Craig M. Rossman - Emerson Electric Co. David N. Farr - Emerson Electric Co. Frank J. Dellaquila - Emerson Electric Co.

Scott Reed Davis - Barclays Capital, Inc. Gautam Khanna - Cowen & Co. LLC Steven Eric Winoker - Sanford C. Bernstein & Co. LLC Andrew Kaplowitz - Citigroup Global Markets, Inc. (Broker) Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker) Michael Wood - Macquarie Securities Joseph Alfred Ritchie - Goldman Sachs & Co. Robert McCarthy - Stifel, Nicolaus & Co., Inc. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker) Shannon O'Callaghan - UBS Securities LLC Joshua Pokrzywinski - The Buckingham Research Group, Inc. Jeffrey Todd Sprague - Vertical Research Partners LLC Deane Dray - RBC Capital Markets LLC Richard M. Kwas - Wells Fargo Securities LLC

Good day, ladies and gentlemen. Thank you for standing by and 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. This conference is being recorded today, May 3, 2016. 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, Craig Rossman, Director of Investor Relations at Emerson. Please go ahead, sir. Craig M. Rossman - Emerson Electric Co.: Thank you, Matt. I'm 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 second quarter 2016 results. A conference call slide presentation will accompany my comments and is available on the Emerson website at Emerson.com. A replay of this conference call and slide presentation will be available on the website for the next 90 days. I will start the presentation with the second quarter summary, as shown on slide two. Net sales in the quarter decreased 9% to $4.9 billion, with underlying sales down 5%. As we anticipated, served markets were mixed, as oil and gas and industrial markets remained under pressure, particularly in North America where conditions were tougher. On the positive side, market conditions were more favorable in HVAC and U.S. construction. Data center and telecommunications spending improved during the quarter as well. Reported earnings per share decreased 60% to $0.57. Adjusted earnings per share of $0.66, which exclude $56 million of total separation costs, were slightly above our expectations. Profitability in the quarter benefited from the significant restructuring actions we completed in 2015 and solid operating performance across our businesses. Improved working capital performance generated strong operating cash flow of $719 million in the quarter. Overall, the second quarter exceeded many of the company's expectations, and we remain on track for fiscal 2016. Turning to slide three, gross profit margin was up 40 basis points due to cost reductions and containment actions, and lower SG&A expense benefited from restructuring actions. The year-over-year change in EBIT reflects the impact of separation costs of $31 million and a $932 million divestiture gain from the Power Transmission Solutions business in the prior year. Excluding the gain and the separation costs, EBIT margin increased 70 basis points. Turning to slide four, underlying sales decreased in all regions except Europe. The results were similar to the first quarter, which are noted on the slide for your reference, as the global economies are still not showing much strength. Turning to slide five, business segment margin improved 140 basis points to 14.6%, led by year-over-year margin improvement in the Network Power, Climate Technologies, and Commercial & Residential Solutions segments. Restructuring was a positive, as savings from the 2015 restructuring actions and lower expense in the current year were a benefit across the segments. Comparisons in Corporate and Other were driven by an increase of $46 million in stock compensation resulting from share price appreciation, pre-tax separation costs of $31 million, and a 2015 divestiture gain of $932 million. Working capital performance drove an operating cash flow improvement of 101% in the quarter. Turning to slide six, Process Management underlying sales decreased 9% in the quarter. Oil and gas customer spending remained a headwind across the regions, but was more pronounced in certain markets like the Canadian Oil Sands and the U.S. Efficiency and productivity projects continue to gain traction with customers in the energy sector, as interest and engagement continued to increase. Project opportunities in power in the U.S., Asia, Europe, and the Middle East Africa continue to support growth, while chemical markets across various regions continue to be favorable as well. Segment margin decreased 20 basis points, primarily from volume deleverage and mix, but were partially offset by savings from restructuring actions, which will continue to benefit profitability in the remainder of the fiscal year. Turning to slide seven, Industrial Automation second quarter sales declined 10%, reflecting continued weakness in industrial and upstream oil and gas spending. Power-generating alternator sales are at a 10-year low. Alternative energy wind projects were a bright spot for the drives business. Segment margin decreased 50 basis points, primarily due to volume deleverage, unfavorable mix, and price, partially offset by savings from restructuring actions and materials cost containment. Slightly better market conditions and easing comparisons are expected to improve both underlying growth and profitability in the second half of fiscal 2016. Turning to slide eight, Network Power underlying sales were down 1% in the quarter. The global demand for data center and telecommunications infrastructure improved during the quarter. Telecommunications power systems had particularly strong growth in North America. Segment margin improved 490 basis points to 8.1%, mainly benefiting from restructuring actions. New product programs and the segment's global repositioning strategy are starting to flow through to both sales and profitability. Improving order transfer both data center and telecommunications investment will drive positive third quarter sales growth and improved margins. Turning to slide nine, Climate Technologies underlying sales increased 2%, driven by the U.S. residential and commercial air conditioning business, which was up 10%. Europe reflected strong growth across the region. The refrigeration business was up high single digits. Segment margin increased 170 basis points, primarily due to significant savings from restructuring actions and material cost containment. Favorable air conditioning and refrigeration end markets should continue to support improvement in underlying growth through the remainder of the fiscal year. Turning to slide 10, underlying sales in the Commercial & Residential Solutions segment increased 2%. Favorable conditions in the U.S. construction markets, particularly residential, were supportive for growth. The divestiture of the Commercial Storage business reduced year-over-year sales by 16%, but had a positive impact on segment margin, which improved 380 basis points to 23.2%. Favorable trends in U.S. residential construction are expected to continue, supporting the outlook for modest levels of underlying growth and margin improvement in the remainder of the fiscal year. Turning to slide 11, while the global economic environment for Emerson businesses will continue to be challenging, demand has begun to stabilize or improve in certain markets. Comparisons in the second half of the year also become easier due to the significant decline in underlying sales during fiscal 2015. As we have indicated, order trends remain in line with expectations and therefore continue to support our assumptions that 2016 underlying sales will be down 2% to 5%, excluding negative currency translation of 1% and a 2% deduction from completed divestitures. Underlying sales in the third quarter are expected to be approximately flat to the prior year. We also reaffirm our guidance that adjusted earnings per share will be $3.05 to $3.25, excluding $250 million to $300 million of separation costs related to the company's portfolio repositioning. Adjusted earnings per share for the third quarter are anticipated to be flat to the prior year or approximately $0.85, excluding $145 million of separation costs. And now I'll turn it over to Mr. David Farr. David N. Farr - Emerson Electric Co.: Thank you very much, Craig. Thank you very much for joining us today. I appreciate your time. And as you can see, fundamentally this was a very solid quarter. And I want to thank the entire global organization relative to execution around the significant restructuring starting last year and continuing to run through this year, and the results are starting to flow through as they did for the last three quarters. Poor profitability has now begun to improve, and we're exhibiting strong cash flow and very good performance. And again, I want to thank the global Emerson organization out there for doing some very difficult heavy lifting in a very challenging marketplace. As we've talked about, since November I've been talking about fixed rate orders. We're going to reach a goal by April. I'm not quite sure yet. But as we've looked at the order pace through the last several months, step by step by step, with October being the bottom, we've seen continued improvement. Last month's three-month roll, we basically saw around negative 4%. We do not know what the April ending numbers will be, which we report – we're talking about reporting around the May Electrical Products Group meeting. But right now, my gut tells me we've seen some weaker North America oil and gas spending on the short cycle, and clearly we're seeing very weak spending around the backup power generator marketplace, which as we see it is running at an 11-year low. But we might be close, and we'll know when we get it all in. But it might be May, but we haven't given up on April yet. And I know I can tell you this much. We're going to be close enough that my 14-month-old Zorro might be able to jump that rope and get there, but I do know there has been some weakening in the North America oil and gas spending route and the alternate route for sure. The overall performance this quarter relative to the operations was very good in a very challenging marketplace. You think about the balance sheet, the cash flow, the earnings setting up for us what we believe is a very important milestone again in the third quarter, with hopefully underlying sales getting close to zero and our earnings per share being flat with improved margins. Again, very important milestones as we quickly work through the process. And the operations have done a lot of heavy lifting here and the restructuring is really starting to pay off. From my perspective right now, as I look at the global marketplace, I just came back from Europe. Europe, our Western European business has continued to improve. I finally see some good momentum there. No, the economy is not going to be robust there, but they clearly are making investments. They're making strategic investments. They have some exports. And so underlying, we see our European business being a benefit, a positive versus what it was a couple months ago. To the U.S., the U.S. economy in particular around the industrial segment has continued to be challenging. And in certain segments, I would say even weaker within the U.S. marketplace. The rest of world basically is trending along the lines that we've been talking about for the last two or three, four quarters, including what we talked about at our Analyst Meeting in February. So not a whole lot of change as I see it, the pluses coming from Europe, the minuses coming from the U.S. Network Power business orders continued to be improving and positive, and we expect Network Power to have positive growth in the third quarter at the top line and positive growth in earnings. We expect the Commercial & Residential Solutions, that business to continue to be positive, and we also expect our Climate Technology business to do reasonably well. But one market they're struggling with right now is China residential. The rest of the world, they're progressing and doing extremely well. And obviously, you can see some of the profitability coming through in some of these businesses as they've got the restructuring done in the second half of last year and the early part of this year. From a restructuring standpoint, we're going to be around this, Frank, I think we were talking about $60 million to $80 million – $70 million to $80 million. We are looking at areas right now where we've seen weaknesses where we will ramp up a little bit more restructuring. What we have is pretty well in focus. As we look at this year, we're also starting look at opportunities as we've now formed the two strategic businesses underneath two leaders of Mike Train and Bob Sharp, and we're looking at programs that we'll institute coming forward in 2017 and 2018 to I would say create a more best cost, structural, global organization and manufacturing process. And the opportunities that we can then look at taking more cost out, both for profitability, but also to increase investments for growth in some of the technologies and innovations area. So overall, I'm pleased with the opportunities there and look forward to continuing to figure out how we can generate higher levels of profitability in the two core businesses that will remain as we finish the repositioning. Relative to the repositioning, as we reviewed with the board last night and again this morning, we're making progress. The Network Power program bolt (14:22) is on the table at this point in time. We're looking at either a sale or a spin. Both are viable at this point in time. And the board along with input from the management team are getting closer and closer to making that final decision, and we will be making that final decision. We have filed the initial spin documents, which you have to do, and we'll continue to refine those documents based on input from the SEC. But from our standpoint right now, both options of what we're going to do with the business to create value for our shareholders and value for us as a company going forward are still on the table and are still actively being worked. And it is not a problem. I know people like to speculate and people like to aggravate, but this is a process that's well underway and well in focus and well in line with what we expected. Relative to Leroy-Somer CT, Control Techniques, again, we have a lot of viable global – global potential buyers of these assets, and that process is well underway. And even despite the tougher marketplace we see in that market we're selling, we still have a good, good opportunity there to sell these businesses for what I would say a respectable price and exit that and take that money and reinvest it back into Emerson and the two core businesses that we're going to maintain. We also reviewed today significant acquisition opportunities with the board. One thing good about the world today and the struggle relative to a lot of companies, there are unique acquisition opportunities out there, both from a technology standpoint, both from a commercial and residential standpoint, and also from the automation solutions standpoint. So we're looking for opportunities to reinvest the proceeds, and the objective is to take that money and reinvest it back into the core businesses and eventually get back into a $20 billion-plus corporation, but a much more focused and selective and profitable business. As we talked about in February, when we come out of this transition, we will be a more profitable business, we'll be a more focused business, and we'll be more very much focused on doing significant acquisitions around these two businesses. And once again, regaining the size that I think is appropriate relative to what we need to do on a global basis. So I like where we sit today. We're pivoting from significant restructuring to getting closer to growth in orders, significant growth in improved profitability, and pivoting towards the completion of the repositioning of the two core businesses we're trying to get out, and positioning ourselves towards making additional acquisitions, and great progress along those lines. No more specific details than I just gave you, so you can ask and I will say no comment. But that's the flavor we are right now, and good discussion with the board for a lengthy term last night and again today relative to that. But again, as we wrap up here and open up for questions, again, very, very good execution by the operating folks, from Frank and his team, and Ed Purvis and Ed Monser, and then all the business leaders out there. I truly appreciate it. They're really working this hard and trying to create a higher level of profitability and a higher level of cash flow for us to have the opportunity to reinvest and grow this company again. So with that, I'll open the mic for questions.

Thank you. And at this time, we'll take a question from Scott Davis with Barclays. Please go ahead. Scott Reed Davis - Barclays Capital, Inc.: Hi. Good afternoon, guys. Good afternoon, Dave. Frank J. Dellaquila - Emerson Electric Co.: Good afternoon, Scott. David N. Farr - Emerson Electric Co.: Good afternoon. Scott Reed Davis - Barclays Capital, Inc.: I've got to admit, those Network Power orders popped back a little faster than probably some of us would have thought. Give us a sense, like were there some timing issues, maybe some big projects that got thrown into February or March? Or is it again, just such bombed out comps that we're likely to continue to see some pretty good levels from here? David N. Farr - Emerson Electric Co.: That's a pretty negative approach to thinking about that, Scott. Scott Reed Davis - Barclays Capital, Inc.: I just have to ask. David N. Farr - Emerson Electric Co.: You must be watching TV too much, Scott. That's all I can think about. No, it's a fair ask. There are a couple things going on. As you know, when we went through the period of significant restructuring and trying to change the organization, we went through a period of having to develop I would say a more selective type of product portfolio for the market changes and opportunities. It did give us a chance to really have a better package to go out and sell and a more a focused approach with the organization. And also clearly, the comps got a little bit easier. But the most important thing here is the work that Scott Barbour and his team did over the last couple years in getting their team focused around the different channels, the different products, the different solutions. And now I think that that focus and that cost structure we've put in place really are allowing these guys to compete and win, and it's a global thing. And so that is very good to see. So we have a long way to go with that business, but it's nice to have it healthy and carrying a load right now. So that's what's really going on. Scott Reed Davis - Barclays Capital, Inc.: Good. Dave, is there a sense, can you give us a little bit of sense on timing? And I know you said you weren't going to give any details. But are we talking about having Network Power wrapped up in three months, or is it more like six months? David N. Farr - Emerson Electric Co.: From our perspective, if you go the route of a sale, most likely it will be a little longer from the standpoint of a review and approval process. There's a lot of regulation. It's a very, as you know, a global, global business, so a lot of people will be reviewing that. A spin is one that you could have, assuming we don't know what the SEC will do from an input standpoint, but our focus right now if we decide to go the route of a spin, it will be towards the end of the fiscal year, if not just right after the fiscal year. If we have to sell it and have to go through a review process, it could be a couple months longer. But right now, we still look at some time in the September/October – end of September/October/November time period for that based on the way we go. But that's the timeframe we're looking at there, Scott. On Leroy-Somer and Control Techniques, again, it really depends. There is a sale process. If we have to go with an international person relative to a potential strategic buyer there, it will take I think from a review standpoint both from the various governments around the world longer. Both the U.S. government and the European government, as you know, there's a substantial position for Leroy-Somer CT in France. So I think that's going to definitely be most likely by the time it's completed in the fourth calendar quarter. But what you'll hear from us some time most likely this quarter or end of this quarter or early next fourth quarter, you'll hear which way we're going. You'll hear from us, sale or spin. Scott Reed Davis - Barclays Capital, Inc.: Okay. Am I to assume that that's not a gating factor in doing deals, that you'd be comfortable doing a deal even before those things were announced, or do you feel like... David N. Farr - Emerson Electric Co.: Correct. Our financial position right now is we can go out and do deals right now. And we are doing deals, but we could do several billions of dollars of deals right now if we need to. We have the financial capability. Spin, sale, it doesn't make much difference. We have the capability of doing that right now. Scott Reed Davis - Barclays Capital, Inc.: Okay. Good luck, Dave. Thank you. David N. Farr - Emerson Electric Co.: Thank you. And, Scott, as a follow-up to that, one of the reasons why we did stop the share repurchase in the second quarter and most likely tail it back again in the third quarter is to make sure that we do have the financial flexibility to do the type of transactions. The market is starting to open up, and we just want to make sure we have the capability. And we can always come back and do the share repurchase, which we're now looking at probably around $1 billion this year versus what we've said earlier. So that's another thing we've done. Scott Reed Davis - Barclays Capital, Inc.: Okay, we'll see you down at EPG [Electrical Products Group]. Thank you, Dave. David N. Farr - Emerson Electric Co.: Thank you, see you.

At this time, we'll move to Gautam Khanna with Cowen & Company. Gautam Khanna - Cowen & Co. LLC: Good morning, thanks. Good afternoon, I should say. Sorry. David N. Farr - Emerson Electric Co.: Good afternoon, Gautam. Gautam Khanna - Cowen & Co. LLC: I was wondering if you could expand on your comments about some of the oil and gas orders weakening or what have you, the pace of activity weakening. And if you could, just expand on what you saw, if it related to any specific type of projects. And if you could, comment more broadly on any repricing of the backlog or customers pushing back on existing orders and trying to reprice them lower. Thanks. David N. Farr - Emerson Electric Co.: Relative to the second question, the answer is nothing. We're not seeing that type of pressure from us from that standpoint on a repricing of a commitment from one of our customers. And that's not an issue relative to this space at this point in time. Relative to North America and particularly the U.S., it's primarily just the day-to-day type of spending that you see on the oil projects, not really big project specific. It's all around the day-to-day type of what we'd call the MRO type of – normal type of spend. But capital budgets are definitely being curtailed by most oil and gas guys. There are companies within North America, both in Canada and the United States. And so they're continuing to tighten those belts up, and we're seeing that business and that day-to-day business given our strength in this marketplace, which has been hurting us more on what I would call the shorter-cycle type of products. And the project business, we haven't seen anything there. It's just been more the day-to-day type of situation. And that's been weakening here for the last couple months. And we anticipate that's going to continue for the rest of this year now, as most of the oil and gas companies reported here in the last couple weeks have talked about again slowing down some capital. And we're feeling that on the day-to-day type of spend. That's where we're seeing it. Gautam Khanna - Cowen & Co. LLC: Okay. And just on the flip side, given that oil has moved a bit back up, do you think that it actually will be down for the full year, or do you think there's the potential to actually see a lift before the fiscal year end? David N. Farr - Emerson Electric Co.: I don't see a lift before the fiscal year. I think that the price of oil, I've talked about my opinion on the price of oil over the months here. I still think there's a chance that we could slip back in the $30s and then start trailing back up towards $50. You've got to see stability in the $50-plus range toward $60 and then a continued growth of demand, which we see today around the world, the demand for oil and gas. But clearly, the current pricing and the stress that companies are going through right now to make sure they right-size, they're not going to turn around in a month or two and say hey, okay, go ahead and spend. That's not going to happen. I think you're going to see the way we're looking at this marketplace right now is the first part of 2017 will continue to be challenging for our customer base. And they'll continue to be tight in places like North America, and they're going to be very, very tight relative to spending. And I just don't see that bounce back until probably later in 2017 or early 2018. Gautam Khanna - Cowen & Co. LLC: Thanks a lot, David. David N. Farr - Emerson Electric Co.: Thank you.

We'll move now to Steven Winoker with Bernstein. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Hey. Good afternoon, guys. David N. Farr - Emerson Electric Co.: Good afternoon, Steve. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Just, Dave, you've talked a lot about the challenges in making the call for growth investments versus cuts and how to draw that line across the businesses, particularly when we're revisiting your guide. So where are you now in that thinking given how the market has been evolving and the more aggressive, it sounds like, achievement on the cost side that you guys have been getting? So when should we not be surprised about this pivot to growth investment? David N. Farr - Emerson Electric Co.: I think that we're starting to pivot to growth on the Commercial & Residential Solutions side already. We're looking at some unique technology investments here, both internally and through acquisitions. On the Automation side, so on the Commercial & Residential side, so I think you're going to start seeing, as we start talking about as we get into the quarters, that business continue to grow. I think that we are looking at unique investments to help grow that business more in 2017 and 2018. On the Automation side of the business right now, we're still going to go through – I would say continue to downsize and rationalize for some time here. One of the things as we form the two businesses, we're looking at ways that we can take out cost and create new investment dollars, some to go to margin, some to go internally. But that's going to be more in the 2017 – 2018 time period. So I think you're looking at us already pivoting on part of the portfolio. And the automation part of the portfolio we are still rationalizing, restructuring, protecting profitability, and making sure that we do the right thing to protect the core value of the businesses. And so we're not walking away from the strategic investments there, but we're more in the let's make sure we have this opportunity to get the costs in line, and if we have any weak pieces of the tree and the wood, whatever it is, let's get it trimmed. And that's where we're at right now. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And then it looks like – so you've got obviously flat growth guided for 3Q, and therefore implied flattish growth for 4Q underlying. David N. Farr - Emerson Electric Co.: Correct. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: So what does that mean for your assumptions around the MRO side, small to mid-size projects, because you did call it out again? I'm just still a little unclear on therefore what do we have to see happen for that to be achieved in the fourth quarter – sorry, for the rest of the year. David N. Farr - Emerson Electric Co.: I think what you need – we're seeing some – it depends on which segment you look at, Steve. I think that businesses are – just look at the business reporting in the economic reports. They're continuing to really curtail spending. And I think until you see businesses start then feeling comfortable that they can start stabilizing their capital spend versus cutting their capital spend, I think it's going to be a quarter-by-quarter fight in the U.S./North America region here. But we're already seeing some increase in Europe. We're already seeing it in Southeast Asia, but the key markets here in North America, they're still being pretty tight. So I think until we start hearing CEOs talk about expanding core capital investments for productivity, not capacity, but just for productivity and for some new products, I think it's going to be a slog. There's no doubt about it. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay, great. Thanks. David N. Farr - Emerson Electric Co.: Thank you, Steve.

Andrew Kaplowitz from Citi has the next question. Andrew Kaplowitz - Citigroup Global Markets, Inc. (Broker): Good afternoon, guys. Hi, Dave. David N. Farr - Emerson Electric Co.: Good afternoon, Andrew. Andrew Kaplowitz - Citigroup Global Markets, Inc. (Broker): Good afternoon. So your guidance for the year for China was down mid-single digits. Obviously, there has been some signs of stability, but GC (29:15) was still down 12%. So maybe you can talk about what you're seeing there and what you think for the rest of the year. David N. Farr - Emerson Electric Co.: Our forecast is still to be in that mid-single digit, 5%, 6%, 7%, 8% down. From a comparison standpoint, this sucker really turned down hard in the second. I shouldn't call it a sucker, but I did. This market really turned down hard in the second half last year. We had down – if you think about the second half of 2015, our China destination sales were down probably around 16%; not probably, they were. In the first half of this year, they're down around 12% – 13%. So what we're seeing is we're starting to see some pick back up in certain sectors, and comparisons will be a little bit easier. So if we go flat, it's still not real exciting given the fact how hard it was down last year. So that's what we see at this point in time. We see the second half being about the same pace, a little bit better, but coming off a lot easier comps because the second half of 2015 was down 16% – 17%. So that's where we are right now. And we see that across some of the businesses where some of the day-to-day spending in Process is starting to happen. We're starting to see the refrigeration in some of the transportation market spending for Climate Technologies. We're seeing the data centers and telecom spending. So we're starting to see some level of improvement there. So I still think that we'll see on average the year being down 6%, 7%, 8% at this point in time unless there's been another shock, which we haven't seen yet. That's where we are right now. Andrew Kaplowitz - Citigroup Global Markets, Inc. (Broker): Great. That's helpful, Dave. And then Process Management margin down a little bit in the quarter. You're obviously expecting a pretty weak first half of the year. But you do need a fairly steep increase to get to your high teens guidance for the year. So how realistic is that, and could you get there with your current plan? Is mix having a more unfavorable impact than you expected? David N. Farr - Emerson Electric Co.: No, I think that Steve [Sonnenberg] and Mike and his whole team have done a phenomenal job of going after the costs, and they're working it very hard. So that cost is coming out very quickly. It started last year, and they've been aggressively after it. So we're going to start seeing more and more savings. They had a very good second quarter profitability, as I saw it, and I think that we're starting to see that flow through. Now we are concerned about the North America I would say weakness because that is a very profitable business for us. But they still have other actions they can take to protect that profitability, and we are set pretty comfortable relative to the whole year, that range we gave you I think back in February. And so I still feel pretty good about that. I think we're reasonably on track. Andrew Kaplowitz - Citigroup Global Markets, Inc. (Broker): Okay. Thanks, Dave. I appreciate it. David N. Farr - Emerson Electric Co.: You're welcome, take care.

And let's move now to Julian Mitchell with Credit Suisse. David N. Farr - Emerson Electric Co.: Hello, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi, hello. David N. Farr - Emerson Electric Co.: Good afternoon to you, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Good afternoon. I just wanted to start with Industrial Automation. You talked about pricing pressure in the slides. I think that may be new, so maybe any color around that. And also, are you seeing particularly heavy destocking or something because the order trend is not really improving it looked like February to March? So just maybe give some color on different verticals within that. David N. Farr - Emerson Electric Co.: The big issue there is we have the mix going on from the standpoint of pricing pressure, profitability pressures. The other big issue is our alternator business in North America and parts of Europe has been extremely weak and taken a nosedive down. And so that's been a big issue for us. As that continues to weaken – and they're basically at this point in time seeing very weak end market demand, our customers, and so our guys are continuing to ratchet back down. We're getting to the point right now to the pace that's getting low enough, but it's ugly from the standpoint there's not much volume going on. That's where we are at this point in time, in a very – I mean depth of the cycle. And it took another notch down the last couple months. And I think we're getting really close and we should start seeing some improvement in momentum back up through that. And that's where we are at this time. And again, they continue to take costs out. It's a tough cycle right now for these guys. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Understood. And then just overall, companywide, I think in February you talked about a $335 million savings number for this year, if there's any detail you could give on how much of that was recognized in the first half. David N. Farr - Emerson Electric Co.: Yes. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): And maybe any sense, when you look at the restructuring plans for the next six months, any color you could give on how much you might be carrying into next year. David N. Farr - Emerson Electric Co.: Okay. Now the number we gave you was what, $350 million for the year, you said? Is that what you said? Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): $335 million. David N. Farr - Emerson Electric Co.: $335 million? Right now we're probably just a tad better than that right now given the second half of the year from the restructuring and the benefits that we're seeing from that. So as we look at the pieces, these are the actual numbers, these aren't the deltas, correct? I'm looking at a sheet here. Frank J. Dellaquila - Emerson Electric Co.: Those are the deltas. David N. Farr - Emerson Electric Co.: These are deltas. So in the first quarter, we're at a delta here of around $80 million improved from restructuring. Second quarter we're looking at around $100 million. The third quarter, it looks to us like it's going to be probably back around $70 million because now we started to get some comparisons from last year. And then in the fourth quarter, what happens here is we'll see it bounce back up again, probably to over $100 million because the expense is going to be down. So the delta there is going to help us a little bit. So that's how the numbers look right now. And we just had a very good quarter here. I would expect us to have another decent quarter in the third quarter, and then we'll get a big pop because there will be less spending versus last year, which we had a big pickup. So the savings are starting to flow through along those lines. Next year, now I would say based just on the core businesses left, let's say that we're executing the sale or the spin or whatever of the businesses. You look at the Process business and you look at the Commercial & Residential business left and just the day-to-day restructuring. Those numbers are going to drop significantly because of what's going on. And so when I say significantly, we're going to be under $50 million. I haven't seen the number yet, but I've got to believe it's going to be under $50 million. And then what's going to happen, though, is Bob Sharp and Jim Lindemann are looking at opportunities across the Commercial & Residential Solutions business that we are going to start executing on as we get into 2017. So there all of a sudden – we don't have a number yet but we're going start taking that number up. Where that $50 million may be comfortable, we might go up $25 million, $30 million, $40 million, as we look at a two-year program to right-size and restructure and reposition the Commercial & Residential on a global basis to make it really best cost location, best cost structure, and allow us to take some of that profitability to the P&L and also to help us invest for growth. So there are some unique opportunities now that we've put these businesses together, and so that will happen as we get into 2017. But next year restructuring, my gut tells me the core basis will be down significantly. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Great, thank you. David N. Farr - Emerson Electric Co.: It's a long-winded answer for probably what you didn't want to hear. But that's... Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): No, that's great. Thank you. David N. Farr - Emerson Electric Co.: Okay.

And now we'll hear from Mike Wood with Macquarie Capital. Michael Wood - Macquarie Securities: Hi, good afternoon. David N. Farr - Emerson Electric Co.: Hey, Mike. Michael Wood - Macquarie Securities: I think of Emerson as particularly dominant in the larger projects in Process, Industrial Automation. And you're calling out in some of your remarks hope for the smaller, medium-sized projects in MRO, in Process, for example. I'm just curious if you can give us some color in terms of how that may shift market shares or what you're doing to work on the share in the smaller-sized, medium-sized projects? David N. Farr - Emerson Electric Co.: From our perspective, we've been really pushing resources because there's not as many large, large, large projects out there right now. So we redirect our resources back into the small and medium-sized projects to pick up that business because you're right. If you look at our share, we go very high to large. We're very, very strong in the day-to-day. In the middle, we're probably the weakest, as you said. So we've been shifting some of the resources down from the large down to the medium and go after those – off to the smaller projects. From growth in market share, I still feel that we're going to end up – we'll come out of this cycle ahead. As we did the last cycle, I think Emerson will come out ahead. And we'll be a stronger player in the Process Management industrial marketplace around this space here when the cycle comes out from overall participation. On the day-to-day stuff, that's being more driven by the corporate world of CEOs being very cautious, worried about cash flow, doing the same thing I'm doing if you look at Emerson. If you look at our capital spending in the first half of the year, we're down significantly from last year. I don't think I'm any different from any other CEO out there, and I think that CEOs right now are being very, very cautious relative to spending, and particularly given they keep seeing weakness emerging in the industrial space. So I think that part is going to be pretty challenging here for the next six months until CEOs feel okay, I can let go of a little bit more money and reinvest back into the company. That's how I see it at this point in time. Michael Wood - Macquarie Securities: Got it. And also, you called out the efficiency productivity investments in Process. Where are we in that investment cycle? Is it just beginning? And I'm curious why we don't see that in Industrial Automation in some of those efficiency investments. David N. Farr - Emerson Electric Co.: Boy, if I could read everyone's mind, I'd be okay there. I think that we are seeing that both on the Automation side and the Process side in Europe. We're starting to see it where Western Europe did not invest for some time, and now they're doing it. They're going after it. We're starting to see a little bit of that in Asia-Pacific. In North America, people are just being very, very tight with capital right now. Even though money is cheap, free almost, people are very, very cautious at this point in time relative to spending a lot of capital. We're very focused in our capital spend right now on productivity, quality improvement, and trying to get the costs down, but a lot of people are still trying to evaluate where they want to take their businesses. I think there has been an underinvestment, and hopefully we'll see it come back up in the old productivity and improving your efficiency and operations in North America. I'm a little bit disappointed to watch corporate America cutting too far in that area. But that's where they are right now, and I can't push and shove any more to make them do it. I know what we're doing, and we've redirected heavily the capital we're spending. We're spending less capital, but it's all tied basically to efficiency and productivity and how do we get lower costs for the future. Michael Wood - Macquarie Securities: Thank you. David N. Farr - Emerson Electric Co.: You're welcome.

We'll move now to Joe Ritchie with Goldman Sachs. Joseph Alfred Ritchie - Goldman Sachs & Co.: Thanks. Good afternoon, everyone. David N. Farr - Emerson Electric Co.: Good afternoon. Joseph Alfred Ritchie - Goldman Sachs & Co.: So, Dave, I just wanted to square your comments on orders bottoming in Process and the fact that things are getting weaker in oil and gas. One of the things that you mentioned in your slides was that the power markets have been getting better, and we've heard that from a few different people as well. So maybe is that the reason why you feel better about the orders bottoming on the Process business? And what specifically are you guys seeing in the power markets? David N. Farr - Emerson Electric Co.: The Process business, I look around the world. The one place that we've seen increased weakness is this U.S. day-to-day type of spending. That's the one area I see the weakness. The rest of world has continued to start increasing their investments in what I'd call the day-to-day productivity type investments. We're seeing that spending going on. If I look at the order pace in Europe and I look at the order pace in Asia, that trend is turning the right way. So that's why we felt pretty good. The one surprise we had is in the last couple months we've seen the U.S. spending rate come back down again, which bothers us. And that's what's created probably this delay by one month relative to April, the April target, which we have – I don't know yet for sure, but just intuition tells me where we were at negative 4% that should have been closer to negative 2%. So what's going on right now is this is climbing up a little bit slower, and we're having people be a little more cautious in spending. But on the power side, people are having to spend money for the new regulations coming into play. They've underinvested for a while. They have some plants they've had to take offline, and so we're seeing people spend money on trying to move towards gas. And so the spending is there for power and we're aggressively seeing that. We're doing extremely well in Europe. We're doing well in North America, and we'll doing well in Asia. We are a company that has actually continued to invest and grow and put new technology in. A lot of our competitors are walking away from what I call primary power. And so be it, I love it. We'll gladly make those investments for people. And so we've been investing from technology and innovation and acquisitions, and a lot of companies in our space that we compete against are actually deemphasizing it and walking away from it. Joseph Alfred Ritchie - Goldman Sachs & Co.: Got it. And maybe to follow up there on the oil and gas piece, have you started to see any weakness in midstream? I know that's one area that you guys have called out as being pretty strong for you. Is that attributing to some of the weaker oil and gas spending? David N. Farr - Emerson Electric Co.: No, midstream is fine. I think there might be an element going on. We could be seeing some cannibalization going on. As you know, there was a lot of investments that were done that's sitting out there, used equipment, maybe equipment that was never put in place. There could be an element of that, people going back and digesting and cannibalizing that right now. But clearly, something has happened to create people to back off. Maybe they found a warehouse of stuff that they had purchased for some investments. But clearly they're backed off and so they're using some older equipment or some equipment they found, and that's all that's going on at this point in time. Joseph Alfred Ritchie - Goldman Sachs & Co.: Okay, thanks. I'll get back in queue. David N. Farr - Emerson Electric Co.: Thank you.

We'll move on to Robert McCarthy with Stifel. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Good afternoon, Dave. David N. Farr - Emerson Electric Co.: Good afternoon. I thought we cut you out of the queue. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Our usual bet, Mortimer? Just kidding. So in any event, in terms of April versus May, given the fact that you've maintained your guidance, it really doesn't matter. And obviously the restructuring benefits have definitely kicked in. But do you feel good, it's just a matter of... David N. Farr - Emerson Electric Co.: Is it Bob, Rob? Norm (44:30) won't get any dinner for two weeks if we don't get April, so he's out there working his ass off right now. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: But do you think it's a question of you'll start to see that kind of nice pull-through in May – June timeframe? And how are you thinking about how – do you feel like the year from this perspective, given the restructuring benefits you've gotten and the most all margin conversion is well intact here? David N. Farr - Emerson Electric Co.: I'm looking at Frank. I think we feel good about the profitability right now because I think the operations and I think I know the operations are really, we got on this last year starting real early and they've worked it and we've kept the pace. And as you know, we haven't really slipped off the spending or the savings, and it's really starting to flow through. So we feel good about that. I feel a little bit more worried about sales because of the U.S. marketplace in particular. I feel better about Europe, as you can tell. I feel a little bit nervous about Latin America because I still think these guys are still struggling. But the U.S., this I would say slow to start turning that nose up really bothers me. But I would say that within the forecast we've given out there for sales, we're still comfortable, but it's probably a little lower than it was below. But I feel good about the profitability from the Power because that's happening. And so it's just we have some markets going our way, some markets are not going that way, and they're not all turning at the same time. And so that's where we are at this point in time. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Admittedly, a very strong quarter on margins and free cash flow generation. I don't think anybody can debate that. The final question I have is just following up I think on Scott's earlier question around the timing of M&A, and there are probably limits to what you can talk about this. But obviously, there's a certain decile of deals that you'd have to use equity for. Would that delay the timing? Do you have to get this exit out of the way before you would consider using equity? Is there a gating factor there? David N. Farr - Emerson Electric Co.: No, we don't see it as an issue there. The deals we're working on right now are probably not going to be cash deals. We could do billions of dollars in cash right now. That's not an issue. We've got an ample balance sheet. The operations have got – they've got the liquidity back in, they've got the working capital back in line. Our profitability is coming up. So I think from the type of deals we're seeing at this point in time we're looking at – and not some big strategic – I don't see us moving that way until we exit these other two businesses. But we see opportunities of multiple billion-dollar type opportunities that we could do internally right now just with pure cash. So we've got the position to do that. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: So for a large deal, really that's the gating factor is exiting Network Power, okay. David N. Farr - Emerson Electric Co.: Right. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Thank you very much. David N. Farr - Emerson Electric Co.: Take care, Rob. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: All right.

And now we'll move on to Christopher Glynn with Oppenheimer. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Thanks. David N. Farr - Emerson Electric Co.: Hi, Chris. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Hey, Dave and Frank. So you undercut our nosier questions about the portfolio of Process. But could you just sum up the run rates of Leroy Control and I think it's maybe ClosetMaid combined, how they're contributing this year? David N. Farr - Emerson Electric Co.: Leroy, I would say that Leroy Control Techniques are struggling this year. Frank J. Dellaquila - Emerson Electric Co.: $1.5 billion – $1.6 billion. David N. Farr - Emerson Electric Co.: Yes, they're what you call sales there. Frank J. Dellaquila - Emerson Electric Co.: It was $1.7 billion the prior year, but I would say it's probably down to $1.5 billion. David N. Farr - Emerson Electric Co.: Around $1.5 billion. Profit margin is down a little bit. ClosetMaid I would say is probably somewhat flat. Frank J. Dellaquila - Emerson Electric Co.: Yes. David N. Farr - Emerson Electric Co.: The margins are somewhat flat this year. So there's not – and we're not really taking any action on ClosetMaid at this point in time. But I would say Leroy-Somer Control Techniques have not seen the recovery that we thought originally. That business, the backup power area in industrial spending has been much weaker, though we're starting to see the improvements in Europe in that area and some improvement in Asia. So hopefully, we're getting to the bottom of this from a cycle standpoint, but it's been a tough run for these guys for the last couple years. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay. And with the Industrial Automation segment and your orders and business run rate, are you seeing any issue on customer commitments ahead of the question of who's going to own these properties? David N. Farr - Emerson Electric Co.: No, no, they trust that we're going to do the right thing. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay, and then last one on Network Power. You called out the importance of new channels and solutions allowing better winning out there in the marketplace. Already seeing big improvements this year, but you also commented on a long way to go, so I'm wondering if you've now established the guide path for another big step up in profitability here for the segment. David N. Farr - Emerson Electric Co.: We expect the profitability – the business used to run 10%-plus type of profitability, and so the goal is to get that back above that. And so as this business continues, the restructuring is getting closer and closer. I think they've gotten the majority of their restructuring done. They probably have a little bit left in the second half of this year. But from the underlying profit, when the growth comes, these guys are going to leverage quite nicely. So I expect them to see pretty good growth in the second half of the year and improvement in profitability in the second half of the year, both from growth and then also from improvement in the cost structure. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Thanks. David N. Farr - Emerson Electric Co.: You're welcome.

We'll move now to Shannon O'Callaghan with UBS. Shannon O'Callaghan - UBS Securities LLC: Good afternoon. David N. Farr - Emerson Electric Co.: Good afternoon. Shannon O'Callaghan - UBS Securities LLC: Hey, Dave, just on the restructuring, it sounds like it's tracking according to plan and everything, but the first half was only $28 million of expense. Just conceptually, I'm trying to figure out why that would be a back half loaded restructuring plan. It seems like you know what you need to do and you'd be getting after it earlier in the year. Can you just maybe explain what's going on there? David N. Farr - Emerson Electric Co.: We're doing some significant restructuring, some challenging restructuring in Europe, and you have to do it at a very measured pace. That's one of the issues right there. And so it's a plan that you try to get it done within 12 months; sometimes it takes 14 months. Our European process for restructuring is one that you want to do very carefully to get it done without major disruption and major problems with your workforce. So a lot of it is around that European situation. North America is a little bit easier, and that's pretty straightforward. But we have some restructuring underway in Europe that we well-planned out, and we might miss a month or two here as we push around. So that's what's going on at this point in time. The other thing we're doing at this point in time is also MEA. They are getting their restructuring done and they're actually getting it done at a little lower cost. They're getting their profit. They're getting it done, which is nice to see. If you do it with a measured pace, you actually get it done at a better cost structure and get the work done and it costs us less. But I still think we're going to be doing it around this $60 million – $70 million this year. And again, as I said, we're looking at some of the Process and Industrial area right now because there's some more incremental things we need to do to be properly positioned as we go into I would say a challenging first half of 2017 at this point in time. Shannon O'Callaghan - UBS Securities LLC: Okay, thanks, and maybe just one more follow-up on the M&A angle. Clearly, as you mentioned, you have the financial strength to do what you want to do. Organizationally, there's been – obviously, you're undergoing some big changes and also some management has moved around within the businesses. Organizationally, are you in a position where you would want to do something sizable? David N. Farr - Emerson Electric Co.: Yes, we're ready to go. We're ready to go. From the restructuring, by the time you start the process – I mean the restructuring, a lot of it will be well behind you as you get – our acquisitions don't happen in one day or two days. So if you do the process, I think that we're well-positioned as we go into the second half of this calendar year to take on some additional. And if we can pick up couple billion dollars worth of things, then we'd be very excited about that. Shannon O'Callaghan - UBS Securities LLC: All right, thanks a lot. David N. Farr - Emerson Electric Co.: You're welcome.

At this time, we will move to Josh Pokrzywinski with Buckingham Research. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Hi. Good afternoon, guys. David N. Farr - Emerson Electric Co.: Good afternoon, Josh. How do you pronounce your last name? Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Not like that, we'll try Pokrzywinski next time. David N. Farr - Emerson Electric Co.: Okay. I just wanted to make sure I didn't – I thought I knew who you were. I thought maybe you got a name change or something. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: I'm trying to revert to old country where we're nationalizing here ahead of any trouble. David N. Farr - Emerson Electric Co.: We just nationalized? I didn't know that. Thank you, Josh, all pun intended there. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: On Network Power, you called off some of the project strength in Europe, but you sound a bit more sanguine on the business in general. If I pulled out some of this project activity in Europe, which sounds chunky and maybe some detail on when that ends as well, but how do you feel about the other regions going forward or what you're seeing today? David N. Farr - Emerson Electric Co.: Network Power in total is doing reasonably well across the world. That industry does go – we've got a couple months we're on and then you have a pause. But generally, we're pretty pleased in the last couple months, and it's reasonably broad-based. So we'll see how April comes in. Our anticipation of April is that we have high single-digit order pace. And I think it would be interesting to see which regions come into play again. So if we get a high single-digit order pace in that space, then that means – that's more than one or two dots. Let's put it that way. So we'll see. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: How far does the European project activity take you out? David N. Farr - Emerson Electric Co.: Our European project right now is working on the second half – we work out second half calendar year. So what we're booking right now is really going to start helping us in the second half of this year. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Got you. And just to revisit the April – May order dynamic here, and maybe one month doesn't make a difference, but it does sound like you're talking about a bit more caution in the business. I guess versus three months ago, clearly easier comps get you a lot of the way, and stability would get you to positive order intake by that April – May timeframe. But did you actually see orders come in below where you would have thought, comp aside, just a daily order rate? David N. Farr - Emerson Electric Co.: What we saw was, as I was talking earlier on the phone call or in my initial comments would be the U.S./North America oil and gas day-to-day business was weaker than we would have anticipated. On the positive side, Network Power is a little bit stronger. I would say also – I would say that our order pace in China and some of the other businesses I thought would maybe be a little bit better, but it didn't quite trend that way yet. But I would say the primary reasons I look at the order pace is the North America capital type of spend market, day-to-day marketplace, was weaker the last three or four months. That's probably what's created the slowdown. If you look at the line, it still continued to drift up. It should have drifted a little bit faster the last two months, but it's on a curve now. It's one month behind where I thought it would be. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: So maybe a bit more of a bathtub shaped recovery here versus anything else? David N. Farr - Emerson Electric Co.: Yes, exactly. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: All right, great. Thanks, guys. See you at EPG. David N. Farr - Emerson Electric Co.: You're welcome, see you.

We'll move along to Jeffrey Sprague with Vertical Research Partners. Jeffrey Todd Sprague - Vertical Research Partners LLC: Good afternoon, Dave and everyone. David N. Farr - Emerson Electric Co.: Good afternoon, Jeff. Jeffrey Todd Sprague - Vertical Research Partners LLC: Hey, a couple questions. Maybe we could drill into China a little bit more and resi HVAC in particular. We've seen some mixed data there, Dave. Do you think you have any particular market share issue going on there, or is there anything to point out beyond just the challenging macro? David N. Farr - Emerson Electric Co.: No, I don't think so from a residential standpoint. We're not as much of a residential – it depends on how we mean it. The high-end residential we'd be a player there. But I would say our core markets, our core customer right now just went into a situation with too much inventory, and they're having to deal with that. And the rest, if you look at the rest of China, it's been pretty good for our residential business – or not, for our commercial, our residential business and the climate business, but there's not much going on there. It's just that market goes in pockets. These guys will go two and three quarters, they buy heavily, and then they overstock and then they cut back. So nothing unusual there at this point in time. Jeffrey Todd Sprague - Vertical Research Partners LLC: And just back to the portfolio one more time. I appreciate you've crossed the line in terms of planning and strategic thinking afore to where you want to be. But if you really do have the capability to do things on the buy side, so to speak, without getting these deals done, do you really want to be selling these IA [Industrial Automation] businesses in an environment where you're saying they're nose-diving into an 11-year bottom? Does that make sense? David N. Farr - Emerson Electric Co.: I said one piece of it was at an 11-year bottom, and I don't think I used the word nose-diving. But I would say that at this point in time, if we feel we can get the right type of cash out of this asset, then we will monetize it and move on. How long it takes for some of these assets to come back in certain cycles, we have things we want to do relative to repositioning, so we want to get on with it and do it rather than sit there and manage it. Jeffrey Todd Sprague - Vertical Research Partners LLC: Okay. And then on the Network Power side then too, I guess you are alluding to some strategic interest then if you look at maybe finding a buyer or taking longer for an approval process. Are you seeing some actual strategic interest as opposed to just maybe private equity type of interest for that business? David N. Farr - Emerson Electric Co.: I think there have been press releases on this but strategic interest out there? And the answer is yes, there is strategic interest out there. Jeffrey Todd Sprague - Vertical Research Partners LLC: Great, thanks, see you in a couple weeks. David N. Farr - Emerson Electric Co.: See you in a couple weeks.

At this time, we'll move to Deane Dray with RBC Capital Markets. Deane Dray - RBC Capital Markets LLC: Thanks. Good afternoon, everyone. David N. Farr - Emerson Electric Co.: Good afternoon. Deane Dray - RBC Capital Markets LLC: Hey, just to stay on Network Power on that last point, sale or spin, and maybe there's some nuance here that I don't appreciate. But my understanding is to qualify for a tax-free spin, you cannot have had substantive conversations with outside parties about a sale. So I'm not sure how you can have both these conversations and still have a tax-free spin. So what am I missing? Frank J. Dellaquila - Emerson Electric Co.: Deane, I think those rules – this is Frank. Hi. I think that's specific to a specific party, so that if you were to have conversations with a specific party and then spin it and then subsequently they buy it, then you'd have an issue with the tax-free nature of the spin. It is not a general prohibition against having conversations with parties as you spin the company. Deane Dray - RBC Capital Markets LLC: Okay. So that has not been breached then? Frank J. Dellaquila - Emerson Electric Co.: No. We're very, very careful about how we're going about this. David N. Farr - Emerson Electric Co.: Yeah. And people know that if they have a conversation with us and then they do go to certain levels and then they back off and then they wait for a spin, they have a problem. Deane Dray - RBC Capital Markets LLC: Got it, all right. I appreciate that clarification. And then as a follow-up then, Dave, you surprised us last quarter when you went back into the guidance business, quarterly guidance business, and you're surprising here again with not a range, but a point estimate. David N. Farr - Emerson Electric Co.: It's an approximate point, approximately. Approximately could be a range. Deane Dray - RBC Capital Markets LLC: Yes, but that squiggle, I'm seeing the $0.85. But the idea there is it suggests pretty good precision and visibility into the outlook. And so we can't even say where the assumptions on the high end and the low end, but just what's changed in terms of giving you this additional visibility? David N. Farr - Emerson Electric Co.: When I say approximately, I mean probably within a nickel. So I'd give you my sense right there from that standpoint. I just think that – I want to make sure that people understand on the projection we're on from the standpoint of watching people have a tougher time figure out where things are trending, I want to make sure that people understood where we are. So I'm going to make it very clear. Deane Dray - RBC Capital Markets LLC: Is it a top line that would provide that range, the high and low? David N. Farr - Emerson Electric Co.: Yes. Deane Dray - RBC Capital Markets LLC: And would it be U.S. change? David N. Farr - Emerson Electric Co.: What I said earlier, our cost reduction, our profitability is running at very good levels. If you look at the underlying conversion that we had in the last several quarters, it's been getting better. And then you look at the slower climb out on order pace will create – clearly putting some pressure on us where we think the top line will be. If the top line was a little bit stronger, then clearly our profitability would go higher and our EPS would go higher. Right now, we're more concerned about the top line sales than we are the profitability because we've got our cost structure in line right now. I feel good about that. We feel good about that. Deane Dray - RBC Capital Markets LLC: Understood, thank you. David N. Farr - Emerson Electric Co.: You're welcome.

We'll take the final question from Rich Kwas with Wells Fargo Securities David N. Farr - Emerson Electric Co.: Hello, Rick. Richard M. Kwas - Wells Fargo Securities LLC: Good afternoon. David N. Farr - Emerson Electric Co.: What are you doing? Are you all busy today? Are you working something hard today? Richard M. Kwas - Wells Fargo Securities LLC: Trying to, pretending at least. David N. Farr - Emerson Electric Co.: You work pretty hard. Richard M. Kwas - Wells Fargo Securities LLC: A couple for me. In terms of, Dave, you alluded to your expectation around oil prices may be pulling back a little bit. Should we think of the back half guidance being sub-$40 in terms of your assumption from a sales standpoint as it relates to...? David N. Farr - Emerson Electric Co.: No, I don't think right now – I think the day-to-day sales are pretty much set. It's not price of oil driven. I just happen to be one of these guys – you know me, Rich. I put stakes in the ground. I put a stake in the ground back in November about April. How many people do things like that? It's just my nature. And so my feel right now, I've always told you that I always felt that price always would run up, would run down a couple times. I fundamentally believe there's a chance it could run back down again into the $30s. I personally believe by the time we get into the fourth calendar quarter this year we'll be around that $50 mark. That's where I think things are going. People are cutting back. The demand is still growing, but it takes a long time. When you make an investment and you have oil and gas pumping and you've got that capital spend, you don't just turn it off. Typically, you let it run and try and make some cash out of it. Even though you're not making as much as you thought, you're still trying to get that payback. I think that's what we're going through right now. We're still squeezing it out. And I think there could be a bump in the road here down, but fundamentally I think the trend line is back up a little bit towards the $50 mark. And it doesn't make much difference in the next three or four months in sales. Richard M. Kwas - Wells Fargo Securities LLC: Right, okay. David N. Farr - Emerson Electric Co.: Volume in sales. Richard M. Kwas - Wells Fargo Securities LLC: All right, fair enough. And then... David N. Farr - Emerson Electric Co.: I mean you make calls, I make calls, you know? Richard M. Kwas - Wells Fargo Securities LLC: Right, exactly. David N. Farr - Emerson Electric Co.: Here you go. Richard M. Kwas - Wells Fargo Securities LLC: And then on U.S. HVAC, so you had a good quarter and the sell-in data has been very good and the manufacturing data has been a little bouncy. So how do you feel about inventories right now, and you're expecting a good fiscal Q3. Any risks around that based on what you're seeing out there? David N. Farr - Emerson Electric Co.: Nothing right now. The channels move up and down. I think that it could have had a couple months where construction wasn't as strong as people did and the inventories being built. Right now, it looks like things are pretty well balanced and the order pace is pretty good in North America. So I would expect us to have a decent third quarter in North America. And depending how hot it gets is how much liquidation goes out and how much you have to build later in the year, which will be a good thing for us. So we'll see what happens now. Right now, it's setting up to be a decent year for us in North America and a decent year for us in Europe and in some of the other parts of the marketplace. But it's good to see. It's good to see. Richard M. Kwas - Wells Fargo Securities LLC: If it's the normal weather, you feel pretty good about the growth trend. David N. Farr - Emerson Electric Co.: I feel pretty good about it. I'm not too worried about that segment right now. I'm not hearing anybody jumping up and down at this point. Frank, do you hear anybody jumping up and down? Frank J. Dellaquila - Emerson Electric Co.: No. David N. Farr - Emerson Electric Co.: Frank just shook his head. Frank J. Dellaquila - Emerson Electric Co.: I think we're in pretty good shape there. David N. Farr - Emerson Electric Co.: And if Frank doesn't jump up and down and shake his head, we're okay. Richard M. Kwas - Wells Fargo Securities LLC: All right. I'll see you in a couple weeks. David N. Farr - Emerson Electric Co.: Okay, good. Thanks. I want to thank everybody for their time today. Again, operations, outstanding job in execution. I thank Frank and Ed and Ed and everybody out there working with the operation guys to get this done. And we clearly continue to pivot towards the repositioning. And our goal is to come out, as we talked about in the February investor meeting, come out a little bit smaller company, more profitable company but quickly add on acquisitions to use the money we're going to generate here to invest in the growth again and get this company back above $20 billion with a 19% to 20% EBIT margin, so a very good business. So that thank you very much, and you all have a great summer. Bye.

Thank you. And this does conclude today's conference call. Thank you all for your participation.