Good morning and welcome to Pall Corporation’s conference call and webcast for second quarter and fiscal 2008. (Operator instructions). We’d like to remind you that the company’s second quarter press release is available on Pall’s website at www.pall.com. Management’s remarks this morning will include forward looking statements. Please refer to slide 2 or request a copy of the specific wording of this qualification for the company’s remarks. Management also uses certain non GAAP measures to assess the company’s performance. Reconciliations of these measures to their GAAP counterparts are included in the slides at the end of this presentation. At this time I will turn the call over to Mr. Eric Krasnoff, Pall Corporation’s Chairman and CEO, please go ahead sir.

Thank you, good morning and thanks to all of you for participating in our call today. I am sitting here with Lisa McDermott, Pall’s Chief Financial Officer and Frank Moschella, Pall’s Corporate Controller. On Friday Pall Corporation reported sales and earnings for the second quarter ended January 31st 2008 and the completion of the restatement of prior period financial results. The company previously announced that the audit committee of its Board of Directors with the assistance of independent counsel completed its inquiry with respect to Pall’s previously announced understatement of US Federal income tax payments and provision for income taxes. As a result of the matters that led to this inquiry, the company restated its financial statements for the fiscal years 1999 through 2006 and for the three fiscal quarters ended April 30th, 2007. The restatement of those prior period financial statements is now complete and reflected in the company’s full year 2007 annual report on form 10K filed with the SEC this past Friday. The company concurrently filed its form 10Qs for the first two quarters of fiscal year 2008. With these filings, the company is current with its SEC reporting requirements and in accordance with all agreements with its lenders. It has been eight months since management discovered and self reported that Pall had understated its income tax provisions and payments in several prior periods. While much of this arduous work is behind us, still significant challenges remain. We have yet to settle with the IRS and we continue to cooperate with impending government inquiries as well as the civil litigation that has ensued. While we work through this, we are retaining a sharp focus on the substantial opportunities before us to increase sales and earnings. Our plan for today is to review the filings and business results at the half year mark relative to our expectations for fiscal 2008 and we will certainly leave plenty of time for your questions. For the most part, fiscal 2008 is tracking to plan. Gross margins and the forward going tax rate require specific focus and updated guidance and Lisa will address this in just a minute. While the path may not always be linear, Pall’s strategy to generate sustainable profitable growth are working. The top line has been growing steadily as we further diversify by customer, by market and by geography and as we see the business for the future. Our well established productivity improvement and cost reduction initiatives continue to enhance service to customers while lowering costs and increasing efficiency. We are making consistent progress towards reducing SG&A and are well ahead of our goals in this area. Pall’s business fundamentals are sound. We have a successful franchise and the strategies, plans and talent and drive to achieve our long term goals. Now with that opening, I’ll hand this off to Lisa to talk about the restatement and give her report on where we stand midway through fiscal 2008 against key metrics.

Thank you Eric and good morning everyone. I’d like to start with a discussion of the financial impact of the restatement which is shown on slide 7. As indicated in our 2007 form 10K, the restatement involved the financial results of the fiscal years 1999 through 2006 and the first three quarters of fiscal 2007 and primarily related to the taxation of inter-company transactions during those periods. The restatement for each year was limited to impacts on income tax expense and related interest expense. Therefore, earnings before interest and taxes remain unchanged for all the periods impacted. Both the audit committee and management undertook a careful review of the income tax area to complete the restatement. On an aggregated basis for the periods concerned, the restatement resulted in an increase to income tax and related interest expense of $278 million including estimated penalties. By far the largest item in the restatement involved the deemed dividend treatment under the US Internal Revenue Code of the accumulation of certain unpaid inter-company balances owed by a US subsidiary to a foreign controlled corporation. The restatement also includes items related to the taxation by US and foreign taxing jurisdictions of certain other inter-company transactions identified during the course of our review. The existence of the deemed dividend going back to our fiscal year 1999 undermined the company’s 2006 plan intended to benefit from the American Jobs Creation Act and in addition to the accumulation of charges through fiscal year 2005, also resulted in a large charge in fiscal 2006. This is because the deemed dividends resulting from the inter-company payable balances underlying the restatement created a balance of previously taxed income prior to the repatriation that could have been repatriated without any additional US Federal income tax irrespective of the act. The restatement reflects the tax consequences of the inter-company payable balances, one effect of which was to eliminate a previously recorded incremental tax provision in fiscal year 06 associated with the intended repatriation under the act and to reflect an increase in income tax expense in fiscal year 2006 because the repatriation of that previously taxed income caused the deemed dividend inclusion for 2006 to increase to reflect the relevant inter-company payable balances during the period by virtue of the technical operation of the Internal Revenue Code. Although the restatement is significant in its magnitude, we have maintained access to borrowing capacity under our revolving credit agreement with our bank group. We believe that this, combined with our continued ability to focus on areas to improve cash from operations is sufficient to handle liquidity needs in the near term, including any future amount that we may be required to pay as a result of the matters underlying the restatement to US or overseas taxing authorities. Our net debt as a percentage of net debt to equity was 23.2% as of the end of January and this is after having paid the $135 million deposit to the US Treasury and total indebtedness of $757 million compared with EBITDA on a trailing four quarter basis stands at only 1.8 times. Our balance sheet is still strong as is our liquidity. Furthermore, we have maintained investment grade ratings from both of our rating agencies and have obtained all necessary amendments and waivers from our lenders and other counter parties during this process. Turning now to the estimated tax rate for fiscal 2008, we estimate the effective rate will be approximately 33%. The deemed dividend matter has been remediated with no impact to our forward going tax rate. The largest impact to our income tax rate prospectively is derived from the expect decreased in benefit from Puerto Rico given the very recent issuance by the IRS of the so called tier one issue related to all multi-nationals with Puerto Rican subsidiaries in the wake of the repeal of section 936. We expect our effective tax rate to approximately 30-32% over the next year or two which could be impacted by various factors. The timing and amount of fund repatriated in the US from our foreign operations and the geographic mix of income in tax jurisdictions that have a broad range of statutory rates are among them. For example, a change in Germany’s tax rates resulting in a charge of about $2.5 million in our first quarter from the revaluation of deferred items, increasing the effective rate for the quarter to over 36%, excluding this charge the rate was 32.3% in the quarter. That said, it is factored into the 2000 and tax rate estimate I mentioned a moment ago. Our effective tax rate may also be favorably impacted by our continuous improvement initiatives to rationalize our global supply chain, legal structure and manufacturing footprint. While it is our objective to reinvest accumulated foreign earnings overseas [investmently], we recorded a charge to income tax expense of approximately $22 million in the fourth quarter of fiscal year 2007 in anticipation of repatriating approximately $160 million of foreign earnings in the near future to help fund the cash outlay related to the tax matter. As noted earlier, more details of the restatement are in the 2007 form 10K, so with that, let’s move on to Pall’s financial results for the quarter and year to date which are displayed on slides 8 and 9. Sales in the quarter increased almost 15% and at the half year mark are up almost 14% as reported. Given our international profile with two-thirds of our revenues derived outside the United States, we are well positioned to benefit from the weak dollar. Although we are a US domiciled company and investment in Pall is naturally an investment play overseas as well, in fact foreign currency translation against the weak dollar has added approximately 6.5% to our top line, equating to about $64 million for the six months and approximately $0.04 in earnings per share. At the onset of the fiscal year, our expectation was for local currency sales growth in the range of 5.5-6.5% with industrial slightly outpacing life sciences. At midyear we’re ahead of this revenue guidance with both businesses near even. This sales growth is despite the fact that the microelectronics market is in the midst of a cyclical downturn, even with this, we expect overall sales growth to be within this range for the year. If the US economy continues to slow, it may make us more cautious. The Asian economy in particular shows no signs of slowing. Continued investment in emerging markets is a key factor in driving sales. System sales grew 40% in the quarter and just 34% in the six months. For the full year, we expect system sales to increase approximately 22% and to represent approximately 12% of our total sales. And over 80% of these sales are in Pall industrial. Now as shown on slide 10, gross margin in the quarter came in at 46.1% compared with 47.1% last year. The tremendous growth in systems sales which depressed margins in the short term was the key driver of this result, but there were other factors, particularly in the industrial business where we saw gross margins slip by 2% in the quarter. The most significant of these relates to incremental costs in Europe due to the facilities rationalization program and mix within consumables where we have seen a reduction in higher margin consumable product sales such as in microelectronics and an increase in lower margin hardware sales, such as in aerospace and transportation. While these served to dampen gross margins in the quarter, improved pricing contributed about 30 basis points to gross margin improvement and myriad manufacturing cost reduction and efficiency initiatives also helped. Gross margins at the half year mark stand at 46.3% compared with 46% last year with expectations for continued strong system sales for the balance of the year, particularly in this quarter, meaning the third quarter, as well as the continuation of mix changes within consumables we’ve seen in the first half, we now expect gross margins to be flattish for the year. We are committed to gross margin expansion by continued focus on price increases, systems margin improvement, continuous improvement activities and cost reduction programs. Selling, general and administrative expenses, excluding the impact of foreign exchange which has added about $9 million was up about 1% in dollars in the quarter. As a percentage of sales, SG&A reduced 230 basis points to 28.6% from 30.9% in last year’s second quarter. For the six months, SG&A excluding the estimated impact of foreign exchange increased 2% and as a percentage of sales came in at 29.5%, 170 basis points lower than the six months of last year. For the full year 2008 we expect SG&A expenses as a percentage of sales to be about 29%, an improvement of approximately 100 basis points over fiscal year 2007. The improvement in SG&A as a percentage of sales reflects the impact of cost reduction initiatives as well as leveraging a largely fixed cost pool on a growing top line and we are pleased with these results. The net earnings in the second quarter were $48 million or $0.39 per share compared to $44.3 million as restated or $0.36 per share last year. Earnings per share on a pro forma basis excluding items principally related to the company’s cost reduction initiatives and costs related to the tax inquiry were $0.46 per share compared to $0.35 per share a year ago. Net earnings in the six months were $84.1 million or $0.68 per share compared to $60.3 million as restated or $0.49 per share last year. Earnings per share on a pro forma basis excluding the items that I mentioned a moment ago were $0.82 per share compared with $0.57 per share a year ago. Taking all of this on board, we expect earnings per share excluding restructuring and other charges to be in the range of $1.82 to $1.92 for fiscal year 2008, assuming the dollar remains at about its current rate. This excludes restructuring and other charges recorded in the first half that equated to about $0.14 per share and such charges in the second half that may range from $0.03 to $0.06 per share. In addition to the remarks I made earlier about the company’s liquidity, I will now add some additional color. Free cash flows for the first half have been negatively impacted by the tax payment of $135 million as well as what has been an expected increase in capital expenditures as we move through our facilities rationalization initiative. Capital expenditures were approximately $53 million in the first half of fiscal year 08, up about $20 million for the same period last year. We expect cap ex to be below our original expectation of $130 million for the full year as we move certain expenditures into next year. Depreciation and amortization for the six months was approximately $46 million and is expected to be about $95 million on par with last year, for the full year. With [the lots] depreciation and amortization, EBITDA has come in at about $211 million for the six months, up 21% year over year. Our goal of reducing the investment in non cash working capital continues to be challenging. Inventory turns were 2.6 compared to 2.7 last year, reflecting the continued impact of the facilities rationalization program and the growth in system sales, particularly in the general industrial markets. Overall DSO was 83 days compared to 78 days in the second quarter of fiscal year 2007. DSO in life sciences was 63 days compared to 61 days last year, while DSO in industrial increased to 95 days from 90 last year. We are addressing this through tightened credit management and lean inventory and reduced lead time initiatives and we expect to see cash generation in the second half show marked improvement. We paid dividends of approximately $29 million, up 9% from a year ago reflecting the $0.01 per share increase last January. Demonstrating confidence in our ability to generate cash and our commitment to our shareholders, we also just announced another dividend increase, taking the dividend to $0.13 per share per quarter. This represents a 44% increase since 2004. Other potential future uses of cash that are constantly under review include share repurchases and while we’ve been out of the market for the duration of the tax matter, we have $348 million available to be expended under the Board’s authorizations and certainly acquisitions are a potential use of cash. These would be aimed at acquiring complementary technologies that enable us to practice total fluid management. Well, Eric has said, this has been a difficult time in Pall history, the testament of a strong company and its management team is the ability to weather such challenges and come out on the other side a stronger company. We are pleased that as of January 31st 2008, we believe that we have remediated the material weakness with respect to tax accounting that was identified in our year end testing. Rest assured, we are as committed to sound fiscal practices as we are to executing business strategies to build earnings and cash flows and we continue to be confident and excited about Pall Corporation’s prospects and opportunities. Thank you very much for your attention this morning and for your patience during the last few months. And with that, I will hand this back to Eric.

Thank you very much Lisa. I’ll just make a few remarks about our major markets and outlook for the rest of the year. Unless otherwise notified and noticed our comments will be in local currency for percentages. After this we’ll be happy to take your questions. Looking at Pall microelectronics, sales for the first half of the year are tracking slightly ahead of planned. That’s despite the slowdown in the semiconductor industry which represents about 60% of our microelectronic sales. The other 40% of the business comes from the less cyclical macro-electronics markets. The current cycle is not as severe as prior slowdowns as evidenced by the fact that sales are down only slightly for the year against tough comps. Industry forecasters are now projecting that the integrated circuit market will remain sluggish through calendar 2008. With our market inroads we still expect to be about flat for the year. For perspective, Pall sales in microelectronics fell about 20% during the 2002 downturn. At this juncture it appears that the cycle and its impact on Pall will be different. Why? Well for one thing, the semiconductor industry has taken measures itself to mitigate the severity. Another, now ubiquitous must have consumer electronics products have made the macro-electronics market much larger than it was six years ago. Our strategic diversification into the macro side has enabled us to capitalize on the vast global demand for these devices and we’re continuing to diversify into other emerging opportunities, particularly solar cells to increase revenues and further reduce our sensitivity to the more cyclical side of the business. Sales in aerospace and transportation increased almost 12% in the quarter and over 8% year to date. Orders are strong up almost 15% fueling our belief that we have entered a period of sustained growth in A&T as some of the 16 or more development programs we’ve been working on go into production. At this rate, we’re ahead of our mid-single digit growth expectation for the year and believe there is potential to finish higher. General industrial is on track for another solid year led by municipal water which is up over 42% at the halfway mark and industrial manufacturing which is up 15%. Overall, sales in general industrial increased more than 9% in the quarter and 10.5% for the year. Sales in the Western Hemisphere for general industrial have been very strong, posting an 11.5% increase for the first six months. Our sales in Asia soared 24% over this period and exceeded our Western Hemisphere business. The rate of industrialization in China is just staggering. Consider that China is currently constructing the equivalent of two 500 megawatt coal fired power plants per weeks and the capacity equivalent to the entire United Kingdom power grid each year. The markets we serve in general industrial are at the heart of industrializing societies. Pall technologies enable increased production, regulatory compliance and resource conservation. These markets have been characterized by tremendous global investment over the past several years and new or added capacity and in plant upgrades. The investments have been a boom for Pall systems. Whether these systems are replacing [diotenatious] earth in a brewery or enabling municipalities to recycle water in areas such as drought stricken Australia, each system we sell sets the stage for a mutually beneficial long term relationship. Our backlog in general industrial is also healthy and we remain confident. Let’s switch over to life sciences. Medical has grown by low single digits so far this year but we expect the full year to be down slightly. The reduction is in the blood thinner part of the business. We lost a key contact of tender in Canada and will see the impact in the third quarter. Our whole blood filter has just been approved for use in blood thinners by the Japanese Red Cross and that will contribute but not until next year. New products such as the Acrodose platelet system and creates adoption of Pall aquasafe water filters and other produces that help prevent hospital acquired infections and greater growth in Asia as these countries move into the direction of universal blood filtration create opportunities for longer term growth. Pall biopharmaceuticals had an exceptional quarter of revenue growth with local currency sales up over 20%. This brings us to 15% growth for the six months and puts us well ahead of our original expectation of high single digit growth for the year. We now expect another a year of double digit growth in biopharmaceuticals with the second half just a bit slower than the first half. We have felt production cutbacks at a few major biotech accounts in the US. Impact on revenues has been more than offset by strong systems sales and strong end user demand for consumables, particularly in our European biotech and vaccine production markets. The key here is that customers are investing and they’re choosing Pall equipment for their factories. In this industry, every million dollars that we can sell eventually results in a $300,000 a year consumable payback when it goes into full production and at much higher margins. Now to sum up, backlog overall remains healthy and while we are cautiously optimistic given the economic climate, prospects for the full year are on track. We continue to make good progress reducing SG&A and attack gross margins which remain challenging. We estimate that the segment operating profit reduced by corporate expenses will come in at just about 15% of sales and as Lisa said earlier, this year’s tax rate looks like it’ll be about 33%. Clearly, this will be an area of ongoing focus. Our full suite of process strengthening and productivity initiatives is driving improvements to the top and bottom line. We’ve made considerable progress toward the goals laid out in our 2009 strategic plan and we are now developing a new set of plans to take us out to fiscal 2013. We look forward to sharing our progress towards our 09 goals and laying out the new five year plan and goals for Pall Corporation at an investor conference later this year. Now with that and with the help of our conference operator, we are looking forward to your questions.

(Operator instructions). Your first question comes from Dan Leonard.

Hi, good morning. My first question is for you Eric, have you seen any change in business conditions since the end of your January quarter over the last two months?

No. I mean that’s a very broad statement but generally, no, nothing other than the normal little ups and downs. February was actually a very strong month.

So nothing macro-economy related that you’ve noticed in your business?

No. You know we keep our hands on the pulse of the US economy and potential eco affects in Asia where almost half of say China production still comes back to the US, but we have not seen it yet.

Okay and my second question for Lisa, Lisa when does the interest expense normalize?

The interest expense will normalize when we settle with the IRS, such date, you know unknown because we are accruing interest expense on the full amount of liabilities that we’ve recognized in the financial statements.

Okay, thank you.

Your next question comes from Jeff Zekauskas.

Hi, good morning. Can you talk about the income taxes payable noncurrent item of $220 million and when you would expect that to go to zero?

Sure. The new line item that we added into our 10Q that shows the noncurrent income taxes payable, first and foremost that was done in accordance with the adoption of a new accounting standard where you have to reflect your classification of your income tax liabilities different than under the prior accounting standard that governed our 10K. That said, that which was Fin 48, thank you Eric. That said, they’re classified there as long term, certainly because we don’t expect them to settle within 12 months following each 10Q and right now it’s uncertain as to when they would settle. You know there is uncertainty surrounding several audits that are ongoing, both in foreign tax jurisdictions as well as in the US.

So is that your estimate of cash outlays in the future having to do with tax matters that are still in dispute?

Based upon the accounting standards, yes that would be our more likely than not estimate of cash outlays in the future.

With the characterization will not necessarily be in dispute, these are years that have not settled as well as there are issues that may be in dispute. And you know obviously this is our best effort, we’ve been, these numbers have been gone over by more fine tooth combs than I knew existed. But we think these are very, very reasonable proper numbers and in reality we may settle higher or lower than those numbers.

And then lastly, in the segment commentary in the Q, it said that for overall life sciences in local currency you expect to grow about 4% for the year and in industrial about 6%. And both those growth rates are lower than what you experienced in the first half. So that is in the verbal commentary in the conference call you seem to be more optimistic than the written commentary in the Q, can you talk about that?

Sure, our guidance as you recall for the year in local currency growth was 5.5-6.5% with life science on the lower end and industrial on the upper end. So we still feel that we are within that nest of guidance that was provided at the very beginning of the year. Having said that we do see a slowing down in the medical business for 08. We haven’t seen it in the first half, but we still expect it to be coming. And countering that we’re seeing more strength than expected in biopharmaceuticals. If that continues, then life science may well do more than what we are projecting. On the industrial side, the markets are at this point quite robust but to the first question from Dan, we have to factor in something for the US economy.

Okay, thank you very much.

Your next question comes from Richard Eastman.

I just have a question on the equipment influence on the gross margin line. Lisa or Eric, are we seeing worse pricing or is you know some of the margin impact driven by what we’ve had in backlog flowing through the P&L? I mean what’s really happening on the equipment side?

With our systems sales, it’s hard to look at it quarter to quarter and to make trend judgments. You know the mix in any quarter can be different. Certain systems as a class have lower margins but also a higher payback in terms of higher margin disposables and a quicker payback. So depending upon that blend it can be different. I think we need to look at say three of four quarters and keep that line going to get the proper sense of how the business is doing.

I guess we were under the impression the newer business that’s being booked on the systems side is better margin business, is that still?

That is correct, we saw a 600 basis point improvement last year in systems and you know so we’re already on a much higher threshold for comparisons, but looking at the mix between say a biopharmaceutical system or water system or an energy system, each are different in terms of their margins overall.

Okay and then just a quick question, just to go back, I just need to simplify this a little bit, on the tax liability, the $278 number differs from the $135 escrowed number which was an original estimate. Is the primary difference there this issue with the jobs creation act and backing that out?

No, but the $135 million represented at that time are best interest of liability and some of the interest payable and was deposited principally to stop the costs running on some of the interest. You know such things as foreign tax credits reduce your cash outlay although you do expense them when you utilize them, when you take charges, so some of the difference is attributable to the difference between cash and what you book. And you know there are other items in there related to foreign tax jurisdictions as well.

Okay and the amount, the $124 million that you identified as potentially additional penalties, is that, that’s over and above the $278 and that is a function of things that are still in dispute, primarily?

That is over and above the amount that we’ve accrued and recognize that we have not accrued that because we believe that it’s unlikely to be assessed.

Unlikely, okay. Okay, very good, thank you.

But there are penalties in the $278.

There are penalties but the number that was being questioned is over and above what we’ve accrued and what we’ve accrued we think is more than likely to come to fruition and the supplemental disclosures about possible penalties we have not accrued but are required to disclose.

Okay, very good, thank you.

(Operator instructions). Your next question comes from Jonathan Groberg.

Good morning, thanks for taking the call. Can you just maybe, incredible strength in the bio pharma market, can you maybe expand just a little more on that? Could you just maybe what percent of your bio pharma sales in the quarter were systems since you said that kind of offset some slowness at the bigger biotech customers and then maybe just describe geographically where you’re seeing strength, maybe by class of drug. I know you mentioned some vaccine pickup and maybe even if there are certain, is this being driven by certain customers or is this more broad based?

You know we characterize our market as very broad, we have, we’re not specifically focused on biotechnology although it’s a very fast growing segment. So we’re happy to sell to smaller traditional producers of you know both classic as well as biotech. We’re very strong in vaccines which we mentioned before which is a rapidly expanding area and we’ve also over the last five or six years been focusing on single use disposable formats, you know whether those are full systems with bags or just disposable cartridges with plastic housing. So I think we’ve positioned ourselves right for the current phase of the market. We have taken some decent hits with the reduction in the Easter production in the US but Europe has more than made up for that, very, very strong results in Europe an increasing return on our investments in Asia. We have a life science validation center for biotech and pharmaceuticals in India which we opened last year in Bangalore, we just announced a day or two ago an opening of the life science technical center in China and we’re continuing to invest heavily throughout that region as well.

And then what percent of your bio pharma sales are systems.

Of course I forgot to answer the first question you had, it’s 15% with systems.

In the quarter?

Yeah, which is a growing number for us and we hope that number grows even more.

The systems business in biopharmaceuticals tripled in the quarter.

And do your systems in bio pharma have the same kind of negative, as big of a negative impact as the systems on the industrial side relative to the consumables that you sell or are they higher margin products?

They’re higher margin than the industrial.

But still lower than the consumables gross margin.

Okay and then just a follow up on some of these questions about the economy, I mean taken that for example your position in the municipal water market and given maybe what’s happening with expectations for municipal budgets, I mean are you seeing any indication of kind of longer sell cycles, more signatures, cancelled orders, I mean I’m not exactly familiar with how municipal purchasing processes work, but are you seeing anything that might indicate that people are getting a little nervous about budgets?

No. In the municipal water market in the US where the largest part of our business is present, these are generally funded by longer term bonds. And people do not go to membrane filtration unless they have a real problem. You know, this is the sledgehammer of solutions to water filtration problems, they’ll try chlorine first, they’ll try sand filtration but if they have a contaminated water source and they need to go to a Pall product, they do. I mean if they’re out of compliance.

And in fact all orders were up about 50% in the quarter, in the second quarter on municipal water.

And we think we’re just beginning to get strong penetration outside of the US in our basic drinking water filtration part of the business.

Okay, great and then just two factual questions Lisa, can you maybe tell us what you in the $278 million of the cumulative impact here of the taxes and the penalties, can you maybe just tell us what is assumed for penalties, I don’t know if you’ve assumed some type of rate or maybe let us know. And then I just wanted to clarify your earnings guidance for 08, the adjusted number is $1.82-$1.92, I just wanted to make sure I heard that correctly, thanks.

I’ll start with your latter question, yes that’s correct, our adjusted guidance including the forward going rate for 08 of 33% is $1.82 to $1.92. With respect to the former question, you know given that we’ve not settled the matter with the IRS as well as other taxing jurisdictions and the ongoing investigations by various regulatory authorities, it’s just not appropriate to comment on that at this point.

Okay, thank you very much.

Your next question comes from David Chung.

Thanks very much. Just had a quick question, you talked about the mix and the industrial in terms of your consumables to some of the lower margin consumables, how should we be thinking about that, that mix in terms of the rest of the year? And then in general when you talk about higher system sales, when in generally, what should we be thinking about in terms of the consumable pull through for those system sales and when would we generally expect to see that in a meaningful way?

Answering the last part first, I think we are seeing it in a meaningful way. If we look back over the last five years of Palls top line growth rate and you’re seeing something moving up from 2-8% the last two years, so it’s definitely there now and as we get more systems operating it’ll continue to pull out. In terms of the mix, are you referring to the mix between industrial systems and industrial consumables?

Well more in terms of your commentary within the industrial segment, you talked about some of the lower margin consumable items within there, is that mix changing?

What we see for the balance of the year is now with microelectronics being flattish for the rest of the year and a higher gross margin product line as opposed to you know mid-single digit growth in aerospace and transportation with perhaps some upside there, with lower gross margins, this is all within consumables now that I’m commenting on. You know we see that impacting margins in the last half that we expect our gross margins for the full year to be flattish.

Thanks very much.

(Operator instructions). Mr. Krasnoff, there are no further questions.

Okay, I’d like to thank everyone for their time and attention this morning. We look forward to a normal reporting schedule for our third quarter and we particularly look forward to holding our 2007 annual meeting on May 28th. And also we look forward further out to providing a full update of our strategic plans both for the next two years and going out for the next five years. We think it’s exciting times and we want to get back to the excitement where we like it which is in the business. So, thank you very much.

This concludes today’s conference call, you may now disconnect.