My name is Katie and I will be your conference operator today. At this time, I would like to welcome everyone to the Pentair Q2 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I’d now like to turn the call over to Jim Lucas, VP of Investor Relations. Please go ahead. Mr. Lucas.

Thanks, Katie and welcome to Pentair’s second quarter 2012 earnings conference call. We’re glad you could join us. I’m Jim Lucas, Vice President of Investor Relations. With me today is Randy Hogan, our Chairman and Chief Executive Officer and John Stauch our Chief Financial Officer. Today’s call we will provide details on our second quarter 2012 performance, as well as our full year 2012 outlook as outlined in this morning’s release. Before we begin, let me remind you that any statements made about the company’s anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in Pentair’s 10-K for the year-ended December 31, 2011 and today’s release. Forward-looking statements included herein are made as of today and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today’s webcast is accompanied by a presentation which can be found in the investor’s section of Pentair’s website. We will reference these slides throughout the prepared remarks. All references today will be on an adjusted basis unless otherwise indicated, for which the non-GAAP financials are reconciled in the appendix of the presentation. I would like to also point out that the third quarter and full year outlook does not include any future impact related to the pending Tyco Flow deal that we announced on March 28 as stated in this morning’s release. We will be sure to reserve time for questions-and-answers after our prepared remarks. I will now turn the call over to Randy.

Thanks, Jim and welcome. And good morning to everybody. Let me begin with second quarter results as shown on slide three. We had another strong operating performance in the quarter driven by our focus on the three Ps that we can control. PIMS, price and productivity. We grew sales 3% on a reported basis. We drove operating profits up 11% expanding adjusted operating margins by 100 basis points and we delivered adjusted EPS of $0.83, which is up 11%. While a combination of unfavorable foreign currency translation, continued softness in Western Europe, and the last quarter of an end-of-life telecom project tempered top line growth, we saw continued strength in many of the sectors we serve. Industrial, agriculture, pool and energy all contributed solid gains in the quarter and we saw strong pricing across the portfolio with total price favorable by 2.4%. Fast growth region sales were slower but still grew faster than overall Pentair. We continue to expect double-digit growth for the full year in fast growth regions as we execute our expansion plans. Adjusted margins increased 100 basis points to 14.3% in the second quarter as we continue to drive greater productivity and execute the pricing actions to offset material inflation while funding growth investments. While we have seen some easing in commodity inflation, our pricing initiatives remain sound. In the second quarter, we delivered adjusted EPS of $0.83 compared to the $0.75 in the prior year driven by our strong operational execution in the quarter, which helps somewhat mitigate the areas out of our control, such as softer Western European volumes and continued headwinds from foreign currency. On cash flow, we saw the seasonal rebound in free cash of $222 million in the second quarter, bringing the year-to-date total to 140 million, putting us well on our…

Thank you, Randy. Please turn to slide number 10, labeled first half and full year operating margins. Let me begin on the left hand side of the chart. As Randy mentioned previously, we expanded Pentair adjusted operating margin by 100 basis points in the second quarter versus last year. Tech Products led the way with 290 basis points of margin expansion, while Water delivered 50 basis points of expansion. Adjusting for the last quarter of the CPT acquisition headwind, which was 70 basis points, Water delivered around 120 basis points of margin expansion. Both Water and Technical Products benefited from acceleration of PIMS and Lean initiatives, proactive pricing actions, lower raw material costs, value engineering efforts, prioritized investments and previously taken repositioning actions. We continue to focus on four wall accountability and we are raising the expectations of the plants and businesses and they are responding with thoughtful projects that are yielding significant results. Also a benefit in the quarter in both segment were more significant contributions in income from fast growth regions. Our efforts to localize sales, marketing, engineering, sourcing and manufacturing in these regions is being rewarded. As we look at the full year expectations for 2012, we see most of the trends from Q2 remaining consistent into the second half of the year. We expect the top-line contribution to be a little lighter than previously anticipated due to FX translation, not just in Europe, but also in Brazil, Canada and India back to the U.S. dollar. While the top-line impact of FX was nearly 27 million in the second quarter, the estimated impact of the bottom-line was only about $0.02 of EPS due to the fact that we benefited from transactional FX, in some cases, as well as we were proactive in taking out costs in most…

Absolutely. (Operator Instructions) Your first question comes from the line of Brian Konigsberg from Vertical Research. Your line is now open.

Brian?

We cannot hear you, Brian.

Brian?

Mr. Konigsberg, if your line is on mute, would you please un-mute. Brian Konigsberg – Vertical Research: Can you hear me? Hello?

Yes, we can now. Brian Konigsberg – Vertical Research: Okay. Sorry about that.

No problem. Brian Konigsberg – Vertical Research: Just first question on Technical Products, great quarter. Margins at 20%, I think that is a record from what I could tell. I’m just curious, with the volumes under a bit of pressure, what are the chances you get push back from your distributor base asking for a price concessions, given that also some of the commodities are seeing some relief.

There is always a risk of that in major project settings. But one of the great things about the structure of our industry is when you sell through distribution the prices kind of roll through. We don’t do surcharging. Everything goes into the base. So we always assume that in our – that there will be some erosion due to the larger projects. But in terms of the flow business, stuff that really just flows through distribution, it’s a virtuous situation. Distributors benefit from price increases as well. Brian Konigsberg – Vertical Research: Got it. And just moving over to Europe, what gives you confidence that you should see stabilization in the second half of the year? And I think you made a comment that the weakening Euro is spurring a little bit of a demand. Can you maybe just give some color on how much benefit you are seeing from that and what do you expect in the second half?

Yes. The biggest factor in the second half for Europe is that a lot of our European business saw the decline last year, saw some precipitous declines in the third and fourth quarter. So the comps are easier. So we are not saying that things get better. We just said that year-over-year it doesn’t look as bad, I would say the biggest factor there. That’s particularly true in Water Purification. And you want to talk about the lower Euro helps our exports, right?

Yeah. I mean – we are not yet at a point where the Euro is low enough where I think we see the benefit. I mean, when we saw it under 120 last time, we saw a pretty significant pick up in exports. So we’re not calling for that or planning for that in the second half. But we do buy projects or buy products from Europe and we are absolutely seeing a transactional benefit of purchasing, drives for instance, and our IntelliFlo pumps come from Europe. And we also cross ship and sell into the U.S. technical products. So I think we’ve got the foreign exchange, although it’s a headline on the top line. I think we’ve got it managed on the cost position well. And just to reiterate what Randy said, I mean, we’re not looking for a pick up. Matter of fact, Q3 will be down sequentially as normal because of the August shut down, which is typical in Europe. And then as Randy mentioned, starting in September of last year, we saw a significant decline in our water businesses. So I think we’ve framed it appropriately and obviously we’re not looking for a pick up.

And if I could just add one more thing, China and Europe or Western Europe are pretty light, I mean, Western Europe is the largest – a very large export market for China, which is affecting China. And a lot of the European exports, particularly the German exports, go into China to help drive manufacturing investment, or to support manufacturing investment. So weaker China, even with a lower Euro, it doesn’t mean that there will be a huge demand increase for European – for the OEMs that we serve in Europe. So anyway that’s the way we’re thinking about it. Brian Konigsberg – Vertical Research: Great. Thank you very much.

Thank you.

Your next question comes from the line of Jeff Hammond from KeyBanc Capital Markets. Your line is now open. Brett Lindsay – KeyBanc Capital Markets: Hi, good morning, this is Brett Lindsay stepping in for Jeff.

Hey, Brett. Brett Lindsay – KeyBanc Capital Markets: Hey, just on the restructuring plans, which businesses in the quarter were most impacted from some of these initiatives weighted between Water and Technical Products?

Yes. We took, if you think about it, it’s a third roughly in Tech Products where we took some actions in Europe based upon proactively assessing where the volumes were at. And two thirds of it would be Water and we again more heavily weighted to Europe and the sense of rightsizing the volume on anticipated lower demand. Brett Lindsay – KeyBanc Capital Markets: Okay. And then you mentioned in your comments about moderation in North America. Could you just talk in a little bit more detail around the puts and takes domestically where you might be seeing signs of deceleration within the business?

Yes. Industrial is the place where we are seeing deceleration and which we see a little bit in the Water and more in Tech Products. At the same time we think Residential, and Municipal, and Commercial have – we see some encouraging signs in that. Not huge volume necessarily. But certainly as we mentioned in Municipal, we expect to see actually an increase in volume sales in the fourth quarter. But some of the programs that we have in Residential I think are quite promising to help us drive growth and Residential is clearly coming off the bottom now.

I mean, just to put some context there. I mean, we are really saying that high single-digits in North American industrial slows to 3 to 4 points of growth, which I think is a probably more normalized long term growth rate. In Residential, if you really look at it, we’ve got two businesses Water Purification and our Pool business that are in the high single-digits and we’ve been impacted on the retail side of flood related products to the tune of down 30% year-over-year. So, we have seen a recovery in the Residential in two of our three businesses. And we’re expecting those year-over-year comparisons in the retail side to mitigate at some point here, and I think you’ll see the residential growth start to accelerate. Brett Lindsay – KeyBanc Capital Markets: Okay, great. I’ll get back in queue. Thanks.

Your next question comes from the line of Hamzah Mazari from Credit Suisse. Your line is now open. Hamzah Mazari – Credit Suisse: Good morning. Thank you. The first question...

Hi. Hamzah Mazari – Credit Suisse: Hey. The first question is just on repositioning actions and spend. Maybe if you could talk about get into some more detail on what are some of the actions you are taking? How much are you spending there? And how that ramps up through the balance of the year?

Yeah. If you look at the two charts, you can see the $7 million on the Water chart and the $3 million, and it’s really – it’s all about people. It’s basically to pay for the reduction in force, which is as you know more expensive in Europe. But we expect, John, the benefits would start reading out fairly quickly.

Yeah. Q3, Q4 next year and think of the pay back being 40% to 50% of the expected reduction. I think – to put it in context, we look at delivering the long-term goals with the type of merger is delivering the base. Making sure that the synergies are additive to that base and then our bolt-on acquisitions would be additive to those numbers and think of this as securing the base in wake of what is now a slightly slower Europe than expected, and making sure that we’re staying out ahead of the cost actions to stay competitive. Hamzah Mazari – Credit Suisse: All right. And just on the Tyco deal, you know that deal obviously closes in Q3. But maybe if you could share when you think you will be in a position to talk more in detail on revenue synergies and sort of the top-line opportunity out of that deal. I know you’ve already highlighted the cost side.

Yeah. We –as we’ve been allowed – to the extent we’ve been able to work together and get into the details we still feel very good about our plan, we still feel very good about the strategy. What I’d like to – what we are planning to doing is bringing the teams from both sides together as soon after closing – like that first week. And then probably back to you in terms of – in terms of detailed guidance and then probably have an analyst meeting probably pull it into November-December somewhere in there where we will bring everyone together and we’ll go through things in detail. Hamzah Mazari – Credit Suisse: Great. And just the last question. On weather, maybe if you could remind us on how that’s impacted your business this year. You mentioned the flood side, flood being slower. Maybe any other businesses where you saw pull forward due to weather or any other impact as we think about your business next year?

In terms of the – as you know the Pool business got off to an early season in the first quarter, the first quarter was – it came out like we thought. The first quarter was stronger and we got the 8% growth in the second quarter here and as we look at the first half it was just what we thought it would be. So we feel good about that. We had floods both in Europe and in the U.S. in the spring last year, in 2011, and didn’t have either this year. So, I don’t John how much is...

I mean, our flood related SKUs, put in context, are down 30% year-over-year. So that gives you a context. I mean, it’s hitting our Water business by roughly 2 to 3 points on a year-over-year basis. We don’t have any anticipated weather in the second half. We’re not weather forecasters here. So we’ve kept things consistent with where they’ve been sequentially.

Price sold pumps in Minnesota this morning, early this afternoon. They had three inches of rain this morning. Hamzah Mazari – Credit Suisse: All right. Perfect. That’s good color. I appreciate it. Thank you.

Your next question comes from the line of Garik Shmois from Longbow Research. Your line is now open. Garik Shmois – Longbow Research: Thank you. Just wondering if you can give us a little bit more color on how the sales trends progressed as you moved through the second quarter, April, May and June, that would be helpful.

We track them all along, I mean, we didn’t see any different or uniqueness. June finished fairly strong. April and May were consistent with what our expectations were. So as far as color, I mean, we anticipated some challenges and things played out pretty much as expected except for the currency and Europe not getting better versus Q1. Garik Shmois – Longbow Research: Okay. So there wasn’t any market deceleration as you moved through the second quarter.

Not as we see it. Garik Shmois – Longbow Research: Great. And then just secondly, you identified a number of new projects looking out over the next several years. As a result of CPT, the desal project in Saudi Arabia. I was wondering if you can maybe put some numbers around these new project opportunities, maybe on annual basis, anticipated revenue growth just so we can get an idea of the order of magnitude that we’re looking at from these projects that you’ve highlighted.

I’ll just give you the numbers piece first and then I’ll let Randy kind of fill in the color. I mean, we’ve got a really growing robust backlog in our CPT related project businesses. And as we mentioned on the last several calls we’ve been in the transition of moving away from the muni projects, except for desel where we have a really nice product offering, and transitioning into more water reuse and CO2 recovery and Beer Membrane filtration industrial side. We are targeting north of 10% growth on what is now north of $300 million annual basis and you should think of the backlog or the project deck being multiple times that as you would expect leakage in that project and the push out of the projects. So that gives you an idea of what we are targeting and kind of where our backlog is. And I will let Randy put in the color where we...

Yes. And the way I like to think about it is we bought CPT to have double-digit growth, $240 million in sales, that double-digit growth would be $24 million a year. I think a lot of that is from the new applications and it’s in the $20 million to $30 million range. We are making a lot of progress in Dairy. We were making a lot of progress in as – we mentioned – we mentioned a framework agreement, which is kind of interesting it’s the same sort of approach that Tyco Flow Control uses in the energy side using big frame agreements to look at multiyear relationships. We see some real opportunities to do that in food and beverage. We see some real opportunities to do that in what I would call industrial water. So and that’s where, as John mentioned, water reuse. Water reuse is – we have the technology. We have systems. We believe water reuse. We just look at the droughts and look at the issues being caused by lack of water. People – the industrials are going to be the first people that are serious about taking care of water, so we really see that technology being useful there. So I think about it in terms of $20 million to $30 million kind of a growth a year. On top of that, I believe there is at least that – there is another $20 million or so that’s in the water purification area. That’s why we focus so much on the filtration side. We are very – I’m very bullish on Hybrid DI. I think, I said before it’s not an iPad, but we’re going to work like hell to make it one. It really can be a game changer in terms of Residential and Commercial. Garik Shmois – Longbow Research: Okay, great. Thank you for the color.

Thank you.

Your next question comes from the line of Robert Barry from UBS. Your line is now open. Robert Barry – UBS: Hi, guys, good morning.

Good morning.

Good morning. Robert Barry – UBS: Question on the Technical Products margins. Is that communications revenue that’s been weak especially low margin?

Yes.

Yes.

There is a mix benefit, no doubt about it. Robert Barry – UBS: I guess that was my question, I’m trying to unpack like where in the walk the mix comes in, is it under productivity price, and how big is it?

It would show up in productivity, yeah.

If I was estimating it, you can’t be precise on that, but I would say it’s anywhere from 70 to 80 basis points of mixed benefit. If you think of it in areas that we’ve been challenged, I mean, our European businesses don’t have the margins that our North American business does in Technical Products. And the communications side, which is OEM and project related work, especially towards the tail end of those projects where the volumes aren’t where they used to be, tend to be very low margin. Robert Barry – UBS: Got you. So it sounds like there is still some room that you’re actually raising price on kind of a like-for-like product basis?

Yeah. There was definitely price and there was definitely productivity. And that was 270 basis points...

220 net.

To 220 net. You take out the 80 and we’re still up 140. So price plus...

It’s 290 minus 80 would be about 210 and that would reflect the ongoing price. Robert Barry – UBS: And then I just wanted...

But I think – just to follow up on that. I mean, one of the things Randy is challenging this business for sometime about is, we don’t need to continue to chase these large telecommunication businesses. So as we build the factories and start to fill the international locations, we’re looking more for that steady margin, industrial energy and infrastructure.

And that’s what exciting about when you see we are adding 20 distributors in China and we are getting 30% distribution growth in China. That telecom project that we are finally getting out of was one we took back during the financial crisis to fill the factory. I mean, so this is what happens when you don’t have lane discipline, and by the way we were on board with that decision at that time. Robert Barry – UBS: Yeah. So it’s not like – it’s a benefit that unwinds?

Correct. Right. Robert Barry – UBS: Yeah. And I just also just wanted to follow-up on Pool and you touched on it little bit earlier. The growth decelerated quarter-to-quarter still good, but decelerated a lot versus a much easier comp. I mean – and you also had that deal, I think the Brazil acquisition in there. I’m curious how much that added and how you are thinking about Pool given the deceleration from quarter-to-quarter.

Brazil was a rounding error, Rob. I mean, with the time you take to add in the revenue less the foreign exchange in the Real, I mean, maybe less than a $1 million.

(Inaudible) the inventory...

We are just getting it up and then we’ve got an inventory impact. Yeah, I mean, I think it’s hard to call upper-single digit 8% growth in a business that’s not seeing an increase in installed base, and our Pool permits today are 80% or down 80% from where they were at the peak. So we are not seeing a substantial amount of increase in Pool builds, but we are seeing an increase in content from the energy efficiency line that we are adding.

Yeah. The point about the good secular trends that I talked about in my script remains true. I mean, it actually as housing stabilizes particularly as the Florida market has stabilized and houses start to turn and people start fixing their pools. I’m not worried about Pool at all. Robert Barry – UBS: Yeah, do you think the second quarter growth is (inaudible).

Well, as I said, I kind of looked at the first quarter as the weather was so good that had to be – couldn’t continue that we thought there was (inaudible) from second quarter. We planned, we thought that way and in fact it was. So we kind of look at the first half and say, yeah, it was about like we thought it should be. Robert Barry – UBS: Got you. Okay. Thank you.

Thank you.

Your next question comes from the line of Deane Dray from Citi Research. Your line is now open. Deane Dray – Citi Research: Thank you. Good morning, everyone.

Good morning. Deane Dray – Citi Research: And also best wishes to Jim and his new role. First question on the Pool, just to follow-up on Rob’s questions on the Pool side, in adding these new dealers, was there any channel fill benefit that was meaningful in the quarter?

Not really. Our dealers are really pool builders and so they basically pull through Pool Corp or whatever distributor they work with, as they do a service on a pool, rebuild or build an actual pool. So there aren’t that many of them that stock and they are particularly – the ones we added are smaller ones, so they particularly don’t really stock.

But we do look at it as way to gain more content in the overall market Deane, and so we hope that that has a sustainable impact on the growth rate long-term. Deane Dray – Citi Research: And then do you have a sense of how much the – some of these green products, the IntelliFlo, have contributed to the top line. And just if you kind of parse out what the year-over-year is? How much of that are these green products?

The IntelliFlo grew 30% in the quarter. It’s now...

35% of the overall...

The whole Eco Select product line, all of what we call the green Eco Select bottom line is 35% of our growth, and it’s been growing at least twice the rate of the overall business. So it’s been a big part of it.

And Deane, just as we shared with you or shared with everyone earlier, the overall market is not growing. So we definitely think that this Eco Select line is helping us grow double-digit, high single-digits in what is not necessarily a robust market. Deane Dray – Citi Research: Great. And then over on the CPT side, it sounds as though you have got some new products or some new business on the beverage side in China. So we were at the Singapore water tradeshow a few weeks ago and there was a lot of buzz about what the opportunities are for CPT in China, and specifically on the beverage side. So how does that business look? Are you displacing competitors there? Or is it just better distribution into China? Just give us an update if you could?

I think it’s the advancement of the technology as they continue to build out what I would call more world class food and beverage capability. As you know, their dairy business is going through quite a cathartic change and so bringing in more world class technology is where we see it. Also, Beer Membranes versus the (inaudible) approach and getting these relationships with these brewers and these dairies are really the opportunities. I think less of it as takeaway as terms of just getting the growth. Deane Dray – Citi Research: Great. And then I might have missed this, but on the repositioning actions, can you comment on what the payback period is? If you’re doing this in Europe, typically that’s a little bit more extended than North America. But what can you quantify the payback?

Yeah. It’s about 4 million to 5 million total payback. And we expect it to start – annually – so we expect to start within Q3, Q4, so (inaudible). Deane Dray – Citi Research: So we would start seeing the savings in what quarter?

Starting in Q3. Deane Dray – Citi Research: Of this year?

Yes. Deane Dray – Citi Research: Okay. Thank you.

Thank you.

Your next question comes from the line of Mike Wherley from Janney Capital Markets. Your line is now open. Mike Wherley – Janney Capital Markets: Good morning, guys. I was just wondering, if you could give us a little more detail on what you’re seeing in muni, you said that you’re getting some improvements there, and I just wonder if you could give a little bit more detail.

Yeah. Let me, just give the first piece and then I’ll let Randy share with you. For the first half of the year to put in context, our overall global infrastructure in muni was down about 5% to 7% year-over-year, and so what we’re now – sales. So now what we’re heading into is a growing backlog in order rate in which we think that at least is not negative in the back half of the year.

When we look at it, we look at orders when we look at backlog. The backlog is actually up 32% as we exit the quarter versus a year ago, which is good. And the first half orders are up 6%. The second quarter was up 20%. So – and if we look at – if you will, the quote activity right now, it’s up over two times. So, we view that as all good signs. We secured everything that’s in order. We secured and we know when that ships, that’s why we feel like the fourth quarter we’ll be up in municipal and the first half of next year. So as I said, is this another dead cat bounce in this market? And that’s why we’re not saying it’s – we feel good about it, but I am not calling the bottom yet. Mike Wherley – Janney Capital Markets: Do you – what do you attribute this big pick up to? I mean, do you think that these cities have just put this off too long?

No. I view it as break and fix. What happened was the stimulus – we are – this is primarily in the pump business and it’s primarily North America. We are making progress outside North America in this business, but the big changes – the stimulus package that the government –U.S. government had pulled ahead a bunch of investments. It basically paid for stuff and as soon as that money ran out, everything stopped. And then what happens is in the municipal world – I mean, our strategy has always been in municipal in U.S. is a break and fix world. It’s not – they’ve never priced to the point where they do what we would call state-of-the-art kind of investment and maintenance. They just don’t price water that way in the U.S. So what they do is when things break they fix it. And so it’s a break and fix world and they can only put that off for so long. So that’s what we believe is – they pulled ahead of a bunch of stuff when the U.S. government was paying and then it stopped, and now they can’t put it off any more. Mike Wherley – Janney Capital Markets: Okay. Thanks a lot guys.

Thank you.

Your next question comes from the line of Brian Drab from William Blair. Your line is now open.

Hey, Brian. Brian Drab – William Blair: Good morning. I just have one question at this point. On the Ag space, can you talk a little bit more about that business? And Randy said you’re gaining share there at 13% growth. What’s that market then growing and as secondary question, are you seeing any pressure on that business given some of the restrictions around irrigation given the drought?

The answer to the second question is yes. In certain areas of the Midwest, which are big irrigation areas, there are some restrictions, which haven’t read through to our order rate yet, but could do. Although it could favor more wells, well pumps as opposed to surface water pumps. The reason we think the business is up maybe around 10, so up around 13. We think the share gain – we know that we have added distributors and we’re up a lot with those distributors in some areas in the Midwest where we’re frankly under penetrated and under covered in the Midwest and Texas. We’ve also raised our service levels in California so we know our order rate there is very good. So those are the sources of why we feel good about the share gain because we can see it in different regions where we’ve had lower market share. Brian Drab – William Blair: Okay. And roughly what is the revenue in that business quarterly at this point?

It represents about 5% to 6% of our overall Pentair revenues. Brian Drab – William Blair: Of total company rev.

Correct. Brian Drab – William Blair: Okay. All right. Thank you.

Thank you.

Your next question comes from the line of Scott Graham from Jefferies. Your line is now open. Scott Graham – Jefferies: Good morning.

Hey, Scott. Scott Graham – Jefferies: Just wanted to see if you would share with us kind of the same type of analysis that you just did on muni with respect to resi. Maybe kind of how orders progress during the quarter? What are you seeing out there because there is a lot of distribution out there? What are your distributors telling you? Resi looks like it’s picking up in some of the macro data, but is it starting to pick up in your business as well?

As I mentioned earlier, Scott, I will break into the three components and think of this as roughly a third, a third, a third. You know, a third being our water purification business, which is seeing definitely a pickup in orders and shipments in North American residential. And I would put that more in the mid- to high single-digit range. Pool as we mentioned earlier experienced double-digit for the first half and eight in the Q2 and we have it in sort of the 5% to 7% range for the rest of the year. Now that is a season that starts to dwindle off here, so it’s not really an indicator. And then we are experiencing this headwind in the flood side of residential flow, but if you take the pump business that goes into well, which benefits from the drought season, again, we are seeing an uptick in the orders somewhere in that 5% to 7% range. So definitely movement in residential, certainly a long way from the top, but starting to feel like we are seeing some recovery. Scott Graham – Jefferies: True. And I probably should have been more specific on that. The water purification business is certainly the one that’s certainly most intriguing. That is a little bit of a higher margin business for you as well, is that correct than some of your other businesses in water?

Correct.

Correct. Scott Graham – Jefferies: Okay. Very good. That’s all I had. Thank you.

Thank you, Scott.

(Operator Instructions).

Go ahead.

(Operator Instructions).

Any questions left, operator?

Yes, we do have a few more questions.

Okay, Katie.

Your next question comes from the line of Christopher Glynn from Oppenheimer. Your line is now open.

Hi, Chris. Christopher Glynn – Oppenheimer: Hey. Wanted to look at reuse from a high level, a couple years ago you talked about the Twins stadium installation as a reference site. We’re hearing about a lot of new regulations in fracking, you mentioned industrial reuse. Can you comment on the market opportunity you see there and the traction that you’re seeing?

Yeah. I mean, we are very small in fracking, but we have had a win there in terms of pumps and treatment. We are working on gaining better access to that market because we do have technology. The big opportunities we see are where we are strong in food and beverage. Where we can get – we can reduce there – that’s one of the exciting parts of dairy is to actually reduce their water use. And the other one is in the produced water area, again and that’s regarding fracking when this stuff comes back up, it’s taking that water and cleaning it and reusing it. That’s a very promising area for us. Christopher Glynn – Oppenheimer: Great. Thank you.

Thank you.

Your next question comes from the line of David Rose from Wedbush Securities. Your line is open. David Rose – Wedbush Securities: Good morning. Most of my questions have been asked. I do have a follow-up on CPT. Just trying to get a better idea of sort of the pricing discipline and overall discipline when you put in CPT and what we can expect for margin improvement in 2013, given that you have a lot of system orders in place, you start to benefit from the consumable side at some point. Do we see any benefit in pricing discipline to some of the actions you’ve taken at Lean? And then three, any benefit from consumable sales in 2013 or ‘14? And as a corollary to all of this, is there any distraction from Tyco’s merger as it relates to the integration process with CPT.

Let me start with that one, because I didn’t put this in the script. But I’m very proud of how well the Pentair team has stayed focused on execution, while all of this other work is going on in terms of the Tyco integration. It’s very impressive and I thank everybody at Pentair for the great job they have done with that. There will be a time when there is going to be more. Right now we don’t have a lot of discussions going on for legal reasons between go-to-market sides of the Tyco and the Pentair, because that has to wait until proper regulatory approvals. So there will be a time when there is going to be more of that and we are very watchful to make sure we don’t take our eye either off the Tyco core business or the Pentair core business. That’s why, as John said, that’s why our focus is on firming up our core. In terms of CPT, we have instituted different pricing mechanisms in pricing. There was an approach to basically make money on the membrane and sell the system at cost and just make the money on the membrane. We don’t take that approach. We want to make money on the systems too and so we winning with better pricing, so that’s going to read through as we ship those. And in terms of productivity, some of the restructuring we did actually is related to CPT as we’ve gotten to the point where Lean is having an impact. We either fill the factories with additional business or we take costs out, so some of the repositioning is actually related to CPT, so we can get some of the benefits from Lean to actually go to the bottom-line. I don’t know John if you want to...

Yeah. I would just add. I mean, to answer your question, I think of it is 200 to 250 basis points a year for the next couple of years, and that’s both from the integration of the back office, the pricing disciplines that Randy mentioned, the better positioning of products into industrial versus muni. And then just a lot of the Lean activities that are really starting to read out and as they embrace it. David Rose – Wedbush Securities: Okay. Thanks. And then lastly, can you provide us with the backlog figure for CPT? You did I think in the last quarter.

I don’t have that right here.

I don’t have it with me either. David Rose – Wedbush Securities: Okay. Well, I can follow-up afterwards.

I will follow up with you off-line. David Rose – Wedbush Securities: Okay. Thank you both.

Thank you.

We have no further questions in queue. I’ll turn the call back over to the presenters.

All right. Thank you very much. There will be a call-in number, do you have the call-in number, operator?

I sure do. The playback for this call will be made available to you on July 25, 2012 at 5:00 P.M. Eastern. So to access that recording please dial 855-859-2059 or 404-537-3406 and enter the conference ID.

Thank you and talk to you later. Bye.