Patrick Fitzgerald - Director, Investor Relations David Farr - Chairman and Chief Executive Officer Frank Dellaquila - Executive Vice President and Chief Financial Officer

John Inch - Deutsche Bank Deane Dray - Citi Research Julian Mitchell - Credit Suisse Josh Pokrzywinski - MKM Partners Shannon O’Callaghan - Nomura Steve Tusa - JPMorgan Rich Kwas - Wells Fargo Securities Steven Winoker - Sanford Bernstein Scott Davis - Barclays Brian Langenberg - Langenberg and Company Jeremy Capron - CLSA John Quealy - Canaccord Genuity Jamie Sullivan - RBC Capital Markets

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Emerson’s Investor Conference Call. During today’s presentation by Emerson management, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, February 4, 2014. Emerson’s commentary and responses to your questions may contain forward-looking statements including the company’s outlook for the remainder of the year. Information on factors that could cause actual results to vary materially from those discussed today is available at Emerson’s most recent Annual Report on Form 10-K as filed with the SEC. I would now like to turn the conference over to our host, Patrick Fitzgerald, Director of Investor Relations at Emerson. Please go ahead. Patrick Fitzgerald - Director, Investor Relations: Thank you, Ron. I am joined today by David Farr, Chairman and Chief Executive Officer of Emerson and Frank Dellaquila, Executive Vice President and Chief Financial Officer. Today’s call will summarize Emerson’s first quarter 2014 results. A conference call slide presentation will accompany my comments and is available on Emerson’s website at emerson.com. A replay of this conference call and slide presentation will be available on the website after the call for the next three months. I will start with the highlights of the quarter as shown on Page 2 of the conference call slide presentation. Sales increased 1% in the quarter to $5.6 billion, with underlying sales up 3% as the economic environment reflected slowly improving market conditions. Demand among industries and geographies was mixed, but favorable overall with a better business climate in Europe and emerging markets growth of 7%. Gross profit and business segment margin reflected solid improvement. One-time corporate items related to accelerated charitable contributions and acquisition costs increased expenses by about $50 million. Earnings per share of $0.65, increased 5% or up 8% to $0.67 excluding the acquisition costs. Cash generation was strong with operating cash flow up 8% supporting the repurchase of 4.6 million shares. It was a solid start for 2014 with execution from several strategic priorities. Next slide, P&L summary. As I noted, reported sales increased 1% and underlying sales decreased 3%. Gross profit margin expanded 20 basis points excluding one-time acquisition costs related to the previously announced Virgo and Enardo transactions. Higher SG&A expense reflects a $30 million accelerated charitable contribution that was offset by related tax benefits, such that earnings per share was essentially neutral. Acquisition costs and charitable contributions impacted EBIT margin about 90 basis points. The tax rate was lower from the contribution benefit and final items from the embedded computing and power transaction. EPS of $0.65, up 5% reflects through repurchase of 4.6 million shares for about $300 million. Next slide, sales by geography. The underlying sales increase of 3% was led by 10% growth in Asia, which includes a 14% increase in China. In other geographies, the U.S. was up 3%, Europe was flat, Latin America declined to 1%, Canada declined 5% and Middle East and Africa grew 9%. Emerging markets were strong across the business segments up 7%. Moving to Slide 5, segment earnings and cash flow. Profitability remained strong across the business segments with 40 basis points of margin improvement. Corporate expense was elevated due to the previously mentioned accelerated charitable contributions of $30 million and acquisition costs of $21 million. Operating cash flow grew 8% reflecting earnings growth and lower working capital investment. Trade working capital as a percent of sales improved 90 basis points led by strong inventory performance. Moving to Slide 6, process management. Process management underlying sales increased 5% with North America up 4%, Asia up 14%, Europe up 3%, Latin America down 10% and Middle East and Africa up 4%. Acquisitions contributed 3% resulting in net sales up 8%. The sustained strength in the oil, gas, power and chemical industries continued to drive growth, which was led by a near double digit increase in the systems and the solutions business, which was particularly strong in China. North America accelerated with the U.S. up 6% while project timing caused the decline in Latin America sales where orders increased at a double digit rate. Process automation markets continue to support elevated investment levels with a robust project pipeline particularly in North America. Next slide Industrial Automation. Industrial Automation underlying sales were flat with North America unchanged, Asia up 9%, Europe down 5%, Latin America up 3%, and Middle East and Africa up 18%. Industrial goods markets reflected mixed trends with strength in Asia, improvement in North America and softness in Europe. Emerging markets were up high single digits. Growth in the fluid automation motors and drives, electrical distribution and materials joining businesses was offset by weakness in mechanical power transmission markets. Sales in the power generating alternators business were flat with stable but sluggish markets. Market conditions are expected to slowly improve as demand recovery and favorable comparisons support a modest growth outlook. Moving to Slide 8, Network Power, Network Power underlying sales increased 2% with North America up 1%, Asia up 2%, Europe up 1%, Latin America up 8%, and Middle East and Africa up 27%. The embedded computing and power divestiture and currency translation deducted 13% for reported sales down 11%. Strong demand for global telecommunications infrastructure and steady data center market conditions drove the growth. Emerging markets were up double digits led by Latin America and Middle East and Africa. Telecommunications end markets were supported by 4G network investments globally. Data center investment growth in Asia and Europe was offset by slower demand in the Americas. Profit margin declined primarily due to a $13 million one-time research and development credit in the prior year. Market conditions are expected to be favorable in the near-term supported by recovery in Europe and momentum in Asia. Next slide, Climate Technologies, Climate Technologies underlying sales increased 5% with North America down 1%, Asia up 13%, Europe up 5%, Latin America up 9% and Middle East and Africa up 6%. Growth was supported by the global refrigeration market recovery and stable air conditioning markets. U.S. sales were mixed with double digit growth in temperature controls, weakness in service and flat demand in air conditioning after mid-teens growth in the prior year. Growth in China exceeded 20% with strength in air conditioning and refrigeration businesses. Europe improved as well. Orders accelerated to 8% growth in the quarter led by Asia and Europe. Growth momentum is expected to be led by global refrigeration markets along the continued strength in the air conditioning business. Moving to Slide 10, Commercial & Residential Solutions, Commercial & Residential Solutions net and underlying sales increased 3% with North America up 2%, Asia up 11%, Europe up 6%, Latin America up 6% and Middle East and Africa up 4%. Residential investment in North America continues to increase steadily which drove growth in the professional tools, food waste disposers and storage business. The wet/ dry vacuums business declined in large part due to high demand in the prior year from Hurricane Sandy. Market conditions are expected to remain solid in the near-term with support from continued North America residential momentum. Next slide 2014 outlook, economic indicators remain mix, but trending slightly favorable as reflected in our underlying orders which have been trending in the 3% to 4% range for several months. We are expecting global macroeconomic tends to remain favorable supported by improved conditions in Europe. Based on current market conditions, our 2014 outlook is unchanged with underlying sales growth of 3% to 5%. Reported sales are expected to change minus 1% to 1% which reflects the embedded computing and power divestiture, completed acquisitions and currency translation. Margins are expected to expand approximately 0.5% with the benefits from portfolio changes and volume leverage partially offset by accelerated strategic investment. Earnings per share excluding goodwill and tax charges are expected to go 4% to 7%. Business segment and other financial metric forecasts will be provided at our annual investor conference next week in Boston. And with that summary of results I’ll turn it over to David Farr. David Farr - Chairman and Chief Executive Officer: Thank you very much, Pat. First of all I want to thank everybody for joining us today and hopefully you guys won’t get too much snow, I’m looking out my conference room right now, we’ve got plenty of snow fall in here in St. Louis, a nice cold winter, good for the oil and gas industry. First quarter unfolded as we expected. From the standpoint of our financial forecast that we presented in November and will update in details in the investor conference next week in Boston, it happens just like we believe to what happen. We will talk about the incremental investments next week and where they’re going and why this was important and what you’ll see the deal why this was pretty strategic to us and why the timing is right now. I also intend to have five business leaders with me next week, in addition to my talk so we will have the five (business leaders) give a brief update on the key issues they’re seeing both from a business standpoint and the investment profile, give you a chance to give a broader perspective and what’s going across this company. I want to thank all the operational leaders for delivering in the first quarter, a good first quarter with underlying sales actually a little bit over 3% and 3.4% range. Order trends should continue to drive sequentially better sales, better earnings, better margins and growth in the next two quarters. From my perspective we have good start and things are lining up for a very solid year as we talked about back in November and we’ll talk about it next week. New acquisitions are starting off well and will contribute EPS this year even with the normal balance sheet, accounting actions we had to take in the first quarter which is typical with this type of acquisition not unusual there. We’ve done $1.2 billion; we’re still targeting $1.5 billion for the year and with one small divestiture which we hope to get done in the preceding second half of our fiscal year. Operating cash flow and free cash flow was very good in the first quarter on top of last year’s extremely strong first quarter. As I look at it right now we’re targeting somewhere around $3.4 billion to $3.5 billion in operating cash flow and we’ll continue to payback money to our shareholders most likely in the 50% to 60% range this year a little bit under 60% given the fact that we’re doing more acquisitions than we have over the last three years. But overall very good cash flow performance, the balance sheet in very good shape and we had the flexibility and the need or the flexibility, the ability to do what we need to do from acquisitions or investments internally or getting money back to our shareholders. As usual I’ll give you a lot more details on the economic expectations what we see both for the world in 2014 and over the next couple of years and what that means to our various businesses, I go in great detail on obliging. But just give you a little bit perspective right now to taken a long trip around the world with adding a couple of their OC members. As we look at USA right now it is getting slightly better. We see the USA trends improving and we expect pretty good growth in USA this year versus last year. Canada getting a little bit better though, a very slow start, weather is not been very good and but we do expect Canada to have a reasonable growth this year of both as the oil and gas money has happened and if can sort of I get that pipeline going some point down would really help all of our investments up and down, Canada and the Midwest. Europe, European trends continue to improve. Europe was flat in the quarter but all businesses were up except for one which is industrial automation and that’s primarily driven because of the Caterpillar, but everybody else was up and we had a good quarter in Europe, I expect that will continue to gain momentum, I do not expect that to be super-fast growth but improvement growth which will help us in the United States and else will help China, we’ll talk further about that next week. Just coming back to the Middle East also see that Middle East doing well for us right now both in orders and sales and expect Middle East potentially be the strongest growth segment that we have are ordinary this year coming out of Middle East. China had a great start all across all businesses, the order pace was good. Yes, the news coming out of China things are slowing, that’s nothing new. We do expect China to still have a good growth here this year as we see right now and we’ll see how that goes in the next couple of months, but right now everything looks pretty good for us. In total, Asia-Pacific looks pretty good, driven by China and parts of Southeast Asia and hopefully India will hold in there right now as it did – as the orders show right now. Latin America will be okay growth this year, won’t be as good as last year in my opinion, but still be positive. It’s probably high-single digit. Hopefully that will continue to strengthen. But overall as I unfold the year I like the pace, I like where things are right now. We are making investments. In my opinion all the operational performance was delivered in the first quarter. Basically we talked about – we laid out in our targets, in our financial plan, so I felt good about it. And I am looking forward to seeing everyone next week in Boston. To help Pat’s job a lot easier, we decided not to give any charts out this year. So it will be really not to decide, which ones we are going to put in and not put in. And so we will have no charts. And so that will be a lot easier for everybody and Pat is dying right now because he is looking forward to that conversation. So I look forward to seeing everybody next week and hopefully you guys will have a reasonable weather for the next couple of days and not get snowed in. So with that, let’s open the floor for questions. And we will see what’s on your guys mind. Thank you.

Thank you. (Operator Instructions) Your first question comes from John Inch from Deutsche Bank. Please go ahead. John Inch - Deutsche Bank: Thank you. Good morning Dave.

Hi John.

Hi John. John Inch - Deutsche Bank: Dave, could you talk a little bit about your emerging market exposures, what you are seeing and maybe exclude China. And the question is sort of how the cadence of emerging market trends played out over the quarter and kind of how you are thinking about it this year?

Sure. I went through a little bit there. From my perspective right now in the emerging markets, the Middle East looks still pretty good. I was just there, the order pace is good. I expect them to have a good year. I wouldn’t be surprised if they are not as strongest, fastest in growth rate, high-single digit maybe even getting close to 10%. India is a market I am concerned about and I am factoring in the – let’s say I think I am looking at Asia being somewhere in the 6% to 8%. I am factoring in basically a challenging year in India. We will see how that performs. I am a little bit concerned about India. Southeast Asia looks pretty good. Obviously the Thailand thing bothers me a little bit. From this perspective our business has not been disrupted yet, but there is a potential chance that it could be disrupted because it gets a little bit more wide spread. Coming back into Latin America, the order pace looks pretty good, we have some delays relative to what’s going on in Mexico because the law changes, which are going to be very good relative to – for the energy marketplace will be good for us. Debt flow was down relative to sales. Overall I am pretty confident that our Mexican and our Latin American business will be high single digits for the year. Africa is doing okay. Eastern Europe, right now it’s starting to improve, I would say if Europe continues to trend upward then we will see Eastern Europe doing okay this year. So my biggest concern right now on emerging markets would be probably down into deep in the Latin America and the Brazil, Brazil region, Venezuela region and I am also concerned about India at this point in time. But that’s my perspective. China it’s I think the way our businesses will line up I think we’ll do okay in China this year. John Inch - Deutsche Bank: Okay, that makes a ton of sense. David, if we were to look at Network Power, how were margins ex-embedded computing and I am really sort of, is there a way to kind of parse out the margins year-over-year like how did the margins perform ex-embedded, I think you still have kind of this part of that?

They were still slightly down based on some of the investments and restructuring things we are doing right now. But we are seeing – with their way where that we thought they would be for the start of this year. We have a lot going on relative to Network Power relative to new products and the changing things like that. So I mean from the margin performance standpoint I am pleased where Network Power is unfolding and holding and but they were still slightly down even we take out the embedded piece. They are in good shape. They had – orders were positive, sales were positive, Europe was positive, Asia was very positive. So right now I think Network Power is on track to have a much better year than they did last year, which is important for us. John Inch - Deutsche Bank: The fact that you don’t have embedded in the business and you once did low teens margins, is there some dynamic given the fact that I agreed the business is getting better, but there is still a lot of sort of mix questions, right? Some reasons why you don’t think this business over time, so obviously not ‘14 couldn’t get back to kind of a low teens margin?

I know – our plan is to get it back in that low teens margin, the 12%, 13%, 14% and 15%, yes, we are. We expect that that’s where we will go. I mean the fundamental today, I mean right now we have significant investments as we are rebuilding in some technologies, we are rebuilding in some global sales positions and technology positions, so we expect that to put your backup in that range. That business fundamentally should be there. John Inch - Deutsche Bank: Got it. Okay, thank you.

See you next week, John.

Your next question comes from Deane Dray from Citi Research. Please go ahead. Deane Dray - Citi Research: Thank you. Good afternoon everyone.

Good afternoon, Deane. Deane Dray - Citi Research: Hi, Dave. I was hoping you get expand on your comment on process in the robust pipeline, I know you choose your words carefully and that sounds pretty positive and you highlighted North America maybe just take us in, what are the end markets, what are the customers telling you and when do these turn into revenue?

From our respective right now in North America, we are starting to see some of the downstream investment from all the strength into oil, the real oil and the gas coming out of the North America. We are starting to see the investments are happening across the southern part of this America and the product is being let go right now. We will start getting some sales late this year as you remember I have said all along our process would be more – the growth will be a little bit more rear-end loaded, because of some of these projects. So from my perspective right now, our project business both here and the Americas is looking pretty good. Also Asia is still looking very, very good. I think we are going to have another record setting year both on bookings and sales in Asia. And I am pleasantly surprised at the investment profile even coming out of the Middle East in the oil and gas area. So I would expect based on the pipeline we are seeing right now based on the level of activities from the bidding standpoint that we should have a very good process here again this year. Obviously, we are coming up with very high levels and I don’t – right now, I do not anticipate getting double-digit top line sales, but I expect to have high single-digit type of gross sales out of these guys. But it’s setting up very nicely and obviously we continue to make very good money in profitability and invest a lot in this business too. Deane Dray - Citi Research: Okay, that’s real helpful. And just given all the headlines on some of the Latin America currencies, you all are one of the very few that engages in hedging practices. So this might be a good opportunity just to refresh everyone on the hedging and how perhaps any of the – any of the major currency swings affect it?

Yes. I mean, the only hedging we do right now is at the operational level from the standpoint of buying and selling goods, but that’s the sort of transactional that flows in and out. There is not much going on. We don’t hedge a whole lot. I mean, obviously the currency right now the weakness and the real, the Brazilian real is not a good thing. But sometimes we have swings in the quarter, because what happens is a lot of our global contracts in the process in particular are done in dollars and they go back and forth. They true-up by year end, but we are not doing a whole lot of hedging right now, but clearly the weakening in southern currencies are also very disturbing from the standpoint of overall business and what’s going to happen down there. So, that’s why I am more cautious about Latin America than my internal people would be, just put that way. I think to your point there is going to be a concern there. Deane Dray - Citi Research: Understood. We will hear more about that in Boston.

Take care, Deane. Deane Dray - Citi Research: Thank you.

Your next question comes from Julian Mitchell with Credit Suisse. Please go ahead. Julian Mitchell - Credit Suisse: Hi, thanks.

Hello, Julian. Are you guys seeing a lot of snow? Julian Mitchell - Credit Suisse: Yesterday some, but it’s pretty much gone now.

Good, good. Julian Mitchell - Credit Suisse: In terms of the – you talked about the accelerated investments back in November.

Yes. Julian Mitchell - Credit Suisse: And I guess did you see kind of the normal run rate for the year in Q1, because I guess your clean gross margin was up 60 bps, your SG&A to sales extra charitable stuff was flattish. So, it didn’t – from the outside it wasn’t obvious you had stepped up investments. So, I just wondered if that was something that you had done and you just absorbed it in the operational leverage?

I would say we did it and we absorbed it in operational leverage, but we also – it will grow bigger as the year goes on, but we still did pretty good job on actually absorbing some of the start of this investments. And clearly, we got very close to 3.5% underlying sales growth for the quarter. That’s a good number for us. Once we get in that 3.5% range, we do leverage a little bit better, because as we move towards 4%, it’s even better. So, clearly, we are – the investment dollars will ramp up as the year goes on, Julian and I am hoping that hopefully we will have pretty good leverage as the year goes on too. So maybe a little bit slightly better profitability, but we’ve got to get the sales, that’s key for us right now. Julian Mitchell - Credit Suisse: Thanks. And then within industrial automation, yes, you have done a lot of restructuring there the last four years or so. The margins were down slightly I guess even with revenues being up, was there anything – was that because of I don’t know decremental margins within power transmission or was there anything kind of special going on there?

Nothing special, just some tough mix for the quarter and some of the investments going forward, so I mean that’s little bit of mixed noise, I mean, from quarter-to-quarter that more round, but overall, the profitability of that business should be pretty good again this year as it was last year. Julian Mitchell - Credit Suisse: Thanks. And then just lastly within your U.S. process business, you reiterated the fact that sales should pickup later in the year from downstream projects. I guess was the 6% growth in the U.S. you saw in the December quarter, was that a surprise, just the base was very, very difficult, but you still grew 6%, I guess even without these projects coming through?

I would say, it’s probably – I was pleasantly surprised at how the U.S. did. The U.S. did little bit better than I thought they would. I actually thought we grow a little bit in the quarter in Europe, but we didn’t, but as I look at the first quarter, I was pleasantly surprised in the U.S. I was hoping a little bit of growth out of Europe. I was disappointed in the Latin America, which did not grow on that. And so we saw better growth in the U.S. and not as much growth in Latin America – no growth in Latin America. So I think those are three surprises I saw in the quarter. Julian Mitchell - Credit Suisse: Great, thanks a lot.

You are welcome. Take care.

Your next question comes from Josh Pokrzywinski with MKM Partners. Please go ahead. Josh Pokrzywinski - MKM Partners: Hi, good afternoon guys.

Good afternoon Josh. Josh Pokrzywinski - MKM Partners: Dave, could you just walk us around the portfolio and give us a sense for how pricing is looking, where you guys are green and where maybe it’s been a little bit tougher?

The portfolio right now, where everyone would be green, except for I would say network power. Network power with some of the – we have been – we are going after some telecom business, the China Mobile build-out is happening right now and we are aggressively going after that business. We want to make sure we protect our installed base there and that is one of the biggest telecom investments you are going to see in China for the next couple of years and we want to make sure we have our adequate fair share of that. So I would say that’s the place that we have had to sharpen our pencil the most around the world. And other than that, pricing is holding in there pretty well right now. We might see a little bit of squeeze if some of the commodity pressure keeps dropping down, but right now from a price cost standpoint, we are in pretty good shape. Would you say so, Frank?

Yes, we were positive for the quarter. And I think we are pretty much on our plan for the year right now.

Yes. We will give an update here at February as the guys come in for President’s Council, but nothing surprising. I don’t think you are going to see much overall movement positive or negative around. I mean, we might be look I said I think in November slightly positive or slightly negative. We are going to be pretty tight at this one. There is not a lot of movement right now. Josh Pokrzywinski - MKM Partners: Got you. So the pressure or I guess design pressure on your end in embedded or not I am sorry not embedded, network power in China right now plan for the rest of the year as you see it today?

I would say that we are going to close that a little bit. We will probably end up being a little bit of red there by the end of the year, but it will be less red than it is today. Josh Pokrzywinski - MKM Partners: Got you. Alright, thank you.

You are welcome. Thank you. I will see you next week hopefully.

Your next question comes from Shannon O’Callaghan with Nomura. Please go ahead. Shannon O’Callaghan - Nomura: Good afternoon guys.

Good afternoon Shannon. Shannon O’Callaghan - Nomura: Hey. So Dave, I mean you clearly sound more positive on Europe, I mean I know it was only flat in the quarter, but things seem to be getting better there, how positive does the turn kind of in capital investment plans feel there and how much you think Europe could actually grow?

I am going to talk about that next week, but right now, my gut tells me that we are not looking for a big turn, I am looking probably for Europe in the 1% to 2% type of growth range for us. I look at the GFI by growing 2% to 3% type next year. I mean, as the trend lines continue to improve, clearly we need to get it towards that 2% range or the 3% range in GFI to help us little bit more, but I was pleasantly surprised where I am hearing in Europe from our customer base and also from our own guys internally. And that’s going to be very important from my perspective, the way I would see the world is China, if Europe starts growing again and output and you are going to see China be helped and then you will see us be helped and so the U.S. helped. So I think that’s a key thing and the world doing well next year if Europe stalls. And I think you will see the global economy stall again. And I think Europe is going to be the key driver of this thing. Shannon O’Callaghan - Nomura: Okay. And on process in terms of this pipeline, the pickup in the second half of ‘14 that you have been talking about, what’s the tail like on that accelerated growth once it starts going? I mean, how long is this pipeline going to run when we started to think into ‘15 plus?

If the pipeline actually gets built and they started actually flowing the oil down to the – into the Southern part of the United States then you could see for many years being like two, three, four years a pretty significant build out of what I would call downstream type of businesses across Louisiana and the Texas and Oklahoma region. People talk about there is only 50 new jobs because of the pipelines, but that isn’t taking into consideration that if you build that pipeline and you have that steady stream of oil coming just like the gas pipelines that are being built right now the manufacturing and downstream production will happen in that region and we will have a lot of – lot more high paying jobs. First of all, to build those factories and secondly to operate those factories and those are skilled jobs when you are looking at be a refining or chemical or whatever type of process you are looking at those are pretty good jobs. And those ones that will come down the road that will be more in the 2015, 2016 time range. So it would be very positive. Shannon O’Callaghan - Nomura: Okay, great, thanks. See you next week.

Alright thank you.

Your next question comes from Steve Tusa from JPMorgan. Please go ahead. Steve Tusa - JPMorgan: Hi, good afternoon.

Good afternoon Steve, did you make the show in New York, the HVAC or was it more too cold so you couldn’t call it HVAC (indiscernible)? Steve Tusa - JPMorgan: I made it. I saw your guys there. Yes, some good technology, good technology.

Was it a heating show or air conditioning show? Steve Tusa - JPMorgan: When I walked across town about five blocks in the snow I was wishing it was a heating show but it was pretty cold so. But back to business on network power, so could you just give us the embedded, the actual embedded sales and profit you booked in the quarter I am just – I am having hard time understanding what you mean by the margin was still down a little bit ex-embedded did you – does that mean down a little bit ex-embedded stripping it out of the first quarter of ’13 as well or down from the 7.2%, just wondering what the run rate is in the second quarter here?

We going to give it to you right now, hold still.

When you – Steve this is Frank. Hand on one second here.

This is because I am not going to give anybody any charts, so we are going to give you actual numbers. This is the trade off so (indiscernible) and because no one gets charts start, you get this information because you get this information no one gets chart so.

So it raises the margin for both ‘13 and ‘14 when you strip it out of both years, but the delta actually gets a little bit worse, maybe a little bit worse. Steve Tusa - JPMorgan: What were sales last year in the...?

It was essentially breakeven sales last year. We booked about $350 million. This year closer to $150 million. Steve Tusa - JPMorgan: Okay, so $150 million at breakeven?

Yes, basically yes. Steve Tusa - JPMorgan: Okay so it’s like a lowest like mid-7%, low to mid-7% type margin. Am I doing math right

When you strip it out yes, no it’s a little higher than that.

It’s like approximately what?

It’s about 8%. Steve Tusa - JPMorgan: Okay, 8%. Now the seasonality here, Dave as I move through the year I mean historically at least in the last several years it’s been kind of like first and second quarter even and then you kind of see a little bit of a ramp in the second half. I mean is that how we think about the second quarter margin for these guys kind of in that similar range?

Yes, I think across all of Emerson our seasonal pattern is pretty similar. We – the first quarter is our weakest. Then second gets a little bit better and then third and then fourth. Sometimes third is even better than fourth, but third and fourth clearly we are always the second – just the way our customer base is and the way – and the type of channel we have here that’s the way it is. So it’s going to be first, second, third, fourth I would say that’s how it’s going to go – improvement. Steve Tusa - JPMorgan: Okay. And then sequentially on the total sales for next quarter I guess last several years you have been kind of a high-single digit sales number obviously you have some headwind from embedded. So just for total Emerson kind of mid-single digit sequential sales increase first to second quarter, is that the right seasonality?

No I think right now we are looking at more would be if we did about – we are going to be in the fours I would say. I think right now the order – and the pattern is pretty important to us. January was not a great month for anybody as you have been hearing everywhere I mean that we lost so many – we lost lot of days. Steve Tusa - JPMorgan: How bad was January, was it down?

I mean in January – we lost several days. I mean I don’t know exact numbers right now. It’s just anecdotal to me. But it is not I mean it was because we lost 2 or 3 days and so a lot of businesses. And so I would expect and our customers did too. So I expect if this weather stays up like this there as a lot of people losing today again too. Steve Tusa - JPMorgan: Okay what – sorry go ahead.

Yes, so I would expect we are going to be – I mean the numbers I am looking at right now for the quarter I would be looking at 4%, 4.5% range for underlying sales growth. Steve Tusa - JPMorgan: For underlying year-over-year sales growth for the total company?

Correct. Steve Tusa - JPMorgan: And then one last quick one just on China, I know you have got some dynamics around process and network power, but I guess in this kind of a general industrial you are seeing in China, there has been a bit of an uptick for a couple of peers I think Siemens and Rockwell talked about it. It doesn’t appear that, that economy is getting like materially better. Is that a – is there – are there some stocking dynamics going on there do you think, is there – how do you think about just kind of like general industrial demand in China?

Our general industrial business was very – it was very strong in the quarter both in – I mean we’re strong across the board in China in sales and orders in the first quarter. Steve Tusa - JPMorgan: It’s got.

It was very weak – it’s been very weak for about 18 months, the Climate guys started leading out if you remember correctly last year late. And so we’re starting to see – it’s not a channel building here because this is not a channel business, that much of business for us. We’re seeing pretty much a lot of the people starting to invest, continue to invest in the productivity, they’ve got the capacity right-sized. And so right now I just came back from meeting with all my agents that we saw a very good first quarter, we’re still – we still feel very good about the second quarter. So we see orders and we see a good quarter in the second quarter in China then I might feel very good about the year there. Steve Tusa - JPMorgan: Okay, great. Thanks.

You’re welcome. Take care.

Your next question comes from Rich Kwas with Wells Fargo Securities. Please go ahead. Rich Kwas - Wells Fargo Securities: Hi, good afternoon.

Good afternoon, Rich. Rich Kwas - Wells Fargo Securities: Two quick ones on process the margin was pretty good this quarter and last quarter Dave you talked about MRO potentially picking up in North America. Did that come through maybe earlier than expected?

We saw some good – we did see some good MRO in the quarter, yes we did. And I mean I don’t have the full analyzing, I don’t have to do every quarter, but I would say that, that also tells me we could have a lot of big projects flown through there either at this point in time. So we had a lot of MRO. So it was just overall, it was a good mix, it was a right mix for us, sometimes you get lucky but I would say MRO came especially since we saw North America do well too. Rich Kwas - Wells Fargo Securities: Alright. So the way to think about it going forward is the mix probably gets a little less favorable?

I would say so. As we go into the second half this year we’re going to start seeing some more – I would see some more margin squeeze, we’ll still do okay for the year I mean we’ll still do very well for the margin to the year but I would say that we could see some squeeze. And the other thing going for us too is we’re going to have – we’re going to have some good growth in acquisitions we make through which are very good help us there too. So it’s going to be an interesting dynamic, I expect pretty good things in our process this year. Rich Kwas - Wells Fargo Securities: Okay. And then in network with UPS in North America has been pretty tough at for a while now based on your order commentary and the results. What are the dynamics there, what are you seeing out there competitively I mean it doesn’t sound like anybody is knocking the cover off the ball, but how do you think this plays out over the course for the next 12 to 18 months in terms of growth?

I think we and our competitors are going to start seeing a better market dynamic in the UPS here. We are – we’re actually seeing the orders now and as the UPS is a little bit longer lead-time because of big systems. So I was in Italy, I saw that the pipeline there and not prudent with the pipeline here in North America. So I think you’re going to see UPS which had been weak for the last – you are right the last 18 months for all of us, you’re going to start seeing better investments. We’re actually seeing better UPS business outside the United States right now because a lot of big – some projects being done outside the United States by some of the big datacenters so the cloud datacenters. Right now based on the pipeline and based on order pace I think you’re going to start see in North America UPS do better. Rich Kwas - Wells Fargo Securities: Okay, great. See you next week.

You’re welcome. See you next week. Look forward to it.

Your next question comes from Steven Winoker with Sanford Bernstein. Please go ahead. Steven Winoker - Sanford Bernstein: Hi, good afternoon.

Good afternoon, Steven. Steven Winoker - Sanford Bernstein: Nice to hear you speaking positively about manufacturing in the U.S. resurgence whether it’s a pipeline or anything else?

You know I’m a very proud America guy. I’m from the Midwest. We’re very positive people out here. Steven Winoker - Sanford Bernstein: Excellent. So..

And won the World Series. Steven Winoker - Sanford Bernstein: Well it’s always next year, right?

Thank you very much. I appreciate that opportunity. Steven Winoker - Sanford Bernstein: So can you just talk a little bit about acquisitions and your strategy I mean you did Virgo, Enardo, those obviously give you quite a lot of additional capability. Should we be thinking about this on a more aggressive basis going forward?

No, I mean as I said we’re going to probably do another $300 million this year. We would like to do – we’d like to stay focused on this $1 billion to $1.5 billion type of bolt-on type acquisitions over the next couple of years. As I talk about next week that’s what I’m going to talk about, we’re going to be looking at level type acquisitions. These are ones that we’re quoting, these are ones we’re working, the timing is not always – we don’t drive the timing, we work it hard, but that’s a tough acquisition we’re going to do, we’re going to do, we did one in Network Power, a nice solutions service type business there. We did a couple of acquisitions and the process in the first quarter. So you’re going to see us through those in process, some in Network Power, some in Industrial Automation, and some in Climate along those type of things, nothing real big, maybe ranging anywhere from $30 million up to the $500 million range, that’s our focus plan right now. Steven Winoker - Sanford Bernstein: Okay, great. I know you talked about January before a little bit on weather, but if you think about the PMIs that you’re actually starring at coming out recently obviously for U.S. but elsewhere too. I mean are you as confident I mean is there anything that sort of impacted your confidence level in that, are you just saying what we’re seeing, we’re seeing in our portfolio so it’s got to be weather and move on and we’ll get better in a couple of months. So how are you thinking about that, Dave?

Well the numbers that came out yes it didn’t surprise me because we had all the business leaders last week and we all – we had heard – we run a four, four, five type of company or a four, four, five and a half that means we close up to four weeks in a month. We already knew that January is going to be like from the business there. So we lost days in North America, we lost days around the world sounds like because of the weather. So the numbers didn’t surprise me and I mean our customers are still optimistic. What we’re seeing is still very positive. So I think that they will come back. If the weather stays like this for the next couple of months you’ll lose some more floppiness and obviously make February, March much harder, but so right now I feel pretty good. The China numbers didn’t surprise me at all I mean given where the Chinese New Year fell and what’s going on with – the government is trying to play around the shadow banking a little bit, trying to play it a little bit. But overall I mean my customer base in China is still pretty positive. So.. Steven Winoker - Sanford Bernstein: Okay.

Nothing surprising there. Steven Winoker - Sanford Bernstein: Okay. And maybe just before I go, if you just address quickly than what you’re seeing in terms of non-res momentum and you mentioned the Power Transmission side as well?

The non-res, the inquiry – the things we’re hearing in the United States relative to non-res construction are positive. We haven’t seen a lot of order pace shed on it. We’re seeing a lot of inquiries; we’re seeing a lot of planning around it. And so even from our perspective today we went to our Board on two North America non-res construction that will unfold as the year unfolds and goes into next year. So I think that all that have kept our capacity real low, we’ve worked it down in fact we’ve taken it down after the ‘08 crash and now we’re starting to work it back again. So I think it’s going to unfold here. I think non-res will start ticking up, it’s not going to be a exposure, but I think it’s going to pickup as year goes on. Steven Winoker - Sanford Bernstein: Alright. I see you next week. Thanks, Dave.

See you next week. Take care. Steven, bye.

Your next question comes from Scott Davis with Barclays. Please go ahead. Scott Davis - Barclays: Hi, good afternoon guys.

Good afternoon, Scott. Scott Davis - Barclays: Dave, is this the portfolio you have that you’re going to ride for the year I mean is this – are you fairly committed to what you have I mean just reading your annual report it seems like this is – this is the – this is the game plan, is that accurate?

That’s accurate except for one small divesture this year, that’s what we ride this year right now and I mean particular interest in getting North America in particular the U.S. to strengthen improvement and then I think we’ll talk about next week that I have – we have plans that in the next couple of years that we would most likely see $1 billion to $1.5 billion type of divestitures. So you’ll see that talk about that next week. Scott Davis - Barclays: Okay. Fair enough. And then on the strategic investments, are these long – I mean what’s the mix of kind of long-term, short term projects I mean when I think about ERP systems and things like that they tend to last three or four years. But are a lot of the strategic investments you made things that we could be fairly confident to be over with in 2014?

I think you’re going to see us – so many of these things are going to last up two to three years that the type of investment period we’re seeing here. We’ll talk – I’ll talk about it how you’re going to see a little bit of tweaking up in a couple of areas and you’ll see the numbers and we’ll talk about those. But all of them will start paying back in my opinion as we leave this year and start getting into next year and particular ones in some of the service side that we’re investing and some of the technology sides we’re investing. Those will payback much faster than let’s say the Oracle type investments or a custom interface and type stuff I mean so the majority of the investments we’re talking about are going to be ones that will start paying back late this year and start – be in this next year a little bit too. So it will be self funding here as it goes on. Scott Davis - Barclays: Okay, great. And then just a quick follow-up and sorry if you already answered this question. But in the alternator business we’ve had several quarters of inventory destock. Is that pretty much done at this point?

We’re going sideways right now, yes. Scott Davis - Barclays: Okay, okay, see you next week.

See you next week. Thank you very much.

Your next question comes from Brian Langenberg with Langenberg and Company. Please go ahead. Brian Langenberg - Langenberg and Company: Thank you. Hey, Dave.

Good afternoon, Brian. Brian Langenberg - Langenberg and Company: Afternoon. Just want to ask the same question a slightly different way, it’s an analyst thing with Europe?

I think I can answer the same way. Go ahead. Brian Langenberg - Langenberg and Company: No, you can’t. You have to answer them differently. With Europe, obviously it’s a big place, dive a little bit deep here, talk about the short cycle versus maybe capital spending driven? And then the second part of this is there is somebody doing something in Europe for Europe and there is in Europe for someplace else. So the best that you can maybe talk about what you have been seeing in Europe in that way and color the commentary that way, if you would?

Okay. So, the first question is on short cycle, long cycle. The short cycle business is I mean, I would say, right now is what’s really driving us at this point in time. The longer cycle business is just starting to unfold as I see it, it’s early days. We are starting just the order pace we see it coming as the activity. People talking about it – coming at it, so right now, what’s been driving this shorter cycle type of stuff, MRO business or some of the consumer or light industrial stuff and that’s been driving us here a little bit. I expect the longer cycle stuff in order for our year to unfold and I am talking 3% to 5%, with 3.5% in the first quarter underlying growth and I am talking over 4% in the second quarter. We are expecting some of that longer cycle stuff to start kicking in for us. And Europe right now, we have actually seen some of the Europe – outside Europe improving. Europe for Europe has not improved as much, but Europe for outside Europe is starting to improve and that’s a good sign. And so from my perspective, if the economic numbers in underlying GDP or gross fixed investment continue to improve, you are going to see – then you will start seeing investments in Europe for Europe. Italy is still a concern for us. The southern part of the country, Europe is still concerned, France is we haven’t seen much recovery in France yet, but there is enough going on in Europe right now that for the exporting kind of businesses that’s a good sign. And if China continues to improve, then you will see that will help us too. Brian Langenberg - Langenberg and Company: Got it. Thank you.

You are welcome.

Your next question comes from Mike Wood with Macquarie. Please go ahead.

Hey guys. This is Adam in for Mike. Just a quick one here. Are you seeing any impact…

You changed the name Mike on to Adam.

Yes me. Just a quick one, are you seeing any impact from credit issues for kind of the small or medium sized customers in China. I know it’s something that has sort of come up before and seem to be resolved fairly quickly?

We haven’t seen it. Yes, I was talking to the guys about it. They are definitely, even though, we had a very good month and quarter on receivables, the receivable issue in China is still there. They are very slow paying, but they are getting access to money. It got a little tighter a couple of quarters ago, but it seems unfolding a little bit right now. And I think the government is trying very carefully to figure out how to rein this down slowly without totally crushing things, but right now, it’s okay. But the receivable is definitely spread out a little bit and that’s something we will be working pretty hard. We don’t have much, in a company bad debt – the company the size of our bad debt in any year is about $7 million.

$10 million.

$10 million. So we don’t have much, but it’s – at this time, I am going to watch very closely here.

Got it. Thanks a lot guys.

You’re welcome.

Your next question comes from Jeremy Capron with CLSA. Please go ahead. Jeremy Capron - CLSA: Good afternoon.

Good afternoon Jeremy. Jeremy Capron - CLSA: Question on pricing, could you talk about pricing across your businesses, I mean industrial automation and network power margins are down, I am wondering if there is anything related to pricing here and then more generally across the other business platforms as well?

Yes. As I mentioned earlier, Jeremy, the pricing across our businesses right now in this quarter was pretty good. Everyone was slightly positive. We look at the price cost is green across the whole company. And then if you look at network power, it was – it’s more of a mix issue. We have gone after, but strategically we want to make sure we play in the rollout of China Mobile with the 4G. And the other thing is that we have some new product coming out in North America on our precision cooling platform, a much broader platform that the newer product, which from a cost standpoint is a little bit high and we don’t have our costs quite in line yet with what the selling price is. So, there is a little bit of squeeze there, but it’s more of a mix thing in network power at this point in time. That’s where it is. It’s pretty good and I expect to be decent for the year for us. Jeremy Capron - CLSA: Great. And then can we go back to the alternators business, you are talking about a stabilization here. I’m wondering could you comment on the extent of the decline that you’ve experienced here over the past year or so?

We’ve not given those numbers out, the magnitude, but that is quite significant of the numbers. And I’m sure we’ll I mean we’ll pull something together if you’re going to be there next week we’ll probably talk about it a little bit. I don’t want to give you a number off the top of my head right here, but it’s not something but I won’t go talk about either. Jeremy Capron - CLSA: Okay. Thanks very much.

We can give you a general feel. It’s quite significant. Let’s put this way, it’s got two in front of it. Jeremy Capron - CLSA: Great. Thank you.

Thank you.

Your next question comes from John Quealy with Canaccord Genuity. Please go ahead. John Quealy - Canaccord Genuity: Hi, good afternoon.

Good afternoon, John. John Quealy - Canaccord Genuity: So two quick questions. First, in Network Power, can you talk about how demand was in the sort of office LAN environment, I know you’ve talked about datacenter pretty well, but can you talk about that LAN opportunity? And then, secondly within Climate Technologies in the U.S., if you could just talk about the dynamics of that field services business and when we should see that rebound? Thanks.

Yes, on the LAN side I can’t – I don’t have that type of deal. What I would do is I’ll talk to Scott Barbour be there this weekend. We will be webcasting, so why don’t we find out little bit, give a little color on that – on the length because I can’t – I don’t want to make something up, John, some people accuse me of making things up that I don’t want to do it. Now relative to Climate Technology in the service side I think the key issue there is we just – we’ve seen our – unbelievably weak replacement type of marketplace right now. People are either putting whole new systems in and they work on the heating system because we’ve just not seen much turnover year that we’ve seen a very weak replacement. And so I would expect we would see an improvement when the spring comes that people – they’re going to evaluate, do we put a whole new system in or do you repair. If your heating went out which we saw a lot of people here in St. Louis in early heat wave, a lot of heaters went out, they replaced a whole system, there wasn’t repaired going no. So I’m hoping that we’ll see at this spring, we’ll see a recovery in that repair cycle, a very nice part of our business which has been down for almost a year and a half and maybe two years now and so its proper side of our business there too. So that’s our current feel, we don’t have anything better than that at this point in time. John Quealy - Canaccord Genuity: Great. Thank you.

Take care, John.

Your next question comes from Jamie Sullivan with RBC Capital Markets. Please go ahead. Jamie Sullivan - RBC Capital Markets: Good afternoon and thanks.

Good afternoon, Jamie. Jamie Sullivan - RBC Capital Markets: So maybe just to follow-on to that question. Just more generally about Climate in the U.S. were some of those puts and takes. How you’re kind of thinking about those dynamics for the year with you mentioned AC flat, field service was feeling some pressure. It sounds like you might improve in this spring, maybe just more broadly in the U.S. how you’re thinking about Climate?

Broadly in Climate U.S., I feel we have a good year. I mean on the AC side, just look at the AC side, the housing I think you’re going – the housing continue to be okay, I think it’s been several years now that we have not seen a strong HVAC marketplace in North America. I’m feeling there is going to be a better one this year, inventories are extremely, extremely low right now. On the refrigeration side we’ve seen the marine business pop back which is a good sign. If we actually are correct about non-res picking backup as year progresses you’ll start seeing some of our non-res business improve too and the refrigeration side will improve. The only call on the replacement market will be is that people have the money to spend and they feel like they’re spending the money. They will – the replacement market will soon come back up. I feel pretty good about Climate Technology in North America this year. I feel good about in Asia, good about in Europe. We’ve had a couple of two flat years in Climate. They are due to have what I call is a solid breakout year because there is still – we’ll talk a little bit about this through the cycle that is still I believe 5% to 7% underlying growth companies globally and they need to be at the high end of that cycle this year. Jamie Sullivan - RBC Capital Markets: That’s helpful. Thanks.

That’s where it is. Jamie Sullivan - RBC Capital Markets: And then…

Take care, Jamie. See you – you will be there next week. Jamie Sullivan - RBC Capital Markets: I am. Could I squeeze in one last one before we go?

Well if it’s a decent question yes Jamie I would take it, if it’s not a decent just – I’m just going to hang up, okay. Jamie Sullivan - RBC Capital Markets: Alright, fair enough.

No pressure, no pressure. Jamie Sullivan - RBC Capital Markets: No pressure. So just on the Network Power margin I think you said for the forward year pro forma they’re around 10.5 for 2013. Is that right, I think you said that last quarter? I’m just wondering how you’re thinking about this year relative to that, it sounds like some pressure relative to that?

Yes. What we’re trying to do is I would expect – we’re not trying to get much margin improvement this year on Network Power. What I’m trying to do right now is we are making some strategic investments. We are trying to get the business moving on a positive top line basis and I hope a slight improvement in margin, but that is not my focus in this business. We have gone through. We have torn this business apart. We have been making some significant investments. We want this business to have a positive top line. And then I expect if that happens, you will start seeing the margin improvement. And so we are looking at margin, slight margin improvement, that’s the game plan this year, but the game for me is growth. I want some positive growth like we saw in the first quarter. That’s important for me. And the new products are coming off. So that’s why our focus is in that business this year. Jamie Sullivan - RBC Capital Markets: Thanks very much. We will see you next week then.

See you next week, Jamie. You didn’t get the X button, you are lucky. You didn’t ask about Obamacare or something like that, man. Did you get your healthcare plan yet? Jamie Sullivan - RBC Capital Markets: I got mine.

That’s good. Yes, everyone is covering that one too. Jamie Sullivan - RBC Capital Markets: Thanks a lot. David Farr - Chairman and Chief Executive Officer: Thank you everybody. That’s it. I want to thank everybody. I am looking forward to seeing everybody next. Again, the first quarter unfolded like we thought would. We still feel good about the year. We still feel good about the recovery. And I am looking obviously, feeling a little better about a stronger second quarter as a normal progression. Look forward to talking to people next week. And I am looking forward for Pat to talk about why we are not handing any charts out next week. I mean, that should be an interesting conversation. I mean, this will be good sendoff for Pat to figure out how to explain you guys you get no charts, I mean just give them a booklet of blank pages. That’s what I think I would do. Pat, take care. Have a great one.

Ladies and gentlemen, that does conclude the conference call for today. Thanks for participating. You may now disconnect your lines.