Welcome to Pall Corporation's Conference Call and Webcast for the Second Quarter of Fiscal 2015. Today's call is being recorded and simultaneously webcast. Instructions for the question-and-answer session will be provided at the end of management’s prepared remarks. Right now, all lines are in listen-only mode. We’d like to remind you that the company's press release is available at www.pall.com. Management's remarks this morning will include forward-looking statements. Please refer to slide two or request a copy of the specific wording of this qualification of the company's remarks. Management also uses certain non-GAAP measures to assess the company's performance. Reconciliations of these measures to their GAAP counterparts are included in slides at the end of the presentation. At this time, I will turn the call over to Mr. Larry Kingsley, Pall Corporation's Chairman and CEO. Please go ahead, sir.

Good morning. Thank you, Felicia. I'm here today with Brent Jones, our SVP of Corporate Development and our Treasurer; and Angelina Rouse, our Corporate Controller. I’ll begin by recapping the quarter and updating you on the markets we serve. We'll then run through the Q2 numbers and conclude with an update on our full year outlook and some summary remarks. As I'm sure you've already seen from our press release, we delivered a pretty solid result particularly in light of the significant FX headwinds we faced. We had overall growth of 6% on a local currency basis with organic growth of just over 2% despite our U.S. dollar heavy cost structure we still managed a modest increase in operating margin. Pro forma EPS of $0.88 was up 7%, if you exclude the impact of the translational FX, which represents $0.11 in the quarter, EPS rose by 21%. As you know, we've been achieving very strong profit conversion on solid organic growth both productivity gains and the structural actions that we’ve taken in recent years are further enabling continued margin expansion. Our strong organic conversion continued in the quarter with operating income increasing by 2%, despite a 5% decline in reported sales. We are also converting the cash strongly, free cash flow as a percent of net income for the quarter was 129% and 123% on a year-to-date basis. For the balance of the year and beyond, we expect our cash conversion to be in excess of 100% as we drive working capital improvements in the overall capital efficiency of the company. Before we dig into the details of the quarter, a quick update on what we are seeing out there generally, as well as more specific commentary on the end-markets that we serve. Our Life Sciences business continues to be strong globally, the BioPharm market is showing solid growth and we are performing well. Although, our sales and order rates were not quite at the exceptional levels we saw in the first quarter, the team continues to execute very nicely and our single-use business has become a strong contributor. We continue to invest both organically and acquisitively to expand our offering. Medical and Food and Beverage market conditions remain GDP like and we are continuing to outperform the market in Food and Beverage. On the Industrial side end markets remained mixed. MicroE markets are solid with good throughput, but CapEx is more muted than we have seen in the last 18 months. Our technical advances and associated share gains continue to drive solid sales and order performance fill. Aerospace continues to perform consistent with customer and program related demand patterns. The impact of constraint federal spending is impacting our Military business. But this is being offset by strength in new commercial programs and our expanding aftermarket presence. The Process Technologies, which largely consist of machinery and equipment, and fuels and chemicals applications, continues to be mix, with pockets of strength in various applications and geographies. Machinery and Equipment OEMs are our most challenging customer category. While in-plant automotive continues to be strong globally, applications and primary metals and mining are pretty weak. The fuels and chemicals, we don't have significant exposure in upstream oil and gas markets, our key applications are downstream, that is in refineries and petrochemicals and polymers. These markets continue to show reasonable growth. However, our performance is project and event driven. So there are quarters like the present where sales are soft but orders quite strong. I will come back to our view of the energy markets and how it influences our current forecast for the remainder of the year after Brent goes through the Q2 results. In summary though, the environment is not without challenges, but we continue to find segments to grow and evolve our strategy. I'm pleased that the improvements are continued to see across the company from sharpen sales execution to continued operational improvement and good SG&A discipline. While we aren’t yet operating at the level we aspire to and continue to make good progress. And so with that, we are going to dive into the results, and I am turning to slide five for your reference. Sales grew 6%, excluding FX and 2% excluding the acquisitions and FX. Gross margin declined 30 basis points in the quarter. This decline was largely due to the dilutive contribution from our recent acquisitions and adverse transactional FX. But we also experience some favorable mix within the Life Sciences segment. SG&A as a percent of sales was down 50 basis points. All-in, operating margin was 18.5% in the quarter, that’s up 30 basis points from a year ago. Pro forma earnings per share in the quarter was $0.88, which represents an increase of $0.06, or 7% compared to last year, bridging this increase, operating profit contributed $0.12, the impact of share count reduction, lower tax rate and other items in the aggregate contributed $0.05, while translational FX again was an $0.11 detriment. So now I am going to hand it over to Brent who will go through the results in a bit more detail. Brent?

Thanks, Larry. I am on slide six. As noted, I will talk to the year-over-year changes excluding translation FX. Life Sciences sales grew by 9% in the quarter and 5% on an organic basis. Industrial sales were up 3% and were down 7% organically. Consumables which represented 88% of sales in the quarter, grew 7% overall. Life Sciences consumables grew 11%, while Industrial consumables were up 2%, both benefiting from our recent acquisitions. Systems sales were up 3% overall, with Industrial, which comprises a larger share of our Systems business, up 9%, while Life Sciences was down 6%. Turning to slide seven and to Life Sciences segment, BioPharm consumables sales grew 13% on overall market strength, growth in single-use systems and the benefit of the ATMI acquisition. Organic growth was 7%. Medical consumables increased 2%, on growth in OEM sales, partly offset by lower blood media sales. Finally, consumables sales in Food and Beverage were up 8%, on growth in all three regions. On the order side, consumables increased 11%. BioPharm orders were particularly strong, both with and without the impact of acquisitions. Food and Beverage orders were up 6%, while Medical orders were flat. Systems orders decreased 3% in the quarter. In terms of margins, Q2 segment gross margin decreased 170 basis points to 54.9%, largely due to the dilutive impact of the ATMI acquisition and some adverse product mix. Segment reported SG&A declined 30 basis points, while R&D spend was down 50 basis points. The combination of these factors resulted in segment margin of 24.8%, a 90 basis point decrease from a year ago. Now turning to the Industrial segment on slide eight. Process Technologies consumable sales were flat all-in and were down 11% organically. As Larry mentioned earlier, this is mainly due to a global slowdown in Machinery & Equipment and weakness in Fuels & Chemicals, which was largely timing related. Aerospace consumables sales increased 8%, on strength in both commercial and military. MicroE consumables sales grew 3% on strength in Asia, and Systems sales increased 9% mainly due to timing of Process Technologies capital projects. Consumables orders were up 6%, largely due to the contribution of our FSI acquisition. Systems orders were down 15% in the quarter. Turning to margins, Q2 segment gross margin increased 120 basis points to 45.7%. This is largely due to improved systems margins. Segment reported SG&A declined 90 basis points, while R&D spend increased 40 basis points. All-in, segment margin for the quarter increased by 170 basis points to 16.2%. Turning to slide nine. As Larry mentioned earlier, we had another terrific quarter for cash flow. Operating cash flow in the six months was $238 million, compared to $206 million last year, an increase of 16%. CapEx was about $25 million. As a result, free cash flow was $213 million, a 25% year-over-year increase and about a 123% of reported net income. Our cash generation capability continues to improve and is sustainable. We are confident that we will achieve our full year goal of free cash flow exceeding net income. Significant uses of cash during the six months included $304 million of share repurchase and $63 million of dividend payments. Finally, our cash position stood at around $1 billion as of January 31, and our net debt position was $147 million. I will now turn it back to Larry.

Thank you, Brent. I am on slide 10. So one of the obvious major changes since we last spoke has been the dramatic decline in oil prices and the associated industry response. The economic flow through as we all know was complicated, but can be boiled down to basically two effects. First, the actual spend associated with exploration, production, and downstream activities, and then secondly, the derivative impact of both positive and negative that has to do with the energy cost and the oil gas related CapEx spend to the broader industrial economy. In terms of the former, the upstream oil and gas markets, our content is generally limited to the injection water, the LNG, and the acid gas applications, which in the aggregate represent a pretty small portion of our Fuels & Chemicals content. Our primary applications are downstream. As we talked to you before about, they include the compounds such as ethylene, hydrogen peroxide, and then synthetics like polymer fiber production. These markets are driven by throughput and input costs and thus they are typically helped by reductions in the crude oil prices. In terms of the impact to the broader industrial economy, while we aren’t going to speculate on the macroeconomic impact of the oil pricing generally, we can tell you that it has created some uncertainty in the marketplace, as largely as it relates to capital deployment which can be impacted by broader corporate spending directives. There have been regions. And Russia, obviously, at the top of the list that have been very strongly impacted. However, if there is any trend for what we are experiencing, it would be toward greater caution and delays rather than outright cancelations. So I am going to change topic. So if you look at slide 11, and you could look at that for your modeling purposes, the charts represent our revenue by functional currency for all of fiscal '14 and fiscal '15 to-date. This illustrates the magnitude of the problem that we have been alluding to and that is that about 70% of our revenue is ex-U.S., but also the effect that rates are already having, evidenced by the smaller proportion of FY ’15, that’s in the pie related to the depreciated euro and yen. If you then look at slide 12, you can see the magnitude of the U.S. dollars strengthening. When we last updated you in November, the euro had declined 8% versus our plan rate. Now it’s down about twice as much at 16% down. The yen has held stable since the November discussion but still down about 17% versus plan and the sterling has continued to weaken, it’s down about 9% versus ‘12. So the strong U.S. dollar affects us more than most due to our higher share of ex-U.S. revenue. Our profit is a function of our ex-U.S. revenue profile, is further magnified by our disproportionately high U.S. located SG&A and R&D spend. And the combination provides for quite a structural challenge in the current environment. On slide 13 and 14, you can see our revised expectations. So if you look at it, despite the noise around the currency situation, the underlying local currency performance of the business remains strong. In fact, our local currency expectations for the business have only improved since we begin the year. We expect Life Sciences to perform in the high single digits on the topline and Industrial to be up mid-to-high single digits, where you could see our expectations revised downward is in the all-in revenue and EPS. We now expect reported revenue growth to be low single-digit. To put this in context, when we provided our fiscal ‘15 guidance initially, rates were such that we expected no translational impact for the year or where at the prevailing rates, we will see approximately $200 million of full year headwind to revenue about 7% and the impact of FX translation EPS will be even greater around $0.40. So while we are operating very well, the FX impact is too large to countermeasure with improved core performance. And accordingly, we are reducing our full year pro forma EPS guidance to $3.65 to $3.85 and that still represents a 6% to 12% increase over fiscal ’14. Last quarter we said, we expected to large countermeasure what was at the time of $0.25 FX headwind. Now though the FX headwind has increased by an additional $0.15. Accordingly, we are lowering the midpoint of our range by only $0.10 and that thinking is based on, one, the continued strength that we see in Life Sciences and two, our very strong version among some other things. So there are risks to the outlook. The primary one is still FX, which we don't expect to improve for a while, which may actually get worse before it gets better. We also continue to be very cautious about the industrial outlook generally in Asia, regionally in particular. So, again, our local currency based guidance for the year has actually risen, just not well enough to overcome this unprecedented headwind. But even with an estimated $0.40 impact from translational FX, we still expect EPS to grow at the midpoint of our range or just under 10%. Our operational journey continues and it is continuing unabated. Operating margins continue to rise and SG&A continues to fall. We are generating cash like we never have before and we are ready to deploy the balance sheet when we find those great opportunities. So, in summary, while we certainly have a number of exogenous factors working against us, we have good momentum and I'm confident in our ability to execute and deliver a solid second half for fiscal ’15. So, with that, Felicia, we are going to open the line for questions.

[Operator Instructions] And your first question comes from the line of Isaac Ro with Goldman Sachs.

Thank you. Just first off, you guys mentioned a couple of times in the script, the improving sustained free cash flow dynamic. Same time, you have had some competitors involved in M&A. So curios if you're seeing, perhaps a little bit more opportunity for deal flow this fiscal year, is that a reasonable possibility?

Yeah. Isaac, I would say that the dynamic in the markets are similar to what we’ve seen for the last 18 months or so, maybe even longer now. There hasn’t been that much deal flow on a relative basis. Those properties that have traded, as you know have traded at incredibly high prices. And the way we think about it is we like certain properties and there is a finite population that we like enough to buy at the kind of premiums that we’ve seen stuffs trade at. If it’s opportunistic and we can’t see our way to a good enough return, we are certainly not going to go there. We’ll take the organic route or some other means to get to the markets that we like. I think it’s important and maybe more so now than ever to be incredibly disciplined around not going after stuff for the sake of doing so, where the returns just frankly don’t make a lot of sense. So, bottom line of that, I wouldn’t think to tell you that the dynamics have changed a lot in the recent time and I think that we still go after the stuff that we like very aggressively and the stuff that we think is opportunistic, which we’ll certainly take a look at it but we are not going to participate at crazy premium.

Sure. That makes sense. And just one question on the fundamentals this quarter, it sounded like you guys wanted to, if I recall, probably decent health in the biopharma end markets. Can you comment at all how you feel about just the market share positions? Did you think maybe you took a little bit of share this quarter and for the balance of the year, any expectations that that might continue? Thanks.

Yeah. Sure. I would say it’s difficult. We’ve said this before and a couple of quarter calls, difficult to say on a quarter-to-quarter basis whether you’re taking share or losing share for that matter. I think for the first half of the year, certainly our growth rate is stronger than just about anybody else there. Organically, we’re executing quite well. As I said in the prepared remarks, our single use business is performing extraordinarily well. I’m not going to delve into those specific product line growth rate because it gets just a little bit too transparent for the market around us. But we have reasonably good data -- granular data around all of the rest that are performing at X rate, we think we’re X plus by a pretty good margin right now for the first half of the year. The back half looks strong.

Got it. Thanks so much.

Sure.

Your next question comes from the line of Richard Eastman with Robert W. Baird.

Hi. Good morning.

Hi Rick. How are you?

Larry, could you maybe just tease out the order numbers within Pall Industrial. I think the consumables was kind of 0.25% to plus 6% but it sounds like most of that was FSI. So when you look at the systems orders being down 15%, consumables maybe flattish. Is there much -- has the tone changed at all there. Has it softened or improved anywhere? It looks like the America's growth was pretty good but just maybe the tone under Pall Industrial side?

Sure, Rick. The bottomline, it hasn’t changed a lot but the significant components, if you think about the first by the portions of product segment that contribute next around the geographic components. If you look at consumables organic orders, excluding the impact of Aerospace, it’s around 3%. Aerospace consumable organic in the quarter was down. I’ll have to bridge that math and you can do that, down about four. The organic systems rate is down quite a bit. As we mentioned, Brent mentioned in his prepared remarks. And some of that was projects, couple of projects that we decided not to participate in due to very competitive pricing. As we’ve said before, we’re only going to go after systems, opportunities that one, present that annuity stream and two, make sense to meet our overall margin threshold. So there was a bit of a competitive pricing on the industrial systems front for which we didn’t receive orders net-net in the quarter. The bottomline is, I don’t think that we’re thinking dramatically differently about geographic content as it relates to industrial either for consumables or systems. So it is -- essentially Americas pretty strong, Asia, we’re watchful on and Europe, it’s more secular in nature, it’s too what’s performing and what’s not. On a global basis, when you look at it, as we talked in our prepared remarks, the M&E portion is by far the most concerning. And that’s such a big mobile application at a very top of the concerned list. So anything that has wheels on it, not looking great right now. Some of the other big capital stuff metals and paper and things of that sort also are pretty slow. There are some of these offsets within M&E as I mentioned in the remarks, in-plant, general industrial lube applications not bad but M&E is the one we’re watching. We don’t have much in our assumptions set for the next six months or so.

Okay.

F&C, very strong order rates and ought to play though pretty nicely in terms of really strong organic performance for the back half of the year.

Okay. And then just as a follow-up, when I look at the profitability in PI, again it does -- it certainly looks like the system strategy is helping the profitability for not chasing the lower margin product systems. But then also, given where your manufacturing assets are on Pall Industrial, is it -- did currency help the EBIT line at all, was there a benefit at the EBIT line?

No.

Okay. So just structurally here though, we have made enough improvements that our EBIT margin again has stepped up year-over-year primarily because of the improvements internally on the system side?

Well, it’s a combination of things. And again quarter is a short period of time to draw a trend line from but we have positive contribution, roughly 100 bps associated with consumables versus systems mix. And we got some price, little bit of pricing in the quarter, productivity for the company but also for industrial was strong. And we see that as continuing to be strong for the back half. And we -- the only offsets on there were essentially the transactional FX which is the mix of currencies where stuff’s produced and that cost us about 50 bps in terms of gross margin in the quarter for industrial. And then the M&A that we spoke to.

Okay. Great. Thank you much.

The next question comes from the line of Brian Drab with William Blair.

Good morning. Hi Larry. Hi Brent.

Hi Bryan.

First question, I think you may have touched on this just briefly, Larry but on the raw material side of things and I’m wondering if you could get a benefit as we move through the year here in terms of margins. I have in my notes that about 50% of your COGS is raw materials. And again, just in my notes, more than half of that is resins, so just looking at the prices of Polyethelene, Polypropylene, some of the -- could we see a lift in margins related to lower oil?

It is a more complicated answer than you might think. It is a much smaller percentage to start with, Brian, in the piece that’s actually oil content within resins, within the wovens, within our cost of goods is so small that the impact is negligible. And I think we are going to see later this week. So rather wait for a conversation now, we can market through later this week. But it’s for the broader population on the call here today that the impact is negligible.

Okay. Okay. Thanks. And then, so again, we talked a lot about translational FX today. I’m wondering if you have any comments on transactional, that was always a significant issue in the past. How significant was that in the second quarter and what are the expectations for the full year?

In the quarter, it was about $0.02. For the year-to-date number, I think it’s what, $0.06, Brent?

$0.04.

$0.04. And it is not so much a function of moves that we’ve made as to where we make stuff, i.e. the moves in Europe from the U.K to euro denominated locations. It’s more about the particular pairings of where stuff is made and sold globally. It is not immaterial on a full year basis but it’s not anything close to the magnitude of the translational impact.

Yeah. Brian, the key pairings there are the yen versus the euro and dollar, which we’ve talked about a lot recently. And then the euro sterling, just there has been a little more of a mismatch there. We have dampened that due to our cash flow hedging but it’s certainly an affect. But those were kind of 50-50 in terms of their impact using very rough numbers.

Okay. That’s really helpful. Thanks a lot.

Yes. Thank you.

Your next question comes from the line of Paul Knight with Janney Capital.

Good morning. How are you?

Good.

Thanks for the clear explanation on guidance. But the biotechnology segment had higher bookings growth, I believe in the first quarter than the second. Any re-through on that?

As we’ve said -- no not really. As we said last quarter Paul, there were some orders in terms of where they placed on the first versus second quarter that through that rate up. But when we look back at the end of the year, I can tell you there we’re going to look at a pretty impressive orders and sales organic rate for a BioPharm and it moves around a little bit quarter-to-quarter but all-in it really impresses.

And the success of your acquisitions in single-use market, can you talk to that?

Well. The single use market generally is growing very nicely. Frankly, unlike anything in the industrial technology space that I ever seen. We are very pleased with the assets that we’ve acquired. Operations of our single-use business is lagging, the broader company at this point. We’ve got a fair amount of work to get it to the bottom line as nicely as the kind of the traditional BioPharm business. But we are on our way and I think it’s only a matter of how we ride the broncho here for some period of time. But it’s really a great business. We created a nice product position for ourselves and things are basically tracking on or just slightly ahead of our strategic plan.

So, I guess the tone is biotech deal’s better.

Biotech has felt great for quite sometime. So versus time, I would say it is pretty consistent. Biotech versus any other space that we participate in or any other space I’m aware of, yes, is better. It’s a great place to be.

Okay. Thank you.

Your next question comes from the line of Derik De Bruin.

Hey. Good morning. It’s Rafael in here for Derik and thank you for the questions. Larry, just wanted to get a little bit more color on the Process Technologies end market. In the prepared remarks, you were talking about the mix in end markets, certainly you’ve spend some time on the energy portion of that. But can you, I guess talk a little bit more about the areas where you are seeing that strength and how that’s translating into the orders that are at hand right now? Thanks.

Yeah. Sure. As I think I mentioned, the seesaw nature in what we saw in terms of not so great organic sales performance for what we call Fuels & Chemicals is certainly more than offset by what we saw in the very strong orders performance. Organic up mid teens and reported up, double that. And it is a pretty broader way of consumables that we’re seeing not just in the U.S., but broadly Europe performed quit nicely. Within energy, we also report our power-gen business, which is $110 million, $120 million year kind of business that is not nearly as strong. And we don’t have expectation that’s going to be strong anytime soon and for us that’s a combination of fossil and nuclear applications and some OEM content there. So you’d find stuff on board, power production, OEM equipment that we don’t see as very strong for some time to come. It doesn’t have a very large dilutive impact to the total performance of the -- what we call Process Technologies. But that would be the breakout of how I would characterize all in what we call energy. The other components of what we call Process Technologies are water, which is largely municipal water and that’s come down a long way from where it was several years ago but that is performing pretty well right now. And well small it’s nice to see it kind of accretive in terms of rate. And then M&E as I mentioned the piece that’s not expected to do well for at least six months some of that is inventory destocking that we’ve seen with some of the big guys that you would know the names of. We are not getting to specific and those guys are telling us that their bleed is another five to seven months and then they order again at some pace. But we are not holding our breath for any fantastic performance there. On the systems side within Process Technologies, it’s a mix bag, but generally we don’t have high expectations there for good organic contribution out of system for some time to come.

Okay. Appreciate that color. And just had one on the margin progression, can you remind us what the margin progression would -- operating margin expansion would look like on a local currency basis?

You mean for the quarter without the impact of the….

Just what’s embedded in the 2015 guidance, what that would -- what that expansion would look like if we didn’t have the currency headwinds or if we could catch up offline on that one?

Yeah. Rather than give you a bad number, why don’t we catch up offline and let’s have it handy.

Yeah.

We have to go back and recalculate kind of two quarters ago to get to LC on a full year basis before we have the -- even the Q1 conversations.

Okay. We’ll catch up on that later. Thank you.

You are welcome.

And your next question comes from the line of Jeff Zekauskas with J.P. Morgan.

Good morning. It’s Silka Koopf for Jeff. How are you?

Hi Silka. How are you.

I am doing well. I’ve got a couple of questions. I was wondering where you can shed more light as to what happened in the Life Sciences business. So just maybe can you explain what are like the higher margin products, what are like the lower margin products and why EBIT was down even though the local currency growth was up 9%?

Yeah. Really good question, Silka. So there’s really three things happening there within Life Sciences and we’ll just talk about at the gross margin level because generally speaking the rest of it leverages quite nicely. So if you look at the number for the quarter report that you got the down 170 bps, we talked about the fact that transactional FX, that’s the make versus sell currency pair piece cost to something, it was about 30 bps. And the M&A impact in the quarter meaning the lower gross margin rate versus the kind of incumbent business cost us about a 110 bps. So the two are around 140 out of the 170, but then when you bridge the rest of it, we benefited from the consumable systems mix that was 30 bps. So we got a little bit of price around 20 bps or 30 bps. Productivity was a strong 150 bps for Life Sciences in the quarter and then the mix was that down 240 and that’s three components within the drive-it. First, it’s single use versus the classic biopharm business which I just mentioned a few minutes ago, and then it was particularly the mix within single use. So single use is now becoming a broader portfolio for us, some of its equipment, some of its consumables. We’re not getting overly specific for competitive reasons. There are some better margin product in there versus some yet not so great margin product in there. And within single use, we didn’t have great mix. And there was a little bit of adverse contribution from the segment in the segment of Life Sciences with food and bev being stronger and food and bev margins as we all know historically not quite as strong as Biopharm. So I know there is more detail than you wanted but that’s…

No, no that the right level of detail. Okay. That’s helpful. On the industrial side, the Process Technologies business is like the largest piece was in the business and if you strip out the acquisition benefits from FSI like it looks like organic growth was down, like something like negative 11 and is -- have you seen the most difficult quarter yet in Process Technologies or is there more to come because it seems like the order patterns look better but if this were a trend, it seems that whatever the guidance is for industrial for the year seems too optimistic?

Well, again I wouldn’t draw a trend out of either the sales performance for Process Technologies in the quarter, which was down kind of in the range that you spoke of or the orders for Process Technologies. Within there, you got quite a few things going on. But the bottomline is that, I think, we have see the worst of organic sales performance quarters by far for the year largely impacted by fuels and chemicals which was down double digits, but then, if you look again at organic orders in the quarter, up given the 17%.

Right.

So, I really honestly wouldn’t try to draw a trend line out of the quarter for Process Technologies. Certainly, we don’t think we’re performing where we should be for that business and we’ve got work to do, but we don’t have big assumptions built-in for that M&E, machinery and equipment piece for the next six months and we still get to the guidance component that we spoke to in that that we talked about in our prepared remarks.

Okay. And lastly, on capital deployment, so in the beginning it will be a, I remember like you were saying, we’re going to spend $700 million this year, part of its CapEx, part of its dividend? But buybacks $300 million for some shares which you did. And then there was like another $300 million that you do something with acquisition, share repurchase and like it doesn’t seem there is anything in immediate pipeline? So have you made the decisions as to when you would step back to buyback some shares or step back and I guess, to buyback some shares?

We have been considering that and I think that, yes, it would be a stress to say that that $300 million gets deployed acquisitively between now and the end of the year, not because there’s not the desire to do so, but because the property needs to be there. We do like that capital equation that you referenced, that Akhil spoke to and so that would still be the target. I’m not going to get more specific right now in terms of how we think about, how we would allocate it given the back half expectations.

Okay. That’s fair. Thanks a bunch. I’ll get back in the queue.

And your next question comes from the line of David Rose with Wedbush Securities.

Good morning. Thank you for taking my call. Couple follow-up questions on the orders. Where did you see the greatest acceleration in orders in Life Sciences?

We -- acceleration versus with sequential or organic?

Sequential -- sequential organic.

There really isn’t a greatest acceleration.

No. Deceleration within the segment?

Deceleration?

Yeah.

It’s really not a matter of great deceleration and again, as I said earlier, you really wouldn’t want to think about Q1 versus Q2 order rates in any defined way. If you look at some of the big orders that we got in Q1 some of those bridge, three or more quarters worth of sales expectations, we didn’t see as many big blankets in Q2? If you look at kind of overall book-to-ship activity and how layers into how we’re loaded for the back half of the year and as we enter into next year, it kind of level loads as pretty nicely and you get that very high single-digit even edging on double-digit kind of consistent organic assumption.

Okay. And then, I missed the M&E orders, what was the change in orders for the quarter in organic?

I don’t have the Q1 M&E organic number in front of me. So I can’t give you that Q1 versus Q2.

No. Just year-over-year.

It’s down 10.

Okay. And then, lastly, your comments on Asia, you mentioned you were more cautious or concerned about Asia? Can you provide maybe a little bit color on which pockets within the segments you’re more concerned about? What makes you more concerned about Asia?

It’s the same as we already spoke to. Its basically M&E, and bits and pieces of PI otherwise, but again it would be more pronounced as we would look at M&E as it relates to Asia. We’re seeing generally pretty solid execution in emerging Asia right now, Japan is strong and a back of MicroE. You think about mining, primary metals and the geographies of Australia, New Zealand, things of this sort, that’s where you’d have your kind of largest year-over-year concern and just kind a watchful eye toward the back half. But, again, the components of Life Science, MicroE, good chunks of PI otherwise remain quite strong in Asia for the back half.

Okay. That’s helpful. All right. Well, thank you very much.

You’re welcome.

And your next question comes from the line of [Nick Pingrass] [ph].

Hi. Good morning.

Hi.

I just had a quick question on your tax rate here, came in a little bit lower --if I’m calculating it correctly on an adjusted basis, it came it a little bit lower than what we are anticipating? Was there anything unusual in there?

Hey, Nick. It’s Brent. It’s mainly due to the final -- the passage of some of the extenders and then some associated catch-up.

So, that you’re talking about the R&D extender?

Correct. Correct. And there are some other tactical pieces of that legislation, but that you could summarize it that way fairly.

Okay.

So it certainly is a more advantage rate for the quarter then that that against sort of a more normalized rate consistent with our guidance for the back half of the year is what leads to the full year guidance going down by about 50 basis points on rate.

Sure. That’s what I figured. All right.

Yeah.

And then one more thing and I think you spoke this in your prepared remarks. But you’d mentioned that the FX headwind is increasing by about $0.15 but you’re only lowering your guns by about $0.10 and what was the $0.05 delta there?

Good execution. Some of it in the quarter, some of it continued expectations for strong productivity, good PPV, little bit of price, but its fell at operating execution.

Okay. All right. Well, thank you very much.

And there are no further questions at this time.

Okay. Well, we would like to thank all. Thank you, Felicia. We look forward to talking to you throughout the quarter. But most importantly, we look forward to talking to you when it’s a lot warmer than it is today here in Port Washington, so we’ll speak at our next quarter call right after the Memorial Day holidays. With that we’re going to end our call. Thank you all.

Thank you. And this concludes today's conference call. You may now disconnect.