Good morning. At this time, I would like to welcome everyone to the Mohawk Industries third quarter Earnings Call. (Operator Instructions) I would now like to introduce Jeff Lorberbaum, Chairman and CEO of Mohawk Industries.

Good morning. We appreciate you joining us to review our third quarter results. With me, I have Frank Boykin, our CFO, who will now review our Safe Harbor statement and later, the financials. Frank?

I would like to remind everyone that our press release, and statements we make on this call, may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risk and uncertainties including, but not limited to, those set forth in our press release and our periodic filings with the SEC. This call may include discussion of non-GAAP numbers. You can refer to our press release at the Investor Information section of our website for reconciliation of any non-GAAP to GAAP amounts. Jeff?

Thank you. Our 2008 third quarter sales of $1.764 billion was a decrease of 9% from 2007. The company generated cash flow from operations of $185 million, paid down debt of $128 million, and has over $800 million available under its current credit facilities. As a result of Mohawk's declining stock price and deteriorating industry condition, accounting rules required non-cash charges of a goodwill and tax deferred write-off of $1.2 million net of tax. Excluding the non-cash charges, non-GAAP net earnings were $76 million, or $1.10 per share. These charges do not require any cash payments or impact our operations, liquidity, or debt covenants. For the quarter, excluding non-cash write-offs, we have positive cash flow and earnings. Our balance sheet is strong, with approximately $1.4 billion debt reduction since the Unilin acquisition in October, 2005. Our financing facilities provide us with the flexibility to invest in the right opportunities. Each of our businesses has the same priorities: rightsizing the infrastructure for current environment, managing working capital, and enhancing sales, margins, and business processes. During the period, we implemented price increases across most of our US products, which will not fully be in effect until next year. The quarter was more difficult than anticipated, with greater deterioration in demand, as well as cost increases. The US economy is declining and consumers are reducing discretionary expenditures. Residential home sales and remodeling are at low levels and commercial projects are being impacted by tightening credit and softening business conditions. The European economy has become significantly weaker in the past quarter, and affected both our flooring and non-flooring products. Like the US, there are no near term signs of recovery in Europe. Raw material costs have risen more than expected during the third quarter, but are showing signs of softening in the future. Government intervention should help stabilize the banking system and improve availability of credit. We are hopeful that declining energy and commodity prices will help strengthen consumer confidence, and lead to an improvement in the flooring market next year. Frank, would you review our financials?

Certainly, I will be glad to. As Jeff mentioned, our net sales came in at $1.8 billion, down 9% from last year. All segments, both in the US and in Europe were down, with both residential and commercial businesses declining. Our sales are down 10% on a constant exchange rate. We are continuing to see greater decline into October from September. Our gross profit as a percent of sales was 24.9%, down about 300 basis points from 28.1% last year. The decline in our margins are due primarily to lower volumes and higher raw material costs, with our lagging selling price increases. SG&A came in at $321 million, that's down 7% or $23 million over the last year, or $27 million at a constant exchange rate. We have many cost initiatives that are going to be implemented through the remainder of this year and into next year, which should help us in the future. If we move to operating income, excluding charges, operating income came in at $118 million, or 7% as a percent of net sales. Interest and other expenses; interest was down with lower debt levels, and other expenses were unfavorably impacted by foreign exchange, with the Canadian dollar, peso and euro impacting as unfavorable. Income taxes, excluding charges, came in with a tax rate of about 9.5%, comparing to 25.5% last year. Lower this year due to the European tax planning that we put in place and, in addition, the fixed tax deductions that we have in Europe impact our rate favorably as the taxable income declines. We expect the fourth quarter tax rate to be within the 10% to 12% range and then looking forward to next year, more likely to be in the low 20s to mid-20% range. If we look at the impairment charge…

Thank you. This is one of the most difficult periods in the history of our industry and we continue to adjust to the environment. The discretionary remodeling of new home construction is at low levels in both the US and Europe. During the period, the impact of high oil and gas prices on raw materials, energy, and transportation reached unanticipated levels. Sales slowed significantly, with falling customer confidence as we moved through the quarter. We announced price increases in the US on most products during the period. We are continuing to manage our costs, working capital investments in each product category. Each of the business units has sales, manufacturing, and administrative initiatives to adapt to a tough environment. In the short term, most operations will be taking significant temporary shutdowns to control inventory levels as sales require. We are permanently closing some plants and warehouses. We continue to reduce our infrastructure to lower our overhead, since the industry environment shows no signs of a near term recovery. The Mohawk segment was impacted most by the downturn. Sales declined by 11%, with both costs and revenues under pressure. We are not satisfied with our result in the segment, and have made organizational changes and cost reductions. Almost every channel and product category has slowed during the quarter. Customer traffic in the retail stores is lower, and even the more affluent customers are reducing their spending. Commercial sales have begun to be impacted, with discretionary purchases being postponed. Healthcare and government end use markets are performing better than the other commercial categories. The price increases we announced in the summer should be fully implemented by year-end, for a combined increase of about 10%. We see trading down in all channels as customers use lower quality products to stay within their budgets. During…

(Operator instructions) Your first question comes from Eric Bosshard with Cleveland Research.

Good morning.

Good morning.

Good morning, Eric.

If you look at, thanks for all the detail. As you look at the Delta that you see now begin in Europe and commercial impacting the Unilin and the Dal-Tile business. Can you give us a sense of where the margins might contract in those businesses? I see all the things that you are doing, but I am just wondering how far the margins can fall in those businesses in the face of what looks to be likely some extended demand softness?

The fourth quarter margins are showing a dramatic contraction, impacted by the inventory reductions we are doing. When we look out, and we start with that the Unilin has had, all-time highs in the last couple of years in its margins. The economy, the volume, as well as pricing has been favorable, as well as the FX prices with it. What is happened to us in this period? Is that two things; one is that the decline in volumes decreased the margins, that we have had increasing raw materials of energy costs that have impacted the margins in the short-term. The other thing that is going on too is that we manufacture boards to support all of our different product categories, as well as selling to outside uses, both flooring, furniture and construction. Those board manufacturing is highly automated and so as the volume declines, you get significant unabsorbed overhead. The majority of the decline that we had in the third quarter was from the decline in pricing and materials within the Unilin business. The branded position and the higher quality product, I think, will help us maintain much of our margins in the laminate flooring business, so it is going to be more an impact of what the volume is going to be through the different businesses as we go forward. Frank do you have any other comments?

No.

Then on the commercial, on the tile side of the business, how do you think about how that business will behave from this point?

We think that the commercial business will soften. We see less new projects coming in. We see a decline of new projects coming on. We also see a decline in the discretionary purchases, in the remodeling parts of it, that business is getting worse and we see it declining and reducing it. We think we are about go into a cycle where the commercial business would be off, because your guess is as good as ours, as what that could be.

Your next question comes from David Goldberg with UBS.

Thanks, good morning.

Good morning.

First question is, if you could walk us through the calculation a little bit more in depth on the goodwill write-down, the impairments, and how concerned you are moving forward that there is going to be a further goodwill write-down. I know you have a lot of room and a cushion on the debt covenants, but if there were another write-down, maybe some sensitivity around share prices declines and the potential write-downs with that?

Shall I keep it real simple; it is a fairly complex process, and it took quite a bit of time to arrive at the answer that we are at, but in just very simple terms, the stock price is what is really driving the valuation, and pushing us towards a top line enterprise value for the business. What we end up having to do in this calculation to come up, with a write-off of the goodwill, is take a look at all of our other assets and liabilities and assign a fair value for those, based on today's value. Using those fair values, that drives the ultimate goodwill write-offs. So the higher the fair value and the other offsets, the higher the write-off is for goodwill. Then, of course, as I mentioned, we are not allowed to record those higher fair values of the other assets in this whole process. So, I would say two things, stock price, and then, the calculations of the fair values for the other assets. As I mentioned, we could have further write-downs, depending upon the future stock price. It is, like I said, a very complex process, so it is hard for me to silt here and say that it will or will not happen in a certain stock price. We do have plenty of room in our debt-to-cap covenant. We are around 40% right now with the current write-off, and, I believe even if we were to write-off all the goodwill, we would still be below our 60% requirement.

Great. Then one follow-up question, Jeff you mentioned in your comments, and in the written piece that you expect 2009 to be better than the second half '08, and with that you mentioned some pickup from the stimulus, the Congress is working on, and I am wondering if demand does not get better, and stays where they are, at the fourth quarter levels, how can we think about the run rate and try to model and think about where your earnings could be? More simply where margins can be as we look forward?

We start off with what is happening in the second half of '08. We start with it, we have had very low consumer confidence and consumption and there has been a dramatic retraction of purchases and from there we also have that there is a tremendous amount of liquidity stimulus being done by the government, and we are assuming that the government actions are forcing liquidity into the marketplace and at some point its going to improve it from the present contraction. At the same time, we have seen unprecedented high material and energy costs in the third quarter, and then what will happen is those will impact our costs in the fourth quarter and as we move into the first and second quarters, we anticipate having some relief in our cost structures. At the same time, we have had the lag of our selling prices not being implemented, as well as new selling price increases we have put in. So the combination of those things we expect to help us positively. In addition, we had all the different actions that we have been putting in place the last six to nine months, as well as what we are doing now to reduce our infrastructure costs for manufacturing, distribution, and SG&A costs. We are doing things to improve the productivity. The cost in the fourth quarter, we are cutting production to control the working capital as we go through. So as we look forward and take all of these things into consideration, we start off that we believe over the next 12 months consumption trends will improve from where they are today, that all these pricing cost initiatives that we have will benefit our results. That the cuts we have made in the infrastructure and improvements in productivity will help our margins. So as we look forward, we believe that these things will all benefit 2009 and help us have better results than we are presently having.

Your next question comes from Sam Darkatsh with Raymond James.

Good morning, Jeff, good morning, Frank.

Good morning, Sam.

Good morning.

I have got three questions if I may. First Frank, I do appreciate that the detail on the write-downs, specifically as it relates to the deferred tax asset. I understand, I think that the 253 is an intangible within that deferred tax asset, but are you still running that down because of lower expected future taxable income that would offset it? Or how do you go about getting the valuation of that deferred tax asset right sized? I am confused.

Yes, it can be confusing. The first point to member is that the operating losses that are generated in this tax strategy have indefinite lives. So from a tax cash standpoint we will be able to realize them at some point of time in the future. The rules require you to take a look at what you estimate cash flows to be over some long period of time. If your estimate changes from one year to the next, then that is what impacts whether you put the asset up, like we did in the fourth quarter, when we took the benefit, or you take it down, like we did this quarter, when we charged it back to taxes. So, it is more of a view at a point in time, cash flows related to a specific strategy.

So this is a reflection of a decrease and earnings expectations from your foreign operations. Is that how we should read it?

It is a change in timing in terms of when cash flows would come in.

Timing, meaning pushing them out, because the near term results are more depressed than previously thought, when you originally established the asset, is that how to look at it?

Forces you to take a point of view at a point in time?

Okay. Second question, you noted that you want to draw down your inventories, so I am guessing that your production is going to be below to your shipment level in the fourth quarter, can you give us a sense of degree, in terms of how much your production will be down versus shipments or if you can give us a sense of where inventories might be by year end?

I think that each of the different businesses is continuing to circumstances in the sales, which I can not say that our estimates have been so good in the last few months. Frank, do you have a direction to give him?

They will be down from the third quarter, Sam. I am not sure we are prepared to give you an exact number, but they will be down in absolute dollars in the third to the fourth quarter, and then down from the fourth quarter a year ago.

Inventories will be down more so than sales might be, is how we should look at it?

Yes.

Yes, you just said, yes, I am sorry?

Yes.

Okay. I am sorry. Last question and I will defer to others. Could you help us with what your thoughts are, you said that in Dal-Tile you are gaining share. I would imagine that laminates in many areas you are gaining share, which is good in this environment. Talk about the Mohawk segment, what your thoughts are, in terms of the share situation there, and how we should look at that, because on the reported numbers, on the industry, it looks like the reported numbers are not as tough as what you folks are saying?

First, the Mohawk segment has multiple things in it, and we have hard surface sales of which the division has much more new construction in the overall business. A year ago, we also discontinued our flat woven products last year. The Mohawk division versus the industry numbers has less participation in the carpet tile business, which has been growing faster, and also, has higher average price points. At the same time, we have been growing our share in the polyester business, and polyester brings greater value and therefore has a lower average price, which is impacting a little bit our average price versus the market. At the same time, during the structure, we have reduced our SKUs and we have made cuts in our SG&A going into this thing that impacted our distribution. We have many things going on to improve our position. Starting with the things we did this quarter, which is realigning the sales management to improve our execution. It is also going to help us coordinate our brands to satisfy each of the customer needs and get all the products to each of the customers who desire them. We have put in new introductions and continued to fill specific gaps that we created with some of our dropping of products. We are improving our speed to market, as well as our service levels. We have improved systems, as well as reporting, to help manage the sales better, by account, by sales person. We are increasing our focus on retail and multifamily channels and all the different pieces. We are significantly increasing our participation in the carpet tile offering and distribution, including, offering new products at lower values than the overall marketplace to try to expand the carpet tile category. We have also put in new wood products to broaden the wood offering within the segment. So, we have many different initiatives going on to improve the market share.

Thank you both.

You are welcome.

Your next question comes from David MacGregor with Longbow Research.

Good morning, Jeff. Good morning, Frank.

Good morning.

Good morning.

What share price were the write-offs based on?

It was an average price, David. I think it was around $62.

I do not want a long answer, but is there a short answer as to how the average is calculated, is it over a quarter?

Can we take it offline? It will be a long answer.

Certainly can. In terms of confining the manufacturing curtailments to the fourth quarter, what is the likelihood that that is achievable versus seeing these manufacturing curtailments spill into the first half '09?

I think that we will see additional curtailments in the first quarter. The first quarter is always a low quarter. We are expecting that could be low industry volume during the quarter, so we would expect them to keep on through the first quarter and your guess is as good as mine as to what happens to the rest of the year.

Okay. Any asset sales contemplated?

No.

Okay. Thanks very much.

Your next question comes from Michael Rehaut with JPMorgan.

Hello. This is Ray Huang on for Mike. So going down to the fourth quarter guidance, looks like the third quarter sales held up actually relatively well. Did the trend get significantly worse in October or is it more a function of the inventory reductions and the margin contraction that you had expected in the fourth quarter?

It is all of the above. We expect demand to continue decreasing. We do not see the consumers at this point changing. We see a slowing of the commercial business. We see the higher cost inventory, which came from peak prices in the third quarter, flowing into the fourth quarter, where it is going to be used. We have inventory reductions, compounding the low sales volume, creating a negative absorption just talked about. There are price increases that some of the divisions put in during the quarter will not be fully recognized in the first quarter. There is unfavorable FX and then we have some unfavorable GAAP hedges, which the majority of it will be through in the fourth quarter. So the combination of all those are making the fourth quarter much worse than we would like it to do.

Okay. Then moving in to the first half of '09; assuming that your demand stays relatively weak at these levels, and assuming raw materials stabilize at these levels. What margin benefits can we expect in the first half of '09, especially given that you said that, the first half of '09 should be better than the second half of '08, rough basis point estimate for what type of margin improvement you expect, just excluding everything else there, everything else being equal? You know, from to the [re-stable] out there.

Just to correct you, the statement is that the second half of '08 trends will improve the '09, not first half the second half. Just to correct what we have said. The cost structures are still fluid. We are not sure where the prices are going to end up. It takes months for these things to flow through the system. We had high prices in the third quarter. There is some softening going on. We are not sure where they are going to end up at this point. So we do not know exactly what the benefit would be. At the same time, we are assuming also that there is going to be additional promotions by the industry, to try to keep capacity running. You have to offset those with. I mean, it is not a, there is no simple answer to the question.

Okay. Lastly just speaking of the price increases, I think you mentioned, in Mohawk, the cumulative price increase would be 10%, incremental in '09. Do you have a breakout for Dal-Tile and Unilin would be. I know you mentioned the 4% to 5% increase in the third quarter but you can give like a cumulative price increase for, what the incremental would be for '09?

I do not think we have that in front of us. We will be glad to get it to you. We have announced all the various increases.

Can you call me back, with…

I will give it to you, Ray.

Okay, great. Thank you.

Your next question comes from Ivy Zelman with Zelman & Associates. Ivy Zelman - Zelman & Associates: Good morning, everyone. Maybe if I can address what would like the elephant in the room and you can tell me if I am wrong. I think, you mentioned quite a number of things that you have done, whether reducing your SG&A or improving load factors or your new extrusion equipment and price increases and shutdowns and doing everything you can to mitigate the challenging environment. Yet for all that you have done, you are still running on the fourth quarter, what appears to be in this challenging environment a $0.20 to $0.30 estimate. So lot of people are wondering, is that a number that you can extrapolate and say, wow, does that mean that they are going to earn a buck next year and the street said $4.15. So when you are looking out in '09, despite having done a lot of what you have already started to initiate. You are also on the other hand putting a lot of money out there with respect to new initiatives, service centers, new plants, new facilities and new product offerings. So what we would love to understand is how we should think about '09, relative to your indicating that the improvement we will see from the fourth quarter. I mean, seems as if the environment could actually get worse and would like to have more clarity on why should we expect an improvement in the second half, given the $0.20 to $0.30 run rate, when you should be benefiting from all the things that you said you have been doing?

Again, I am going to repeat a lot of the same things. The cost structures in the third quarter were at all time highs. Those things will pass through into the third quarter and some of it into the first quarter before you see the impacts of the lower costs. The second piece is that the selling prices are being put in through the fourth quarter, so you will get the impact of both of those things as you move into the first quarter positively. At the same time, our assumptions for the next year are that the present level of constriction of the consumer have got to have some relief, because the consumer can not not spend anything for the entire year given the amount of liquidity we are expecting in the marketplace to help promote it. With that, you know with all the stimulus, our assumption are that as we move through the year, that there will be more positive purchases by the consumer. Most of our businesses are in the remodeling piece across the country. We do have a significant share of the other, but it is going to take a while to be impacted by what is going on. We think the confidence is going to… Ivy Zelman - Zelman & Associates: What would you change if you, realizing a lot of it is contingent on the consumer not remaining at these depressed levels in terms of their spending. What do you think would have to change in your outlook? Would it mean more rationalization, more plant potential split and shutdowns, change in CapEx, exit plans for '09, because right now when you went into the third quarter obviously you were caught by surprise. What happens if you are caught by surprise, and there is no improvement? What are some of the things that you would do differently?

We are already making those changes. I mean we are continuing to increase the cuts in infrastructure. We are continuing to right size the business in all parts of the piece, the capital expenditures will decline significantly, we have to put them together. This year it is a little over $200 million. I do not know how far we can drive them down next year, but, I mean at the moment, we are going to go in to the year only spending money on the things that get really high paybacks or we have to do. Then the question about how far we have to adapt them, as we go through the year and see what is going to happen. So the changes are being implemented through every division as hundreds of different priorities. They have cost structures and goals, by department, by our manufacturing facility, by the sales group. Each one of them is reviewing the cost structures and pairing it down to where they perceive it to be today. We will continue doing those things. Ivy Zelman - Zelman & Associates: Okay. Thank you.

Your next question comes from Howard Friedman with Rodman Capital.

I would like for you to give us some insight into the criteria that were used in having these write-offs. Maybe you could give us insight as to whether more are expected. At the time you made the acquisitions, there was considerable criticism voiced towards management that you all were overpaying for these acquisitions. As an ancillary question to what I just asked, to examine the criteria, could you give us your reaction? Are these in effect write-offs forced upon you and/or are they not an adequate reflection of what you feel to be the underlying asset values of the company, or with the benefit of hindsight, do you think that maybe the acquisition should not have been made at the time? The last question I wanted to deal with is, as I understand it, all of the loans that you might have are not asset-based, but they are cash, that the regulations around them are cash flow based. Is that correct?

Lot of questions there. I am sure we are not going to remember all of them, so you may have to help us, but just starting with the question regarding the goodwill write-off, I would say that our view is this does not indicate that there was an overpayment either to the Unilin or to Dal-Tile acquisitions. Again, the accounting rules forced to take a point of view at a point in time, with the stock price being the primary driver in this model for the valuation. Then in addition to that, as I had mentioned before, we are required to go through and look at all the other assets and liabilities, and place a fair value in the model for those, which drives down the goodwill value. Even though, we are not allowed to take credit for those higher values of other assets in our financials. So I think answering your question is, this does not really change our view on what we did in 2002, when we bought Dal-Tile or in 2005 when we bought Unilin. Then what was the rest of your question?

My understanding is that your bank loans, as well as your debt are not connected at all to the assets that you have on your asset side of the balance sheet, on one side of the balance sheet and the only criteria are really are your cash flow generation. Is that correct? Could you maybe refreshen us as to what those criteria are?

None of our assets are pledged against any of the debt. The only one covenant we have, that I mentioned earlier, is the debt-to-capitalization covenant, where we have to remain below 60%. Does that answer your question?

Yes, I think so.

Okay.

Your next question comes from Stephen East with Pali Capital.

Good morning, everybody.

Good morning.

If you look at the fourth quarter and all of the negative factors that are weighing on you, if you could just rank order what the biggest drivers are, in other words, is under absorption the biggest driver, versus raw material costs, et cetera?

Run us through that one more time, Steven.

Okay. If you look at what is impacting you in the fourth quarter, if you could rank order for me the negative factors, what your biggest driver is, is it the under absorption because of idling plants? Is it the raw material costs? Is it FX? How would you just rank order the impact of those?

Well, number one is going to be production volume, being much lower than what it had been in the past.

As the volume goes down, the margin also goes down. It goes along with it, which is different than the absorption. You are losing both.

Okay.

I would say that is number one and then I am not sure how the others fall out off the top of my head.

Okay. Then if you look at that production volume and that idling, it is following on Ivy's question about what happens if the consumer does not come back in the first quarter. I am trying to understand how much of your idling is due to your desire to bring down inventories, versus how much of it is driven by the lack of demand out in the marketplace?

I think what you are trying to get, is the first quarter going to be wonderful. I think in the first quarter we are going to continue having volume problems in the quarter and under absorbed overheads. The first quarter will continue to be difficult, what we will have though is the offsetting cost improvements we are hoping to have an increase in selling prices. So those things are going to help positively impact it. Then there should be as you said less reduction of inventory in the first quarter. Those things will improve versus the fourth quarter.

Okay. Then the last question I have is just on the impairments. If you were running at $60 plus a share, $62 a share in the quarter, I mean, this quarter right now. If we did not really improve much, we are going to be running in the mid-40s. That level, should we assume that we will see another meaningful impairment in the goodwill?

That is a hard assumption to make. One thing you have to keep in mind is our book value per share now is in the $50 range. So that is going to impact the analysis also and like I mentioned earlier, there is a lot of moving parts. It is a very complicated process and it is hard to say that we will definitely have or not have, but there is a possibility that we will have another impairment charge.

Okay. Thanks a lot.

Your next question comes from Laura Champine with Cowen and Company.

Hello, this is John Kern, I am sitting in for Laura.

Good morning.

Could you give us some color on why you are excluding the restructuring charges from your Q4 guidance? It seems as if there is a possibility that it could become recurring going into next year. It does not seem that you have been excluding them throughout the rest of the downturn.

Well, they were a little bit larger this time around then they had been in the past and other than making it easier for everybody to understand from the get go, what they were going to be that is about it.

So just thinking about '09, do you think that we are going to see more in Q1 and maybe in the first half of '09?

We do not have any plans for them, or we would have done them.

Okay, thank you.

Your next question comes from Alex Mitchell with Globus Asset Management.

Hi, good morning.

Good Morning.

You have been putting through your price increases for quite sometime now and as always obviously it comes to you with a lag. I am just wondering in previous cycles, when you have seen, the cost of raw materials catch up to the underlying demand of our product. How effective have you been to hold on to those price increases?

If you go back to 2001, and I am not sure I am going to get the years exactly right, where oil dropped dramatically. The Mohawk business had its largest margins as the raw materials were dropping: I am not sure it was 2001 or 2002, something. It was that high watermark for the Mohawk segment? What typically happens is that the prices fall. There is more specific promotions going on by the industry, and we are trying to manage it as it goes through. At the same time, I have to remind you that as the costs went up, the margins have gone down, because we have not recovered it all, but the industry hopefully will try to recover some of the lost margins on the other side, that we need to maintain the businesses.

Okay. So you sound pretty confident that you are going to hold on to a lot of prices increases that you have been able to take?

You asked what has happened in the past, than I heard you.

Well, you are welcome to comment on the future too.

The future, we hope to do the same.

Okay. Thank you very much.

Your next question comes from Carl Reichardt with Wachovia Securities.

Good morning.

Good morning.

Frank the mid point of your guidance for fourth quarter I presume that before any additional impairments that the Mohawk segment is operating income profitable?

No, there is no impairment charges assumed in the Q4.

I know that but is that are you assuming that ex that operating income in the Mohawk segment is above the zero in the fourth quarter. Does that imply that the midpoint of your guidance range?

Carl, we have not gotten into giving any guidance or specific information regarding guidance by segment.

Okay fine. Then just in thinking about the past and potential future. I am thinking about the larger portion of the customer base, the retail customer base. In past cycles Jeff, has there been a tendency for that customer base to contract in numbers or is there an opportunity for you recognizing the structure of these the carpets sides changed? Is there an opportunity for you to gain customers given the expense you have made into other products and given potential attrition or consolidation in that industry? What is your thought process on your ability to grow your share with that base of customers?

Are you talking about the retailers?

Yes, the retailers and in fact, yes, just the retailer in specific.

What typically happens is in other pieces, that other times we have been through these cycles, the number of retailer contracts by some amount. What happens is every time we have been through this; that the industry starts projecting that small retailers will not be here and every time we get through it, the other side is still here. So I do not know if this one is going to be the same as the rest of them, but if the rest of them, it takes limited capital to get into the business, so that as the industry expands on the other side, we tend to have more people getting into the business. I do not see anything that is going to change that at this moment.

I appreciate it. Thank you.

Your final question for today comes from Arnie Brief with Goldsmith & Harris.

Good morning. Arnie Brief - Goldsmith & Harris: Good morning. Two questions, One, in terms of trying to model for next year, I can plug in the pricing increase and I can guess at raw material costs. The number I can not guess at all is the. Could you total up all the efforts you are making to cut infrastructure and what they might total on a run rate basis when they are all fully implemented?

The problem we have is that depending on the volume levels as we cut the costs in many cases, they are offset by unabsorbed overheads. Arnie Brief - Goldsmith & Harris: I am not asking you to make that judgment. The volume number is anybody's guess, and I have to make my own. I am just asking what the cost cutting total could be when it is fully implemented. Then you know of course is mix, there is all kinds of other things. We do not know if the price increase is going to hold with weak volume and declining raw material costs. So basically, lots of things could change, but a number would help, at least in terms of getting us into a ballpark on what all of these cost cuttings would produce?

I do not have that at my fingertips for the collective business to give you. I do not see if we can get something together that would make any sense. Arnie Brief - Goldsmith & Harris: Okay. Thank you.

I would now like to turn the call back over to management for closing remarks.

We appreciate everyone being on the call. These are a difficult environment. We have a good management team that is working to adapt to the changes in the marketplace and continue improve the business. We believe that the category, the industry will improve over time that we are going through a cyclical downturn that is much worse than historical and it too will end. That we think we are putting the things in place to be well positioned as we come out of this. Thank you very much.

Ladies and gentlemen this concludes today's Mohawk Industries third quarter earnings conference call. You may now disconnect.