Good day everyone and welcome to today's Ingersoll-Rand First Quarter 2008 Earnings Conference Call. Just as a reminder, today's call is being recorded. At this time for opening remarks, I would like the turn the conference over to the Director of Investor Relations, Mr. Joseph Fimbianti. Please go ahead, sir.

Thank you, Christina. Good morning. This is Joseph Fimbianti, Director of Investor Relations for Ingersoll-Rand. Welcome to our first quarter 2008 conference call. We released earnings at 7 a.m. this morning and the press release is also posted on our website. I would like to cover some of the usual housekeeping items before we begin. This morning, concurrent with our normal phone-in conference call, we’ll be broadcasting calls over our public website. There you will also find the slide presentation for the call. Both the call and the presentation will be archived on our website and will be available tomorrow morning at 10 a.m. Now, if you would please go to slide number two, before we begin I'd like to remind everyone that there will be forward-looking discussion this morning, which is covered by our Safe Harbor statement. Please refer to our December 31, 2007 Form 10-K for the details on factors that may influence results. In addition, please be aware that some of the subject matter discussed in the following presentation will be addressed in the final version of our proxy statement prospectus to be filed with SEC relating to the acquisition of Trane. Now, I'd like to introduce the participants on this morning's call. We will have Herbert Henkel, the Chairman, President and CEO of Ingersoll-Rand. James Gelly, our Senior Vice President and Chief Financial Officer, and Richard Randall, Vice President and Controller. We will start with the formal presentation by Herb Henkel and James Gelly, followed by a question-and-answer period. Herb will start with the overview. Now if you would please go to slide number three. Herb?

Thanks, Joe, and good morning to everyone who dialed into today's call. Let me get started this morning with a few introductory comments. Overall, the first quarter lived up to our expectations. Revenues were somewhat stronger than originally forecast, primarily in markets outside North America that we were able to offset higher than expected material inflation through price, higher productivity and cost controls. For the quarter, revenue increased 9.5% and we had solid growth in all of our major businesses, despite decline in North American residential construction and truck and trailer market. EPS from continuing operations was $0.77. Excluding a $0.04 one-time tax benefit, our results are consistent with the previous guidance range for continuing operations of $0.72 to $0.77 per share. We've also made considerable progress in the quarter relative to the completion of the acquisition Trane and towards realizing the available cost synergies; a couple of more in the Trane acquisition later this morning. Finally, based upon our thorough going through discussion, which James will take you through later on in the call, we are in a position to confirm our prior guidance of $3.80 to $3.90 of EPS from continuing operations for full-year 2008. Now let me turn it over to James, who will take you through the first quarter. James?

Thanks, Herb. First slide number four gives a quick summary of revenue and operating margin for the first quarter. As you can see on the upper right, revenues were about $2.2 billion, up 9.5%. Operating margin was 11.4%, up eight-tenths of a point from last year's 10.6%. Please note that this quarter's results included about $3.8 million in restructuring charges, representing about two-tenths of a point. Excluding restructuring margins would have been up nearly a full point year-over-year. I’ll come back to the topic of margins and operating leverage in greater detail. So let's now go to slide number five entitled first quarter revenue growth. As you can see on the upper right, currency neutral growth in the quarter was a little over 5% with about four points of growth coming from the impact of a weaker U.S. dollar. Going to the upper left, all three operating segments delivered solid revenue growth in the quarter. We continue to see momentum in key end markets outside North America. Most of our North American businesses registered modest growth in the first quarter with the notable exceptions of truck and trailer and residential buildings, both which I’ll discuss in more detail. Security Technologies was up 7%, while Industrial and Climate were both up double-digits. Organic growth for Industrial was 10% with about a point coming from a small acquisition. Looking at the lower left, you can see growth rates by region, which sort of tells the story of the quarter. We continue to benefit from global diversification with nearly all of this quarter's topline growth coming from outside the U.S. We saw 1% domestic growth at an average of 21% outside North America. Results were strong in Asia, Latin America and Europe across all reporting segments. Let's go to slide six entitled year-over-year…

Thanks, James, and please go to slide number 13. By any standard, one of the key transformational steps of the past decade has been the acquisition of Trane. Trane added to Ingersoll-Rand creates a leading diversified industrial company. As a result, the combination gives you a company with stronger growth, better earnings consistency and much better critical mass around the world. I want to take a few minutes to update you on Trane's performance in the first quarter and how we are progressing towards completing this significant acquistion. So if you please go to slide number 14. Trane's performance in the first quarter like Ingersoll-Rand's was consistent with prior expectations. The revenues increased by 6.5% and EPS increased from $0.28 to $0.33 and that’s an 18% increase. Both measures were consistent with the prior guidance. Revenues for global commercial equipment increased by about 6%, while global parts, services, and solutions were especially strong with year-over-year sales growth of about 21%. Global parts and services delivered double-digit growth in all geographic regions. Our residential sales in North America declined in the quarter, hampered by a substantial decline in new construction and a softer renovation market. Commercial order growth for the quarter was a very solid 10%. Global backlog improved by about 7% over $1 billion. The record backlog was driven by strong growth in markets outside the U.S. Now, if you please go to slide number 15. During the last four months, we've made significant progress towards completing the Trane acquisition. We've completed all the required antitrust approvals and we believe that we are in the final stages of obtaining Securities and Exchange Commission approval of our proxy documents. The Trane shareholder meeting to approve the acquisition will be held approximately one month after receiving SEC clearance and we expect to…

Thanks, Herb. As we said back in February, this year's forecast has a little added complexity due to some uncertainty about the exact timing of the Trane acquisition closing and the... and with the closing taking place in a seasonally strong time of the year. In addition, like most people we are keeping a close eye on the economy. So if you'd be good enough to go to slide 21, I can start by updating the economic assumptions behind our 2008 forecast and this is for stand-alone Ingersoll-Rand, using the same chart we used in February. The chart summarizes the key economic and business assumptions and we’ve noted any changes from the February assumptions in red. Starting at the upper left, we've seen further deceleration in the U.S. and we've taken 2008 U.S. GDP growth down about 0.5 point from our own original outlook to 1.5%... 1.2%. Western Europe will probably be a bit slower about 0.5 point below our February view. While the U.S. economy is clearly slowing, we built our 2008 revenue guidance based upon the lion’s share of growth this year being generated outside North America. We expect this pattern to continue for some time but also expect to see some moderate deceleration in the developed world during the balance of the year. Looking at the upper right at U.S. construction, we assume residential building markets will show upturn before 2009. Non-residential will see about a 7% year-over-year decline in square footage terms with institutional activity roughly flat year-over-year and commercial construction expected to decline about 10% year-over-year. Our market mix and the 9 months to 12 months lag from these leading indicators give our non-residential security business some pretty good visibility into the back end of the year. Moving down the right-hand side, you can see…

Absolutely. [Operator Instructions] And our first question will come from David Raso with Citi.

Hi, good morning. My question is on the margin guidance for the full year. You maintained it. I'm just trying to walk through the pieces in a sense of you’ve taken the revenue to down the most in your highest margin business so the mix just first blush [34:54] would seem adverse, as well as of course the cost inflation issue. Can you walk us through where the EBIT margins can stay similar the prior guidance? Is a higher pricing assumed or maybe help us with a little more FX help on the top line, where does that drop into the bottom line?

Yes. I think you’ve identified the moving parts, David, and the short answer is you said it, a little bit better price realization that’s both the products have passed through from last year and additional actions that we take this year. You were correct in saying that currency is a help at the top line and at the operating income line. Productivity and other actions that we are taking are a benefit. And I'd say that the... you are correct that the largest reduction in revenue from our last outlook was in the highest margin segment, but I'd say a good deal of activity happening to take underperforming either business or regions and move them up are offset that you can't see.

James, can you quantify some of those numbers? The FX help, obviously I’m talking margins, so if it helped this quarter roughly I think like $350 million of revenues, what was the EBIT benefit in the quarter from FX?

I guess the way to answer that question is if you think about the businesses that benefited the most from currency translation, you'd be looking at, for example, a very strong Thermo King revenues in Europe, which are well above the average for the... certainly for the reporting segment and for the company as a whole. And so that would be margin accretive just from the translation effect of those higher margin businesses. Yes. I guess I would say you probably picked up, just looking at the quarter, $10 million maybe $15 million of additional operating income just from currencies on... a little… yes, so your margins would be expanded just from the currency impact in the first quarter.

And not to beat a dead horse here, but that would have helped the margin, if you only brought in $15 million of EBIT on $350 million of FX revenues, it's actually a margin drag, so if your guidance has more FX help?

Dave, I was just talking about the quarter.

Well, that's... well, that's what I'm talking about... well, yes, okay, you told full year, $350 million. Okay. So essentially, FX help, Security Technologies is trying to go after the cost with the lower revenue outlook and your pricing, where is the pricing coming and your cost inflation was raised a little bit less than I would have thought. Can you just walk through those last two things, I will get back in queue?

Yes, David. I think this two areas, number one, that we were successful in getting some higher than what we had originally forecasted prices through on Security that really happened in the latter part of the year, so we are obviously getting the benefit of them beginning of the year. And as you look at the material inflation, we were fortunate enough to guess right on our hedging and we took some stuff in the first quarter where we were at copper at $290 million versus where some of the forecasts were. So we didn't see the full impact of the increase of that otherwise would have been out there if we were out there bare and without them. And so for us the challenge gets to being, as James was saying it, how much are we able to continue to control the increases of both steel as well as copper. We've seen zinc favorable for us. Those are the things we have to go manage our way through. But the price increases that overall for the first time that I can remember in a long time, we actually got slightly above 2% in the first quarter of this year and we expect to continue to see that going through the rest of the year.

And that there is more increases during the course of the year essentially, correct?

That's right.

Okay, great. I appreciate the detail. Thank you.

Thank you.

[Operator Instructions] Our next question will come from Ann Duignan with Bear Stearns.

Hi, good morning. It's Ann Duignan at Bear Stearns.

That’s what we thought.

The guys have changed my last name.

Is that like Fimbianti?

That’s true. My question is around Security Technologies I mean that continues to deliver very strong performance. I'm assuming that that's been driven by the institutional sector, which although you expected to slow, is still holding up pretty good. How much of that business is being driven by retrofits versus new builds? Is that an appropriate way to ask a question?

Yes, I think what you look at, Ann, is that we are really continuing to benefit from strength in both of those areas that continue to expand the size of existing hospitals, while they are also building new ones. So I don't think it's one or the other, I think it's a combination of those. And clearly a saying is that the overall commercial strength was still there in the first quarter, but I would tell you that if you actually look... I mean, and I'm not knocking the result, commercial performance is excellent in terms of margins. But the real improvement we saw was on the residential side, and frankly, that's one that probably surprised me the most as for the strength in both the margins, as well as outperforming the marketplace conditions that we saw out there. So I think it's not just the commercial piece that we've got to look at. It’s really the combination of commercial as well as outperformance by our residential team.

Okay. Thank you. And a follow-up question on your cost synergies. On the purchasing side, given what's happened to many of your major input costs or your commodities that you are purchasing since beginning of the year, does this put any risk to your synergy goals in terms of what you can accomplish on the raw materials side?

Well, obviously that if the copper is at $4 versus $3, what it will do is it will make it harder to go find the synergies on the bottom line. But clearly a thing is that we continue to work through these items and we're looking at not only the buy side, but an awful lot of the sourcing activity itself. It's not just the raw commodity we are going after; it's the supply base. When I've looked through the suppliers, what I was very, very surprised frankly was how little overlap that was between the suppliers we have and suppliers that Trane was using. So as we wind up going now and approaching it as a combined company, I think we’ll be able to really leverage that entire buy quite well and having to deal with the headwind of raw material cost.

Okay. And you didn't name a successor to Mike Lamach on the Security Technologies side. Is that something that we should be looking out for or have you already named the person internally?

What we said was that in order to not create lame duck situation scandal, what we said is we are going to go announce the replacement for Mike at the time that the acquisition is completed. But yes, we have some excellent internal candidates for the role and we expect to announce it on the date of the closing of the deal when Mike assumes his new role.

Okay. And best wishes to Mike in his new role. So thank you, I will get back in queue.

Thanks, Ann.

And our next question will come from Merrill Lynch, we will hear from Andrew Obin.

Yes, good morning.

Good morning.

Just first question sort of more philosophical, historically, analyst consensus and the company's guidance included discontinued ops. Are we now going to exclude discontinued ops and one-time items when we provide guidance?

Well, certainly, Andrew, we are in a position to provide both.

No, but it's just... I mean, it creates confusion I think when the company reports, because for the past six years as far as I recall discontinued ops... you measured performance including the discontinuing at ops and that's what the consensus was based on. And it seems that we... other companies do it, it seems that we are sort of now presenting earnings and you want us to look at discontinued ops separately, when we put numbers into things like First Call and Bloomberg, how should I think about it?

I would suggest and yours is a good point. The original guidance for this year is $0.06 of discontinued ops, if I recall, and we did have a couple of items in the quarter. And I guess what I would say we will give you guidance for discontinued ops, that's probably where you should put your estimates in First Call and then we will try and talk about the two pieces, but I think appropriately we should talk about reported earnings. We just thought it would be clear to give guidance on continuing ops knowing that disc ops is going to be $0.06. It didn't work out that way as you can see in the quarter, but yes, why don’t you just put into the system including discontinued ops to aid the investor.

Thank you. And just what was the nature of the discontinued ops charge in the quarter and what was the nature of the charge for product liability or which product was it for?

It was actually for a Dresser-Rand product that tells you how disconnected or discontinued it really is. It was for an explanation that was done years ago that they have something to do with the ongoing code operation of that facility. And Andrew, the whole subject, when we try to give the guidance going forward, once Trane is on board and we are into the what I call the new Ingersoll-Rand, we obviously will be looking at the overall performance. We were trying to now go and to really demonstrate, if you will, what's going on with the businesses versus what's going on with the cash that gone into bank, or all the other moving pieces as a result of gains and discontinued type stuff. So we're not trying to hide it, we're trying to really get into how can you really manage, if you will, and measure the performance of the businesses themselves as they are and going forward. So as we wind up getting again to have what I call a stable portfolio with Trane in and we are going to be reporting out in four sectors, I think you'll see then in terms of [inaudible] the entire number becoming more meaningful than with an awful lot of ups and downs that we have had as a result of the divestitures over the last two years.

No, I sure appreciate the complexity of what you are trying to accomplish certainly provide the disclosure. And just last question, then I’ll let it go. The restructuring expense, how should I be thinking about restructuring actions for the rest of the year, obviously, we'll have positive impact on '09 numbers? Could you give some guidance on what should I see second, third and fourth quarter?

So last year just to remind everybody, we did about almost $30 million worth of restructuring. This year it’s probably excluding anything, Andrew, related to Trane synergies, this is just the...

Yes. No, exactly.

Just the old Ingersoll-Rand be closer to 20 in the quarter, as you know we did almost four and we'd be talking about for the balance of the year a bigger second quarter. We got some projects underway, which could be 8 to 10 in total for the second quarter, and then that would level out to about four for each of the third and fourth quarters.

And I assume that going into '09, I should just reverse these restructuring actions, right?

Yes.

On top of whatever operating leverage you get?

Right.

That’s correct.

That’s right.

Thank you very much.

Thanks a bunch.

Our next question will come from Terry Darling with Goldman Sachs.

Thanks. I had a couple of quick questions. First on foreign currency revenue impact by segment in the first quarter, can you take us through those numbers?

Yes. So Industrial was a benefit of 4 percentage points, Climate, 6 and Security 3.

Okay. And on slide 22, where you are not changing your '08 FX expected impact between this slide package and the one last quarter. Therefore, I am confused about the response to the first question about a greater FX benefit for the full year, what am I missing in that translation?

I think the question in the first... the first question I think revolved around the income impact versus what we assumed for the full year and that answer was given about the effect on operating margin or income not so much on revenue.

Okay. So there has been no change on revenue impact, but you are expecting a bigger operating income benefit, is that the way to translate that?

I think I’m here to say there is a little bit more currency benefit to revenue, not maybe we are dealing with rounding at this point.

Okay.

But the question really was does it help margins, and I said yes.

Okay and but... again just trying to square up what's changed with your margin guidance… now, that's not changed, your revenue has come down. FX was a big item there. I'm still confused as to what the other I guess drivers of the essentially an uptick in absolute operating income dollars with the revenues coming down.

So this is like the first question. I’m going to go back over to first question that we’ve had earlier…

I mean if foreign currency is really not changed very much, are there other items, which seemed to be [ph] that there would need to be some other items.

Yes, I think this is the repeat of the first question, which is... okay, so we have pricing realization, we have productivity, we have kind of better growth rate in certain businesses outside the U.S., which have higher income and there were some assumptions about inflation. We've had better hedging was done at levels that have created benefits. As you can see, there is a number of elements here that going to the margin calculation, but at the end of the day, it's going to be productivity, inflation, volume, and mix. And I'm not trying to be cute. I'm just saying the mix is a little bit better helped by growth in regions outside the United States, where businesses have higher than average margins. Productivity we're working a way at which you can probably sense. We are... we have got the benefit of some hedges, we are seeing therefore a little bit better commodity performance and I think that kind of squares the...

Okay. And did your price assumption go up?

Yes.

Yes.

A little bit.

Okay, good. And that essentially… because you did take the raw material cost assumption up about 10% or so?

That's right.

So there's a little more pricing here. And then lastly the unallocated expense guidance, if we take the first quarter actual, add in the second quarter guidance and look at what that implies for the second half of the year, it actually assumes that the... I think the numbers would suggest that the total company actually would be below what Ingersoll-Rand stand-alone would be from the first quarter. Is that correct, and if so, how do we get that? Is that just front-end loading some of the corporate items for the year or is there something else that moved there?

Yes, the big… I'm glad you asked. The big... obviously, the big thing is that we’ve tried to communicate… you take the Trane corporate and other, you take Ingersoll-Rand and then you have what I described as corporate headquarters redundancies, which we sort of tried to say all the way along or the earliest and most clearly identifiable synergies and an acquisition of this type. So you're correct, when you take the Trane corporate structure added to what we have got, drive synergies off of the combined number, you should come in at order of magnitude that you have described, you're correct.

Okay. Thanks very much.

Thank you.

And our next question will come from Morgan Stanley, we will hear from Robert Wertheimer.

Good morning, everybody.

Good morning.

So I wanted to ask about hedging. You mentioned you got a favorable hedge in there. When did you learn of Trane's decision not to hedge this year in contrast to past years? Did you weigh in on that decision and did you think about hedging that yourself?

Robert, we are unable to make any decision that impact the performance of the stand-alone company called Trane. Until we own it, we really do not have anything to say in managing it. We've been accumulating information and going forward. So, yes, we heard about what their decision was in the first quarter, but [inaudible] as that was their decision and not ours that couldn’t impact it.

Okay, that's helpful. Let me ask a second question, if materials do end up coming in higher than you expect, and I wanted to ask about accelerating the synergies or if you get higher than your 300 million synergy goal... some of your stretch goal, can any of that come in the first 12 months, first 24 months or if you do beat your synergy target, is that more back-end loaded?

I think that our goal is really to do both. We expect that there are near-term objectives we can go after for both revenue as well as cost side, above and beyond wasn’t [ph] target, while we are also working on those that are longer. So I don't think it's really at the exclusion of the one or the other. It's really... we're going to be trying to going after both. If you look at the existing levels of copper and steel, the increases that you are talking about there are measured in the tens of millions of dollars. We believe we have revenue opportunities and specifically in areas such as service, and so we can go into to try to really combat that or offset that or exceed that.

Thank you. And let me ask the last follow-up, the cost inflation… the material cost inflation you went from $100 million I think to $110 million.

Yes.

I guess that’s probably because you had hedged it, how long throughout the year do your hedges last and it’s possible to think about that one?

Well, let me give a thing I did, obviously varies by individual product line. But we have stuff that goes out all the way as far as through August in some cases and so it varies in terms of [inaudible] from June through August for most that I recall.

Perfect. Thank you

Thank you.

[Operator Instructions] Our next question will come from Daniel Dowd with Bernstein .

Good morning.

Hi, good morning.

I actually want to talk a little bit about the revenue synergies that you talked about, [inaudible] time in the prepared remarks talking about that. Can you just walk us through... on slide 17, you talked about four different categories of revenue opportunities and the way I’m used to think at about this is that an existing sales force company buys a new company. They have a new product, so now you're pushing this product through this larger and more efficient sales force, and in effect you get higher sales force throughput. Is that what's happening here for the combined Trane and Climate Control sales operations? Is that how we should think about the revenue opportunity?

I would... maybe let me describe it this way to you. First of all, if you look at our parts business both as they exist at Trane and they currently exist in our own Climate Control, we believe that with the extra presence that we have, we now will have over 500 locations throughout the U.S. We believe that in terms on that the networking that's now available, the ability to go and to find a product readily available will encourage people to buy the product in places where they're going to be stored. We also expect to be able to take and to put IR-type products… parts into the existing Trane locations. So we really have seen in terms of on it, the availability of those items on a convenience basis will wind up increasing sales. And when a person walks in to a Trane facility, what we're going to be looking at is introducing them to an awful lot of IR stuff they heretofore would not have seen.

And those are actually different people than are walking into your IR facilities?

Yes. Exactly right.

Okay.

And then second piece on the service side, what we are really looking at their thing is that, you have Trane has heretofore really focused on what I call large, commercial sophisticated complex type facilities, while an [55”11] related service organization and our security service organization, the integration group, we have been really focusing on more of the light commercial type applications. So we believe we are not going to be able to go and to expand the horizon and go after the light commercial type stuff. And on the control side, what we really see is that whether you're controlling an air compressor or whether you're controlling an HVAC unit or whether you're controlling a stationary refrigeration, the control pieces are very, very comparable. The asset tracking, the asset monitoring, they are all there. The last one is that obviously in the cold chain, we are talking about everything here from postharvest cooling, industrial refrigeration, and getting again into really a comprehensive service organization for the retailer. The best example I would tell you personally I was over in China last… a couple weeks ago and I met with the Vice Mayor of Shanghai and his number one object, he wanted to talk to me about was how they have 350 or what they call in terms of energy hog locations in Shanghai that he wanted us to get together the Trane as well as the IR capability and going to an energy audit to reduce all energy, because half of their retail locations. When you combine the stationary refrigeration, the HVAC, we’re consuming over 90% or watching the consumption 90% of the electricity that's there. So those activities now that we will able to go after collectively I think will give us some real upside.

Okay, that's helpful. And then let me just refer to page 19, where you talk about creating enterprise value. Is the shared services organization… is that already in place or are you going to be doing the Trane acquisition looking for the other businesses to drive margins, while simultaneously putting in place the shared services?

We already have in Ingersoll-Rand a comprehensive enterprise services organization that focuses on everything has to do with employees, their benefit plans, their payroll plans, as well as IT type services. And what we look at doing is leveraging that know-how across the entire company, including the Trane pieces, where they have a much more limited scope of work. And our existing enterprise services organization, the shared service group, is already global in nature. They exist in the U.S., they are in Europe as well as in Asia-Pacific. Daniel Dowd – Bernstein: Okay. So what you... so really the organizational things are focused on is really just the Trane acquisition?

That's correct. Daniel Dowd – Bernstein: Okay. Thank you.

And our next question will come from Mark Koznarek with Cleveland Research.

Hi. Mark Koznarek. Good morning.

Good morning, Mark.

Just a couple of details here, one on the tax line for James. The downward revision by 1 point for the full-year tax rate, is that simply the first quarter here being at 18.2%?

Pretty much, Mark.

Okay. Then the second one for the second quarter outlook, you have got your operating margin estimate actually down from a year ago, and here in the first quarter overall for... I'm talking legacy IR, first quarter here was up. And so where do you think the swing is going to be? I think you already touched on part of it that there's going to be double the amount of restructuring. But in what other segments are we expecting further margin compression from your first quarter levels?

Yes, I think the... you’ve pretty much got it in the form of the restructuring that’s going on in the quarter. The margins in our Climate business and our Security business flat to down and the Industrial Technologies up year-over-year in the second quarter.

And what's reason for that change, is it raw material, is it mix, is it competitive pressure?

Well, I was going to give pretty much the list that you gave, which is we have some productivity as you probably could guess, our initiatives in motion. We have got restructuring going on. You’re right from a… call it a price cost standpoint. We’re still working to get price pass through to offset material inflation, other types of inflation. And then there is geographic mix, what in the second quarter is driving the top line growth and what's called incremental margins, and it does differ by segment. But I think the biggest call out here probably is the restructuring that we are doing.

Okay. Thanks very much.

Thanks, Mark.

Operator, we are going to take two more questions please.

Okay. And our next question will come from Robert Mccarthy with Robert W. Baird.

Good morning.

Hi, how are you?

I wonder if I could get you to follow-up... I think it was Terry who asked you this, it was the currency impact by segment, I wonder if you could do the same thing for the geographic split on slide five?

That might be one more where we’ll give you a ring back. I have it, but I don't have it in pack of stuff in front of me here.

Okay. And I just want to make sure that I understand exactly what's being said about intermediate period post acquisition, specific comment that you're going to focus cash on debt reduction for 18 to 24 months in particular. I mean is that the same as saying that even bolt-on acquisitions are off the table for a period of time?

Let me start by... I will give one part of the answer and Herb can give the other part. Basically, what we are saying in the short-term, this business is going to generate a lot of cash and we’ve put together a financial plan, which we think we can… from a cash-generation standpoint, we think we can beat. Our ratings on the pro forma company are predicated on a certain amount of the cash that we generate being used to delever some of the short-term debt. The sum and substance of our remarks, as the cash deployment as an element of [inaudible] people that we said we would pay down some short-term debt. We have flexibility. I guess the point is, I’ll will turn it over to Herb, but it really was just to remind people that we have to dedicate some short-term cash generation and to paying down some short-term debt.

Robert, we said in our February call which I repeat now that we had in our plan to spend up to as much as $500 million over the next 12 to 18 months cumulative on bolt-on type acquisitions if they met certain hurdle rates and that was still what we had put into place when we did our entire cash flow analysis. So we are not walking away from bolt-ons that are very, very accretive. And I would give you an example, we have seen in terms of on it, obviously, at Trane that there are some distribution opportunities that we may want to look at. There are some really bolt-on areas, geographic expansions and so on that probably would be interesting for us. But we right now are targeting things that are in the quote less than several hundreds of millions of dollars rather than things that are bigger than that.

Okay. Thank you.

Thanks.

And our final question will come from Sarah Majors [ph] with Wachovia.

[inaudible] Just a clarification on the guidance for 2008, does it include the approximate $0.04 of tax benefit that was called out in Q1? And if so, does that imply that the earnings guidance from continuing operations is actually lowered by $0.04?

Let me say that the $0.04 of tax benefit, which is in continuing ops…

Yes.

Is incorporated in our guidance.

Okay.

And so, yes, it's in the guidance.

Okay. So then since you’ve maintained guidance from the end of Q4 then it actually came down a little bit?

The... now, let’s just say this, I didn't know of the tax benefit when I provided the guidance in February.

Okay. All right.

It is a variance from what we said in February.

Okay. That's fair. And just a follow-up, within negative $0.15 contribution to '08 earnings from discontinued operations, are you including the $0.11 to $0.12 related charges from Q1?

Yes.

Okay. I just want to clarify that. Thank you.

Thank you.

And that's all the time that we have for the questions today.

Thank you very much. We are going to wrap up now. There will be an instant replay of today's conference call available at approximately 10 a.m. tomorrow. It will be available until May 7, 2008. Call-in number is 888-203-1112 and the pass code is 8848191. Audio and slides from today's conference call will be archived on our website. And finally, the transcript of this conference call will also be available tomorrow morning. Please call me if you have any additional questions. I’m at 201-573-3113. This concludes our call. Thank you again. Good-bye.

That does conclude our teleconference for today. We like to thank everyone for your participation and have a wonderful day.