Theeffective tax rate for the quarter was 6

These decreases were primarilydue to lower absorption of manufacturing overhead costs caused by lowerproduction levels. Included in the quarterresults was a pretax restructuring charge of $39.8 million ($29.7 millionafter-tax or approximately $0.17 per share), relating to the previouslyannounced restructuring program. Also included was a non-cash goodwillimpairment charge of $93.1 million (both pretax and after-tax), or approximately$0.53 per share, related to a previous acquisition in the transportationdivision. The December quarter compares with net income of $59.2 million, or$0.33 per share in the prior year quarter that included a pretax restructuringcharge of $7.3 million, or approximately $0.02 per share after-tax. Theeffective tax rate for the quarter was 6.1, due to the goodwill impairmentcharge that does not result in a tax benefit. Excluding goodwill, the taxprovision reflects an annualized rate of 34, as compared with the Septemberquarter rate of 32.

During the quarter, significant actions were taken to reduce headcount and lowerthe cost of employee benefits. These included changes in retirement medicalbenefits, a reduction in planned contributions to the profit sharing trust and areduction in the planned incentive bonus payout. In addition, manufacturing employees worked reduced hours in the plantsmost impacted by the economic slowdown Due to the sudden strengthening of theU.S. dollar at the end of October, we also recognized an exchange gain thatincreased pretax profit in the December quarter by $14.3 million.

The combinedeffect of the benefit changes and exchange gain was $0.11 per share. Orders for the December quarter were $562.2 million, down 34.5 compared withthe prior year quarter and down 29.4 sequentially. The Companys order backlogon December 31, 2008 was $285.3 million, compared with $374.7 million in theprior year December quarter and $385.5 million in the September quarter. Capital expenditures for the December quarter were $51.3 million, compared with$53.3 million in the prior year December quarter and included expendituresrelated to plant construction as part of the Companys restructuring program.Capital expenditures for the first two quarters of fiscal 2009 were $96.6million or 6.4 of revenue, compared with $102.4 million or 6.3 of revenue inthe prior year period. As a result of lower demand, the capital expenditure planfor fiscal 2009 was significantly reduced and is now estimated in a range of$170 to $190 million. This compares with fiscal 2008 spending of $234.6 million.Spending for research and development was $41.2 million, compared with $43.1million in the prior year quarter. Product development expenditures weremodestly lowered in reaction to the decline in new product development.