone’s realized that we have excess capacity, need to get it out of maybe get it out of the market to get our cost positions in line. And again, I’ll go back to the pricing question that we were all behind the curve on rising raw material costs. And as I pointed out, we still haven’t caught up with pipe and don’t expect to catch up given the reduced volume that we’ll beg shipping in the first quarter. So, I think we probably all still have some of those pressures. And so I think that we’ll wait and see but I do think the we do think that we probably were a little ahead given our closing, our closure of Burlington but I do think the rest of the industry is recognizing what’s happened, especially with orders in the market activity the last couple months that they needed to take out more capacity.

Okay, Greg, thanks, that’s helpful to get your perspective on that. I guess, just another question, this one I guess more for you Evan. I mean you talked a lot about the debt covenants and so forth. I wonder if you can talk just in general terms about the methodology that you used to test the good will for impairment on the balance sheet and really, essentially in terms of whether equity prices are an input in that analysis and what the outcome of that analysis was in your fourth quarter annual review of those intangible assets. And whether you know, the fall in the stock price and the stock prices in general you know, had an impact on that analysis.

Yes, we do do an annual test for impairment of good will and other acquisition related intangibles. And there was no impairment in Q4. In this environment though, we are going to diligently monitor that on a quarterly basis. We really looked at a discounted cash flow model as well as a kind of market input. It’s kind of weighted 50/50. You know from our analysis, we looked at it, used the outside advisors Duff and Phelps and it indicated there was no impairment but you know, it was somewhat close based upon our stock prices and that 50%. But like I said, there really are no long term changes into the fundamentals of our business and our forward looking projections are solid and we feel comfortable with those. But we do take into consideration those two factors. But at this time, no impairment. We will be monitoring closely going forward.

Great. Thanks for your time.

Our next question comes from Seth Weber; your line is open and please state your company name.

Thanks, it’s Bank of America. Morning everybody.

Morning, Seth.

Most of my questions have been addressed. Maybe you know, Greg, can you talk a little bit about the pipe business. You know, structurally at what point, you know, how much pricing power do you really think exists in this space relative to PVC? I mean, is some of the problem that you know, customers are just going to use lower priced alternatives? Have you seen any of that?

Yes, Seth, I don’t think we’ve seen a lot of that in the very short term. Again, it gets down to a lot of the smaller diameter pipe, when you go four inch, six inch, eight inch, as I say, over the last 16 years, already moved to plastic pipe, PVC and now in some instances, HCPE. When we start getting in the larger sizes, 14 and above, then generally, because of the greater volume of water that goes through those, that sized pipe, the higher pressures, there’s a preference to use octillion pipe. So, I think there’s more of an engineering reason to stick with octillion pipe. We have seen, I would say in the last couple months, some municipalities on these larger sized pipes permit the PVC pipes to quote on the project. Though there’s none that come to mind to where they’ve actually selected the PVC. But we’ve seen it at least now approved the quote. But I think there are positions still is that we think that given the physical properties of octillion pipe in the larger diameter, that pipe is that that will stay. Octillion. And we’ve seen, I think, a lot of erosion already on the smaller diameters. So, I’m not sure there’s that much more to lose.

Okay, thanks. That’s helpful. And then just a thought, question on the cost savings. Is there a dollar number we should think about for cost savings in ’09 from actions that you’ve already taken? You quoted a number for the fourth quarter. Is there a number that we can plug in for 2009?

Yes, on a consolidated basis, we said, we’ve said all along that we would that we would have a decreasing—that the real benefit to the action that we saw that we’ve taken, we would see in ’07 and ’08 if you look on the 12.7 million we did in this quarter. Then probably when you look at our action, those peaked, so we’ll, we would expect to see something you know, much less than that next year. We will see an additional six to eight million dollar savings from the Burlington closure that we didn’t see this year. But we would expect again to be—the actions that we’re taking we’ve already put in place that we’ll see benefits. But will be below what we did this year and I think probably on an annual basis we were around 40 million dollars in savings this year. Seth Weber - Bank of America Securities Okay, thanks very much.

Thanks.

Our next question comes from Michael Schneider; your line is open and please state your company name.

It’s Mike Schneider from Baird again. Greg, maybe we can go through just the Mueller co volumes by product line. That is, just the brass product valves and hydrants, if you can give us a sense of what went on in the quarter.

Yeah, Mike, it was almost pretty even that through the last two—well you’re talking for the quarter or the last two months? Sorry, Mike.

The quarter and then I’d also like to know, that was my next question, what went on since.

Yeah, if you look on the quarter actually the fall off in dollars on a year over year basis, range between 10% and 30%. And the biggest was the biggest drop off were in valves which is not surprising because valves are a product that we would have expected to see the real pull forward into Q3. So, when we saw that, the drop off in Q4, it was not unexpected because of the pull forward. For instance, the brass product fell off the least amount and again, that was because we would not have expected to see as much pull forward because that’s a lower priced item. So, we saw as I said, valves 30%, hydrants less than that, about somewhere in the mid 20% and brass in the high teens to about 20%. So, but again, that’s not what concerned us. We expected to see the fall offs. What was the real concerning is when we got into September and October, as I said, where orders were down, pretty much across all three product lines on a year over year basis of—it continued at that 30% and in October it was down over 40% and about 45% and that was for valves and the hydrants, primarily with brass products off a little bit. So, when we see volume at that rate we would expect that that would probably carry through in the shipment. Volume shipments in the first quarter. So, on a year over year basis, we would expect that that 30% would probably carry through on a year over year basis at 30% cline, decline, just first quarter over the first quarter of 2008. And just to put it in perspective, of course the first quarter of 2008 was our lowest shipment quarter for Mueller. So, with that kind of drop in volume that we would see you know, operating margins erode to you know high single, probably high single digits. When you look at this quarter that our operating margins at Mueller were 19 over 19%. So, the drop off in the Mueller orders early in the quarter, in July and August, they weren’t that much of a concern because we knew that was related to the pull forward. It was the drop off that we saw in September and then it continuing at an even greater rate in October that’s a big concern.

Okay. And to that point about volumes, when you’re quoting these down 47% levels at Mueller and U.S. Pipe, you are talking year over year, correct?

Yes, we’re talking year over year.

Okay. And then within those declines, the most recent numbers that you quoted for Mueller, you mentioned that brass products wasn’t off as much. Is that more an indication of brass products are used more in the residential area versus municipal so it is indeed just concentrated in the municipal area?

That’s a good question. That’s a good observation Mike. Certainly that’s true. That brass products are used strictly for residential. And we would’ve seen I think that’s right, we would’ve seen a bigger drop off in valves and hydrants because of the absolute slow down in municipal spending. Also a year over year basis so I would think that’s the biggest contributor. Also a little bit, as I referenced, that we probably didn’t see as much pull forward on brass products either because that’s a much lower ticket item. I think the distributors will try to lock in lower pricing on valves and hydrants than it’s a little less important on the brass products. But I think it’s a combination of both and I do think that us, you know, with what’s happening in municipal markets, certainly we saw a much bigger year over year drop off in that market than what we expected we would have seen in residential construction.

Okay and the explanation as to why Mueller margins go to the high single digits in Q1. If we go back a year ago, that was almost your toughest quarter. You were dramatically carrying inventory at that point yet revenue was only, well it was basically flat to the division. But now we’ve got just the double impact of substantially lower volumes here earlier in the quarter and presumable you’ve got to take inventory levels down another level?

Yeah, it’d be related to just the absolute production related to the drop in volume? We’ll see probably some decline in inventory so we’ve done a pretty good job, I think, in bringing down inventories all along. And so it’s—we don’t have the big hit related to bringing down inventory that we would’ve had five quarters ago. It’s just the absolute fall off in production related to volume.

So, it’s by at least your guys’ site, clearly operating income’s going to be positive in Q1. But when you look at an earnings per share basis, do you actually expect to remain positive?

Mike, we don’t give guidance but certainly I think that there is the possibility that we do expect to have positives, we do expect to have positive cash flow. We do expect operating income to be operating income and the operations to be positive. With our one time expense related to collapsing the shares you know as well as some potential severance cost and the and just ongoing tax and interest expenses that it could be a negative territory.

Thank you again.

Thanks.

That does conclude today’s question and answer segment.

Well, again, thanks, thank you for your interest and look forward to speaking to you at next quarter.