Question-and-Answer Session
Operator
(Operator Instructions) We’ll go first to Howard Rubel with Jeffries & Co.
Howard Rubel - Jeffries & Co.
Good morning. Thank you very much. Just two questions, one, if you look at the Carrier results and we back out the currency, then on kind of a real basis there is still a little bit of deterioration in the business. Is that's a fair way to think about that?
Ken Parks
The growth rate of Carrier was 13% and about 3% of FX, so X FX you're talking operating growth of around 10%.
Howard Rubel - Jefferies & Co.
Yes, but, I mean the fact, Ken if I look at it in terms of guidance, you didn’t really -- there was no real change there and yet you had better than planned currency year-over-year. Is that a fair way to think about that?
Ken Parks
Howard, that is right. If you think about it, Carrier has had a benefit from FX going forward. We've talked about that and we've seen that in the results. I think what you're seeing that is offsetting that, of course, is commodities. There is about $50 million of higher commodity costs in Carrier's numbers for the year, which has really offset the benefit of FX.
In Resin, of course, is a lot worse than what we had thought even a few months ago, so I think it’s fair to say business is not better than what we had thought, but I think the three other parts of the business, that is that make up 80%, that’s the commercial HVAC, international resin, and the refrigeration businesses are hitting on all cylinders. So I wouldn’t characterize it as anything other than a very strong performance in Carrier.
Howard Rubel - Jefferies & Co.
I hear you and I mean, that’s the opportunity you have. I mean, you're not yet at the point where you see that market bottoming, though, do you? I realize every time anybody has made a step, it has been wrong.
Greg Hayes
When we started the year, we thought about 5.9 million units in the U.S. residential market. We think that is probably more like 5.5 million today. We had thought we would see a second half recovery and I think everybody today would tell you it’s going to be '08 and perhaps even late '08 before we see a real recovery in the U.S. housing market.
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