Jim Lucas - Pentair Plc Randall J. Hogan - Pentair Plc John L. Stauch - Pentair Plc

Shannon O'Callaghan - UBS Securities LLC Steven Eric Winoker - Sanford C. Bernstein & Co. LLC Michael Halloran - Robert W. Baird Charles Stephen Tusa - JPMorgan Securities LLC Ronnie Weiss - Credit Suisse Securities (USA) LLC (Broker) Joe Ritchie - Goldman Sachs & Co. R. Scott Graham - BMO Capital Markets (United States) Nathan Jones - Stifel, Nicolaus & Co., Inc. John Fred Walsh - Vertical Research Partners LLC Jeffrey Hammond - KeyBanc Capital Markets, Inc. Joshua Pokrzywinski - The Buckingham Research Group, Inc. Robert Barry - Susquehanna Financial Group LLLP

Good morning. My name is Scott and I will be your conference operator today. At this time, I would like to welcome everyone to the Pentair Q3 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Jim Lucas, Vice President of Investor Relations, you may begin your conference. Jim Lucas - Pentair Plc: Thanks, Scott, and welcome to Pentair's Third Quarter 2016 Earnings Conference Call. We're glad you can join us. I'm Jim Lucas, Vice President of Investor Relations and Strategic Planning. With me today is Randy Hogan, our Chairman and Chief Executive Officer; and John Stauch, our Chief Financial Officer. On today's call, we will provide details on our third quarter 2016 performance as well as our fourth quarter and full-year 2016 outlook, as outlined in this morning's release. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in Pentair's most recent 10-K and today's release. Forward-looking statements included herein are made as of today, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation which can be found in the Investors section of Pentair's website. We will reference these slides throughout our prepared remarks. Any references to non-GAAP financials are reconciled in the appendix of the presentation. We will be sure to reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and a follow-up in order to ensure everyone an opportunity to ask their questions. I will now turn the call over to Randy. Randall J. Hogan - Pentair Plc: Thanks, Jim, and thank you all for joining us today. I'll be starting on slide 4. We delivered third quarter results that operationally met the high end of our forecast and were slightly above our guidance as a result of anticipated separation costs that did not materialize. While two of our three segments did not deliver core sales growth as a result of continued slow industrial spending, the margin performance overall is a testament to our strong discipline around cost management. We announced in August that we reached an agreement to sell our Valves & Controls business to Emerson. This transaction is on track to close at the end of this year or early next year, subject to regulatory approvals. We're not expecting any recovery in industrial capital or maintenance spending at the end of the year in contrast to the typical year-end lift. Given this muted top line outlook predominantly on industrial-facing businesses, we're lower our fourth quarter outlook. We do not believe the fourth quarter is indicative of a trend, and we expect at some point maintenance spending will return in a more meaningful way. And longer cycle projects, particularly in food and beverage and infrastructure, are also likely to break loose. As we look ahead to 2017, we believe we are positioned to deliver strong EPS expansion despite this ongoing slower growth environment. I'll discuss this in more detail later in the call. Now let's turn to slide five for discussion of our Q3 2016 results. Third quarter core sales decline 2% as we saw further slowdown in capital spending throughout the quarter and ongoing referrals deferrals in maintenance spending. Water Quality Systems was our only segment to deliver core growth as the pool business once again finished the season in a strong position. We reached the one-year anniversary of the ERICO acquisition and the performance has met all of our expectation. Segment income grew 15% and return on sales expanded 110 basis points to 17.9%. Water Quality Systems delivered over 300 basis points of margin expansion. And despite the core sales decline in Flow & Filtration Solutions, income and margins were down only modestly as the segment delivered on better internal execution. Adjusted EPS grew 11% to $0.78 per share and exceeded our forecast of $0.70 to $0.75 per share as our core operating results met our income forecast while we did not incur the one-time separation costs we were expecting below the segment income line. Free cash flow continued to be bright spot, up over $150 million year-to-date compared to last year, and our conversion to adjusted net income remains just north of 100%. Now, let's turn to slide six for more detail on Pentair's Q3 2016 performance. Once again the residential and commercial vertical was a bright spot, driven in large part by our strong North American pool performance. While ERICO's performance was not captured in the core, its commercial sales also remain strong. After a good second quarter, we did see overall infrastructure sales decline modestly in the third quarter. We continue to see strength in engineered pump orders and backlog but our process filtration business faces difficult second half comparisons as large projects in the comparable period last year are not repeating. Food and beverage declined with delays in a number of larger beverage projects being the largest factor this quarter. While we've greatly reduced our exposure and energy, our remaining sales for this vertical remain under pressure. Industrial was down in the quarter due in part to ongoing deferrals in short cycle MRO spending and a global capital spending freeze that shows no sign of thawing. The right-hand side of the page shows that price and productivity continue to more than offset inflation as we continue to control costs across the enterprise. ERICO's contribution also helped drive the strong margin performance in the quarter. Now let's turn to slide seven for a look at Water Quality Systems performance in Q3. Water Quality Systems delivered core growth of 2%. These results were below our expectations as within our water filtration business we saw foodservice and commercial market softness in North America and Western Europe, as well as shifts in timing of key account program installation. We also experienced a moderation in growth rates in the fast growth regions as our distributors closely managed inventory levels due to slower growth in China. The North American pool market ended its season on a strong note. We continue to view this market favorably longer-term. We also believe our water filtration business has good long-term prospects and expect growth to return in 2017 as new product rollouts and key account program installations, particularly in foodservice, return to growth at a normal level. Segment income grew an impressive 15% and return on sales expanded 240 basis points to 21.2%. Robust operating leverage was once again the largest contributor to this strong margin performance, with the strong growth in the pool business contributing positively in the quarter. Now let's move to slide eight for a look at Flow & Filtration Solutions performance in Q3. Flow & Filtration Solutions saw core sales decline 6%. While we anticipated sales to contract in the quarter, water technologies and fluid solutions were down more than expected, as we saw softening demand in short cycle pump sales and weaker capital spending and beverage. Water technologies core sales declined 3% as distributors managed inventory levels tightly and we saw continued declines in irrigation sales, albeit at a moderated pace. We experienced a dramatic slowdown in fast growth regions, particularly in the Middle East and Latin America as sell-through was soft in the quarter and, as a result, distributors are not restocking. In contrast, Western Europe was a bright spot, up double digits in the quarter with good momentum. We continue to see an improvement in infrastructure bid activity, which points to a stronger 2017. Fluid solutions core sales declined 1%, which is slightly better than the 3% decline we saw last quarter. Sales in agriculture grew modestly in the quarter and, importantly, we expect this momentum to continue. Our biogas and beer membrane filtration businesses remain strong, offset partially by our beverage business seeing a number of large project delays globally and softer component sell-through. Core sales in process filtration declined 22%, largely in line with expectations, with the key drivers being project timing within infrastructure as well as declines in oil and gas and industrial filtration. Segment income and return on sales declined modestly as the impact of lower volumes were not fully offset by the continued strong productivity and pricing seen for the past several quarters. We remain vigilant on improving the cost structure to offset the impact of lower volumes. Looking ahead, we expect food and beverage to rebound with agriculture turning positive, along with growth in biogas and beer membrane filtration. As we continue to reduce the complexity in the business and drive better execution in projects, we believe we have a long runway for margin improvement. Now let's turn to slide nine to discuss how Technical Solutions performed in the third quarter. Technical Solutions reported 26% sales growth for the quarter, consisting of 1% core sales decline and a 27% positive contributions from ERICO. Core sales in enclosures declined 1% as industrial sales continue to bounce along the bottom, diminishing chances of any order rate growth acceleration for the remainder of 2016. Thermal management core sales declined 5% as downstream energy MRO product sales are not showing any signs of recovery. Our industrial heat tracing business continues to win small projects, but our project growth was challenged as large Canadian projects are nearing completion. While the results of ERICO are captured as acquisition contribution, the business performed in line with our expectations at the completion of the one-year deal anniversary. The majority of ERICO's sales are into commercial vertical, which continued to deliver growth in the quarter, although the rate of growth is moderating. Segment income grew 18% as return on sales contracted 140 basis points to 22%. Margin contraction was isolated to our thermal management business, as the sales of projects versus higher-margin MRO product sales negatively impacted mix and we face the productivity issues at the end of the large Canadian projects. ERICO has performed as we had anticipated, and enclosures continues to stabilize. The performance of these two businesses was not enough in the quarter to offset the margin impact from thermal management. We're not expecting downstream MRO spending to rebound for the remainder of the year. We also expect the Canadian project margins to pressure thermal margins in Q4, as we substantially complete them before the end of the year. This will undoubtedly have an impact on fourth quarter margins for Technical Solutions. With ERICO and enclosures performing as expected and thermal completing the large Canadian projects, we still believe Technical Solutions remains well positioned longer term. I'll now turn the call over to John to discuss our fourth quarter and full year 2016 outlook and then I'll have a few closing remarks about how we're looking at the world entering 2017. John L. Stauch - Pentair Plc: Thank you, Randy. Please turn to slide number 10, titled Q4 2016 Pentair outlook. For the fourth quarter, ERICO is now captured in the core results, so core sales and total sales are currently equal to each other. For the fourth quarter, we expect overall sales to decline approximately 6%, as we expect MRO trends in energy and customer capital spending in all verticals to worsen as we head into the end of the year. Motivation for customers to push our projects and commitments shows no signs of stopping by the end of the year. On a core basis, we expect Water Quality Systems to grow approximately 2%, while we expect Flow & Filtration Solutions to decline approximately 9%, primarily related to project spending in the food and beverage vertical. Technical Solutions is expected to decline approximately 10%, due in large part to the completion of previously mentioned large Canadian projects and mid-teens declines in year-over-year MRO spending within energy. We expect segment income to be down approximately 10%, and return on sales to decline roughly 70 basis points to 17%. Below the operating line, we continue to expect the tax rate to remain around 21.5%, net interest and other to approximate $35 million, and shares outstanding to be around 184 million, about flat with Q3 ending levels. We expect free cash flow to end the year on a strong note, greater than continuing operations net income of $550 million and nearly $780 million inclusive of Valves & Controls. Please turn to slide 11, labeled full year 2016 Pentair outlook. As Randy mentioned at the beginning of the call, we've taken our full-year adjusted EPS outlook for continuing operations down to approximately $3 for 2016. For the full year, we expect core sales to decline 1%. Water Quality Systems full-year core sales are anticipated to be up approximately 4%. We now expect Flow & Filtration Solutions core sales decline of 4% and Technical Solutions core sales to be down 2% for the full year. We expect segment income to grow roughly 11% and return on sales to expand approximately 70 basis points to 17.1%. Our revised forecast factors in slightly better operating performance from Water Quality Systems, while Technical Solutions and Flow & Filtration Solutions are expected to have margins impacted by negative mix related to unfavorable market conditions. The pressure on higher-margin short cycle sales has been felt most acutely within Technical Solutions. We anticipate full-year corporate cost to be just under $110 million, net interest and other roughly $141 million, and the share count to be roughly 183 million. Adjusted EPS is expected to grow approximately 6%. Finally, we remain on track to generate free cash flow in excess of adjusted net income for the full year. Please turn to slide 12, labeled balance sheet and cash flow. We ended the third quarter with $4.4 billion net debt inclusive of cash on hand. This continues to improve as we used our strong cash flows in the quarter to reduce our debt levels. On a year-to-date basis, free cash flow has increased over $150 million versus the first nine months last year. We continue to expect to deliver free cash flow greater than adjusted net income for the full year. Our ROIC ended the quarter at 10.6%. When the sale of Valves & Controls closes, we expect our balance sheet will look dramatically different for the better, with lower debt levels and balance sheet capacity available for tuck-ins or incremental buybacks. I'll now turn the call back over to Randy for some closing comments and preliminary thoughts around 2017. Randall J. Hogan - Pentair Plc: I'll wrap up beginning on slide 13. As I mentioned at the beginning of the call, the sale of Valves & Controls remains on track to close at the end of this year or early next year, subject to the regulatory approvals. With the closing and the Valves & Controls separation, we expect the infusion of cash to alter our balance sheet dramatically for the better. As we discussed in August, we know what debt we will retire, mostly within our bank line. We're also exploring other options to restructure our debt, substantially reduce interest expense on our higher cost fixed rate long-term debt. We also continue to build our bolt-on acquisition funnel for businesses that have earned the right to grow, primarily within Water Quality Systems. We're doing what we can to control our destiny and while we still see some pockets of growth within residential and commercial and infrastructure, the uncertainty around any type of recovery within industrial gives us pause. So we're taking a closer look at our cost structure and adjusting it accordingly. Now, let's move to slide 14 for a look at segment positioning. Water Quality Systems has been a bright spot within the Pentair portfolio for several years, and while we've seen the growth rate moderate some, we continue to believe in the long-term prospects of this high-performing segment. With strong residential demand, dealer intimacy and a steady stream of new products, our outlook for the aquatics business remains strong. Within water filtration, we continue to believe we will benefit from increased awareness around water quality globally, and our investments in a more focused sales effort in North America and Europe are already paying early dividends. Foodservice has been a relatively consistent growth business for us longer term. We continue to believe there are many avenues for growth, including traditional restaurant sales as well as edging on into adjacent products and connected solutions. We believe Flow & Filtration Solutions remains the biggest opportunity for improvement within the Pentair portfolio. Our number one priority is reducing the complexity of the business, accelerating cost-out action and focusing on the most attractive growth prospects. We continue to see momentum around biogas and beer membrane filtration. It is encouraging that agriculture seems to have bottomed. So, we believe we're building some momentum exiting this year after a tough couple of years. As I discussed previously, we are seeing improved orders in backlog and infrastructure, which is a longer cycle part of the business, and is positioning for a return to growth. Finally, we're placing an increased focus on building our aftermarket service capabilities to leverage our installed base. Flow & Filtration Solutions has a number of opportunities and our principal focus is to prioritize which opportunities drive first and build momentum to restore growth and raise margins. We believe Technical Solutions has an attractive position in profitable areas of the electrical industry. We expect the 2016 headwinds will begin to dissipate as industrial order rates are near trough levels, hints of inflation returning are on the horizon, large projects in Canada are complete, and deferred MRO spending cannot continue forever. While we expect the strong growth in commercial to moderate, growth is likely to continue, progressively right-sizing the cost structure with the slower growth environment. This is the piece of our portfolio where we still have energy exposure. And while oil prices appear to have stabilized, we'll watch closely for signs of improving thermal MRO spending. While we still expect some near-term headwinds in parts of our portfolio, we still believe there are many avenues for growth longer-term. Now let's move to slide 15 for a look at the framework for 2017. Given the portfolio change and attendant P&L and balance sheet improvements we're undergoing, we think it's important to provide some framework for thinking about our prospects for next year. As we discussed throughout the call, we expect the slow growth world we are all facing today to continue, and we do not expect a meaningful recovery in 2017. Therefore, it's prudent to focus on having our cost structure aligned with this reality, the result of which should be margin expansion from all three segments next year. Upon the closing of the Valves & Controls sale, we expect to have an opportunity to restructure our debt, which will reduce interest expense. Also, we expect to have the financial flexibility to explore other opportunities to allocate capital in a disciplined manner. By focusing on cost, simplifying the business and improving the capital structure, we expect to be able to deliver EPS growth in excess of 15% next year with minimal top-line help while still positioning the company for the longer term. Thanks. And operator, can you please open the line for questions.

Your first question comes from the line of Shannon O'Callaghan from UBS. Your line is open. Shannon O'Callaghan - UBS Securities LLC: Good morning, guys. Randall J. Hogan - Pentair Plc: Good morning, Shannon. John L. Stauch - Pentair Plc: Good morning, Shannon. Shannon O'Callaghan - UBS Securities LLC: Hey, so, just on kind of the 4Q caution, I mean, is there anything in October that's making you think we've seen yet another like down or you just, is this lack of inflection, concerns around election – maybe just a little more color on what keeps you cautious on 4Q? And I know you're more optimistic beyond 4Q. John L. Stauch - Pentair Plc: Yeah, Shannon. It's John here. I think what, if you take a look at Q3, we started out really strong and we ended okay, but we certainly didn't see acceleration towards the end of Q3. And what we're seeing is continued project slippage, where these are projects that we've either won, but the start dates on the projects continue to move to the right. And given where we are right now, with all the uncertainty you mentioned, we just don't think our customers are going to rush to conclude them between now and the end of the year. The other main issue is we've been hoping that MRO would recover throughout this year and that's on the operational side, primarily in energy, and we're not hopeful now at this point that that's going to recover for the end of the year as our customers manage cash to the end of the balance sheets. So, those are the main issues. Randall J. Hogan - Pentair Plc: Yeah. We almost always see an uptick in the industrial spending in the fourth quarter and what we're saying is, we're not counting on that this time, with these deferrals. Shannon O'Callaghan - UBS Securities LLC: Okay. And then just, in terms of all segments improving margins next year, the one that's been a little bit tougher has been Flow & Filtration, maybe just an update on how you think they're progressing operationally? I know volumes were a little tougher this quarter, but what – do you have confidence that segment can improve margins next year? Randall J. Hogan - Pentair Plc: Yeah. If we had hit the forecast of down 2% instead of down 6%, we would have expanded margin. I think we're making a lot of progress on simplifying the product line and on driving productivity. It's a business that frankly didn't get as much attention as we focused on Valves & Controls and now we're getting back to it. So I think there's lots of opportunities and things like agriculture coming back, the crop spray business and some of the other businesses that are some of the more profitable businesses, those stabilizing and even getting a little bit of growth is going to help in the mix. Shannon O'Callaghan - UBS Securities LLC: Okay. Great. Thanks, guys.

Your next question comes from the line of Steven Winoker from Bernstein. Your line is open. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks. Good morning, all. Randall J. Hogan - Pentair Plc: Morning, Steve. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Just first a quick question on ERICO. So I know it's not in core growth. What would that have contributed to core growth? What was just the ERICO core growth for that business? John L. Stauch - Pentair Plc: 1% to 2%, Steve. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And just on Water Quality Systems, this was one of your strongest businesses that could do no wrong historically and clearly you had a forecast for 8% at least in terms of guidance, came in at just 2%. You talked about a couple of those dynamics, but maybe also for John, I mean where was the forecasting error here and in terms of that business that's supposed to be so much more stable. John L. Stauch - Pentair Plc: I'll hit your last part first and then I'll have Randy. We had three key businesses in Water Quality. We have our aquatic and environmental systems, which is primarily the pool business. The pool business continues to be very strong and we continue to hit all of our forecasts relative to that business. Where the softness came in the quarter, which also relates to the way we're thinking about Q4 was in the foodservice business, which has been up, high single-digits throughout the year and had moderated back to flat in Q3. And then also we had the water purification business which also was strong most of the year and took a little bit of pause in Q3. So that's where the misses came, Steve. Randall J. Hogan - Pentair Plc: Yeah. I'd just add, on the foodservice side, we've been growing at high teens rate in Asia, and while we're still growing there that took a step down to high single-digit growth rate, which was one change. And then we've seen some, I would call, variability in some of the deployments in some of the chains as restaurant growth has slowed down. So we expect those deployments to continue, or get positive again, as we launch a new range of products, which I referenced in my comments, but that won't happen in the quarter. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And Randy, in terms of how you're thinking about M&A. You early on talked about those businesses that have – I guess, have earned the right to capital deployment soon – shortly after Valves & Controls closes. Maybe a little more guidance on how you're thinking about bolt-on, just any kind of size range or just a little bit of sense for investors of what we might expect early next year? Randall J. Hogan - Pentair Plc: Well, we're going to be disciplined, I mean, we're getting out from under the overhang of a lot of the debt and we take our lessons from that, okay. But the place that we have the most opportunity. We are one of the leading players in water. We expanded that with the Tyco merger into the broader flow space and I think we want to get narrowly focused again in what I'll call the water side of the flow space. So, that's why I mentioned Water Quality. There are some that are sort of in between Water Quality and FFS, which is really, I mean, both of them together are our water business. And so, we want to continue to build that leading position and, so around water quality and availability. We like the food and beverage business, although we want to be careful about the heavy capital side of that versus things with annuity, which is why we like the membrane, the beer filtration, and also biogas, which is I think a nice growth business. So, it will be in areas that expand our reach and deepen our expertise in water – way to think about it. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. Great. Thanks a lot.

Your next question comes from the line of Mike Halloran from Robert Baird. Your line is open. Michael Halloran - Robert W. Baird: Hey. Morning, guys. Randall J. Hogan - Pentair Plc: Morning, Mike. Michael Halloran - Robert W. Baird: So, first on 2017 thought process, obviously, no meaningful improvement embedded in those numbers. Yet I got the sense from some of your commentary more specifically on the divisions that there was some expectation that fourth quarter doesn't represent the right run rate. So, maybe help kind of reconcile those two right there and then what areas should start getting maybe a slightly better in the next year and which ones you're more worried about? Randall J. Hogan - Pentair Plc: Let me start with Technical Solutions. We mentioned thermal. As the thermal business saw the decline in the energy business, we got aggressive in going after projects to replace the product. Those have proven to be more challenging from a profitability standpoint and those are coming to an end. And so, we'll immediately mix up, if you will, on the profit side. On the growth side, we expect more normalized. We're assuming in the fourth quarter this muted impact on the usual bump in sales we would see in industrial. We don't think – we're hopeful that after the fourth quarter, we'll return to a more normal level, which won't be the negative impact we see in the industrial market for the fourth quarter. John, if you want to add anything? John L. Stauch - Pentair Plc: No. I agree with that. Michael Halloran - Robert W. Baird: So, you're basically saying beyond that, though, it's a pretty steady run rate from the fourth quarter other than the maintenance side reverting back to normal? John L. Stauch - Pentair Plc: Yeah. If you take a look at the full year, core growth was down 1% for full year, that had a lot of choppiness in it. We started the year with almost double-digit declines in industrial. We've worked a way back to flattish numbers as we close out the year. So sequentially things have stabilized. What we're really saying is these larger projects that were out there for the Q4 cycle are going to be pushed or deferred into next year or may be deferred permanently. And we don't see me environment that's reflected in Q4 in the pause and concern of our overall customer base being the same cause of concern that we see as we enter 2017. Now, we said negative 2% to plus 2% next year so that's clearly not a robust growth environment, but it's flattish and then we have the operating income cost structure changes that we're driving as an organization to drive margin improvement. Randall J. Hogan - Pentair Plc: And I would add as – and that's the framework. We're planning on a minus 2% to plus 2% top line, which means to drive the performance that we know we can drive, we need to focus on simplifying. We're already working on simplifying the cost structure with the removal of Valves & Controls. We're going to do more than that, as a result of that outlook. If we get more upside, we will be in a position to serve (26:22) on the volume side. Michael Halloran - Robert W. Baird: Makes sense. And then, second one on the stranded cost side, maybe just an update there on how that's going? And then, just with the margin levers in the next year, some sort of thought process on how much is discretionary oriented versus something more permanent? Randall J. Hogan - Pentair Plc: Well, we're looking beyond just the stranded cost and we're looking at how do we simply the cost structure and, in a lean sense, how do we really take out waste and variability in the course of that simplification. I'm confident that we will get to a run rate at the beginning of the year that takes that overhang away or more. Michael Halloran - Robert W. Baird: Thank you, guys. Appreciate it. John L. Stauch - Pentair Plc: Just follow on to Randy's point, real quickly. I mean, we had a focus to integrate and standardize a lot of the Valves & Controls activities, because that's where the biggest opportunities were for improvements. And so we repositioned a lot of our cost structure savings towards Valves & Controls. Now we're going to bring back the focus to reintegrating ourselves, if you will, to our Pentair standards on the rest of the portfolio, and we believe we can accelerate a lot of those cost-out actions in simplifying the company as Randy mentioned. Michael Halloran - Robert W. Baird: Thanks, guys.

Your next question comes from the line of Steve Tusa from JPMorgan. Your line is open. Charles Stephen Tusa - JPMorgan Securities LLC: Hi, guys. Good morning. Hey, how do you get so – you got the 5% operating profit increase, I guess 15% EPS growth. Just remind us kind of how you bridge that, I'm not sure if you mentioned early in the call and if you did then I guess I'll take it offline, but just a little more of a precise bridge on how you get there? John L. Stauch - Pentair Plc: Yeah. We didn't, Steve, I mean, but I think the element we're now working to right now is we believe there is opportunity in the debt structure of the company. And we do think for relatively inexpensive investment, we can get a fair amount of interest out by putting our capital position or our debt position more in line with where we want it to be on a permanent basis. And there would clearly be significant interest savings associated with that, Steve. Charles Stephen Tusa - JPMorgan Securities LLC: Okay. So that's a refi or that's, I mean, because your interest rate, I think your average interest rate is pretty low already, right, or is there... Randall J. Hogan - Pentair Plc: Right. We're carrying gross debt fairly high without taking out fixed debt structure and we think there's an opportunity to take out some of the fixed debt structure in a productive way and therefore it's incrementally better than what we had mentioned before. And we think we then have a capital and a debt structure that mirrors where we think we can be longer term as a growth oriented company. Charles Stephen Tusa - JPMorgan Securities LLC: I got it. So it's a kind of combination of use of the proceeds effectively and then a little bit of a different structure in the underlying. John L. Stauch - Pentair Plc: Correct. Charles Stephen Tusa - JPMorgan Securities LLC: In what's leftover. John L. Stauch - Pentair Plc: Correct, but no (29:07) buybacks or -- Randall J. Hogan - Pentair Plc: The 15% plus, think about it as one half on the capital side focused on debt, and one half on the performance side. Charles Stephen Tusa - JPMorgan Securities LLC: Okay. And then in Technical, what's going on in the core enclosures business? And is that decline in the fourth quarter, is that all thermal related? Is that just a tough comp on thermal because it doesn't seem like the enclosures business would have that kind of a drop-off from flat given the short cycle nature. Randall J. Hogan - Pentair Plc: The profit impact is almost 80% thermal and usually in the enclosures business, that's the place where we would see a fourth quarter uptick and we're assuming we won't. Charles Stephen Tusa - JPMorgan Securities LLC: Okay. So that's within enclosures, though, like the kind of short cycle CapEx, the box business, is that stable down in that negative 10%? What is that kind of trending? Randall J. Hogan - Pentair Plc: Bumping along the bottom... John L. Stauch - Pentair Plc: It's stable, Steve, from Q3 sequential. The overall... Charles Stephen Tusa - JPMorgan Securities LLC: Okay. So, but down year-over-year, because you may have had a good fourth quarter last year, or something like that? John L. Stauch - Pentair Plc: Slightly down year-over-year, but not 1% to 2% down. Charles Stephen Tusa - JPMorgan Securities LLC: Okay. I think that's it. Thanks a lot, guys.

Your next question comes from the line of Julian Mitchell from Credit Suisse. Your line is open. Ronnie Weiss - Credit Suisse Securities (USA) LLC (Broker): Hey, good morning, guys. It's Ronnie Weiss on for Julian. Randall J. Hogan - Pentair Plc: Morning. Ronnie Weiss - Credit Suisse Securities (USA) LLC (Broker): Can you just talk a little bit about the pricing dynamics in each of the segments, still holding up decently well and how that kind of looks into 2017? Randall J. Hogan - Pentair Plc: As you can see overall, pricing is – it's not moving a lot in either direction. We actually think with rates go up and inflation goes up a little bit, it'll give us some more pricing leverage. I mentioned in the script that in the thermal projects, that's been tougher on the project side. But we've seen the impact of that. Now, we're being more selective about going after them because we don't want to get low-profit projects anymore. Rather just get the products of it. So I'd say there's really no dramatic change in the pricing environment in any of the businesses. Ronnie Weiss - Credit Suisse Securities (USA) LLC (Broker): Okay. And then kind of on the accelerated alignment of the cost structure going into 2017, can you frame some of those numbers? Is the 50 basis points all productivity, is that 2% benefit that you guys had in Q3, is that the right number to think about into 2017, or does it step back up as you maybe see some more opportunity? John L. Stauch - Pentair Plc: Yeah. I don't think we're ready to give our final number yet. I think the number that you mentioned, about 2% of sales, is certainly in the ballpark of where we're targeting as we head into next year. And obviously, being more selective at where we apply that cost out to where we think the economic conditions will not as robust as other places of the portfolio. But overall, you're in the ballpark. Ronnie Weiss - Credit Suisse Securities (USA) LLC (Broker): Great. Thanks, guys.

Your next question comes from the line of Joe Ritchie from Goldman Sachs. Your line is open. Joe Ritchie - Goldman Sachs & Co.: Hey, good morning, guys. John L. Stauch - Pentair Plc: Good morning. Randall J. Hogan - Pentair Plc: Hey, Joe. Joe Ritchie - Goldman Sachs & Co.: Hey, so, I was trying to follow the answer to Steve's question earlier on the fourth quarter in Technical Solutions. You guys have that stepping down organically 10%, so what exactly is driving that in the fourth quarter? John L. Stauch - Pentair Plc: It's primarily all of our thermal business related to energy, MRO... Randall J. Hogan - Pentair Plc: MRO. John L. Stauch - Pentair Plc: And energy projects. Randall J. Hogan - Pentair Plc: And a couple of points on enclosures. Joe Ritchie - Goldman Sachs & Co.: Got it. So, enclosures are going to be down, I think, low single-digits and thermal and the heat tracing business could be down more than double-digits in the fourth quarter? John L. Stauch - Pentair Plc: Yeah, keep in mind that that's a year-over-year comparison, so last year we had projects roll through. So it's a comparison against the projects. If you actually look at it sequentially from Q3 to Q4, it's just down slightly on the top line. Joe Ritchie - Goldman Sachs & Co.: Got it. Okay. That makes sense. And then the second question is just around the ERICO business. I think you guys mentioned earlier that the annual run rate was about $507 million for this year. And then, I think the numbers that you gave us at the Analyst Day were closer like $530 million, $540 million. So what's happened in that business throughout the year and also maybe some commentary on recent trends there as well? John L. Stauch - Pentair Plc: Yeah. I don't know where the $507 million came from, we think it's $530 million for the year, slightly better than $530 million for the year. So... Joe Ritchie - Goldman Sachs & Co.: Okay. Got it. So, basically that business is flat right now? Randall J. Hogan - Pentair Plc: Slightly up. John L. Stauch - Pentair Plc: Slightly up. Yeah. Joe Ritchie - Goldman Sachs & Co.: Okay. Randall J. Hogan - Pentair Plc: Right in line with the plan. Joe Ritchie - Goldman Sachs & Co.: Okay. All right. Great. I'll get back in queue. Thank you. Randall J. Hogan - Pentair Plc: Thank you.

Your next question comes from the line of Scott Graham from BMO Capital Markets. Your line is open. R. Scott Graham - BMO Capital Markets (United States): Hi, good morning. Randall J. Hogan - Pentair Plc: Good morning. R. Scott Graham - BMO Capital Markets (United States): I was hoping to get underneath some of the inflation numbers here. Where exactly are you guys seeing inflation emerge? Randall J. Hogan - Pentair Plc: Steel, starting to see some pickup in steel related pricing, as a material buy. We're also seeing some uptick in some of the commodity prices for mining related commodities, Scott. R. Scott Graham - BMO Capital Markets (United States): All right. John L. Stauch - Pentair Plc: We also have wage inflation, labor inflation. R. Scott Graham - BMO Capital Markets (United States): Are there price increases set for the fourth quarter, given the steel situation or have they already occurred? John L. Stauch - Pentair Plc: Yeah, as Randy said, we have modest increase as planned and they have already or will already have been in place this early quarter. R. Scott Graham - BMO Capital Markets (United States): All right. And then I have one other more holistic question for you guys. This is the same portfolio as we kind of left off pre-Valves in 2012. And with of course the addition of ERICO, yet we seem to be talking a heck of a lot more about project business today than I really ever recalled in the older portfolio. What has happened to your businesses and the dynamics of the market where so much of your business now seems to be more project oriented? And if there's any way of quantifying how much of your businesses now project oriented now, versus what it was then, I guess sort of the last question within that would be, how does that affect your cost down plans for next year, project orientation makes that a little bit harder or otherwise? Randall J. Hogan - Pentair Plc: Yeah. Let me – there are – it's not wrong. We do have more products – as we move from products to solutions, they tend to be larger, more complex and we call those projects and then of course the thermal business. We saw the thermal business and about half of that is projects, a little bit more than that because of the MRO, the product sales has been impacted. So we expect that the solutions sales can still give us the same amount of margins. We need to get better at predicting when they're going to shift. We need to make sure that we're getting the same margins we're getting as we move the products to solutions and that's all underway. So strategically it's where we were going anyway because it's where customers want us to become. So there are projects in both Technical Solutions and in FSS. John L. Stauch - Pentair Plc: Yeah and the total would be roughly just under 8% of sales – would be our total project revenue for 2016. Randall J. Hogan - Pentair Plc: But a lot of the variability. That's why we need to get better at predicting. John L. Stauch - Pentair Plc: Right. R. Scott Graham - BMO Capital Markets (United States): And would you say that is maybe double or more what it was pre-Valves & Controls? Randall J. Hogan - Pentair Plc: Probably, yes. R. Scott Graham - BMO Capital Markets (United States): All right and does that affect how you pull cost out next year? John L. Stauch - Pentair Plc: It doesn't because the way we look at it is most of that is variable spend, right. So we flex it up and flex it down and so we look at that and as we referenced cost out targets, it's those targets plus what needs to go away related to the project. R. Scott Graham - BMO Capital Markets (United States): I got you. All right, very good. Thanks a lot. John L. Stauch - Pentair Plc: Thank you.

Your next question comes from the line of Nathan Jones from Stifel. Your line is open. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Morning, everyone. Randall J. Hogan - Pentair Plc: Morning. John L. Stauch - Pentair Plc: Hey, Nathan. Nathan Jones - Stifel, Nicolaus & Co., Inc.: I'd just like to follow up, John, on the point you just made about increasing prices in the fourth quarter. Can you maybe give us an idea of historically how much of that pricing sticks and given that we're in a pretty weak demand environment at the moment, if you think that pricing increase will be more or less sticky than it historically has been? John L. Stauch - Pentair Plc: We think that the price increases that we put forward which are more modest price increases will all generally stick. There's only one area of our particular portfolio right now that's unusual versus prior trends and I'd call it the strengthening dollar, right. So... Randall J. Hogan - Pentair Plc: Right. John L. Stauch - Pentair Plc: We're in a situation where Europe and you heard it in Randy's commentary, Europe's doing relatively okay. So there are imports coming from Europe that are realizing lower cost basis. Now we have European business as well that we're benefiting from that. But overall, I think we put in a net price increase, modest less than 100 basis points for the total company, next year that we think we can realize. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Okay. That's helpful. Next question, you talked about I think this call and last call about industrial order rates being at trough levels. But your guidance on that end market there has taken a step down this quarter. Can you reconcile those? Have the order rates taken a step down and now you think they're at trough levels and what gives you confidence that maybe there's not another step down to come from here? John L. Stauch - Pentair Plc: Yeah. Actually it's flat. I mean, the thing is in my 20 years or 30 years in industrial, I'd say 19 out of the 20, there's been an uptick in the fourth quarter and we're saying is that doesn't happen. So we're flat essentially in the third quarter and fourth quarter, and compared to last year, that's down a couple points. Nathan Jones - Stifel, Nicolaus & Co., Inc.: But what gives you confidence that that improves going into 2017? I mean, on a year-over-year basis, we've taken a fairly significant downtick in the fourth quarter, even if it's flat sequentially? John L. Stauch - Pentair Plc: Well, ISM actually went positive in September, that's only one month. We'll see what it does in October. It's usually a precursor of recovery and... Randall J. Hogan - Pentair Plc: But, Nathan, just to be clear, I think our framework, not guidance, but our framework for next year doesn't assume it does, and I think that's what we hope you took away. That, yes, we think Q4 is an anomaly, but if you take a look at the overall core growth for the company at negative 1% and moving to that general framework next year, I don't think we're counting on a big recovery next year. We think it's a slower economic growth environment and we're going to double down on the simplicity of the company, work on the debt restructuring and disciplined capital allocation to drive the value. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Okay. That's fair. Thanks very much. Randall J. Hogan - Pentair Plc: Hope we're wrong, but I don't... Nathan Jones - Stifel, Nicolaus & Co., Inc.: Hopefully not wrong in the wrong direction. Hopefully wrong in the right direction. Randall J. Hogan - Pentair Plc: There you go. There you go.

Your next question comes from the line of John Walsh from Vertical Research Partners. Your line is open. John Fred Walsh - Vertical Research Partners LLC: Hi, good morning. Randall J. Hogan - Pentair Plc: Morning. John L. Stauch - Pentair Plc: Morning. John Fred Walsh - Vertical Research Partners LLC: I didn't see it on the slide, but just wanted to talk about free cash flow conversion to the adjusted net income for the next year and what some of the levers are you have to pull to keep the conversion rate really strong, whether it's CapEx or working capital or any other items to be aware of on the cash side. John L. Stauch - Pentair Plc: We think on a go-forward basis, we're still targeting to achieve greater than 100%. While we've lost some of the working capital opportunity in Valves & Controls, we still have plenty of working capital opportunity in FFS, and we also believe we have a less severance environment, right. So, our cash flow captures our severance outflows as well, and there were a fair amount of those in the Valves & Controls business that as we move away from Valves & Controls no longer are headwinds to the company. So we still think 100% or greater than 100% of net income is our targeted cash flow conversion. Randall J. Hogan - Pentair Plc: Which is what we did before the Tyco merger on a regular basis, so... John Fred Walsh - Vertical Research Partners LLC: Yeah. And then just wondering if you can give us an update on the valuations that you're seeing out there on the deal front, kind of seller and buyer expectations are getting tighter and if it's kind of still a – I don't want to put words in your mouth, but it seemed like it was kind of evenly split between preference for share repo and M&A when you did the Valves & Controls call? Randall J. Hogan - Pentair Plc: Yeah, when we did that, we said we're going to have this firepower. We are about shareholder value and we will as a board look at the opportunities of how we deploy that. Our bias is to grow the business and grow the company, but we're not going to do it with non-strategic acquisitions. So if we can't find them at the right price, and it's hard to generalize as to pricing, but there's a lot of people looking at deals, so usually that causes prices to go up. But we have been disciplined, and we will continue to be disciplined as we look at it. And we're not rushing to put the capital to work. We want it to be informed by a good strategy, and the board is totally aligned on that. John Fred Walsh - Vertical Research Partners LLC: All right. Thank you. Randall J. Hogan - Pentair Plc: Thank you.

Your next question comes from the line of Jeff Hammond from KeyBanc Capital Markets. Your line is open. Jeffrey Hammond - KeyBanc Capital Markets, Inc.: Hey, guys. Just another one on M&A. I think, Randy, your comments were much more focused on Water ,and I think you've talked in the past about both Tech Solutions and Water having the right to grow, so kind of what informs that bias? Is it what's available out there or how you're thinking about the businesses strategically or the end markets? Maybe just a little more color there. Randall J. Hogan - Pentair Plc: Well, Technical Solutions has to get back to earning again. I'm not happy with the forecast that we got on the thermal side. So we want to support high execution. So there are opportunities in Technical Solutions. It's a great business. I mean, as I mentioned in the script, we have great positions in the electrical industry and there are ways to build upon those, but we need to get the cost structure in that business right. We need to get the execution back to where I know it can be, and then I'll let them come up to the front of the line again. Jeffrey Hammond - KeyBanc Capital Markets, Inc.: Okay. And then, John, just back on the debt restructuring. So this ability to restructure some of the debt -- that is built into the guide? Is that the right way to think about it? Randall J. Hogan - Pentair Plc: The framework. John L. Stauch - Pentair Plc: Yes. We haven't given guidance yet. Jeffrey Hammond - KeyBanc Capital Markets, Inc.: Into the framework, yes. Okay. So you're putting that in and are you paying down more – within that framework, are you paying down more debt or you're just getting a more favorable rate based on a restructuring? John L. Stauch - Pentair Plc: We will be paying down more debt. I don't what yet, we're still exploring it, but given our original views, we quickly after the Valves & Controls hadn't had time to look at it. Randall J. Hogan - Pentair Plc: Right. John L. Stauch - Pentair Plc: We're now looking at it and we're seeing that for a very good return, we can invest a little bit of money and get a longer term savings. So we're looking at exploring those options and when we give our guidance, we'll be able to fully share that. But right now we're anticipating it's better than we previously said. Jeffrey Hammond - KeyBanc Capital Markets, Inc.: Okay. Thanks, guys. John L. Stauch - Pentair Plc: Thank you.

Your next question comes from the line of Joshua Pokrzywinski from Buckingham Research Group. Your line is open. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Hi, good morning, guys. Randall J. Hogan - Pentair Plc: Hey, Josh. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Yeah. Just to follow up on I think Steve's earlier question on ERICO. I guess I'm still struggling a little bit with the plug there. I'm looking at the slides from when you guys initially did the deal, $570 million in 2015, $595 million in 2016 forecasted revenue. And it still seems like even with some margin error or maybe some reporting differences, we're still talking about a number in the low $500 million range, whether it's $507 million or $530 million. What am I missing in that bridge? John L. Stauch - Pentair Plc: Yeah. So, thanks for bringing it up. Those original numbers were gross sales. Randall J. Hogan - Pentair Plc: Gross sales. John L. Stauch - Pentair Plc: They're not net sales. And on a net sales basis, we're closer to the $530 million this year and that is roughly a 1 to 2 percentage point growth over where it was on a full year basis last year. It is made up of – roughly half of that is CADDY, which is a commercially exposed business, and then half of it is more related to infrastructure and also rail and utilities. So the big difference in those original slides to what we published later was gross to net deductions. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Got you. And the just to circle back on Flow & Filtration, clearly you guys have a lot of initiatives going on there all at once and the market certainly not helping you out, but what should we expect to see first when you're starting to get traction there? Is it organic growth stabilizing, is it margin improvement, is it a little bit of everything? Because I think you guys have been focused on this for at least the last year and clearly at a high level things are still probably disappointing to you, but I'm trying to figure out what would be the green shoots from your perspective that you'd want people to look at and say, hey, we're starting to get some traction here? Randall J. Hogan - Pentair Plc: Yeah. I would say margins and, Josh, go back two or three years, we were making some good – FFS was, if you will, in the legacy venture side, it was the lowest performing margins and our goal was to get it to 15% or more. I still think we can get them there and we get close at some point. And so you'll see it in our margins first and then growth. So right now we actually have, as I said, some of our innovations like biogas and membrane filtration of beer, even though general the food and beverage industry isn't growing, these applications are and we're doing well in them. So we are getting good progress in a number of growth areas, it's just not enough to offset some of the areas that aren't growing. So margins first, growth second. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: To be fair, though, Randy, the 15% target, that was inclusive of AMR (47:10), right, the way you guys used to report it, or is that wrong? Randall J. Hogan - Pentair Plc: I'd say, yeah. In addition though (47:18) John L. Stauch - Pentair Plc: The margins in Flow & Filtration should approach what they are in Water Quality. I mean these are some high technical specs. I mean, I don't think we'll get our core pump business that high, but the filtration side of this business and the technology side of the business has a lot more potential than 15%. Joshua Pokrzywinski - The Buckingham Research Group, Inc.: Got you. All right. Thanks, guys.

Your next question comes from the line of Robert Barry from Susquehanna. Your line is open. Robert Barry - Susquehanna Financial Group LLLP: Hey, guys, good morning. Randall J. Hogan - Pentair Plc: Good morning. Robert Barry - Susquehanna Financial Group LLLP: So the talk about the large beverage projects being pushed out, is that beer and is that related to M&A or just maybe a little more color on what's happening there? Randall J. Hogan - Pentair Plc: It's basically the valving in all beverage, it's dairy, it's beer, but the biggest ones for us in beer. John L. Stauch - Pentair Plc: Yes, and there is a capital pause happening, as you mentioned, that's driving some of that delay. Robert Barry - Susquehanna Financial Group LLLP: Related to M&A activity, I know you've talked about that before. John L. Stauch - Pentair Plc: Yes. Robert Barry - Susquehanna Financial Group LLLP: And so when you talk about the beverage projects, should we think about that bucket of revenue, is that about $350 million of sales that's kind of... Randall J. Hogan - Pentair Plc: No. John L. Stauch - Pentair Plc: $250-ish million. Randall J. Hogan - Pentair Plc: Yes. Robert Barry - Susquehanna Financial Group LLLP: $250 million. Got you. Okay. And maybe just to put a finer point on some of the earlier questions about the framework for next year. I mean what should we plug in our models for 2017 for interest expense and corporate? John L. Stauch - Pentair Plc: Not there yet. We have to get through and figure out where we end and then we'll give guidance at the appropriate time. We just wanted to provide the framework so that people can understand how we're thinking about it. Robert Barry - Susquehanna Financial Group LLLP: I mean the corporate sounded like maybe it would go back to the 90 (48:47) that it was the pre the V&C sale or maybe even a little lower. Is that kind of ballpark? John L. Stauch - Pentair Plc: I think that would be the low end of the range. Robert Barry - Susquehanna Financial Group LLLP: Got you. And then maybe just finally in Tech Solutions, you talked about some of the productivity issues with the big projects. I mean in the quarter and maybe year-to-date how much of a drag on the margin has the thermal project productivity issue been? John L. Stauch - Pentair Plc: 300 basis points. Robert Barry - Susquehanna Financial Group LLLP: Okay. So when we're looking year-over-year, that's like a 3 point headwind that's just going away? John L. Stauch - Pentair Plc: That's correct. Robert Barry - Susquehanna Financial Group LLLP: For the segment? John L. Stauch - Pentair Plc: That's correct. Robert Barry - Susquehanna Financial Group LLLP: Got you. Okay. Thank you. Randall J. Hogan - Pentair Plc: Thank you.

There are no further questions at this time. I'll turn the call back over to the presenters. Randall J. Hogan - Pentair Plc: Thank you very much. And I'm sure it will be on replay. Thank you. Bye.

This concludes today's conference call. Today's call will be available for replay in approximately two hours time. To listen to the replay, please dial 1-800-642-1687 and enter the conference ID 55576168. Again, dial 1-800-642-1687 and enter ID 55576168. Thank you and have a nice day.