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Raw Materials Gone Soft
Ajay Kejriwal – FBR Capital Markets: So, getting really impressive pricing here, up nearly 2% in the quarter or so. Maybe if you can talk about the outlook for the rest of the year, how should we be thinking about pricing and then also raw materials as they moderate, is that a benefit to the spread and margins?
A Closer Look: 3M Earning Cheat Sheet>>
David W. Meline – SVP and CFO: So, what I would say first on pricing. As you probably recall we had indicated that we get somewhere between 0% and 1% on the year and what we expected given the way prices developed last year as we would see some level of decline as we move through the year. So, if you look at the first half, we’ve been pretty solid and stable there we did (1.7) in the first quarter and now (1.9) in the second. But again as you look at the trend through the year, you will see that moderate somewhat. On the other hand, we had said 0% to 1% and it looks now like we will probably come closer 1 for the year than flat. In terms of raw materials, what we’re seeing like everyone else we are seeing that the raw materials are certainly softer than the – we might have expected at this stage. So, we had raw material price inflation of 2% in the first quarter. We had indicated we thought we’d come in at 1% to 2% for the year. The second quarter actually now declined, so from that 2% level, we were around flat in the second quarter on raw materials and we think for the year in total most likely we will be closer to flat than those higher levels. So yeah, it’s contributing uncertainly to our margins presently and that we expect to continue at some level through the balance of the year.
Ajay Kejriwal – FBR Capital Markets: And then on the discretion spending, Inge, maybe talk a little bit about the initiatives you have put in place and then you are obviously seeing the benefit on the SG&A rate there. Could you maybe talk about what’s the opportunities you see on cost tightening?
Inge G. Thulin – President and CEO: Well, we continue the rest of the year as we started the year, which as I said earlier, we went into the year with a plan that was conservative and we’ve been very cautious. And we have some parts of the world like Western Europe at the moment where there is challenges relative to economic outlook. So, we are managing that very, very tightly. At the same time, when we see opportunities for growth we invest and we talked at the last call, specifically around Health Care which is everywhere around the world and we see very good traction. We also invest in personal safety. We have those two new units that we talked about last time in terms of mining, oil and gas and aerospace where we continue to invest when we see the opportunities, but we are as, yes, cautious as we go and specifically I think a big credit should be given to our West European team that are on that the whole time day-by-day. So, we hope at the time that we can let up, but important thing here as we have the plan, which we now look upon to save it was a good solid plan we roll into the year on and we are very pleased on how the team are executing it. As you saw also in terms of research and development went up to 1.1%, meaning that we are committed to grow for the future in terms of investment. So, I think it’s a good balance here.
Latin America Pricing
Steven Winoker – Bernstein: I actually want to ask you to dig into a little more detail on the pricing question. So, Latin America looks like it was up 440 basis points on pricing, the U.S. 290, EMEA 270. This kind of pricing power is – continues to be extraordinary and the question I have is, can you give us a better sense for the kind of actual actions you are taking on pricing. Whether it’s material contract escalators what are the – what things are you doing, it’s not mix I know. So, what are you doing that’s allowing you to get that kind of pricing quarter-in quarter-out lately?
David W. Meline – SVP and CFO: Steve, basically, as you know we have talked about on number of times over the last, now couple of years that Company really started gearing up to make sure that we were adequately recovering our material costs as we moved through last year and that continued into the first and second quarters here. So, 1.7 in the first quarter overall, 1.9 in the second would indicate that we’ve taken some fairly limited additional increases here in Q2 and not surprisingly for us at least we have very good price retention the products that we offer in these markets around the world. We work very hard to keep them differentiated and fresh which enables us to maintain our prices and offer things that are attractive to market. So, I wouldn’t view it as something different today than we’ve been experiencing in recent times, perhaps just the comps are showing up a little bit more strongly right now.
Steven Winoker – Bernstein: Does that excluding Latin America particularly?
David W. Meline – SVP and CFO: Latin America – certain portion of those products we price in dollars terms, so when you look at depreciating currency environments such as Brazil has 20% decline in currency year-over-year, we do pick up some price on a portion of the products as they are pegged to the dollar.
Steven Winoker – Bernstein: So that separate from all the currency impacts you call out?
David W. Meline – SVP and CFO: Yes.
Steven Winoker – Bernstein: Secondly, when you talk about that second half top-line guidance baking in a more conservative view of the economy, it still looks like there is something like somewhere around at least low single-digit and potentially mid-to-high single-digit growth baked in on the organic side. How are you thinking about that for the second half and because it sounds like there is still acceleration here and you mentioned comps, is it all comps based or…?
David W. Meline – SVP and CFO: It’s a good question. So, if you look at the range for the year, we’ve got a range of now to 2 to 5 for the year in total. We did 2% in the first half, so obviously the scenario in which we would be at that low end would be such that we would continue on the same path and the high end, of course, does indicate that we’d have some pick up. Where do we see that pick up coming from, several factors; one certainly that’s been impacting us as you know is the electronics sector which we do see the recovery developing in the second half exactly as we previously indicated in our planning so that’s contributing to our second half outlook. And then certainly there is a component of it which is the comps which again last year in the second half we had a deterioration. So, even with stable revenue, we would see some level of pick up there.
Steven Winoker – Bernstein: The electronics, what gives you confidence that that could materialize?
David W. Meline – SVP and CFO: We were saying as we exited the quarter, we are starting to see that turnaround develop in terms of the volume. So, it starts with looking at indicators of forward demand including areas like semiconductor fab and our consumer electronics outlook that we observed and then observing what is in our forward orders. And we see importantly the inflection developing now as we’ve exited the second order and again there’s a comp issue that helps that as well.
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