Ladies and gentlemen, thank you for standing by. Welcome to the AMETEK First Quarter 2015 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded, Wednesday, April 29, 2015. I would now like to turn the conference over to Kevin Coleman, Vice President, Investor Relations. Please go ahead, sir.

Great. Thank you, Susie. Good morning, everyone. Welcome to AMETEK's first quarter earnings conference call. Joining me this morning are Frank Hermance, Chairman and CEO; Bob Mandos, Executive Vice President and Chief Financial Officer; and David Zapico, Executive Vice President and Chief Operating Officer. AMETEK's first quarter results were released earlier this morning. These results are available electronically on market systems and our website at the Investor section of ametek.com. A tape of today's call may be accessed until May 13 by calling 800-633-8284 and entering the confirmation code 21766195. This call is also webcasted. It can be accessed ametek.com and streetevents.com. The call will be archived on both of these sites. I will remind you that any statements made by AMETEK during the call that are not historical in nature are to be considered forward-looking statements. As such, these statements are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risk and uncertainties that may affect our future results is contained in AMETEK's filings with the Securities and Exchange Commission. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements. I will also refer you to the Investor section of ametek.com for a reconciliation of any non-GAAP financial measures used during this conference call. We will begin today with prepared remarks and then we'll open it up for questions. I'll now turn the meeting over to Frank. Frank S. Hermance - Chairman & Chief Executive Officer: Thank you, Kevin, and good morning, everyone. AMETEK had a very good start to 2015, with double-digit earnings growth and excellent operating performance. Since we were seeing the effects of a continued strong U.S. dollar and a sluggish global economy, we proactively took actions…

Great. Thank you, Bob. Susie, we're now happy to open it up for questions.

Thank you. Our first question coming from the line of Allison Poliniak with Wells Fargo. Please proceed with your question.

Hi, guys. Good morning. Frank S. Hermance - Chairman & Chief Executive Officer: Hi, Allison.

So we've been hearing a lot the past two weeks about sort of this pervasiveness of this oil and gas decline and sort of the tentacles reaching out into the industrial U.S. And obviously, you talked about the export impact, just given the foreign currency headwind. I mean what's the greatest impact in your mind to AMETEK right now? And I mean I guess based on your limited visibility, what can you see as we move to 2015 here? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. Well in terms of oil and gas, we had given you an estimate at the beginning of the year that we thought we were going to be impacted about $40 million in our overall sales as a result of the oil and gas downturn. And in fact, that estimate is holding. That's roughly what we're seeing from the oil and gas downturn. The effect is obviously significant on the upstream part of our business, but it's offset by really better performance or good performance in the midstream and downstream sector. Interesting, this morning that BP and Total introduced their earnings and their oil and gas businesses were down sizably but less than what estimates analysts had expected. And the reason was the same thing, that their midstream and downstream businesses were very strong. So I think we're paralleling the market, and it shows the diversification of AMETEK's portfolio where any single part of the portfolio, when it goes in decline, is not going to have that significant an impact on the overall business. So that's how I would characterize the Oil & Gas segment for us.

Okay. And then just on investment growth in this environment, it seems like you pulled your RD&E down a little bit. Any others that you feel that you need to pull down near term, just given sort of the uncertainty? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. Actually, it's a great question on RD&E because in essence, you're right that we had given a little bit higher number. But it's actually the result of the translation because of the change in currency. So the actual amount of activity worldwide in the company in terms of people working in the RD&E environment has not been substantially impacted. And we have been very selective in our realignments, as I mentioned in my opening remarks, not to impact our long-term growth. So that question is a great one. If you look at the realignment that we did, we focused it on the operating side of the company. I mean our factories and those parts of the business that will be impacted by a bit of a slower growth environment than what we had originally intended. So we have done some employment reductions. We have done some belt tightening. We have done some and will be doing some additional facility consolidations, but again, very selective not to impact our overall growth.

Great. Thanks so much. Frank S. Hermance - Chairman & Chief Executive Officer: Okay, Allison.

Thank you. Our next question coming from the line of Nigel Coe with Morgan Stanley. Please proceed with your question. Mike W. Sang - Morgan Stanley & Co. LLC: Hi. Good morning. It's actually Mike signing in for Nigel. Frank S. Hermance - Chairman & Chief Executive Officer: Hello. Mike W. Sang - Morgan Stanley & Co. LLC: Had a quick question on the restructuring that you guys... Frank S. Hermance - Chairman & Chief Executive Officer: Yes. Mike W. Sang - Morgan Stanley & Co. LLC: The realignment that you guys announced. So could you give us a sense on how that phases through the year? So the $40 million that you alluded to, Frank, how much of that came in 1Q and how much of that do you expect in 2Q? Frank S. Hermance - Chairman & Chief Executive Officer: Virtually, none in the first quarter and fairly evenly split through the year. A little bit lighter in the second quarter but definitely gaining full steam in the third and the fourth quarters of this year. Mike W. Sang - Morgan Stanley & Co. LLC: Okay. Great. And just to piggyback a little bit on Allison's question. She mentioned pressure that's pervasive and export demand of the U.S. Is that something that you're seeing accelerate through the quarter? And if you can quantify that, that'd be great. Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. I wouldn't say accelerate through the quarter. When you look at the European economy in particular, with the dramatic change in the euro, obviously, anything that you are exporting into that environment is going to be less competitive with respect to local suppliers than it was. We're very fortunate in that our portfolio is extremely differentiated and we have not had to make significant concessions. But there's no question that the competitive issue does have an impact. It's just impossible to quantify. And I noticed that many other companies are not even talking about it, but I would clearly say it's having an impact on us but it's not that significant. Mike W. Sang - Morgan Stanley & Co. LLC: Awesome. Thank you. Frank S. Hermance - Chairman & Chief Executive Officer: Sure.

Thank you. Our next question, coming from the line of Christopher Glynn with Oppenheimer. Please proceed with your question. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Thanks. Good morning, everybody.

Good morning, Chris. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Good morning. So I was just wondering if you could describe the linearity through the quarter and into April. Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. Actually, when you look at the linearity, it actually improved during the quarter. Looking at order input, order input did go up as we went through the quarter. So we feel relatively good about that. But still, when you consider the global macros, that's why we decided to take a very conservative view on organic growth for the year and why we decided to do the realignment that I've talked about. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay. And it sounds like the improvement was sort of gentle rather than a horrific January and a killer March, so to speak. Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. I think that's fair. I'd love to use the word killer but it's not appropriate. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Right. And any surprising divergences among end markets or geographies? Frank S. Hermance - Chairman & Chief Executive Officer: No. I would say there's not amazing change. It's just that when you look outside the United States, you look in Europe, obviously, that economy remains weak. Asia is still good but it's not as good as it has been. And that's being offset by a stronger U.S. economy. Our organic growth was actually up nicely in the United States, so the issues we're seeing are largely offshore and largely focused in really Asia and Europe. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay. And then just on the restructuring, a couple angles I wanted to ask about. One, as we…

Thank you. Our next question, coming from the line of Matt McConnell with RBC. Please proceed with your question.

Thank you. Good morning, guys. Frank S. Hermance - Chairman & Chief Executive Officer: Hello, Matt.

So the commentary about the strength across geographies was definitely helpful. I wonder if you could do something similar about end markets because I know the organic revenue outlook isn't down dramatically, but you're towards the low end of the range. And it sounds like oil and gas maybe might not be the culprit there. So anything you can point to on the end market side that has organic growth coming in kind of towards the low end? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. I mean if you look across our businesses and take a look at EIG, for instance, our Aerospace and Power and Industrial businesses performed very well in the quarter. But our Process businesses were the ones that weakened and what caused us to take a more conservative view on the organic growth. And obviously, the oil and gas impact that I talked about is in that Process segment. But in addition, when we look at the weakened U.S. economy – or excuse me – Europe economy and the weakened or slowing Asia economy, that has, across our businesses, the most significant effect on our Process businesses. So that was the key factor in why our organic growth in the EIG part of the business was a bit down from where we thought it was going to be at the end of the first quarter. So I think if you focus on the Process businesses, you focus on the global part of the Process businesses because a major part of those businesses in terms of percentage is higher than our other businesses outside the U.S. That is a predominant area in the company that took the impact.

Okay. Great. Thanks. That's helpful. And switching gears a little bit to the M&A pipeline, it's been a few quarters since the deal and I know it's always lumpy. You have plenty of balance sheet capacity, obviously. Anything on just seller expectations or the marketplace or what you're able to uncover? Just any update on what you're seeing on the M&A space would be helpful. Thanks. Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. No, I see our strategy of continuing to do acquisitions, as Bob and I both mentioned, our opening remarks, is the prime use of our cash flow. And I'm quite optimistic about being able to do additional deals and deploy a significant amount of capital in this fiscal year. I can tell you we're actively working on deals as we speak. It's hard to predict when and if a deal is going to close, but I would be surprised if you didn't hear from us throughout the year.

Okay. It sounds good. Thank you very much. Frank S. Hermance - Chairman & Chief Executive Officer: You bet.

Thank you. Our next question, coming from the line of Robert McCarthy with Stifel. Please proceed with your question. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Good morning, everyone. How's everybody doing? Robert R. Mandos - Chief Financial Officer & Executive Vice President: Good. Hi, Rob. Frank S. Hermance - Chairman & Chief Executive Officer: Fine. Thanks, Rob. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Good, good, good. So I guess on the M&A question, maybe to come at it from a slightly different direction. Part of the problem on the opportunity for you on the M&A front is presumably, you're looking at the properties that have a lot of European exposure and then also probably a lot implied petrochem exposure. Maybe not directly, but there's going to be a sizeable part of their end markets that are going to serve those end markets or those businesses. So how does that kind of inform your – the bid ask around what you're trying to do in terms of acquiring some of these companies? Because clearly, even if you think your own core oil and gas exposure's manageable, in terms of the rhetoric, in terms of getting deals on the goal line, you're going to be fairly adamant about giving companies with oil and gas exposure a bit of a haircut in terms of the valuation. How do you see that playing out in terms of your opportunity set and your ability to close on some of these properties? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. I mean if you specifically take the question on oil and gas, again, as I mentioned, the oil and gas exposure for AMETEK is not that significant. And so when we look at our portfolio of deals, many…

Thank you. Our next question, coming from the line of Scott Graham with Jefferies. Please proceed with your question.

Hey, good morning. Frank S. Hermance - Chairman & Chief Executive Officer: Hello, Scott.

Hey. So I wanted to – and Bob gave me some of the answers to the questions I was looking for the RIFs (35:02) and the operating cost focus. Could you talk about which businesses these are maybe more focused on? Because this realignment is not typical AMETEK. It's a little bit different than we've seen for quite some time. I'd go back, I think, to the last downturn. Maybe tell us, Frank, kind of how you're thinking of this, how you conceived it because it is a little bit different than what you usually do. What business is most affected? And importantly, does this hurt the prospect of that $100 million productivity in out years from here? Frank S. Hermance - Chairman & Chief Executive Officer: Okay. Scott, yeah. I mean I think what I will say is that when we looked at all of the macro environment issues that are going on right now that most companies are reporting, most companies took down their guidance. And I look at this that when I give a guidance range, there is a commitment from us to make those estimates. And that's really embodied in the culture and the approach that AMETEK has taken for many, many years. So as we saw the growth prospects coming down by a few points, we just didn't wait around. We're going to take actions and we're going to realign. And I can sit here and with confidence tell that our earnings are going to occur within the range that I talked about and hopefully above that range. So I mean that's sort of the top line premise. We looked at our businesses in light of where we were seeing the change in organic growth from our initial estimates. And obviously, we've already talked about the Process businesses. So we took some actions there. We took some actions in EMG. But the way we looked at it is, where are the businesses that are looking at a lower growth than what they originally had talked about? So your comment about this is different, I guess from the viewpoint that we haven't done it since 2008 or 2009, it's probably correct. But if you look at the Zygo acquisition we did and are doing a lot of realignment there. And if you go back in history, we just have a very strong commitment to making the earnings numbers. And when we see an issue, we deal with it. And you just don't let the issue get behind you, in essence; you get in front of it. And that's what we did, and so I hope that helps with your question.

It does, indeed. The simple follow-up I would have is, I guess, is not so simple is if you can kind of do your thing, Frank, with the businesses and kind of how the sales rolled out and expectations roll out from here. Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. Sure. I'd be glad to do that. So if we start with EIG in Aerospace, EIG, Aerospace had a very good first quarter with organic sales up mid single digits, reflecting strong growth in our regional and business jet business and the continued solid growth in our commercial OEM business. Organic orders were also very strong in the quarter, up low double digits. And we're very pleased with the continued strong performance in EIG, Aerospace. This business is well-positioned to continue to drive strong growth, given key wins on a number of next-generation commercial aircraft, including the A350, the 787 and the C919 as well as a number of business and regional jet platforms including HondaJet, Global Express and Agusta. For all of 2015, we expect EIG, Aerospace sales to be up mid single digits, driven by the continued ramp-up of these key commercial OEM platforms and solid growth in business and regional jets. We've already talked a bit about our Process businesses. Organic sales in the Process businesses were down low single digits in the quarter. That was against a difficult prior-year comparison. In 2015, we expect organic sales to be up low single digits over 2014. And as I've mentioned, we've reduced our full-year growth estimates for the Process businesses as a result of the impacts of the stronger U.S. dollar and a slow global macro environment. Power and Industrial had a good first quarter. Organic sales were up mid single digits with solid growth…

Frank, thank you. Frank S. Hermance - Chairman & Chief Executive Officer: You bet.

Thank you. Our next question, coming from the line of Joe Radigan with KeyBanc. Please proceed with your question.

Thank you. Good morning, guys. Frank S. Hermance - Chairman & Chief Executive Officer: Good morning, Joe.

In terms of the second quarter revenue guidance, flat overall, how does that break out by segment on an organic basis, Frank? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. It's going to be roughly the same for each of the segments in the second quarter. I don't see a significant difference between the two segments.

Okay. And then the margins in EMG, I mean record performance there. Is that how we should think about that segment going forward and in the second quarter, kind of assuming the revenue growth environment? Or was there some favorable mix there or some other dynamic that doesn't necessarily repeat? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. I'll let Dave take that question. David A. Zapico - Chief Operating Officer & Executive Vice President: Yeah. I don't think it's a mix issue that won't repeat. There's been really strong cost management in EMG, and the margins that you see are more indicative of the future. So we expect to expand margins in EMG more so than EIG, but it will continue.

Okay. Frank S. Hermance - Chairman & Chief Executive Officer: And just to expand, Joe. I think if you look at all of AMETEK now, we're going to see really superb margin performance this year. We're going to be year-over-year, I would say, well above 100 basis points of operating income margin improvement. So Dave and his team have done just a phenomenal job on the performance of both of these businesses, both EIG and EMG. And the margin performance is truly superb.

Okay. And then lastly for me, I mean you mentioned China organically, your revenue was up mid-teens. But you also talked about the, obviously, the slowing economy there. So – and you touched on this a little bit in your prepared comments, but can you talk more about what's driving that? Is it just the growth initiatives that you're instituting there? And what's your outlook for China going forward for this year and beyond? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. Okay. It's a great question. If you look at the first quarter, there was a bit of an anomaly in our results in that when you look at last year, we had huge benefits from Abenomics in Japan. So therefore, the results in China, which were very good, were offset by the results in Japan, in essence. And we still consider the Far East and in particular, China, very good regions of the world in terms of investment. We are not changing our investment strategy at all. We're going to continue to put manufacturing capability and sales and service capability in that part of the world. The difference is that this – we were reporting overall for Asia growth numbers that were extremely high for the last couple years and now they're going to be more modest. You look at the GDP in China. It, at points, was running 10%, 11%. Now they're forecasting 7%. So you compare that 7% GDP with the U.S. and Europe, it's still the fastest-growing part of the world but it's not growing at the same rate. And that's the way that we are viewing that part of the world. It's still a great place to invest, but it's not growing at the rates that it was.

Okay. Great. Thanks, Frank. Thanks, Dave. Frank S. Hermance - Chairman & Chief Executive Officer: Sure.

Thank you. Our next question, coming from the line of Mark Douglass with Longbow Research. Please proceed with your question.

Good morning, gentlemen.

Hi, Mark. Frank S. Hermance - Chairman & Chief Executive Officer: Hello, Mark.

Bob, what were payables in the quarter? Robert R. Mandos - Chief Financial Officer & Executive Vice President: $381 million.

$381 million. Thank you. What were orders in backlog? Frank S. Hermance - Chairman & Chief Executive Officer: Orders were $944 million. They were overall down 5.5%. Organically, they were actually up low single digits. And the currency impact here was huge. It was 8%. And the reason is that you obviously have to readjust the backlog as the currencies have so dramatically changed. If you look at the total backlog, it's now $1.2 billion, essentially flat with where it was at the beginning of the year.

How much of that backlog was due to currency? Frank S. Hermance - Chairman & Chief Executive Officer: 8%. I mean, well the backlog. That's a different...

Percent of backlog? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. You have to do 8% of $1.2 billion. No. No. The U.S. part of – it was not all of it. But why not, instead of us guessing here, why don't we get to that answer? It's 8% of the part of the backlog that obviously is international, and we don't have that right here at our fingertips.

Okay. You can follow up. And then, Frank, on the realignment spending $16 million and getting $55 million in annualized benefits is pretty huge. It's a hard number to fathom on $16 million of spend. I guess it begs the question, why wouldn't you have done it sooner if the returns are this strong? Frank S. Hermance - Chairman & Chief Executive Officer: You're always – that's a great question. And first of all, the return is as good as it is, predominantly because it is related to severance cost. And therefore, the return, as Bob said, is immediate and it's quick. And you get an excellent return on that. And in terms of your other question, basically, as you know, every year, we try to balance the cost reductions with other things that we are doing. We always have a large number. If you look historically over the last few years, we talked about $100 million of improvements. And again, as we saw the macro situation, we decided to get more aggressive. We always have a list of things that we can do, and we balance that based on the environment. And in this case, as we saw the slowing sales, as just about every industrial company is seeing, we recognized that we weren't going to be shipping as much from our operating facilities. So therefore, we took action. I mean it's pretty straightforward and pretty simple. If we were going to be shipping at a higher level, then we wouldn't have done it.

Right, right. Even with that lower guidance, it's still a pretty big number and you already run pretty lean. So it's just surprising that you're able to find so much. So – but that's a good number. Frank S. Hermance - Chairman & Chief Executive Officer: We're good at this.

All right. Thanks for taking my questions.

Thank you. Our next question, coming from the line of Richard Eastman with Robert W. Baird. Please proceed with your question. Richard Eastman - Robert W. Baird & Co., Inc. (Broker): Yes. A couple things. Frank, the reduction in the core growth for 2015 in the EMG business, kind of comes in that technical motor space. It looks like the cost-driven business is kind of intact in terms of what their expectation was. Is the technical motors piece, is that being influenced by that $100 million of revenue that is kind of sprinkled throughout technical motors from the energy business? Is that where you'd be able to identify some softness there? Frank S. Hermance - Chairman & Chief Executive Officer: Yeah. No question, Rick. If you look at those businesses in the differentiated part of EMG, they also have global market exposure. And what we're seeing is as those economies are weaker, Europe, weak; Asia, not quite as strong as it was, there's an impact there as well. So, yes, we have indeed looked at our thoughts around that differentiated segment. And it's also lower by a couple of points. Richard Eastman - Robert W. Baird & Co., Inc. (Broker): And just to back up a little bit, there was a reference earlier about exports. And obviously, I think most appreciate the competitiveness or lack of when the dollar strengthens like it has. Frank S. Hermance - Chairman & Chief Executive Officer: Right. Richard Eastman - Robert W. Baird & Co., Inc. (Broker): But can I ask you, I mean what percentage of your sales are exports from U.S. to Europe? And then secondly, is there a price component there? Or is it – again, your products are so differentiated, I can't imagine that switching costs aren't awfully high. So…

Thank you. Mr. Coleman, there are no further questions at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.

Thank you, Susie. Thanks, everyone, for joining our call today. As a reminder, a replay of the call can be accessed to ametek.com and streetevents.com. And as always, I'm available for further questions today. Thanks again.