Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Celeste Santangelo with Merrill Lynch.
Celeste Santangelo – Merrill Lynch
Good morning.
Greg Kenny
Hi, good morning, Celeste.
Celeste Santangelo – Merrill Lynch
Hi. Greg, you talked about Rest of the World over delivering first expectation.
Greg Kenny
Yeah.
Celeste Santangelo – Merrill Lynch
Can you talk about the sustainability both from a sales standpoint and the margins you just reported in Q2?
Greg Kenny
Well, again, as you know, Celeste, and I think people who invest in this company realize that a good portion of our business maybe 40% or a bit more, is priced through distribution on a fairly short cycle, so pricing can change. But as I said in the conference call, we do watch knock-on effects of slowing mature economies and global liquidity, and you also know that we only take a forecast of a quarter at a time. I guess what I do want to say is we feel good about the type of activity we are seeing in the regions that Phelps Dodge serves and as you know Phelps Dodge now manages a number of the General Cable business. It’s interesting with high transportation costs, I am encouraged that we will see Central America and Mexico become perhaps more active as labor rates are not dissimilar from China and obviously the logistics cost are different. So I really like our hand in the Americas, where we are a leader and we are seeing strong governmental spending. Many countries are running positive surpluses, so very strong in Latin America. We have great opportunity in sub-Saharan Africa and things are coming together nicely as we have increased our holdings in the Philippines and have begun to pool together all our assets in that region from the Pacific islands through the Oceana then on into Thailand and India. And we are also in China, as you know. You can read about projects. We do a morning news flash around here, and there are pages of projects being announced daily around alternative energy infrastructure, particularly in the developing world, but also in the developed world. So, I feel real good about the market we see. As I said, pricing is set short cycle for a lots of our businesses, including the Phelps Dodge assets, but I am very encouraged.
Celeste Santangelo – Merrill Lynch
Okay. And then turning to subsea Q1, looks like you’ll be operational and you mentioned a healthy backlog. Is there any way to expand on projects you are seeing there?
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