Ladies and gentlemen, thank you for standing by, and welcome to the Lennox International Q2, 2011 Earnings Conference Call. At the request of your host, all lines are in a listen-only mode. There will be a question-and-answer session at the end of the presentation. As a reminder, this call is being recorded. I’d now like to turn the conference over to Steve Harrison, Vice President of Investor Relations. Please go ahead.

Good morning. Thank you for joining us for this review of Lennox International's financial performance for the second quarter of 2011. I’m here today with Todd Bluedorn, CEO, and Bob Hau, CFO. Todd will review the key points on the quarter and Bob will take you through the Company's financial performance. In the earnings release we issued this morning, we have included the necessary reconciliation of the financial metrics that will be discussed to GAAP measures. You can find a direct link to the webcast of today's conference call on our corporate website at www.lennoxinternational.com. We will archive the webcast on that site and make it available for replay. I’d like to remind everyone that in the course of this call to give you a better understanding of our operations we will be making certain forward-looking statements. These statements are subject to numerous risk and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risk and uncertainties see Lennox International's publicly available filings with the SEC. Lennox disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. Now, let me turn the call over to CEO, Todd Bluedorn.

Good morning and thank you all for joining us. Let me take you through a few key points on the second quarter and our current view on market conditions. And then Bob will discuss the financial results in more detail and the outlook. As you saw in our earnings release this morning, the second quarter was disappointing for our residential equipment and service businesses, while Commercial and Refrigeration had solid quarters. Overall, total company revenue quarter was up 7% from the prior year quarter including The Kysor/Warren acquisition. Excluding the acquisition, in a constant currency, revenue was down 2%. EBIT margin was down 230 basis point for the company overall as reported with Kysor/Warren. Margin was impacted by lower volume and mix, higher raw and component commodity cost and a lower favorable annual warranty adjustment in last year. Positive offsets included price productivity initiatives and lower SG&A. Adjusted EPS from continuing operations was $0.84 versus $0.97 in the second quarter a year ago. GAAP EPS from continuing operations is $0.83 versus $0.86 in the prior year quarter. Looking at the quarter for each businesses let me start with residential. Revenue was down 5% at constant currency and segment margin was down 430 basis points to 8.4%; lots of dynamics in this market. In our residential new construction business, the homebuyer tax credit, this is much of 8,000, not being a place this year had a negative impact. Single-family housing starts saw a strong growth in the first half of 2010 driven by the homebuyer tax credit, were down about 15% in the second quarter of this year. New construction now only accounts for about a fifth of our residential business. In our residential replacement business, there were several factors negatively impacting our volume and mix, that’s down from the federal…

Thank you, Todd. Good morning, everyone. Let me provide some additional commentary in the business segments for the quarter, starting with Residential Heating & Cooling. In the second quarter, revenue from Residential Heating & Cooling was $395 million, down 4%. Currency had a 1% positive impact; volume was down 5% and price/mix collectively were flat. Price was two points favorable in the quarter from our price increases earlier this year. Product mix was two points unfavorable and volume was lower against last year for the reasons Todd discussed earlier. Residential segment profit was $33 million compared to $53 million in the prior-year quarter. Segment profit margin was 8.4% compared to 12.7% in the same quarter last year. Results were primarily impacted by lower volume in mix and higher commodity costs. The annual warranty adjustment was favorable, but was $2 million lower in residential than the prior year quarter. Residential benefited from ongoing productivity initiatives, lower SG&A and price realization. Turning to our Commercial Heating and Cooling business, in the second quarter, commercial revenue was $198 million, up 13%. Volume was up 6% and price/mix were up 3%. Currency had a 4% positive impact to revenue growth. North America commercial HVAC revenue was up low double digits and Europe commercial HVAC revenue was up high teens. Commercial segment profit was $27 million compared to $28 million in the prior year quarter. Segment profit margin was 13.7% compared to 15.8% in the same quarter last year. Results were primarily impacted by higher volume and favorable price/mix with offsets from higher commodity costs and a $1 million lower favorable annual warranty adjustment than the prior year quarter. Moving to our Service Experts business, in the second quarter, revenue was $145 million down 13%, volume was down 14% and price/mix were flat Currency had…

(Operator Instructions) Our first question comes from the line of Jeff Hammond, KeyBanc Capital Markets. Please go ahead. Jeffrey Hammond – KeyBanc Capital Markets: Hi. Good morning, guys.

Hi, Jeff.

Good morning, Jeff. Jeffrey Hammond – KeyBanc Capital Markets: Just on the commodity dynamic I mean, what has really changed there, because it doesn’t seem like commodity pressures have gotten incrementally worse and then, can you go through first half versus second half what your, how much of that $60 million to $65 million headwind first half, second half and how does price hit first half, second half?

Yeah, Jeff this is, Bob. Overall commodities in terms of the raw from copper, steel and aluminum haven’t changed significantly. What’s impacting us now in the second quarter and the balance of the year is the second level implication to our component purchases. So the product that we buy from our vendors we are seeing price pressure, cost pressure from them as they deal with those same component or commodity prices that we’re suffering with also. In terms of first half to second half, the $60 million to $65 million is roughly split 50-50, about half of it behind us in the first half, the other half yet to go for the second half of the year. Jeffrey Hammond – KeyBanc Capital Markets: Okay, and just that the $50 million of price how much have you captured today?

A little less than half of that in the first half and that’s really driven by, we’re seeing an immediate impact from the residential price increases, but in our refrigeration, our commercial business there is a little bit of a lag given contractual agreements we have with some customers as those roll off they get the higher prices. So it’s a little bit back half loaded, but roughly 50-50. Jeffrey Hammond – KeyBanc Capital Markets: Okay. That seems more balanced than what you guys have previously been talking about where you know price cost would come more in balance than the second half?

I think all along we expected the commodities to be front half loaded when we are looking at an overall raw commodity situation. Now that we’ve got the second tier it’s more 50-50 and price, initially expected that to a bit back half loaded with those commercial phasing businesses both commercially to back-end refrigeration and the timing of those price increases. Jeffrey Hammond – KeyBanc Capital Markets: Okay. In the $50 million of price does not reflect any capture of these follow-on price increases?

Well, actually it does. So we’ve announced price increases in all of our businesses beginning of the year, first quarter of the year. We didn’t announce the second level increase effective January 1 in our residential business, the $50 million in corporate and all of those. Jeffrey Hammond – KeyBanc Capital Markets: Okay. And then just, Todd on the 50 basis points of share on a rolling 12 months, what would you attribute that to, I think you had some furnace dynamics and then may be just touch on how R22 would be impacting share?

Again, its unit shipments, 12-month rolling share. We’re winning in allied, so we’re actually gaining some share on the entry level products in allied and where we’ve lost share is in the premium Lennox brands, and it’s as you’re suggesting which is our strength is or we have a strong position in furnaces, we especially have a strong position in premium high-end furnaces and we have found that has been the area that has been most affected by the mix down. We’re also very good at systems selling where we sell the furnace or excuse me, when the condensing unit has to be replaced, we tied into a furnace in the elimination at tax credit has made the system sell hard or sell this year. Jeffrey Hammond – KeyBanc Capital Markets: Okay. Thanks, guys. I’ll get back in queue.

Thanks, Jeff.

Okay, thank you. Next question from the line of Adam Samuelson, Goldman Sachs. Please go ahead. Adam Samuelson – Goldman Sachs: Yes, good morning.

Good morning. Adam Samuelson – Goldman Sachs: I was hoping as to dig into the organic revenue growth guidance a little bit, it looks like it would imply some more about 3% to 9% in the second half and maybe help us by segments, you’ve got a tougher comp on the commercial side, and then a tough 4Q comp in residential given the inventory build, last year maybe is it price that’s getting better or maybe what’s year-on-year getting better in the back half that drives the organic acceleration?

I think a couple of things, one is price. So we’ve talked about the price increases that we’ve had. We remain bullish on commercial and refrigeration, even with the tougher comps during the second half of the year as we raised our thinking on the industry for commercial and we’ve talked about backlog and broad strengthen those commercial and refrigeration during the balance of the year. The other piece is last year, we had a partial launch of our new furnace product line, in this year, we’ll have the full product line going into the furnace selling season, which we think will help our residential business. Adam Samuelson – Goldman Sachs: Okay, that’s helpful. And then may be taking a step back and thinking a little bit longer term, the company has 2013 margin targets of 10.5% that you outlined in the past, may be talk about how we should be thinking about those relative to the 2011 performance and where we are today?

Right. I mean, since we give that guidance in December there is especially as we road in into the selling season there is some near term market distortions in residential HVAC because of R22 and because of tax credit. But as I mentioned residential HVAC remains a market with strong fundamentals beyond significant pent up demand that continues to be a demand for premium high efficiency product. Adam Samuelson – Goldman Sachs: Okay and may be just one quick follow up. Is there any change on the cash flow expectations for the year? I think in the past you’ve said approximate net income, net income has come down for the years, free cash conversion of above one sell of the expectation.

Yeah what we’ve said is over the long-term cash would approximate net income and clearly with the reduced net income overall cash flow, we’ll see some pressure. But as I explained in the script up front, we typically use cash in the first half and generate the second. So we expect that 2.3 times debt-to-EBITDA to drop below two back into our range of one to two that we’ve given from the guidance standpoint. Adam Samuelson – Goldman Sachs: Okay thanks very much.

Thank you. And next question from the line of Rich Kwas, Wells Fargo Securities. Please go ahead. Rich Kwas – Wells Fargo Securities: Well, hi, everyone. Todd, could you give a little more color on the market share loss there between Allied and Lennox, sounds like Allied you’ve picked up more than 50, and Lennox, the Lennox brand you may be lost more than 50. Could you provide any color there?

Rich Kwas – Wells Fargo Securities: Okay. And then, I guess as you think about that the tax credits expiring and as you move into next year, what are your thoughts here with R22, I mean how much of a headwind do you expect as you always expect this to be a headwind the rest of the year. But as you move into 2012, how do you think mix is going to play out, and I know there’s some factors there with the macro that affect that, but I mean what are you thinking right now, I mean do you think it is going to be a slow ramp in terms of mix recovery?

I think that as we went into the selling season this year, we were all surprised, I’ll personalize it, we as a company were surprised by the impact on mix from the tax credit, we thought we were positioned to sort of work our way through it, and so, and we didn’t – through May, we were fine on mix, and then in June, we saw a significant deterioration as we started to sell through our dealers. We’re confident that as an industry whether it’s moving from 10th year to 13th year, whether it’s changing refrigerants, whether it’s elimination is tax credit, sort of the history to industries are shocks to the market dynamics that affects a compression of the segmentation of the market. And then as an industry, we work our way back towards three tiers of product and premium product that you’re able to sell to, and you do that with the things that we do, which is focused on premium differentiation, whether that’s in energy efficiency, whether that’s in controls, whether that’s in alternative energy like our SunSource. And so we’re confident that the compression that we’ve seen this year on mix, we’ll be able to move it back out. Rich Kwas – Wells Fargo Securities: Okay. And then, final one from me on the components, I guess I’m surprised that the components cost was a surprise to you, because I would have thought that you would expect that the component suppliers to be passing this on. And so, that would have been embedded in the cost at win that you had articulated before. So I mean if you could provide any color on that, what really surprised you there?

I think what surprised us is we’ve done a good job over the last few years as we’ve aggressively moved components to Asia to offset factors cost pressures that our domestic suppliers had felt given the steep inflation curve that we saw in commodities over the last year in its level to a six months, but over the last year, we were no longer able to hold that off to some of our key suppliers and it sort of worked it’s way through in second quarter. Rich Kwas – Wells Fargo Securities: So it’s really a lag for some – lag coming from some of the newer suppliers that you brought on?

I think that’s fair, I think it was the ability to sort of outrun it by changing suppliers became more challenging over time. Rich Kwas – Wells Fargo Securities: Okay, that’s helpful. Thank you.

You bet.

Thank you. Next question is from the line of Keith Hughes, SunTrust. Please go ahead. Keith Hughes – SunTrust Robinson: Thank you. I’ve a couple of questions. You’d mentioned on the mix that it really came to hit you in June; to really understand why it would have hit you in June and not in the month leading after that? Can you go over that again please?

Yeah, I mean, good question, obviously. What we saw was, dealers thought they were going to be able to do what we thought we were going to be able to do, which is to sell the similar mix and system sales that we’ve done in the past. And so leading up to the summer selling season, dealers are buying, loading their shops, doing some replacements, but sort of the big selling season in June is when you really start to see the sell through the dealers and when the dealers start to reload from us. And what we saw from them was the dynamics that I’m talking about, so in essence they reach back to us and said, you know, we don’t right now need anymore premium furnaces, what we need is more R22 or more 13 SEER entry level condensing units. And so we didn’t really see the sell through effect until June. And I think that’s consistent with what we’ve said Keith, where we said, you know, look, we were surprised by the mix but when we’re asked on the last call about R22 and tax credit, I think, at least I think I always try to characterize the answer was, talk to me in July, I have a better perspective after we see the season starting in the sell through effect. Unfortunately, I have a better perspective and it’s not a good one. Keith Hughes – SunTrust Robinson:

Absolutely. Keith Hughes – SunTrust Robinson:

It’s not so much different, but I think the issue is the ability to system sell, that when you sell the 410A you’re going to sell the coil, you’re going to sell the refrigerant line, you’re going to sort of upgrade the entire system. And then, if you have a tax credit, you’re able to tie in the furnace and have a $5,000 to $10,000 ticket rather than just replacing an R22 condensing unit for a couple of thousand dollars. Keith Hughes – SunTrust Robinson: How much are dry ship of your business now?

We said on the script for our air-conditioning business in second quarter, it was about 17% of our revenue. Keith Hughes – SunTrust Robinson: Okay.

In revenue or shipments? Keith Hughes – SunTrust Robinson: Shipments.

Shipments; 17% of our shipments were dry chart. Keith Hughes – SunTrust Robinson: Okay and then…

And the vast majority of those went out like by the way. Keith Hughes – SunTrust Robinson: Okay. Final question; you’d said, I think I’ve heard of low single digits in residential, is that for the year or the back half or what numbers that represent?

Yeah. I think I’ve said some difference in Bob, and price screwed everything up. The guidance that we’re giving for the industry is up low single digits for resi, and that’s for our full year number. Keith Hughes – SunTrust Robinson: For the full year, which would imply, that you’re going to, you solidly positive numbers in the second half, if you’re going to get to close to that?

We’re talking in industry number, so the guidance we gave is always industry. So we’re saying the residential HVAC industry will be up low single-digits in units. Keith Hughes – SunTrust Robinson: I mean, you’re down 10 in the first, you’re down 5 in the second. And I know you’re sheltering on distribution, so you haven’t had some of the channel disruptions. It seems that you would have to outpace that number in the second half to get close to it. Is that kind of what you’re pushing this towards?

Well, again, just to be clear, one is a revenue number, one is a unit number, and one is ours and one is the industry. So I think the numbers you’ve quoted were our revenues and the numbers I’m quoting are units for the industry. And I’m sort of making the point that we think the industry is mixed down, and so industry unit shipments are down or, excuse me, we think are going be up low single digits. We think unit shipments over the last rolling 12 months, we’ve lost 0.5 point of share. Keith Hughes – SunTrust Robinson: Okay. Where do you think your dealers stand in inventory versus the rest of the channel?

When you compare to other people’s dealers? Keith Hughes – SunTrust Robinson: Yeah. Compare that to the independents or the independents over inventory in the channel or where is your view there?

Again, I mean I think about independents is distributors, and I think about our dealers is dealers, right. So the independents are selling to the same dealers that we’re selling to. So I think the dealer, our dealers have some inventory, July is helping. It’s still even with all cross forces I talked about when it’s hard, it helps. And so I think our dealers were cautious in June, and you saw that in our results. And we’re hoping to whether clear some of that out of the way. Keith Hughes – SunTrust Robinson: All right. Thank you.

Okay, thank you. Next question, from the line of Josh Pokrzywinski of MKM Partners. Please go ahead. Joshua Pokrzywinski – MKM Partners LLC: Hi, good morning guys.

Hi, Josh. Joshua Pokrzywinski – MKM Partners LLC: Just want to focus here on furnace, particularly in the fourth quarter coming up, I know that that was kind of a buy ahead or pull forward quarter for you guys last year. And it seems like a lot of these issues around R22 really coming to release in the air side of the business. I mean I guess help us with what kind of order of magnitude we could expect there, any numbers you can put around, what the mix of high efficiency furnace was last year or what kind of mix implications we should expect kind of given this new reality around R22 in lower furnace demand?

I think the thing I would talk about is what we’ve consistently said was that we had some pull forward last year of units from first quarter into December as we eliminated tax credit. And the number we referred to was, our unit shipments were up 30% in December of last year, and I think a big piece of that was sort of the pull forward into the month of December. I think sort of the offset we’re going to have around all the pressures that I talked about in the industry is our – having a full furnace product line as we go into the selling season, I think that’s going to be important for us, and we are going to be focused on leveraging the new product that we have in the marketplace. Joshua Pokrzywinski – MKM Partners LLC: ,:

I think it’s what I said earlier, I understand the question, but I think it’s what I said earlier which is, this industry has done a good job where when you have a reset from an external shock that the industry has had thrown on it like this that the industry is able to find a way to continue to differentiate product and tier the product in the marketplace. And so, we are working on making that happen. I mean I also think, and again, I don’t know of what next year will bring, but I think overhanging all this is a macroeconomic situation that is not beneficial either to overall volume or to mix up. So I think as we head into next year, we’ll be in a certainly a better position than we are at this year to continue to tier the brand. Joshua Pokrzywinski – MKM Partners LLC: Okay. And then just one more if I may; on the SG&A reductions, how much of that fell into the second quarter versus into the back half?

I’m turning to Bob. I think the majority of it’s during the second half of the year.

We actually ended up the first half of the year down slightly from prior year. So we’ll expect to actually hold that above consistent across the full year. Joshua Pokrzywinski – MKM Partners LLC: Okay. So I guess on that with the higher inflation expectations and lower SG&A that the net is wash and may be modest positive. So we should look at kind of the underlying results from the second half is being more indicative of leveraging mix than of inflation?

If I understood the question, yes. And so, I think the balance of the year is, if I understood the question right, is more about volume and mix issues that we talked about. Joshua Pokrzywinski – MKM Partners LLC: Got you. Okay. Thanks guys.

Thanks.

Okay. Thank you. The next question is from the line of Jeff Hammond, KeyBanc Capital Markets. Please go ahead Jeffrey Hammond – KeyBanc Capital Markets: Hey guys. Just a couple of follow-ups here. Can you just talk about, I know you had the warranty comp, but why would margins be down in the commercial business if you’re kind of matching price versus cost and mix was favorable?

In the commercial price that didn’t match cost exactly given the ramp up of the price increases I’ve mentioned is slightly more weighted to the second half of the year really into both our commercial and our Refrigeration segment. And so commodities both impact to raws and components was slightly larger than our price benefit, and then the warranty headwind in that, it was less favorable if we take an annual warranty adjustment. Jeffrey Hammond – KeyBanc Capital Markets: Right.

…in the quarter, and it was less favorable than last year. Jeffrey Hammond – KeyBanc Capital Markets: And that was about $1.5 million last year, and what would it have been this year?

It was a net decrease of benefit of a million bucks. Jeffrey Hammond – KeyBanc Capital Markets: Okay.

For commercial.

For commercial. Jeffrey Hammond – KeyBanc Capital Markets: And what about volume leverage? That got eaten up by commodities?

Correct. Jeffrey Hammond – KeyBanc Capital Markets: Okay. And then refrigeration, certainly some noise there with Kysor/Warren. If we look at the back half, should we kind of build the model with same where you’re getting underlying margin improvement in the base offset by bringing Kysor/Warren in a lower margin?

Yes. Jeffrey Hammond – KeyBanc Capital Markets: Okay. And then how should we think about corporate spends in share count for the year?

For the year, we’ve got corporate expenses now forecasted full year basis of about $60 million, that’s down from the prior guidance of $70 million. And then share count we expect to end the year at 54 million shares. Jeffrey Hammond – KeyBanc Capital Markets: And why isn’t that moving more based on the share repurchase?

That’s an overall weighted average for the year. Jeffrey Hammond – KeyBanc Capital Markets: The 54 million is weighted average not ending.

That’s correct. Jeffrey Hammond – KeyBanc Capital Markets: And then finally, how do the demand dynamics and maybe the mix dynamics impact; one, your distribution rollout and store rollout; and two, how you think about production in Mexico versus other facilities?

On the distribution strategy, we’ve slowed it down. So the number of Parts Plus stores that we’re opening for the balance of the year, we’ve slowed that down. In fact, we aren’t going to be opening any, which right now are sort of froze in the opening of Parts Plus stores, they’re doing well. We’re up year-over-year in the stores, but they are an investment in the business that we’re putting on hold until we get to the other side of this you know the troubled waters that we saw in second quarter. Still like the investment, still think it’s the right strategy, but as we said based on market conditions we would slow it down and we’ve done that. On Mexico, we continue to look to get as much volume into that factory as quick as we can. Again as we grow our Allied business, as we grow our value tier business making sure our cost serves competitive as possible is going to, is critical, will continue to be critical, so we look to get as much volume in the Mexico as we can. Jeffrey Hammond – KeyBanc Capital Markets: Okay, great. Thanks, guys.

Thanks.

Okay, thank you. (Operator Instructions) Next question comes from the line of Robert Barry, UBS. Please go ahead. Robert Barry – UBS: Hi, guys. Good morning.

Hi, Rob. How are you?

Hi, Robert. Robert Barry – UBS: Quick follow-up on the commodities. Whenever the business is growing, are you getting a rebate from your suppliers, and is the opposite happening now, is that adding pressure there?

I mean that’s some of it, but we – and again our buckets may be get a little fuzzy but we tie rebates into a different category which is the $25 million to $30 million of material cost reduction. When we’re talking about commodity, 60 to 65 (inaudible) rise or its component pricing is high to either contractual language that we have to raise the supplier raises or prices does because their commodities went up or a price increase that’s tied to their commodity cost going up. Robert Barry – UBS: Okay. And I just wanted to get a better sense of what your outlook is for the second half in residential. If you took a pretty significant hit with the guidance, but I’m trying to get a feel for how conservative you’re being, so to the extent you can share some of the assumptions about what the outlook is in the second half for volume, pricing and mix, a little bit more explicitly, is there any kind of color you can give us to help us get a sense of how conservative you’re being around the revised outlook especially as it relates to resi, that would be very helpful.

No, I’m not going to get into, maybe into the low level details as you would like. I think high level what we did was to say, look, we saw a mix in July and more broadly the first half of the year as it mix down the impact of the tax credit, the impacts of R22, the impact of our ability to system sell, offsetting that is the growth in our allied business, offsetting that is having a stronger furnace product line in the heating season in fourth quarter, sort of rolled all that together into our guidance. It was an attempt to sort of throw down the year. It was just a reflection on what we’ve seen in the market year-to-date, what we’ve seen in the selling season, what our customers are telling us and that sort of what we’ve rolled into our guidance for the balance of the year. Robert Barry – UBS: I mean, how conservative do you feel you’re being, do you feel like you’re really ahead of this now or?

I mean, I’m going to give you the tax booking. Robert Barry – UBS: I know that’s a hard question to answer. It would be easier…

Let me give you the text book answer, I’m going to give you the answer to that, that’s actually true, which is I didn’t try and put Kentucky (inaudible) is one way or another, I didn’t try and put the limbo bar, so I could step over it. This is our best guess of where we think it is. Now, the range that we have is wider than you would normally see half way through the year for us, and that reflects some of the uncertainties that we have quite frankly and sort of goes to your question, but I mean, we’re giving your best shot on reality as we see it, not sort of a limbo bar. Robert Barry – UBS: I think there was a comment about, and I might have missed it, a mixed 50% decremental or $75 million hit on resi, could you kind of revisit what that was?

Yeah. What Bob was doing was going through sort of a level wrap to get everybody to the drop in our guidance right. And so what he said was, if he sort of take all the revenue guidance that we give a little bit, it says organic revenue, our cost in currency, full year basis we lowered our guidance by five points. Robert Barry – UBS: Yep.

If you take that five points that’s equivalent to about $150 million of revenue and then when we say when you’re building your models to sort of understand where we dropped our guidance at that $150 million of revenue is going to drop down at $75 million of EBIT, a 50% decremental, which is significantly higher than you’d normally expect from us, and that’s because of the downward mix that we saw in res moving from premium furnaces to R22 drier charge. Robert Barry – UBS: Okay, that’s helpful. And then just a last question, I mean you’d mentioned something in the release about planning to buyback a lot more stock in the second half, and I think $65 million is what you said. How do you square that against freezing the investment in the distribution, you know I thought the distribution was a pretty significant initiative kind of positioning for you, positioning you for the long-term, I’m curious how you square those, weighing those?

Well, around the lot more stock I mean we have been consistent from the beginning of the year that we’re going to offset dilution from our incentive programs and we’re going to do a 100 million of share buyback, and so we are consistent with doing a 100 million of share buyback. I think it’s the first point. Second point is, on our Parts Plus store, still strategically important, we have I’m looking around, make sure I got the right number, 75 stores in place from that strategy, you know we have an initiative in place, velocity for victory, and what we’re doing is all the teams will be focused on starting up new stores and launching new stores, leveraging the share gains with the stores that we have in place. On a year-over-year basis, our revenue in our stores are up 10%, and so we like them and we want to focus on the growth of our existing stores. But like any investment, it sort of a multi year payback, and we want to spend our time right now with our team focused on winning with the stores that we have and let’s see where we are at the end of the year and my guess is, we’re going to start back up on it. Robert Barry – UBS: So with list of that capital allocation choice or operational focus…

Yes. It’s not a capital – fair enough, I should just start up there. It’s not capital allocation of choice, it’s operationally where do we want to spend our time and focus. Robert Barry – UBS: Yeah, fair enough. Okay thank you.

Thanks.

Okay. Thank you. And the next question is from the line of Rich Kwas, Wells Fargo Securities. Please go ahead. Richard Kwas – Wells Fargo Securities: Hi, just a follow-up on R22, the 17% number, Todd, do you expect that to stay at that level for the rest of the year or is there some expectation that moderates in the back half. And then I guess following up on my other question was, as you move into next year, do you expect that number to come down meaningfully because you know just tougher to access?

You know for the balance of the year I think we broadly what I said on guidance was we sort of to a large degree layered in first half and the second half at least in terms of market dynamics. So I think the short answer is, we don’t think there will be a meaningful change on second half but we could be surprised. In terms of next year, I think your hypothesis is right. I think overtime as we get closer to the obsolescence of R22, the more that’s going to – the less customers are going to go that way and also just the overall economy. You tell me what the economy is going to be like next year, the more that its incrementally better than it is now, then I think its helps us on the system selling 410A. So it’s sort of, right now, it’s fresh, it’s new, there’s still R22 refrigerant and there’s all kinds of macroeconomic headwinds. Next year, I think reasonable bets are multiple pieces of the headwind sort to get knocked to the side. Rich Kwas – Wells Fargo Securities: I mean, I guess I’ll see if we’re stuck in this environment of 2% type GDP growth, it sounds like you would expect the R22 mix to come down, I assume, the next year on a year-to-year basis?

(Inaudible) Rich Kwas – Wells Fargo Securities: Okay, all right. Thank you.

Okay, thank you. And back to you, Todd.

Great, thanks. I want to leave you with couple key points, and I’ve said these I think during the script and during the Q&A that, while the residential market is clearly been disappointing near-term and faces volume and mix challenges compared to last year when the government incentives were in place, we’ve reset the bar in our outlook, continued to take cost reduction measures and are engaging a new growth in productivity initiatives. Refrigeration is on track with prior expectations, and we’re raising our outlook on the commercial. backlogs continue to look strong in both of these businesses. The final point is that, we’ll continue to use our balance sheet in a disciplined and balanced way to grow the business, pay a competitive dividend and conduct more than 65 million of share repurchase in the second half of this year. I want to thank everyone for joining us. Have a good day. Thanks.

Okay, thank you. And that concludes our conference for today. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect.