Good morning and welcome to Whirlpool Corporation’s Third quarter 2010 Earnings Call. Today’s call is bring recorded. For opening remarks and introductions, I would like to turn the call over to the Director of Investor Relations, Greg Fritz. Please go ahead.

Welcome to the Whirlpool Third Quarter Conference Call. Joining me today Jeff Fettig, our Chairman and CEO; Michael Todman, President of Whirlpool International; Marc Bitzer, President of Whirlpool North America; and Roy Templin, our Chief Financial Officer. Before we began let me remind you that we conduct this call we will be making forward looking statements to assist you in understanding Whirlpool Corporation’s future expectations. Our actual results could differ maturely from these statements due to many factors discussed in our latest 10K and 10Q. Turning to slide 2, we want to remind you that today’s presentation includes non-GAAP measures. We believe that these measures are important indicators of our operations as the exclude items that may not be indicative of our core operating results. We also think that the adjusted measures will provide you with the better baseline for understanding trends in our underlying business. Listeners are directed to the pending section of our presentation on slight 28 for the reconciliation of non-GAAP items the most directly comparable gap measures. Our remarks track with the presentation available on the investor section of our website at Whirlpoolcorp.com. With that let me turn over the call over the Jeff.

As you saw earlier this morning, we released our third quarter financial results and you can find these results summarized on slide 4. During the quarter, as we expected, we faced the challenge in environment in some markets which resulted in slowing the sales growth compared to the first half of the year. We were able to quickly adapt to these economic changes due to our ongoing focus on cost reductions, productivity, and our innovative new product launches. Revenues for the quarter came in $4.5 billion and that is flat versus last year. On an adjusted basis, our EPS was $2.22 per share compared to $1.67 in prior year. Our productivity results were very positive during the quarter enabled us to meet the challenges related to volume in some markets, price mix and higher material cost. On a year-to-date basis free cash flow was flat which was an improvement from the first half usage of $80 million. Turning to slide 5, I would like to provide you with an update for the full year on our regional demand outlook. In the US, we now expect our full year demand in shipments to be up approximately 3% versus the 5% that we had discussed early this year. We did see some softness in demand here in the third quarter. In spite of this weakening demand environment, overall we performed very well from a brand and share perspective. In Europe, we continue to see industry growth improvement during the quarter. We increased our full year outlook to a demand growth of 1 to 3% as we now see demand growth for three consecutive quarters across the region. In Latin America, we saw appliance demand rebound after some moderation in demand late in the second quarter. As you may recall, we had some…

Let me start by giving my perspective on North America’s performance in the third quarter. As shown on slide 8, we saw strong branded share growth during the quarter, driven by our consumer relevant innovation and improvement in some of the product availability issues we experienced during the second quarter. Our three new product launches are well-received by consumers, but on the same time industry volumes and the pricing environment were more challenging than expected and we took actions to meet some aggressive competitive pricing pressure. On slide nine, we detailed North America’s performance in the third quarter. Net sales decreased 3% to $2.4 billion driven by lower average sales values in the quarter. I will touch on this momentarily, but this decline is largely related to reductions in three major product categories. Our North America unit shipments increased approximately 1%, while U.S. industry unit shipments of major T7 appliances decreased 3% during the third quarter. We had, as mentioned before, a strong increase in brand and share during the quarter. Our operating margin was 4.7% compared to 5.9% in the prior year. Overall the results were unfavorably impacted by lower price mix and higher material costs. Favorable cost reductions and productivity initiatives partially offset the unfavorable items. On slide 10, you can see some of our new products that we expect to continue to support our branded share growth. The Maytag brand Ice20 Easy Access Refrigerator which is the industry’s most efficient four-door refrigerator. It features an external counter height refrigerator door that holds up to five bags of groceries. We also launched the Whirlpool brand most premium front load Duet (inaudible). This is the industry resource efficient washer and dryer. Finally, the KitchenAid brand dishwasher featuring a modern version of a recessed handle found on (inaudible). I would like to point out that all of these new launches happened towards the end of the first quarter. On slide 11, the chart depicts ASU, average sales value industry trend by category. First thing you will note is that we generally buy distribution on a year-over-year basis; there is some categories up and others down. You will also note that the overall reduction is mainly attributable to two categories. We like to rest some of our price points in these categories given the competitive environment and we saw subsequently a strong in our brand and share performance. It is also important to note that our new products innovations start to provide an overall ASV lift and we continue to focus on successfully launching our new products and continuing to generate more new products in the future. Overall, I would sum the third quarter as challenging from a demand and price environment. We continue to address the green consumer relevancy product to market and keeping a strong focus on cost control and productivity. Now, I would like to turn over to Mike for a review of our international operations.

Let me start with an overview of our international business. Our international operating results continued to benefit from our ongoing cost reduction and productivity efforts and solid volume growth from our emerging markets. During the third quarter we experienced improved market conditions in Brazil, slight improvement in Europe while Asia unit volumes remained very strong. Turning to slide 13, our European sales declined 8% year-over-year to $827 million in the quarter with unit shipments increasing 6%. Excluding the effects of currency, sales were essentially flat compared to the prior year. The region reported an operating profit of $26 million during the third quarter compared to an operating profit of $14 million in the previous year. The profitability improvement was driven continued cost reductions and productivity improvement which was partially offset by higher material costs and lower price mix. Slide 14 shows a summary of our Latin American third quarter results. The region reported sales of $1.1 billion, a 13% increase from the prior year period as the appliance unit shipments increased 9%. Excluding the impact of currency, sales increased approximately 9%. Operating profit reached $143 million compared to $93 million reported in the prior year. The profitability improvement is primarily related to the increase in volume, cost reduction and productivity initiatives and increased monetization of certain tax spreads. These favorable items were partially offset by higher material cost and lower price mix. Our third quarter results in the Asia region are shown on slide 15. Net sales increased 21% during the quarter to $195 million, up from $162 million in prior year period as unit shipments increased 18%. Excluding the impact of currency sales increased 16%. On an adjusted basis operating profit reached $5 million for the quarter versus the $5 million generated in the prior year period. Favorables, volume…

Beginning on slide 19, I would like to summarize our third quarter results. For the quarter, our sales grew one half of a percentage point to $4.5 billion. Appliance unit volumes increased 5% from the prior year, while all of our regions reported unit volume increases during the quarter the overall increase was largely driven by higher unit volumes in our international operations. We continue to see a significant benefit from our productivity and cost reduction initiatives during the quarter. In addition to this, we monetized $56 million of BEFIEX credits compared to $8 million in prior year. If you recall in the prior year we saw a significant reduction in our BEFIEX monetization due to the IPI tax reduction, legislated by the Brazilian government, which expired on February 1. Finally, these favorable effects were partially offset by lower price mix and higher material cost. Before we take a look at the income statement in detail, there is one item I would like to highlight. During the quarter we recorded a $93 million accrual related to Embraco settlement agreements. This resulted in an unfavorable impact of $1.20 per diluted share on our third quarter results. Turning to the income statement on slide 20, we reported net sales of just over $4.5 billion. Our gross margins rose 50 basis points to 14.3%. The most significant favorable impacts on our gross margin improvement related to our cost take out and productivity actions and the higher BEFIEX credits, which were partially offset by lower price mix and higher material cost. SG&A expense totaled $391 million. Foreign currency translation accounted for approximately $5 million of the $9 million year-over-year decrease. Despite our relative flat sales results during the quarter, we continue to generate good SG&A leverage, as SG&A as a percentage of sales declined…

Let me summarize, overall I feel that we made strong progress this year executing against our key operational priorities. Our successful cost reduction and productivity initiatives have enabled us to significantly expand our margins during 2010, despite some unfavorable trends in the macroeconomic environment and somewhat slow growth in demand in the developed markets in North America and Europe. From a global unit demand standpoint, our expectation for moderating unit demand is largely unfolded as we’ve expected, although I’d say North America demand is a bit softer and Europe is a bit better than we previously expected. In some of our other markets and key emerging markets such as Brazil and India, we continue to see very strong growth and are creating significant value for our Company there. We remain bullish on the long-term prospects for these economies and believe that we are very well-positioned to capitalize on the economic growth potential in these markets going forward. For the full year our key priorities are unchanged. Our entire organization is very focused and aligned to execute against these priorities as we believe there the keys to successfully navigating through a somewhat volatile global economic environment. In total as we said through our guidance in July and I’ll say in reaffirming it today, we expect to deliver a record year of operating results and value creation to our shareholders this year. At this point in time, I will end and I’ll open this up for questions from our callers.

(Operator Instructions) We will take our first question from Eric Bosshard with Cleveland Research.

North American margin you had shown good progress for a number of quarters in a row and you’ve explained and given us some color that incremental price promotion, these are the factors contributed to the clientless quarter. Can you give us the sense of your outlook and confidence in the trend as we look in 4Q and as we look into 2011, where and why the margins go from here?

Let ask Marc Bitzer to answer that.

Eric, obviously we don’t give a regional forecast or guidance for fourth quarter. Let me talk about the price margin impact in the third quarter. First of all, as we expected and we to some extend talked in Q2 already about it, we did see some degradation of industry price mix during the quarter and we felt the impact as well. In particular with the some pretty aggressive competitive moves in two critical product categories already during Q2 and given our leadership positions, in these categories we decided to meet these new competitive price points. As a result of that, we saw some immediate market share gains amidst the same category. Obviously, our job is to balance that price mix as we did in the past going forward. What gives us confidence is some of the products which we highlight in the presentation, we just launched towards the end of the third quarter and that should give us momentum. At the same time, we do expect from the promotion environment that’s around us to sustain and we’ll continue to match the cost side very aggressively to mitigate that.

Eric, the only thing I would add is, in the third quarter of North America, we saw a fairly sharp change in demand which we expected to a certain degree with higher material cost and we made a conscious decision to make a pricing adjustment in a couple of key product categories. Having said that, in terms of our expectations for margins in North America, this was an adjustment, we expect to improve from here and we have the tools to be able to do that.

I’m interested in your perspective on this, Jeff. You said you’ve made an adjustment, you expect to improve from here and again I’m not trying to pin you down to the fourth quarter margin. What I’m trying to figure out is this margin going to continue to work its way towards 8% or are we seeing a structural change in price points in this business that is going to flatten the rate of improvement or margin recovery in this business back towards what you’ve talked is a median or longer term goal of someday moving back towards whatever 8% or 10%?

Well, again, as you said, if we go back to third quarter last year, we’ve made four quarters of progressive improvement. I see this is an adjustment, but not a change in direction, where we want to go.

Secondly, a similar question in Latin America, excluding BEFIEX, the volumes were good, the margins flattened out and the margins in the first half it sound nice year-over-year improvement, sequentially ex- BEFIEX the margins in Latin America eased. Can you give a little bit of color and perspective in terms of where that goes from this point?

Sure, Eric. It’s Mike Todman. Sequentially there were kind of three things that impacted our margins in Latin America in the third quarter. The first is there is a normal seasonality of business that happened kind of from the second quarter when you go on to the third quarter. We didn’t see it last year because of the IPI tax holiday. That had an impact. The second is we did experience higher material and oil-related cost in the third quarter of this year than we did in the second quarter. The third reason was that, we ended the second quarter with higher inventories, because if you remember, we saw a slight reduction in demand. We took actions to reduce production in the third quarter and that had an impact overall on the margins. I can tell you that I feel very confident that we will see margin expansion in Latin America in the fourth quarter.

We will take our next question from Sam Darkatsh with Raymond James.

Few couple quick questions here. First off the energy tax credits, that are set to expire at the end of this year, included in your guidance is there an assumption that you will hit the limit as to what you’re able to recognize or is there still some wiggle room on your behalf to maximize those credits in Q4?

Sam, this is Roy. In our guidance we do assume that we would hit the limit by the end of the year and a lot of that Sam is based upon what Marc talked about, which is the success rate with the new product introductions coming out in North America.

On a related topic then, you mentioned that you want to work the inventories down a little bit sequentially. If you can put a little color on that in terms of where we should quantify inventories by year end?

Let me start and give you a little bit of perspective in terms of the inventory build and I’ll now talk specifically about what we’re going to do and actually Marc may jump in here as well. If you look at year-over-year Sam, we’re up roughly 12 days in inventories. Now, the first thing that sort of first perspective is that we came into this year with inventories much lower than where we normally are in December, if you remember. In December 2008 we were at $2.2 billion. If you look at sort of our normal traditional exit rate in December, we’re more like $2.5 billion, and we saw some impacts of that, Marc talked about that. He talked about Latin America in terms of availability because of low inventory levels we had coming out of the year. First of all, 62 days a year ago, roughly $200 million Sam or five days of the increase from where it were at the end of the year ago is basically just what we call the normal build to get our inventories back to where we wanted inventories to be, so that takes you to 67 days. We got about a day for seasonality coming out of Asia, Deepavali this year is in the fourth quarter versus the third quarter and we got about a day here in North America, with respect to some other build for the fourth quarter. There is two days there that we call seasonal build that gets you to 69 Sam. We have about four days of excess inventory that I referenced in my script that we’re going to work to get out by the end of the year and as I said in my script Sam, that’s mostly all in North America and then we’ve got one incremental day which is transitioned inventory in North America as we transition our products. Sam, that one day will still be there at the end of the year from a sequential perspective. The sequential piece is really taking out this excess inventory and the action that Marc Bitzer and his team have already taken in North America.

Let me also allude a little bit to this one. North America has right now flattish to high inventory. It’s about what we could consider optimal. That space is two-fold. One is, yes, there is quite a bit of Q4 pre-build around some trade commitments and the other piece is we saw the market slowdown in particular during the second part of the third quarter. Obviously, it takes a little while to take that out of inventory. We have taken measures towards the end of September, in particular, on October and November to run down production to what we would consider appropriate levels of inventory, which given the somewhat choppy demand environment, will be slightly high because we got to be able to respond to the changing demand trends. What I would like to point out is also the energy tax credits and the inventory are two independent issues. Actually, if you would just peel back the onion on our energy tax credit units, actually we run lower inventories than the rest of the average, quite a bit lower, in particular in some of the new products, which cause (inaudible) a bit when we run very low inventories. These two things are fairly unrelated to each other.

We do not recognize energy tax credits based upon production under the accounting rules. You actually amortize the total expected annual demand based upon EBT. There’s not a direct to direct relationship between production in the amount of credits that you have recognized.

You’re guiding for US shipments flat to down 4%. If my math holds in order to get to the year of 3%, which suggests that you’re looking at essentially similar demand patterns on a year-on-year basis in Q4 versus Q3, but the comparison gets much more onerous and so on a two-year stack basis, it would seem as though your expectations with that things improve meaningfully, sequentially, what are you seeing that gives you that confidence to look at it in that respect?

I will concur with your first statement. Yes, mathematically, if you take our 3%, that’s where you would end up 0% to minus 4%, minus 5%. I wouldn’t conclude from this moment sequentially to have significantly improved. Actually, we do see and that’s what we expect all from four quarters a somewhat volatile market environment and that’s what we see in the first couple of weeks in October and that’s pretty much what we expect for Q4. Its obviously this is a promotion environment where you’ll have quite a bit of volatility in the demand, but where we are right now focused, it’s 3% for full year while 0% to minus 4% on the fourth quarter.

We will take our next question from Joshua Pollard with Goldman Sachs.

Can you give us a quick update on the commodity hit that you guys have taken in the third quarter through the first three quarters of the year and what’s your new expectation is for the full year?

This is Roy. Let me start and then Jeff may wish to add a couple of comment. The first part of your question, if you remember in the first quarter, we actually had favorable material costs year-over-year and then in the second quarter, we had little over $50 million impact. What we’ve said and what we’ve said on the second quarter call. Josh it still holds true today is, we only incurred about 15% of what we’re projecting for material cost increases in the first half of the year, and we have about 85% or for us roughly a $190 million of impact that will impact us in the second part of the year. For the quarter, the second part we estimated, it was right about $80 million of impact Josh, and that was 1.8 points of hit on our gross margins. You heard Mike and Marc and Jeff all commented on that in their scripts, but it all came back to just under 2 points of negative impact on gross margins. We’ve been guiding all year $200 million to $300 million, we’re still in that range, but we would now tell you, Josh, we see it at the low-end of that range.

You see it at the low end, is it right to assume that there’s a slightly higher impact, negative impact in the fourth quarter coming?

Yes, a small. Just if you do the math that Roy gave you, but again it’s pretty much fixed at this point in time and we’ll only get two and a half months or a little over two months left and what’s going to be and that’s pretty much we are there.

My other question it’s just around taxes, as we think about it and we think about 2011 versus 2010, you guys have pretty significant net operating loss carry forwards in the U.S. and also in Europe, so I would expect the tax rate in those regions to be zero. Whatever the total benefit will ultimately be for the energy tax credits in the U.S. that will go away, and then you guys are sort of looking at somewhat standard tax rates on your pre-tax income in Asia and in Latin America. Is that the way to be thinking about your taxes for 2011 versus 2010 or should we be thinking about it some other way?

Josh, you referenced a number of variables there and you talked about the effective tax rate and cash taxes as well, but let me say it as simply as I can. We said we typically don’t get into 2011 guidance at this point in time, but I understand the reason for the question. It’s an important question because we’ve had the energy tax credits, which have basically taken us to a negative rate. I said on the last call and it’s still true that you take the energy tax credits out and you’re correct, they are currently set to expire at the end of this year. I don’t know whether there will be any action with respect to future energy tax credits or not, but you’re right, they are set to expire. Once they expire, if you look at 2011 and you take that out of the picture, you go back to that rate that I’ve been referencing for some time, which is that high 20% tax rate for the global business. That rate does include the benefits of BEFIEX, I know there have been some questions whether BEFIEX was in or out of that number, so when I step back Josh and I look at sort of the run rate, tax rate for this enterprise looking at our current dispersion of earnings to the second part of your question, I see it in a high 20s to 30%.

We will take our next question from Laura Champine with Cowen and Company

Just a clarification on the inventory line, are units up about the same as dollars or given the rising raw material environment are units not up as much as dollars year-on-year?

Laura, let me answer it this way. If you look at because I referenced to Sam the days, we do have some year-over-year benefit. For Whirlpool, a day of inventory is $42 million this year. That’s probably $4 million higher than it was this time a year ago. There is some benefit from a days perspective there. Beyond that I don’t think there’s any significant shift between units and dollars.

On the slide that you had on page 11 that talked about the average selling value focused on a few categories. What are those categories and what drove those categories down?

Obviously the reason why we didn’t put up the categories is because we didn’t want to publish it. Let me put it this way, the one on the very right side is one which has been very far, which was front loaded. The near ones are pretty much what we call P6 or P7 categories, but it also shows you yes on washing machines, there is an exposed price competition out there but it’s not across all P6 or P7 categories.

Was Whirlpool a leader in price competition in Q3 and is that what drove you’re units much better than the industry?

I wouldn’t say that.

There are a couple of product categories. Certain competitors have been extremely aggressive for some time. Now in the third quarter that we’re in a position to launch new product innovation. In both these categories, we decided it was appropriate that we come back to where others were establishing market prices. We absolutely have not been driving the leaders in driving that down, but what we found, which we knew that at a comparable value for products with our brands that we would have a positive impact in share and we did. At the same time though on top of that very importantly, we’re establishing new products in the marketplace, which over time will actually raise the mix back up.

We will take our next question from David MacGregor with Longbow Research.

Just a few questions for the model, if I could. The BEFIEX run rate going forward, $56 million on the quarter, should we be thinking about that as the quarterly run rate going forward or just help us think through that?

David, look, for the year now - last call, I said we thought it’d be roughly $165 million given the run rate in the third quarter. What we’ve seen in the fourth quarter, it will be more like $195 million now for the year. If I remember right, it was about $41 million and $47 million in the first two quarters and then $56 million this quarter and obviously that is $51 million left in the fourth quarter.

For 2011, I realize you won’t talk a lot about ‘11 at this point but -

David, it depends on sales levels and it depends on the mix of products within that, so there’s really not basis that - we really can’t give you guidance…

For 2011, again, forgive me for trying to reach forward here a little bit, but pension and OPEB cost, if rates were to remain as they are now, how does that change year-over-year?

David, I don’t really want to go into 2011. First of all, I can’t go into 2011 pension costs because I don’t know the variables yet and so I wouldn’t be able to do that. If you look at sort of all up pension and OPEB cost, this year, because we have the OPEB credit in there, it’s about $80 million. If you look pension 401(k) OPEB, all as a bundle, its $80 million. If you take the OPEB credits out, its $140 million and that’s basically flat-lined with what it was last year. Again depend upon where discount rates go, David, particularly in this environment, I just can’t speculate on what that’s going to be next year. Probably the one point I can make to you though with respect to cash and funding of pensions as you know, we have roughly $1.3 billion unfunded status in our defined benefit plans. Of course, they’re frozen now, but we see the minimum funding requirements given current pension rules to be roughly $200 million in 2011 and that’s an important point from a cash perspective. I just can’t speculate yet, David, on the expense side.

The competitive environment right now, you’ve got Samsung and LG that have been very aggressive in the U.S. market, we’ve been talking a lot on this call about the third quarter. You certainly are formidable target for them. I mean, you are a big player in the North American market, and it’s easy to see why they would focus on you from a targeting standpoint? If we talk about Latin America for a moment, you’ve even more formidable presence in that market and our sense is that LG and Samsung are dialing up the gas down there as well. Can you just talk about what you’re seeing in terms of the changing competitive environment in Latin America and sort of talk if you can about how that plays over the next 12 to 18 months?

Frankly, I don’t think we’re seeing today significant change in terms of the competitive environment and we feel pretty good about our position there. We continue to actually grow our market position. We feel good about the brands and what we are offering in that marketplace and so we’re very competitive and that we’ll continue to expand our margins and our businesses in Latin America.

In North American market, these two competitors seem to be motivated more by share grabs and by profitability. Is it your sense that the same situation down there?

I don’t know that we can David speculate on others intentions. What we do know is as part of our business, we know that we have very competitive cost structure vis-à-vis anyone in the world. We know our brands and the markets we serve are preferred brands. What others do is up to them, but as long as we can offer good values in the marketplace, bring the latest innovation, continue to manage our cost structure, I feel very confident that we can compete with anybody in the world.

Last question, just North America, the Black Friday channel sales, seems like the independents are going to get in this year whereas they weren’t last year, so it would seem that maybe there is more product going into the channel. I wonder if you could just talk about how the channel sale this year compares from last year?

I’d right now say from an overall perspective. We’re in the promotion environment, but I don’t expect that site to play out very different from the previous years. We see the typical channel moves, the typically exposure of different channels at different degree, independent retail tend to be less exposed from Black Friday than other retailers, but they are still somewhat participating. That’s what we would expect for Q4 as well.

We will take our next question from Michael Rehaut with JPMorgan Securities

You had mentioned, Roy, that you’re targeting some reduction in inventory about four days worth due to the slightly softer than expected demand in North America, depending on the success of that inventor reduction, is that how we’re to think about whether or not you’re going to hit the - let’s say if you fully get rid of that inventory that you could hit the lower end of EPS? I know you talked about cash flow as well, but from an EPS perspective, is that the main driver in the remaining range from an EPS perspective?

My comments, Michael, were more with regards to the high end or the low end of the cash guidance, but not from an EPS perspective.

In the guidance, if you do have that inventory reduction and your facilities are running at a lower rate, wouldn’t that impact margins as well?

Yes, if your question is, did we have some overhead in that excess inventory; the answer is certainly we do. We think that’s a few tons of a point at the end of the third quarter, but you are correct. There is definitely overhead sitting on the balance sheet associated with that excess inventory.

The expectation of the impact is clearly in the guidance.

Yes, absolutely.

That’s built in there. Also, looking at Europe tracking at this 3% plus or minus for the full year. Demand is coming a little bit better than expected, but can you talk about obviously at earlier points, you were at 5%, 6% type of range from like, let’s say ‘03, ‘04 to ‘07. How do you feel getting back to that? I mean, is that something that given some of the improvements you can see over a 12-month basis or is it more of a 24- to 36-month basis?

Michael, let me just give you a perspective. As you can see, every quarter we are making progress in terms of expanding our margins in Europe. We’re focused very much, and I talked about this before ensuring that we drive the right cost productivity, so that as volumes begin to come back, we can absolutely see that our margins are going to continue to expand at a pretty strong rate. I’m pretty confident that we will get back to our previous operating margin levels. I’m not going to give you the exact timeframe on that, but I certainly think it’s well within our reach.

Last question if I could, the litigation and the settlement with regards to the DOJ; one, I just want to make sure, is that kind of end of the road in terms of this path in the U.S.? Are we completely kind of through this issue in the U.S. and if you have any update, if there is any action going on from a European Union perspective?

Well, Michael, as we’ve disclosed for some time now that we are cooperating with several jurisdictions. We have settled the two we’ve talked about which is in Brazil and U.S. Other jurisdictions, we’re still obviously in discussion with them, cooperating on, but there is really nothing new we can say about that.

We will take our next question from Jeff Sprague with Vertical Research Partners.

A lot of ground covered, just a couple of other things. We kind of hit on this inventory issue quite a bit, but how does what is currently in your excess stock line up with where the market is? In other words, is the stock in laundry is it at the wrong price point? Is that why it actually backed up or is it kind of just a more generic demand issue?

It’s pretty simple actually. The demand in North America was slower than we expected going into the quarter. Big part of the slowdown started by the middle of the quarter. We decided to start making adjustments and in terms of the mix of inventory and anything like that I don’t - again we’re talking about four or five days. That’s not an unmanageable amount for our kind of business.

Roy, you went through that in pretty good detail, but I was just going back and looking at inventory to sales Q4 of the last several years and it’s been about 50% plus or minus which would say $2.4 billion as where you’d want to end the year on a normalized basis, and you are actually $600 million above that right now.

I was actually computing $2.5 billion, but we’re in the same relevant range.

You only really see a couple of $100 million needing to come. You’re going to be above $2.5 billion, but you wouldn’t view that as abnormal given the seasonality and product transition that you are talking about?

The point I was trying to make. Jeff is that we came into the year with low inventory levels. We’ve talked about that first couple of quarters. We have the intention of building a couple hundred million dollars of inventory from where we ended the year last year. In the third quarter, that’s typically a quarter if you sort of look at as year-in and year-out where we use about $100 million in terms of incremental inventory build. This year that incremental inventory build was $300 million and that 200 delta was my point with respect to this access inventory from traditionally where we’re at in the normal inventory builds and seasonality. I’m not trying to imply that we now lifted a new level with respect to what’s normal. I’m just trying to isolate how much of this is what we intend to do, how much of this is for a seasonality based build, which are two days and then this excess of four days that we have. As I said Jeff earlier, we do have this one day in transition, but Marc and I would both tell you that’s going to be with us for a while until we get through these product transitions.

Just trying to reconcile the comments on negative mix versus branded share being strong, so there is mix erosion within the branded business, but you are shifting more towards branded overall. Is that the correct way to think about it?

For North America, yes we have a significant mix goal towards our branded business. We had in the overall mix, which is obviously the combination of brand mix, trade partner mix, product mix. In the third quarter, we had a slightly negative mix, which is different from the first half. With a lot of new product innovations coming in, we expect to stabilize mix going forward.

Finally, Roy could you just true us up on where the BEFIEX balance is at the end of the quarter given all the currency machinations and everything that’s gone on?

The ending BEFIEX balance will be in the 10-Q this afternoon, 590. I’ll tell you why I’ll look at that up, Jeff, and if I’m wrong I’ll come back and clarify it on the call. I believe it’s going to be 590.

We will take our next question from Robert Kelly with Sidoti and Company

You talked about the slowdown hitting you in the second part of 3Q and making some adjustments with your inventory. What is your sense of your key customers’ inventory? Did they have to make adjustments as well and how does that play into your expectations of price mix for the coming quarter in North America?

There is few reliable data point, which gives you good statistics on customer inventory level, on an overall level. The two hints which we have, is one, if we compare overall sell-in for the industry, the data points which we have on sell-through for the industry, actually sell-through is even softer than sell-in, so you would expect that the inventory is slightly elevated. The opposite appears to be true for our branded business. Actually our sell-through data for the third quarter is better than the sell-in data. On these data, we have also from our trade partners reliable data and their inventory levels I would describe our branded inventory levels with trade partners fairly balanced.

Your expectation is price/mix stable or slightly better in 4Q in North America?

We are working on mix initiative. We have a lot of new products, which will support this one. Be careful, when you compare sequential results year-over-year because you have a promotion period in the fourth quarter.

We have no further questions at this time. I’d like to turn it back over to the floor for any closing comments.