Ladies and gentlemen, thank you for standing by and welcome to the Tyco Electronics Fourth Quarter Earnings Call. At this time, all lines are in a listen-only-mode. Later there'll be an opportunity for questions and instructions will be given at that time. [Operator Instructions]. And as a reminder, this conference is being recorded. I'll now turn the conference over to Vice President, Investor Relations, John Roselli. Please go ahead.

Thank you and good morning. Thank you for joining our conference call to discuss Tyco Electronics' fourth quarter results for fiscal year 2008, our outlook for the first quarter of fiscal year 2009 and our thoughts on the full year. With me today is our Chief Executive Officer, Tom Lynch; and our Chief Financial Officer, Terrence Curtin. During the course of this call, we will be providing certain forward-looking information. We ask you to look at today's press release and read through the forward-looking cautionary statements that we've included there. In addition, we will use certain non-GAAP measures in our discussion this morning, we ask you to read through the sections of our press release that addressed the use of these items. The press release and all related tables can be found on the Investor Relations portions of our website at tycoelectronics.com. Now let me turn the call over to Tom for some opening comments.

Thanks John. Good morning, everyone. Given the current challenging economic environment, we're going to focus the majority of this call on our current business conditions and give you a flavor of what we're seeing right now and also importantly talk about the actions we're taking to improve the company 2009 and beyond. I was just looking back for a minute, our Q4 performance overall was inline with our outlook, although in our electronic components segment which is about 75% of the company. Our conditions in most end markets especially automotive began the week... later in the quarter in this segment and automotive is about 40% of our component segment. We were able to offset this with continued strong execution in Undersea Telecommunications business and this will enabled us to deliver $0.69 of earnings per share which was up 19% of our last year's fourth quarter. In addition during the quarter, as you know we initiated the next major phase of our restructuring program which includes a closure of three automotive plans in Western Europe and that is tracking right now. We also had a another good cash flow quarter with free cash flow of 476 million and we completed the divestiture of two businesses for cash proceeds of 469 million. These two resulted in total cash generations of approximately 900 million in the quarter. For the full year our free cash flow is 1.4 billion and in addition to this we have the 600 million from divestitures. Our pre cash flow exceeded adjusted net income for the year. We also continued to return excess capitals to our shareholders to the dividend and share repurchase. During the fourth quarter, we purchased 12.5 million shares, were approximately 400 million and we also spent another 100 million on share repurchases so far this…

Thanks Tom and good morning everyone. Now as Tom said, let me start with reviewing the segment performance in quarter four. In our components segments our sales grew 3% in the quarter but we were down 2% organically. Also from an regional perspective, we did see all of our regions had single-digit sales declines in the quarter and that was really driven by the consumer related end markets that we serve in the component segment which comprise about two-thirds of the segment's total sales. In the automotive market, we were flat overall but we were down 6% organically. On an organic basis in Europe we saw our sales decline 7% and you know the end quarter we said we expected this to be relatively flat but as we went through the quarter we saw a significant decline in September and as OEMs announce additional production cuts and this led to a reduction in inventories as many of tier 1 customers. In Asia, we did have sales growth of 17% and within China sales grew 17% and as Tom had mentioned we do expect Asia to have an organic sales decline in quarter one close to double-digit. And in North America, in quarter four, our sales decline 26% in the quarter and we expect to similar decline in quarter one. In the computer market, our sales declined to 11% while in the communications market our sales grew 4% organically. On the infrastructure side of the communications market, our sales grew 2% while in the mobile phone side, our interconnect products grew 10% which was essentially inline with the overall production. We do believe based upon our market share gains over the past few years. Now we will continue to grow at this point with unit volumes. In the industrial markets of…

Thanks Terrence. Before we go to Q&A, I'll just... I wanted to summarize what we just talked about, no questions these are tough economic times and although we can predict when demand will return to more levels, we can and we will and we are accelerating our efforts to continue improve to the company. And few key points there, we're staying with our strategy which as you know was build it in on three key things, strengthen our portfolio, still better leverage our broaden these technology capabilities. Streamline the business and improve our operating margins to 15% plus in a more normal growth...environment return that we have not taken our eye off that target. We also expect to strengthen our market position by increasing our focus on the customer and expanding the rate of new product introductions. We have the will to do that. We're taking advantage of the slowdown to continued to improve our costs structure specially in our components segment and more specifically in our automotive business and lastly we'll continue maintain our strong financial position by continuing to generate strong cash flow and used in the cash wisely whether to... return capital to shareholders, or add to our portfolio if I'm opportunistic, strategic investments present themselves. So this is a rough time right now, but this company is more focused. I really believe we are more capable now then we were a year ago; and the whole management team knows our goal is to, we need to strengthen things and be better and stronger on this things turned out. So, with that let's open it up for questions, please. Question And Answer

Thank you. [Operator Instructions]. Our first question is from Amit Daryanani with RBC Capital Markets. Go ahead please.

Thanks. Good morning guys.

Good morning Amit.

Just a little quick question Tom on, I know you talked about considerably hitting a $70 to $80 EPS in '09, although it's not guidance, but when you kind of think of that EPS number, what sort of sales number are you thinking about to hit that EPS line?

Amit, the model if you will is based upon the current sales level. We're hopefully the current sales level will be the low level of the year. But we don't really have a whole lot of visibility, but what we said to ourselves, let's not assume some more miraculous recovery here; let's assume the process of the cost structure point of view. This is where it's going to be drive more change and more cost improvements to the company. So you can think of it is, $12 billion of revenue.

Got it. That's very helpful. And then I guess Terrence... given all the risks especially on the automotive side of things right now. Could you just really talked about any concerns on the AR...the aging of AR and also on the inventory obsolescence, so how do take write-offs in that front?

Tom,let me take those separately. First up on the AR side we... our aging is actually very good, its actually improved. We do have, if you look our business overall our largest customer is less than 4% of sales and that would be the same concentration of receivables. We will continue monitor certainly with the macroeconomic but right now we feel very good with the aging. On the inventory side, we ended the year in the high 70s on the inventory days certainly our quarter one results are being impacted by absorption. So we are focused being sensitive to the inventory levels and we will be our goals is to work that down in these soft times and you're seeing that in the P&L. Due to especially in the automotive probably being our lowest days level, right now we don't see risk but we have to monitor it closely

Got it. And then just final question after that. Just on incremental softness could you A, update us any divesture plan at this point and are you incline to potentially diverse more assets given the market softness?

We had a big September, and we close the deals if you know it had been in the process. We were fortunate, we got in under those rapidly collapsing credit conditions and for those two businesses is that on the 500 million. We just announced the deal itself a small part of our business a battery in where we're a very, very niche in that market and very subscale and we've been working for while to sell that business, so we got somebody there and we're continuing to work through the portfolio I think is the bigger part of the focus right now is the particularly to get out of product that just don't get it payments acquisition years ago and we've been nipping away at those things in the computer business things and the appliance business. So I'd say you could expect to see another couple of 100 million this year and that be the way to think about it.

Excellent. Thanks a lot guys.

Thank you, Amit.

Thank you. And next we go to Jim Suva with Citigroup. Please go ahead.

Great. Thanks very much. Can you just clarify a little bit on the automotive side? I believe you said auto down 25% Q1 organically with the Europe down 35% I think that was for Q1 for the 35% and then Asia expect close to double-digit and for Asia do you mean close to double-digit as a little bit above, 10% or a little bit below 10%?

Its about as 10% Jim, with the biggest declines being in Japan our small decline in China and a larger decline in broader Southeast Asia.

Okay. How much visibility as far as lead time do you have in that area?

In Asia.

Yes.

The lead time is about the same. I mean they're JIT gives us orders release orders weekly, can change orders within the week, don't usually change the total value of orders that you can get change in that of a model shipments to ourselves. It's not a lot of lead times.

Great and then as a quick follow-up the $70 to $80 directly speaking for that scenario. I know you mentioned for Q1 it includes absolutely nothing for your guidance that includes the New York contract to $70 to $80 does that includes New York contract coming in?

No, it doesn't.

Okay. And that's about $0.04 per year. Correct?

New York.

It will depend on how they accept the regions Jim. Previously we've said this coming year could be up to $100 million and about $0.03 to $0.04 but it will depend on how regions are accepted in there. So I think that $0.03 to $0.04 would be the high-end.

Yeah, that'll be two regions.

Great. Thank you, very much.

You're welcome.

And we have question from Matt Sheerin with Thomas Weisel Partners. Go ahead please.

Yes, thanks. Tom you talked about some inventory issues at automotive customers which is fairly obvious but could you be more specific about the extent of those inventory problems how much is out there both in terms of component inventory and with how long will it be for the supply chain to work through that. And as a follow-up to that looking at the March quarter I believe you're normally flat up sequentially in that business shouldn't we assume though given the environment plus the inventory issue that you would be down sequentially?

Let me take the inventory one. There is not a lot of hard data on that yet Matt, why we feel that inventory because if you look at and these come on like basis so for example we don't have our October date yet of new car registrations in Europe which is probably the best leading indicator that the industry have, in September they were down 8%. Now we suspect October is going to be a lot worst that we haven't seen that yet and that what's driving the customers to adjust quickly. The other reason we suspect there is a significant inventory adjustment as we wouldn't expect demand with follow this fast and just give you a couple of data points. First nine months in the year as bad as the U.S. car market and it's more than just a big tree and U.S. car sales were up, they were down 10% in the first nine months of the year, went down over 30% in October. So if you say your period was up than U.S. eventually those to Europe they would expect maybe similar declines with a lot affect, I know that's an over simplification. But Europe also has some dynamics that profit up a little -- make a little stronger than the U.S. there's the Eastern European markets which are emerging and growing so you have demand there now that's slowdown but you have a fundamental, sort of a long untapped demand there and you have significant amount cars in Western Europe, our company cars those are tied in a compensation arrangements. So you have a little more stability there. And in Western Europe there is some less dependents on credits to buy cars than there is in the U.S. So when we look it at that way, AG what we expect Europe go down and as fast as U.S maybe not, that's all kind of proposition. And then if you lay that against what we're actually seeing is exists... our conclusion is there is a significant inventory adjustment here but we're not sure where demand is going to end up in Europe and we wouldn't expect European business to be down for 35% for too long but you don't have any hard data of recent trends. Then the second question was...

Flat point.

We normally do expect, would see a pickup in seasonality in Q2 I think our visibility is typically are on 5%, our visibility is pretty limited right now. Now the big shutdown that are going on are going on over the holiday, the most of the shutdown will end in early January. We typically lead six to eight weeks on our production ahead of that, so if they're starting to ramp up again, we should start to see our orders pickup late in this quarter. You know past both strolled [ph], I think... we also think caveat is today's environment much or what historically trends pull through but we did look over history, we would normally see a pickup, the shutdowns are longer which is making this quarter more pronounced down through up, harder down through up or we would expect a little bit of timing if they're coming back we should start to see that some order activity late in this quarter.

Okay. Thanks. And as a follow-up, even at the current run rate that you're at... you're looking at your revenues for fiscal '09 down in the $2 billion range or so? And talked about cost cutting, you will be specific about the SG&A coming out or could you be more specific about the plan consolidation efforts that are going on has that accelerated and what kind of numbers are we looking at there?

We did... just to give you a little bit history we initiated 13 in '07 and it's about down, we initiated 10 that were bigger in '08, so we were less plans to figure plans more conversion cost course of the big three been in the Western Europe in September. And right now what we're working through is what we do next. So we wouldn't expect to see any benefit realistically in '09 from the next wave that if we can pull something in but I mean our plan is to expand it and pull it in and that's where we're working on right now.

And how many facilities are you at now?

Well we have, we have 23 that are offline or taken offline another 12 that one of our divestitures, so we're getting down around a 100 level.

Okay. Thank you.

Thank you. We'll go next to Steven Fox with Merrill Lynch. Please go ahead.

Hi, good morning. Couple questions, I was wondering first of all we could dig into sort of the incremental change in the margins. It looks like quarter-to-quarter you probably have the like in the components business high 20s type of incremental margin on a basis point discussion looks like it went down about a 100 basis points. You said that it was mainly volume driven but there must been other puts and takes in there. So I was wondering if could you just sort of dig into the component margin a little bit more and also talk about it going forward where you think that would based on similar commentary?

Steve, when you say quarter-on-quarter, are you talking sequentially?

Yeah, sequentially just looking at the electronic components business?

Andwhat I would say there is really primarily affect is it is volume because of it was that the shortest decline was in our automotive business which is the higher fixed cost business than our markets that we serve. So if you do look at it, it was a little bit higher than we typically run because we would add balance that sequentially without currency our automotive business was that about 15% in Q3 to Q4 and that did create some absorptions forms that we saw in the quarter that made the poll through a little bit heavier.

Was there any positive offset, so are we really we hadn't been taking some cost actions would that number would have looked worse?

It kind of look slightly worse, well from that view point, Steve it's mainly volume. The other numbers are smaller compared to those.

And then going forward Terrence when you look at Q1, its all volume related and what would be the other offset you can get?

Really when you look at components in quarter one. And if you think about it, our components segment annually has about $2 billion of fixed conversion cost which is about 500 million on the quarter and you now loosing that 15% of the sales that Tom walked you through, those create absorption pressure against that 500 million which however you want to run it is about $75 million and layering that on the top of the volume or just a sales margin is what you get there. So it does come into the heavier fall down and about the 40% range due to the absorption that we're seeing.

Okay and then just two other quick questions, the SG&A line showed a pretty good costs control going on in the quarter. Where do you see that for this quarter and then lastly on the Battery Stand With business you mentioned? What kind of serve market was that going into and is that now a discontinued business for next quarter?

Let me take the SG&A one Steve. On the SG&A as Tom said we are putting costs containment and we'll also be looking at headcount take out in that. So from that viewpoint that's the $100 million that Tom said, we would expect that to start clicking in and more on quarter two then quarter one, since we are in the middle of it, so I would expect quarter one be similar to quarter four slightly down, as we get some impact and now huge. On the battery's business, this basically was a cell-packed assembly business that came with an acquisition years ago, it serves primarily on some cell and cell phone as well as computer application than it a mid single digit margin that were there. We will not be treating as a discontinued operation due to its small size. So you know, it'll just be something we'll highlight you but it will stay in the results.

Got it, thank you.

Thanks Steve.

Thank you; next we have Shawn Harrison with Longbow Research. Please go ahead

Hi, a few questions. For the year December quarter, what in terms of comp are you assuming in terms of I guess price per pound basis?

Right now, Shawn, that's right around $3. We have fix, as you know we do have a fixing program and we have fixed about 50,000 pounds. So right now we're assuming about $3 copper and we will also be burning of inventory obviously.

Okay, so more off, say late March quarter or June quarter in terms of same kind of, what the below the $2 type of...

I meant to say 50 million pounds not 50 pounds.

Okay. But more on more in late March quarter, or early June quarter for those $72?

That point to how that believe through between the inventory and what we fix.

Okay. Secondly just on the tax rate. What are you assuming for the full year, I know it's 33% this quarter but what do you think you can get that down to maybe exiting the year?

Right now with where we are, 33% is a fair assumption for the year right now.

Okay. And I guess cash flow generation or CapEx, are you pulling it in year-over-year. Maybe what should we expect this kind of a quarterly run rate this year given kind of the press revenue outline?

We're going to... our goal is to keep CapEx in proportion to revenue. The capacity related CapEx is scrutinize than you can imagine very hard right now. We've given our targets to reduce CapEx at least inline with the sales decline. New project CapEx which is about half of what we spend and our total capital so if we win a project we need to buy the tools and go with that. We're going to continue to pursue that. We don't want to discourage any new business et cetera at the right type of levels for us, but we'll definitely be down in CapEx.

Okay. And then just finally going back to the inventory discussion in the automotive business, what are the length of shutdown you're seeing this year and I guess looking at maybe something that could be 2 to 3x normal, shouldn't you see some snap back to a extent in the March quarter just as there maybe normalized production to an extent but maybe have some additional shutdowns?

While we're... we know that there is some European automakers for example that are going to do up to five weeks, unusual they might take generally 2 to 2.5 week unusual to shutdown the whole holiday season. I think those are still being rolled out. We would expect and kind of alluded to that earlier that all things being equal, and I think that's fair and the time right now but yes there should be a snap back, we got to see the data before we want to talk to it, because it's been so rough on the downturn ones could argue that well you should see a little bit more pickup on the upturn, we were certainly going to be prepared for that but we're managing our inventory in our cost structure very closely as well.

Okay. The final question just on the balance sheet I think currency alluded to requiring a slightly higher cash balance going forward given kind of the uncertainty in the credit market is there a dollar amount you want to pick to?

No, I wouldn't say we require it's just been a little bit more cautious for the credit markets right now. So I think it will really will be around Shawn, what do we seeing in the credit markets just to make sure we do have a very strong balance sheet. Our strategy and our philosophy has not changed on cash but just with what's going on some markets have been little bit disruptive such as commercial paper at that times we may have little bit more cash and we had in the past. But our core requirements have not changed in $500 to $600 million level to run the business.

Okay. Thank you very much.

Thanks Shawn.

Thank you. We'll go next to Ajay Kejriwal with Goldman Sachs. Go ahead please

Thank you, good morning. Could you talk about the ForEx losses a little bit? Are these related to production outside the U.S. or these cash flow hedges and I don't remember if you call these out in the past but how much did you benefit in '08 from any mark-to-market gains, at all?

It's Terrence. First of all in '08 it would probably be net I think it was around $0.2. If you look by quarter and some quarters it was $0.01 ahead or $0.02 positive. So it was much smaller in magnitude on the mark-to-market, and that is why we didn't call to that. When you look at what's occurring here this really relates specifically to our Eastern European operations where they are meant to be cash flow hedges but we have mark-to-market accounting. We have about $500 million of exposure to the three major places in Eastern Europe where we have production Hungary, the Czech Kroner as well as the Polish Slavic and those currencies in October devalued significantly. And we do hedge out up to a year on those so really what we're taking here is 12 months worth of hedge in this quarter and like I said in the my statements rate stay where they are we will recover that later in the year assuming business levels stay inline with what we've hedge. So it is a cash flow hedge.

Got it. And I'm assuming you have other hedges in place that would prevent any further losses on this contract, or if currency continues to move the way they've done in the past and of course that's a long assumption but I mean have you taken any actions first that or --?

On these we have done some actions to make sure we cap these losses where I've told you to but from that standpoint we still do hedge our currencies due to the amount of exposure we have outside the dollar. But these three currencies in Eastern Europe where the three that cause the impact of what we sold due to what happened to them in October.

Got it. And outside of these contracts could you remind us how much ForEx helped you in '08 on the top-line and operating income line?

If you look at ForEx in last year it helped us by about $800 million and it helped us by about $0.08 a share.

Okay. And assuming rates remain where they are, I'd imagine FX is a headwind. Could you give us some sensitivity around what FX could be a year-on-year... on a year-on-year basis in '09?

If you look at quarter one, our guidance is saying that's going to impact our growth by about 400 basis point which is about $150 million. If you take a euro at high 120 rate which is the largest currency. We expect that year-on-year that would be $700 million headwind to the top-line perspective. And then as we told you last year, that typically falls through at a lower rate. So it would be about $0.07 to $0.08 impact on EPS year-on-year.

Got it, just on that $1.72, $1.80 range for the year implies sequentially improvement. Obviously you talked about your expectations for European Auto could you maybe talk about any other end markets where you expect things to improve versus the first quarter.

That range doesn't really contemplate much improvement what you will see is that, will probably run a little lower in our Undersea telecom business. Its still as Terrence said we still expect to run in about $900 million rate which is better than what we had thought a couple of months ago because of the backlog till, been a little bit, it will be down slightly wireless in the first quarter is always in our lowest quarter, comes off in a usually a strong fourth quarter as we come inside with governments fiscal year end, as usually a pop in the fourth quarter and then a decline in the first quarter. Do you expect the increase in wireless to offset the increase in Undersea and for this model as I would like to call it, are the $3 billion run rate which you would see kind of running at the rate... Now obviously you know its going to be different from that but in terms of how we are modeling it and the way to think about the variables these action we are taking. Think about it that way. So there is no assumption that we get some masses further deterioration in any of our businesses or recovery.

Got it, thank you.

Thank you.

Thank you. We will go next to William Stein with Credit Suisse. Go ahead please.

Thanks, wondering in the... as early credit environment, are you seeing any thing happened with suppliers or competitors that would create either a bigger problem on the supplier side or an opportunity to either take share or acquire a competitor potentially?

I would say we're not seeing anything totally obvious yes, but we definitely have our eyes open for opportunities of course will be careful about it but not anything, they get well I really... nothings really up there is a few that we keep our eye on customer last competitors that we keep our eye on and there is as Terrence said we're not seeing anything to scare us in the rate of which we're getting paid but there's clearly a lift that we're in more compact lift and normal to track how they're doing but fundamentally, in a state like this, I guess I would expect a little bit of the shakeout and I think that can play our advantage.

And then putting that aside, I know acquisitions were always kind of a longer-term part of the company's strategy. Any update or comments on what that pipeline looks like or whether these deals are more or less likely given the current credit environment?

The pipeline, the areas that we're looking at are still the same, the market we find most attractive is probably the one, is really is the top of our list is energy we are fairly broad in the energy business and we think, there's an opportunity to expand both organically and inorganically there. We are starting to increasingly build our pipeline there. There would be... I think would be... would like to make some moves this year, are not big ones but more technology and capability moves this year if there, if the right opportunity is available on an attractive price. But we are clearly continuing to build that pipeline in that regard.

I think that's all I have thank you.

Thank you. Then we'll go to Brian White with Collins Stewart. Go ahead please.

Good morning, just on the pricing environment. With you know auto customers struggling here and everyone having a tough time. How do we think about pricing for fiscal '09 in the electronic components business?

I think we're going to see more pricing pressure. There's couple things going on is, commodity prices went up obviously, we all got to... push as much of that on. We did about half of it. We got about half of that. We are able to recover our goals is to keep at least half, as things go down and certain commodities are still up year-over-year especially energy and things like that. So and they never really got passed through. But we would expect an environment focus plans less... there's going to be a little more aggressiveness by the things open... everybody in our industry has keep a lot of this cost as it went on the way out. And I think we have a good chase, it's been starting ourselves both to in the higher cost environment to get more back in our erosion and come down significantly from historical levels as well as be ready as commodity prices turndown as they have. So we're going to see more pressure I think we're very well prepared in the right way to keep as much as we can but at the same time in our attractive business we're not going to give up that business for a few points of crisis.

And how do we think about pricing in the last downturn, what happened to pricing like percentage wise you have numbers?

I would say they're incomparable because when you look at very different end market dynamics. Brian, so when you look at what happened during the telecom buzz in places like automotive pricing really did not change. So, the end market demand between less downturn and this one that we're experiencing right now are very different.

Okay. So maybe a mid-single digit decline in the fiscal '09 is reasonable?

I mean, I think it's -- I do believe it's going to be less say less than sort of average.

Okay. And just on Undersea Telecom is that Trans-Pacific finished the project finished?

Basically finished. Yes. I mean there some points.

Essentially that.

Essentially that. Okay. Thank you.

The next we have Carter Shoop with Deutsche Bank. Go ahead please.

Good morning. I wanted to just walk through guidance here one more time. I feel like the top line guidance is for seasonal pickup but at the same time you're saying that you expect to see a seasonal pickup in the March quarter. So if we do see a seasonal pickup then would we expect to come in above the 170, 180 on the EPS line?

Carter, we're giving guidance for the first quarter and know it's not like guidance for the year, but we were just really trying to put a model around for those variables that helped all of you think about the business sort of the same way we think about it. We're not counting on a seasonal pickup in Q2 I mean we're certainly hoping for it, but it's hard to say right now just because of all the uncertainty and this recent decline in Europe has been pretty, it's pretty rapid. So in a more abnormal environment even in the down business more normal environment we would expect to see seasonal profit that's why we're not really going beyond the first quarter at this point. And we'll have a better idea by the end of this quarter based on I mentioned earlier as the automakers come out of their shutdown what we know how fast they come out of those, what's the real end demand they're seeing and how fast they would ramp up. We should see that in the latter part of this quarter.

Okay. That's helpful and I can appreciate how difficult it is to forecast in this environment. Looking at the guidance another way on the EPS line at the midpoint for next quarter or this quarter rather were $0.26 if you add the $0.10 from the FX loss growing off year about $0.36 per quarter on a similar type of revenue run rate, to get the midpoint of your full year guidance we need to be hitting about $0.50 per quarter which translates into about $100 million incremental operating profits for a quarter. So that's said, can you help us understand what's the levers are and what's some -- and maybe rank them by its going to have a biggest contribution to help you get that $0.50 per quarter whether it be raw materials restructuring, financial engineering like buybacks or possibly I guess volume benefits when it be there, but those three items between raw materials, restructuring and financial engineering.

Yes. Those four items.

Carter, how we're thinking about I mean you're exactly right lets take $0.36 punch for get you the around of mid 140 rate. Certainly the cost cutting that Tom articulated in his comments, we basically would say in the SG&A and overhead side would the biggest component, the commodities Tom mentioned $50 to $75 million on that on basically to recapture plus obviously some price get back. We also prior restructure actions. We would say another $40 million share incremental to what we saw last year. And then to your last point you know how we're using our cash certainly our share account will come down as well. Your financial engineering would probably be the smallest out there. So those four components really are the metric drivers and that does assume the $12 billion as Tom said and its mainly around cost take up.

Would we expect, I mean... I think you mentioned this before, we are expecting most of that. Cost take out to occur in the second half of fiscal year.

On the SG&A side, we expect to start seeing the saving's next quarter certainly not the full quarter. The commodity as we stated would be later in the year, prior restructuring would be the next three quarters certainly bigger in the last half and the shares are throughout the year.

Great. One last question, have you started to see any competition in the auto market, from Asian competitor's Asian connector manufactures.

Nothing significant Carter, we clearly run into them as they're taken working on the business trying to get in there for a while but not yet. Not in a significant way. If you think about on high for example.

That's all Mr. Shoop.

Yes it is. Thank you.

Okay thank you then we'll go to Amitabh Passi with UBS. Go ahead please.

Thank you, hi guys can you hear me?

Yes Amitabh how are you?

Good, good thank you, most of my question have been answered, I just had a couple of clarification questions, I think the first one was as we think about the benefits from the restructuring, is it fair to assume that the benefit on your gross margin line is probably sort of the 30 to 40 basis points in '09 and that's sort of the range you are thinking of?

The $40 million, that we mentioned would be that $40 million as all gross margin.

Okay I apologize I miss that and then just on the SG&A, if you could just clarify I didn't quite get your commentary as we think about SG&A in '09 are we looking at it more sort of flattish and dollar basis or I assume is again some benefit from discussing action. I am just wondering how we should think about where SG&A transferred the full year?

Amitabh, what we plan is, we want to take out a $100 million on an annualize basis of the SG&A. And we will start getting those benefits in the second quarter and then obviously ramping throughout the year. So from that view point our view is going to so down.

Got it. And then just quickly on the industrial segment, you talked about your solo business, can you give us any color in terms of how big the business is now or at least with revenues during this quarter even on the relative basis what the year-over-year growth was for that particular?

The growth almost doubled, it was very robust approaching still a small business approaching $100 million but three years ago it was in the rounding. So, its ramped quickly, it especially ramped in Europe were no other countries have subsidies for this. I think we were still very bullish on it. We both committed to it I think is it will continue to ramp where we see that slowing down a bit, subsidies are coming down a little bit and of course it does tend to fluctuate in a little bit, not too much with oil. As oil comes down but still a viewing it is a very high priority high growth business for us.

Got it. And just my final question perhaps asking you Tom. we shared on appear to be sort of an unprecedented times and I was just curious coming back to the M&A question I mean we look at these sort of times as an opportunity moments for you to be perhaps slightly more aggressive or cautiously or selectively on the acquisition front or is this a time, what you think you probably be much more cautious and you rather wait out for storm before you should get aggressive on the M&A front?

I think our strategy is really unchanged there. And I think the way, another way to answer that is we know the areas, we want to get into that our top priorities we're aggressively pursuing them. They're more round out the portfolio type areas and in product especially technology development that we already have and I think particularly the opportunity should be better for the small and mid-sized opportunity. That those companies that likely could have a little bit more difficult circumstances right now, so I guess the short answer is we expect to be more aggressive but staying inline with our strategy not certainly widening our net to be opportunistic with it naturally meet opportunities arise but we focused on our strategy these were the spots we want to go into and be more aggressive given the circumstances.

Got it. Thank you.

Thank you.

Thank you. And our next question is from Brian Girgy [ph] with Legal and General Investments. Please go ahead.

Hi. Just couple of questions. Other than the corporate bond. Do you have any debt outstanding either in the form of commercial paper bank client jobs?

Yes we do, I mean if you look at our exact composition are $3.2 billion on that while we do have lot of bonds outstanding. We have about $150 million of other typical debt and at the end of the year we had $640 million of commercial paper. I mean our commercial paper balance is down, we have used some of the excess proceeds we've had on the divestures as the market has been disruptive and we do go into our backup facility has cash is need because that backup facility was needed to backup the commercial paper. So any disruption in the market we do go into our backup facility.

And how are you relative to your bank covenants right now, how much cushion there?

We are fine with our bank covenants.

Any statistics about where they... where those covenants are and where the data is?

I do not have with me but we're fine with our bank covenants we can get that for you.

Okay. And as far as anyone expose to the automotive industry these days is taking... is getting a hard look from the rating agencies, so you think contact about the rating agencies and it seems like there -- at least with some of the reaction and some of the names in the sector -- I guess the need for more liquidity cash balances that kind of stuff is a something that they highlighted, is it something that you spoken with them recently about?

We always are in contact with the rating agencies update them on our business. So we're always in contact with them. I think you need to keep in the contacts our cash flow generation and we're more than automotive company.

No, absolutely...

From that view point, we just generated $500 million of free cash flow and we'll continue to update the credit rating agencies on what's going on the business but its been normal contact.

Okay. And last question more of typical one I guess in given the current state uncertainty in the market, you have a choice right now whether to keep the cash on the balance sheet or repurchase shares and I understand the stock prices, looks very attractive now, but it's seems there the equity markets rewarding companies that have more liquidity in this environment. I guess I don't see the upside for continuing to repurchase shares if hypothetically, the outside potentially of keeping cash is that, as we start to come out of this having little bit more balance sheet to do acquisitions or something of that nature.

We've always indicated, our strategy is to make sure as we generate excess capital, its either going to be, full returning to our shareholders or for strategic investments, and we continued to balance that. We feel very comfortable with our liquidity position and our cash flow generation. And we do balance those as we run the business everyday.

As Terrence mentioned earlier, we're keeping a little more cash on the balance sheet just because of the credit situation, just to be prudent.

And... I know you have what the balance sheet just right now but I mean obviously the uncertainty in the market specifically with the revenue side of the equation, it seems to me that continuing to repurchase shares, doesn't that make sense?

I would say, you also have to look at, we have no significant debt until 2013 as well.

Understood.

From that viewpoint, our debt is popularly matured and we're going to continue based upon credit conditions and what's going on in market as I said, be a little bit more cautious but our philosophy has not change.

Excellent, keep up the good work. Thanks.

Options are open, I say that's the way you should think about it, that's what we're doing.

Thank you.

Thank you.

Thank you.

Thank you, and gentlemen, we have no further questions. Please go ahead with any closing remarks.

Okay, well thank you for joining us today. Keith Kolstrom and myself will be around the rest of the day to answer any other questions you may have. Thanks and we look forward to talking to you. Thanks everyone.

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