Welcome and thank you for standing by. At this time, all participants have been placed on a listen-only mode until the question-and-answer session for today’s conference. (Operator Instructions) I would now like to turn the call over to Ms. Martie Zakas. Thank you, ma'am, you may begin.

Thank you, Carol. Good morning, everyone and thank you for joining us today as we discuss Mueller Water Products results for the 2008, first quarter. We issued our press release reporting earnings for the period ended December 31st, 2007 yesterday afternoon and a copy of it is available on our website. Slides related to this morning’s call are also available on the website to help illustrate the quarter's results. Mueller Water Products currently has a 115.4 million diluted shares outstanding as of December 31st, 2007 which is comprised of 85.8 million Series B shares and 29.6 million Series A shares. With us on the call this morning are Greg Hyland, our Chairman, President, and CEO, and Mike Vollkommer our CFO. In our press release and on this call we referenced certain non-GAAP financial measures which were derived from GAAP financial measures. These non-GAAP measures are provided, so that investors have the same financial data that management uses. We believe this will assist the investment community in assessing the company's underlying performance for the period being reported. Reconciliations between GAAP and non-GAAP financial measures are included in the supplemental information within our earnings release. This morning we will refer to adjusted income from operations, adjusted net income, adjusted EPS and adjusted EBITDA, all of which exclude the previously announced Burlington restructuring charges in fiscal 2008. These numbers are provided in the press release. On today's call we will make forward-looking statements in accordance with the Safe Harbor Provision of the Securities Litigation Reform Act of 1995. Remarks containing words such as expect, believe, anticipate and project, constitute forward-looking statements. They are not guarantees and such statements involve risk and uncertainties that could cause actual results to differ materially from these statements. Please see our Form 10-K for the fiscal year ended September 30, 2007 for a discussion of these risks. This morning’s call is being recorded and webcast live on the internet. The archived webcast along with the corresponding slides we are presenting this morning will be available in the investor relation section of our website www.MuellerWaterProducts.com for at least 90 days after the presentation. After the prepared remarks we will open the call to questions from our dial-in participants. I’ll now turn the call over to Greg.

Thank you Martie and good morning everyone. We appreciate you joining us this morning as we discuss our results for the first quarter of fiscal 2008. I’ll begin today with a brief overview of the quarter. Mike Vollkommer will then follow with a detailed financial report, after which I’ll update you on our strategy, key drivers influencing our business and our outlook for the rest of the fiscal year. We will then open it up for your questions. In general, our first quarter results were as we expected. Net sales were essentially flat. Our margins were principally impacted by both under absorbed overhead costs associated with our inventory reduction plan and higher raw material costs. Free cash flow increased significantly year-over-year and the closure of U.S. Pipe manufacturing facility in Burlington, New Jersey, which we announced last quarter remains on track. Net sales for the 2008 first quarter totaled $412.3 million, adjusted income from operations was $32.6 million and adjusted net income was $7.9 million or $0.07 per diluted share. The adjusted operating income margin was 7.9% and adjusted EBITDA margin was 13.6%. As I mentioned net sales for the 2008 first quarter were essentially flat compared to 2007. Volume declines were offset by pricing improvements for both Mueller Co. and Anvil, the favorable impact of Canadian currency exchange rates in our acquisition of Fast Fabricators in January 2007. We mentioned during last quarter's call that we would see the final impact of the Mueller Co. inventory reduction plan. In order to achieve the targeted reduction, reduction levels were taken down during the third and fourth quarters of 2007. Approximately $5 million of under-absorbed overhead costs associated with this plan flow through our 2008 first quarter income statement. This reduced EPS by approximately $0.03 and consolidated operating income and EBITDA margins by about 120 basis points. During last quarter's call we also mentioned that rising raw material cost in Mueller and U.S. Pipe would negatively impact margins this quarter. Price increases covered the higher raw material costs at Mueller, but did not cover higher raw material costs in U.S. Pipe. The year-over-year impact of higher raw material costs, net of price increases of $8.4 million in our water infrastructure businesses was approximately $0.04 of EPS and about 200 basis points of consolidated operating income and EBITDA margin impact. We continue to focus on free cash flow. We generated $46.2 million during the 2008 first quarter and ended the quarter with approximately $137 million in cash on the balance sheet. I'll now turn the call over to Mike Vollkommer who will discuss our financial results for the first quarter in more detail.

Thanks, Greg. I'll start by reviewing the consolidated income statement and then discuss segment performance. Consolidated net sales were $412.3 million in the 2008 first quarter, compared to $411.9 million in 2007. Sales increased slightly year-over-year, due to higher sales pricing in the Mueller Co. and Anvil segments, the favorable impact of Canadian currency exchange rates, and the added net sales from Fast Fabricators, which was acquired in January 2007. Volume declined, principally from a continued downturn in residential construction-related demand. While we believe volume related to repair and replace work in the municipal sector increased year-over-year, it did not offset the ongoing weakness in residential construction. Gross profit was $94.4 million in the 2008 first quarter, a decrease of $13.3 million compared to $107.7 million in 2007. Gross margin decreased to 22.9% from 26.1% in the prior year period, these declines were primarily due to increased raw material costs and under-absorbed overhead resulting from lower production volumes in previous quarters. This factors were partially mitigated by cost saving. Selling, general and administrative expenses were $61.8 million in 2008 first quarter, compared with $58.7 million in 2007. The increase was primarily due to higher employee-related costs and professional fees associated with operating the company on a standalone basis post spin. The first quarter 2008 results also include restructuring charges of $16.2 million, related to the closing manufacturing operations at the U.S. Pipe segment, Ductile Iron Pipe facility in Burlington, New Jersey. These charges consist of $14.8 million of asset impairment and $1.4 million of employee-related expenses. Last November we announced this plant, which includes the elimination of approximately 180 jobs. As previously announced we expect the total restructuring charges associated with this action to amount to approximately $19 million consisting of $15 million of asset impairment and $4 million of…

Thanks Mike. As we look to the next three quarters of 2008, we are planning on a continued downturn in new residential construction. We expect to see continued growth in public spending on water infrastructure and a steady commercial construction market. And based on what we have seen in the market for raw material prices during the last quarter we expect rising raw material costs to be an even bigger challenge for all of our segments going forward, than we had originally expected. Our near-term focus remains on reducing costs, maintaining flexibility to take advantage of growth opportunities, and increasing our cash generation. As we discussed on our last call, we estimated during our last fiscal year that our shipments to end markets have shifted roughly to 35% residential construction, 35% public water infrastructure spending and 30% commercial construction. Residential construction is the key driver for our Mueller and US Pipe segment. The downturn in the residential construction market continues with annualized housing starts down 38% in December 2007 over December 2006. Annualized housing starts are down another 15% since September 2007. And some experts project housing starts to continue to decline as the industry works through near-level inventory levels for existing and new homes. We believe that we will continue to see an increase in public spending to improve Water infrastructure. On our last call, we referenced the annual survey sponsored by the American Water Works Association, which concluded that public spending on replacing and upgrading Water infrastructure will grow 17% in 2008 compared to an 11% increase in 2007. Our first quarter results reinforced our belief that we will see overall growth in spending, throughout the fiscal 2008. In the first quarter U.S. Pipe quotations for public work increased 16% in tons over the previous year. In our…

Carol, if you could please walk through for them now, the process for asking a question?

Thank you. Keith Hughes, your line is open. Please state your company name.

It's Keith Hughes, SunTrust Robinson Humphrey. Thank you. Just a couple of questions, I guess the number one, the Fast Fabricators, how much did that add in the quarter?

Keith, we have been pretty consistent on not breaking out Fast Fab for competitive reasons. This will be the last quarter where we won't have that comparison comparability question. Michael Gaugler - Brean Murray, Carret & Co.: Let me ask you this way, in the U.S. Pipe segment, how much was volume down in the quarter, I don't know if you said that or not?

Yeah actually if you look at our overall volume in U.S. Pipe, we were down, volume was down about 11%.

11%, okay. All right, fantastic. And then number two, the 15% price increase was kind of eye popping - you’d give us some kind of back half, what do you think is coming? Do you have to get all 50% of that increase to hit your goal there?

I'll tell you, the price increase as we said, in today's environment getting all that price increase could be questionable. As we've said we saw a 26% increase in the first quarter on year-over-year raw material/ just scrap and we saw it until December. So obviously our competitors are sitting with the same input cost, what's happened to them. So if we get all of the 15% we’ll more than offset our raw material costs.

Okay. And I guess finally you had referred to the survey word on public infrastructure spending and I believe you should see a 17% increase exit for ’08.

Yeah.

When was that survey worked on?

That was published on October.

Okay.

And yeah.

All right. That's what I needed. Thank you very much.

Okay.

Michael Gaugler your line is open. Please state your company name. Michael Gaugler - Brean Murray, Carret & Co. : Brean Murray, Carret. Good morning everyone.

Good morning Michael. Michael Gaugler - Brean Murray, Carret & Co. : Greg I want to circle back to raw material cost for a second and that your competitors obviously is due indicator, you’re feeling some of the same pressures. Are they instituting price increases or are you leading the market once again?

We almost. It is hard to say who came out first but our competitors did announce price increases. So on ductile iron pipe we saw that all manufacturers announced price increases. Michael Gaugler - Brean Murray, Carret & Co.: Okay and second you had also mentioned that you want to maintain some financial flexibility of potentially paying down cash or share repurchases or acquisitions. I am wondering what the pipeline looks for you? How it looks now in terms of new acquisitions? Are you seeing more opportunities and if you are, how is the pricing?

Yeah, Michael I would say that we are probably still in the same position as we have been. We are looking for businesses, in the water infrastructure that can add to our breath of products or expand geographically. But I would say overall we have not seen, activity really hasn’t changed. Michael Gaugler - Brean Murray, Carret & Co.: Alright. Thank you, Greg.

Thanks Michael.

Christopher Glynn your line is open. Please state your company name.

Openheimer. Thank you.

Good morning.

Good morning. On the 15% price increases relative to the (inaudible) manufacturers who did announce price increases. So the variability I guess remains just how disciplined they are with their announced price increases.

Yes.

Okay. And at Anvil margins were very nice. It looked like, could you just talk about that, was there any kind of new productivity kicking in the quarter?

A little bit. On a year-over-year basis, we did have some benefit from Canadian currency translation that added about I think $400,000 or $500,000.

$0.5 million.

And we did have on a year-over-year basis around $400,000 more of dumping duties than what we got in the first quarter of last year. But we did also see some benefit from the synergy program that we’ve talked about throughout last year and impacted our Anvil Colombia facility, we reduced the number of foundry operations from two to one in April and we installed some new equipment to improving productivity in May. So we are starting to see some of those benefits too. Christopher Glynn - Oppenheimer & Co: Okay, and then roughly $500,000 from Canadian currency translation that was the off-profit benefit?

Yes. Christopher Glynn - Oppenheimer & Co: Okay, and then at Mueller Co, just to clarify some of the inputs you put to describe the margins there, so the $9 million from under-absorbed overhead costs, about $9 million includes $5 million related to the inventory reduction with the rest from low market demand and then the $3 million from volume declines, is the $3 million a subset of the $9 million?

No, it would not be. That was just be the absolute margin that we lost on that reduced volume. Christopher Glynn - Oppenheimer & Co: Okay, understood. And I know you gave good commentary on the trajectory through the year, but just a little bit more broadly how do you see seasonality this year versus a normal year, given the kind of peculiar environment out there?

That’s a very good question. Let me put it in context of last year, through the first three quarters of our fiscal last year, we saw the very typical seasonal pattern. In the fourth quarter last year we saw a drop on Mueller and our U.S. pipe business that was not typical. I think as we go forward we will expect to see the typical seasonal pattern and we will see an increase in Q3 and Q4. But as we said that we expect revenues in the second half of the year to be comparable to what they were in the second half last year. Christopher Glynn - Oppenheimer & Co: Okay. And then finally the inventory level was down about 5% year-over-year but a tough demand environment. Could you just give a little extra clarification on why that's enough?

We’ll say that's a good question. I know we discussed this in the last few calls. We talked about our inventory reduction programs for the last, for the second half of 2007. We did it by pure brute force, just shutting down production, shipping out the inventory. We got to the levels where we expected to get, I think in the future. And we did see an overall improvement of our inventory turns. But we will see, I think a continued improvement in our inventory turns, that it will come from improving our processes, not so much from just pure bringing down, just taking out the production. And this quarter actually, if you were looking at our balance sheet, if I would have seen that we did have a slight increase in the inventory that was all at our U.S. pipe business in preparation of our closure of the Burlington facility. We mentioned on the last call that we would be building inventory to make this smooth transition. In fact inventory continued to decline at our other business segments. Christopher Glynn - Oppenheimer & Co: Okay, Great, thanks a lot.

Thank you.

Robert Maloney, your line is open. Please state your company name.

Hey, guys. It's Rob Maloney from Morgan Stanley.

Hi, Rob.

Greg with financing becoming much more challenging over the last several months even for municipal borrowers, I'm curious whether you've seen any increased caution in the public water infrastructure side of your business?

Rob that's a good question, and we're certainly on the lookout for that. As we mentioned earlier, we saw nice growth year-over-year and in our Mueller products out of our Northeast and Central segments where that's more aligned to repair replacement spending, and our quotation activity, our U.S. Pipe on public works in terms of tons was up 16%. What we feel is that we think that spending for that Water infrastructure is typically handled at the local level and accounts for over 90% of the total spending through the local level accounts. We do think though in some markets property taxes, probably also supplement user fees within some systems to support Water projects. But on the other hand, for example, yesterday we were at the polls here like many around the country but more specifically we voted in Atlanta to extend a 1% sales tax to support the Water improvement program, and that was - it was about last word we had, 70% of the voters supported that. So, and again if you look at last year that the median rate increase was about 5% across the country that's up from probably for the previous 10 years it averaged about 4%. So I think as we continue to look at this market obviously we know demand for Water and elastic that what we have seen from our internal data we’d continue to support, that we're seeing the spending. But I think we have an eye open to just to see if it could be impacted somewhat but right now I think our overall view is that we don't think that spending on upgrading public spending or water infrastructure as vulnerable as perhaps some other spending local government spending could be.

Got it, got it. Thanks. Similar question on the commercial construction side of the house, again tough financing has made certainly created all the concerns around the commercial construction environment. What are you seeing in terms of quotation activity on the end of business?

I think you are right. I think right now we think where we are, where that stage of commercial construction spending is and that's a little awkward then we'll see continued stable demand for our products in 2008 but I think we will see a cut back on new construction and it could impact us in '09 and beyond but I think at least there are enough projects that are at a point where they are putting in their fire protection systems in HVAC that we should see stable demand for Anvil, we think in our fiscal year 2008.

Okay. Just one more quick question on distribution. Have you guys seen any changes in your relationship of HD Supply?

I would think the biggest thing that we've seen is now that they are -- I think this is our first full quarter of HD Supply being owned by private equity. I think we've seen a heightened focus on their part, on as you would expect, managing cash. So I would say if anything else that they are even managing, inventory a little closer. That means down the road that we are probably going to have to offer quicker delivery from our factories to satisfy [Anvils] demand because we may not have at least in territories where HD Supply, they are our distributor. They may not have enough inventory to cover demand. So, to answer your question I think the only thing that we’ve seen is, I think they are managing their cash even tighter and cutting back inventories.

No changes in the exclusivity status within the old Hughes and National Water Works businesses.

We continue to have those discussions. I think as we have said in the past as they go through this period of still consolidating locations that we have agreed to allow them to carry our product and a competitor’s product, until they make that decision, with the caveat that we may always pull the line and give it to another distributor. So I think that we are still working thorough their consolidation of locations and so from that standpoint they are carrying some of our competitors products where we have agreed to it. But in the long-term certainly its our desire and we expect to manage our business on an exclusive basis as we do with our other distributors. Okay, thank you very much, gentlemen.

Brent Thielman your line is open. Please state your company name.

Good morning, DA Davidson. Greg and Mike, I am just curious, you mentioned a less favorable sort of product mix in the U.S. pipe segment. I was just curious what exactly does that comprise of and do you have any sense of what the impact to margins was from that?

Yeah Brent we have some pretty highly engineered connecting systems. And I will just say briefly -- when you put two pieces of Ductile Iron Pipe together, they have to lock together and we have, because of I think our technology, those were higher margin products for us and that tends to be more in line with pipe that will be driven by pipe going into neighborhoods as compared to pipe going to transmission lines. So as residential construction would fall, we would expect to see that becoming, those products becoming less a percent of our total revenue. I mean, a rough estimate and we will have the specific impact on margin, but roughly I would say, it probably impacted margins in the pipe segment about a 100 basis points.

Okay, I appreciate that. And then, I guess it relates to Anvil. I know there has been some talk related to some expected tariff on imported steel pipes from China and I think the Commerce Department is sort of working towards making some final determination there. Can you talk about any potential impact to Anvil that would have?

I think that certainly we import as do our competitors import pipe. I think what we will be doing Brent is that it would require that we put -- we are on top of our game in terms of passing along pricing to the marketplace.

Okay. Thanks a lot guys.

Thank you.

Andrea Wirth, your line is open. Please state your company name.

Robert Baird. Good morning guys.

Good morning Andrea.

Just a quick question on the housing side, obviously, we are talking about forecast generally being down for ‘08, just curious, if you could tell us roughly what level you have baked into your operating plan to start to housing starts, in a roughly, a million units. Just want to get a sense of, what kind of plans you have as far as the housing markets goes specifically.

You know Andrea as we went into the year, we mentioned on our last call that we expected to see a downturn in housing starts. This certainly impacts our business. We don't have a one-to-one correlation other than our brass products as you know the real driver demand for our products is when a builder puts in as the development not the actual housing starts. So that if I think if we see a drop that goes below a million, I think that we'll continue to see a decline relative to our expectations. But that's just really a rough, rough ballpark because we don't have that one-to-one correlation. And as I said what impacts us more is what happens with housing developments and that dropped quite a bit in 2007.

And I guess we're just trying to get a little bit more comfort with you know you’re believing that inventory levels have generally been leveled off to where you need them to be. And just trying to get some comfort on growing out of couple of more quarters, we can just see 30% declines in the housing market. When do you think you would need to go back in and start reducing inventory levels again?

I think again that what we did in 2007 was take out the $60 million to $70 million -- I think $50 million to $60 million-$65 million of inventory just by absolutely cutting back production so having taken shifts out, having people our employees stay home for a week and so on and that's why we had the big overhead under-absorbed overhead expenses that flow through the income statement in Q4 and this quarter. I think that with our inventory inline right now that we could bring that down in a more orderly fashion and not have I would think as much impact as the way we took it out in the last couple of quarters.

Okay. And then just on pricing, it looks like U.S. Pipe didn't get much pricing benefit this quarter. So my guess is just given how this last price increase, we’ll go see -- probably you won't see much in 2Q either. But it does look like the Mueller segment got about four points this price. Did they see an additional four points in 2Q or how do we look at past price increases?

Yeah.

Beside the one -- from the one in January that you should see.

Yeah I think you're absolutely right. We did not see any pricing in U.S. Pipe and we will not see any as we've said that we will not expect to see any till the second half of the year. I would think that we would continue to see maybe the same level of price benefit at our Mueller business in the next quarter.

Okay. And then just as far as, when you'll get an idea of how prices are sticking, it sounds like these will probably be more effective as of January 25. Have the price increases you put in place thus far have been coming through at the levels you put them in or just kind of give us an idea of what the initial reaction has been?

Well, we really don't have enough data since it's only been a week, since January 25, on for U.S. Pipe, and obviously February 1 for the Mueller business. So it’s really too soon for us to tell.

Okay. All right. And just a last question, I know, Mike I mean obviously you guys have a lot of cash on the balance sheet now. But I just I want to get an idea and you obviously did the refinance too, but just what are your tightest of covenants that we should be monitoring and I guess how much cushion do you have right now?

There is quite a bit of cushion right now. We have a leverage ratio a requirement of 5.25 times [plus] 12 months EBITDA. I mean interest coverage has to be greater than 2.5 times. So there’s quite a bit of headroom there.

Yeah Mike, let me just expand upon that a little bit too. Especially, I know that, we mentioned in our prepared script and talked about the refinancing in May of 2007 and our timing just turned out to be very, very good. Because they clearly lowered our interest expense and provided more operational flexibility. I think one of the other very key outcomes of that refinancing was that it also extended our principle repayment schedule. So, as Mike mentioned at the end of the first quarter, I mean our debt to EBITDA was about 3.1 versus a maximum of 5.25 in our covenants. So, clearly you see that we have a lot of head room there. Our EBITDA to interest expense was 3.9 times versus a minimum of 2.5 and we currently have a $113 million payment due in 2012 and the largest principle payment of approximately $500 million is not due until 2014. To put that in perspective, before the refinancing, $958 million was due in 2012. So just to further amplify what Mike was saying that we have a lot of flexibility and a lot of room.

The scheduled debt repayments are just over $50 million through 2011 but specific to your question on the covenant side that we've get a lot of room and we would expect to continue to have a lot of room as we go forward.

Okay, thanks guys.

Seth Weber, your line is open. Please state your company name.

Hi, Banc of America, thanks. Good morning everybody.

Good morning Seth.

Greg, just following up on the previous question, it sounds like there are some other levers that you could pull if necessary as you see this on or do you think things are may be progressing little bit more slowly? Can you talk a little bit about that, whether its facility rationalization, workforce flexibility or kind of what you think would be the easiest things for your guys to do at this point?

Yes, Seth. Certainly the second half of the year and I am not talking about it again, the second half of the year will benefit from the Burlington closure. So that is a sum fixed cost that we are getting out of the business. As we said we expect to see about $9 million dollars of benefit. Relative to -- we have very flexible work rules in all of our facilities and we were able to demonstrate that in Q3, Q4 of 2007, that we will flex our workforce, relative to demand and so we obviously can reduce those variable costs. We do have ongoing, at the beginning of the year when we are going thorough our planning process, each of our businesses identify cost reduction initiatives that we monitor on a month-to-month basis. We utilize the six sigma process at our U.S. Pipe, lean manufacturing in our Mueller and Anvil business and that our cost reduction is actually year-over-year for the quarter we just completed. We really also contributed - they had a nice contribution to our margins. So when you look at it, that we think that being able to -- we are pretty well positioned to be able to respond, especially since we were able to close the Burlington facility so quickly and smoothly. In the long term, if we continue to see a significant drop and the housing residential construction doesn’t rebound for several years, we will have to look a lot harder at reducing our manufacturing footprint, though as we said I think on previous calls that any plants that we would close going forward would be a pretty difficult decision and it would be a long time to implement. So I guess to summarize, we will see the benefit of the Burlington closure. We have flexibility in our workforce and have demonstrated our flexibility of taking that cost out and matching it to demand.

Okay. Thanks for that. And just -- have you disclosed what do you think the mini mill will contribute or how that's going to affect your P&L going forward?

Well, yes. When you look at our U.S. Pipe margins, for last the couple of years I think we are in 5% to 6% range. And I think that we've always been pretty consistent that we would expect when we start seeing the full benefits of the mini mill and the closure of our Burlington facility, that we can get that up to the 9% to 10% range.

Okay, great. Thanks very much.

Thanks Seth.

And our last question comes from Brett Levy. Please, state your company name please

Hi, guys, two remaining questions. One is that have you guys gone to -- I mean obviously I feel like iron ore is going to be impacting your costs a little bit later in the year in addition to what would just happened with scrap have you guys talked any of your customers about the possibility of going to a surcharge mechanism, it essentially moves up and down, kind of with some of your raw material costs. And then the second question was given that your bonds are now in the mid-eighties. Have you guys started all of that repurchasing some of your bonds with your free cash flow?

Brent let me take the -- the surcharge is certainly an avenue for us and we talk about it from time to time. It has been the industry's practice in the past to put these types of I guess spikes in cost just in the overall pricing and change -- this time we changed the discount schedule relative to our list price. So we think that both systems always eventually get us to the same place. So our preference would be to try to get into the pricing because we think in the long-term we have a better chance to be able to keep that when we see a reduction in raw material cost, but it's a good question and I think that you can look at it almost 50-50 but we would still rather default to try to get the higher pricing to improve and increase our chances to be able to keep that pricing if we see a drop in raw material cost.

And Greg mentioned the thinking that we've had and what we studied on the use of cash and balancing liquidity maintaining the liquidity at this time with share repurchases and repayment of debt in connection with that we looked at repayment of term debt and the notes as well and have concluded at this time that we maintain liquidity as Greg mentioned.

Got it. All right. Thanks so much, guys.

Thanks, Bret.

Well, again thank you all very much for your continued interest in Mueller. And we look forward to speaking with a number of you in person during the next quarter. Thank you.

That does conclude our conference for today. All parties may disconnect at this time. Thank you.