Mr. Michael Druyanoff

President & Chief Executive Officer, Global HVAC Distributors

GLG News by Mr. Michael Druyanoff, President & Chief Executive Officer

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.

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Carrier (UTX) loses one of it's largest distributors to York (JCI)

July 2, 2007

Analysis of:Johnson Controls Announces Distribution Agreement With US Airconditioning Distributors | biz.yahoo.com

US Air Conditioning Distributors ("US Air"), one of Carrier’s (a division of UTX) largest distributors, has dropped Carrier and starting the end of September 2007 will be selling York branded products in Southern California, Arizona, Utah, Idaho and certain parts of Nevada. US Air represents approximately $500 million in revenue and 48 branches in the market place. Currently, out of this shake up in the market place a few other events have occurred: 1)Ferguson has lost the York line in So. California (and possibly No. California shortly) and Arizona. Currently they do not have a replacement line. 2)Carrier decided to do a hard start in So. California and open Company owned distribution for Residential and Commercial hvac products. They will need to hire hundreds of people and open numerous locations in a short period. 3)Carrier acquired E.B. Ward, the No. California Carrier commercial and residential distributor and it will now operate it as Company owned distribution.

HVAC new construction business outlook

May 29, 2007

Analysis of:April Housing Starts Edge Up but Permits Drop Sharply - The News | www.achrnews.com

As the statistics show, even though we have seen a slight rebound in new construction, we are still in a decline and have not hit bottom yet. This effects all aspects of the business including equipment, supplies and commodities. Currently the new construction segment of the hvac industry represents 25%-30% of the business. The effects on the business are further mitigated by the lower margins this segment brings. Another factor mitigating this downturn is the 13 Seer transition.

Depletion of 10 SEER HVAC Inventory

November 27, 2006

Analysis of:Majority of 10 SEER Inventory Installed | www.achrnews.com

According to the article, 77 percent of the stockpiled 10 SEER units are currently being used and 97 percent of the 10 SEER inventory will be exhausted by the end of 2006.

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