My name is Isa, and I will be your conference facilitator today. At this time I would like to welcome everyone to the Danaher Corp. First Quarter 2016 Earnings Results Conference Call. All lines have been put on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. I will now turn the call over to Mr. Matt Gugino, Vice President of Investor Relations. Mr. Gugino, please begin your conference.

Thank you, Isa, and good morning, everyone and thanks for joining us on the call. With us today are Tom Joyce, our President and Chief Executive Officer; and Dan Comas, our Executive Vice President and Chief Financial Officer. I would like to point out that our earnings release, the slide presentation supplementing today's call, our first quarter Form 10-Q and the reconciliation and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the Investor section of our website www.danaher.com under the heading Financial Information. The audio portion of this call will be archived on the Investor section of our website later today under the heading Events and Presentations and will remain archived until our next quarterly call. A replay of this call will also be available until April 28, 2016. The replay number is 888-203-1112 within the U.S. or 719-457-0820 outside the U.S. and the confirmation code is 4643245. During the presentation, we will describe certain of the more-significant factors that impacted year-over-year performance, the supplemental materials describe additional factors that impacted year-over-year performance. Unless otherwise noted, all references in these remarks and supplemental materials to company-specific financial metrics relates to the continuing operations of the company and the first quarter of 2016 and all references to period-to-period increases or decreases in financial metrics are year-over-year. During the call we will make forward-looking statements within the meaning of the Federal Securities laws including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties including those set forth in our SEC filings and actual results might differ materially from any forward-looking statements that we make today. These forward-looking statements speak…

Thanks, Tom. That concludes our formal remarks. Isa, we're now ready to take questions.

Thank you, sir. We will now take our first question from Scott Davis from Barclays. Please go ahead.

Good morning, Tom and Dan. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hi, Scott.

China was a bright spot for you guys, and I know last quarter was – I mean it tracked pretty comparable last quarter as well, but it sounded like things maybe firmed up a little bit. I mean Fluke – is Fluke your canary in the coal mine in China having that business back in positive territory in the quarter? Maybe just a little color on what you guys are seeing there. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Thanks, Scott, and good morning. China unquestionably is – remains a very good market for us despite much of the headlines that would certainly suggest that there's slowing in various areas. We were very pleased with the performance in China, and I think it was relatively broad-based. If you looked at Danaher versus Fortive, let's say, Danaher was up high-single-digits in China, and Fortive was up mid-single-digits in China. So I think a number of good examples where China remains a very attractive market for us. Relative to your specific question on Fluke, Fluke is just – is an exceptional business overall. We've had a – it's probably one of our most advanced businesses in terms of both go-to-market as well as local production and product development in China. And while there's clearly still some softness around various industrial segments of the Chinese market, Fluke is a very strong brand in that market and has a very strong share position. So I think we're encouraged by some of the stabilization we see in some of the markets, and in other of those markets, we just continue to see very strong growth. Our Dental business continues to perform exceptionally well in China. Life Sciences & Diagnostics broadly continuing to perform well there. So, again, while clearly the headlines would show that that market has pulled back a little bit in the aggregate, it's still a very good place to be.

Okay. That's helpful, Tom. And then I just wanted to ask where you stand in Pall versus the deal model. Kind of help us now that we're a year in or so, I mean give us a sense of how you – what's working, what's not working, what – Industrial is probably far weaker than you thought it was, but the Environmental, or the I should say, the Life Sciences side is probably far stronger than you thought it would be. So how are you managing that variability? And how does it all really stack up at the end of the day versus what your prior expectations were? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Scott, we're in – it's Dan. We're off to a very good start there. We had mid-single-digit good growth in the quarter. As Tom alluded, that was a combination of double-digit growth in the Life Science side and a slight decline on the Industrial side. Clearly that would have been a contributor to our overall organic growth at Danaher. From a margin perspective, we are ahead of schedule. We've talked about north of $100 million of benefit here this year on the margin side, continue to track very well to the ultimate target of $300 million. In addition to this, we are getting favorable mix given the Life Science business is more profitable and we really saw that play out exceedingly well in the first quarter. It'll likely create some opportunities where we'll be able to accelerate some investments here at Pall during this year given we're tracking so well.

That's great. Good luck, guys. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks. Just to follow on Dan's comment a little bit, the team at Pall has just done a tremendous job. It's, as we've mentioned before, it's a great combination of both some seasoned Danaher leaders as well as an exceptional group of folks who have been at Pall for a long time, who together have really brought DBS to life in that business in rapid fashion. You heard me mention about the 100 Kaizens that have gone on. Those have gone on literally around the world. And it's just one indication of the rapid rate at which the Pall team has adopted the tools of DBS, and really that has truly contributed to not only the growth dynamic that we're seeing, but certainly has assisted in us getting ahead on the cost takeouts on the margin side.

Perfect. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Scott.

Our next question comes from Steve Tusa from JPMorgan. Please go ahead. Your line is open.

Hey, guys. Good morning. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hi, Steve. Good morning.

Just back to Pall just to follow up on that, I think they were doing a little bit better than $100 million in R&D a year, and R&D year-over-year was up I think about $20 million bucks. Is that a little bit of a decline in the core R&D? Or are you kind of getting efficiencies there on the Pall side? You also mentioned you're kind of walking away from some business there I think in your 10-Q at Pall. Could you just give us a degree of magnitude on that front? And then I have one quick follow-up. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Steve, on the walking away from some business, that's something that Pall had started prior even to our acquisition. It's down to a relatively nominal amount here and we'll be...

Okay. Daniel L. Comas - Chief Financial Officer & Executive Vice President: I think largely done by the middle of this year.

Okay. And then on the R&D front, what was kind of Pall's R&D? I think it was greater than $100 million. Are you guys getting more efficiencies there? Do you expect to maintain that R&D budget, increase it? Daniel L. Comas - Chief Financial Officer & Executive Vice President: I would – right now, we're sustaining and I suspect over time that will get increased.

Okay. So... Thomas Patrick Joyce - President, Chief Executive Officer & Director: I would just add to that, I think we've mentioned this maybe once before, but if you think back to the play book that we ran post the Beckman acquisition, I think the play book here at Pall is very similar, which is there's a number of opportunities to get cost out of the business broadly defined. And we're working on those, obviously, to start to see the margins coming up. But the play book is to then redeploy some of that cost takeout into investments in sales and marketing in R&D. You see us do that broadly across Danaher with gross margins going up and sales and marking and R&D on the quarter for Danaher in total up 30 basis points. We did that at Beckman. R&D lifted over time. We started to get the innovation engine going. Innovation at Pall has always been a strong suit there, but we think we can take it up another level. So some of those cost takeouts will ultimately translate into either higher spending or potentially more efficient spending if we find opportunities to do a better job innovating at the same cost rate. We'll see.

Okay. And then just lastly on the free cash flow, a very strong quarter. Obviously, you're paying down some debt, beginning to delever here a little bit. Is there anything about the timing of that free cash flow? Or should we think about kind of normal seasonality off of that base? I know there were some accruals, year-over-year accruals were less of a drag. Maybe there's just some timing. I mean, maybe the bottom line, is what's kind of the annual free cash guide? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Well, Steve, you know we don't give a specific guide but we're off to a very good start. There was a little bit of timing benefit around some tax payments, but broadly our cash flow was quite strong. As you know, we ended last year with a record number and a very strong second half for free cash flow. We expect that trend to continue. You know, we're not going to be up 40% year-on-year, but we'd expect a very healthy double-digit increase in free cash flow this year.

Right. Okay. Awesome. Thanks a lot, guys. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Our first quarter last year was... Daniel L. Comas - Chief Financial Officer & Executive Vice President: And we were a little bit light. Thomas Patrick Joyce - President, Chief Executive Officer & Director: A little lighter last first quarter. So a little bit of benefit there from a comp standpoint.

All right. Thanks. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Steve.

Our next question comes from Nigel Cole from Morgan Stanley. Please go ahead. Your line is open. Nigel Coe - Morgan Stanley & Co. LLC: Hey. Thanks. Good morning. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Good morning, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: Yeah. Hi. Tom, so you mentioned you've seen signs of stability. I think that was in relation to Fluke specifically. But maybe if you could just broaden out the conversation to maybe some of the more cyclical businesses within Industrial Tech, Tektronix. What are you seeing today compared to what you saw back in January? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Thanks, Nigel. Our comments about stability were not exclusively associated with Fluke. In fact, I think there's some pockets even around the Fluke business where we've seen stability, but we've also seen still some real headwinds. But I think we have seen stability in some other areas. You asked specifically about on the Industrial Tech side. The Automation businesses, our Sensors & Controls businesses, as we looked at those throughout the course of the quarter, February and March, we saw indications of stability. We saw those order rates kind of firm up a little bit. And while we wouldn't call it an upward trajectory, we would call those a bit more stable than we had seen in the trajectory of the fourth quarter and maybe at the very opening of the year. You mentioned Tektronix, I wouldn't necessarily put Tektronix quite in that category yet. It had one of the more challenging quarters. It's in one of the tougher markets probably that we face today. And so I think while we're very encouraged by the new product flow at Tektronix and we expect to…

Our next question comes from Shannon O'Callaghan from UBS. Go ahead. Your line is open.

Morning, guys. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Morning, Shannon.

Hey, Tom, you mentioned execution and disciplined spending at Dental with the big margin improvement there. I mean that's a segment that you've always targeted getting to much higher margins over the years, but it's been more of a challenge. I mean is this something of a breakthrough here? Or how should we read the performance and those comments? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Well, you're absolutely right, Shannon. It's been a challenge in the past, and we did set our sights and commit to making a difference there. We have some new leadership in place over the platform. Many of you have met Amir Aghdaei, who has led a number of our businesses over the last several years and some of our more challenging businesses. And he's really put a terrific team together. They've set their sights on specific margin improvements over time. There was some outstanding execution, some disciplined cost control. But similar to the comments I made earlier around the play book, I made reference to the Beckman play book and how that applies to Pall, while we'll continue to drive margin improvement at Dental under the team's leadership, we'll also take some of that improvement and continue to invest in sales and marketing and in R&D, because we do have opportunities for improvement in terms of our innovation cadence. We saw some modest improvement there in our core growth in the platform during the quarter, but we know there's opportunities to continue to improve that. We expect it to continue to step up, but some additional investment over time with some of that cost takeout will certainly be a help.

Okay. Great. And then, Dan, maybe a question for you on tax. Obviously a lot of new tax policies being contemplated and put into place that impact a lot of multinationals. Any, just, thoughts on that in general and potential impacts on Danaher as well as how should we think about kind of the two NewCo tax rates and any differentials there? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Sure, Shannon. Yeah, obviously it's something we're spending a lot of time on trying to understand better. I mean our initial read of this is, this is not going to be an impact to us, a material impact to us in the near term. But over time, we could see some rate creep because of it. Now that assumes nothing else happens, and there's no other opportunities, and so sitting here right now, it's not something that worries us a great deal. But it's obviously a potential risk kind of going forward. I don't think there's a big change in how we think about the tax rates of the two entities. We've talked about Fortive likely coming out closer to kind of a high 20%s tax rate. Again, I think as they begin to do some acquisitions, they'll have an opportunity to bring that down, and I would expect that Danaher would be at our current rate or lower. Danaher RemainCo would be at our current rate or lower.

Okay. Great. Helpful. Thanks a lot. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Shannon.

Our next question comes from Steven Winoker from Bernstein. Please go ahead. Your line is open. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks, and good morning, all. Could you maybe just clarify what – you talked about Fortive versus Danaher core growth in China. What was it globally for the quarter? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Danaher was up a couple points and Fortive was down one to two points, say 1.5%, I believe. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And, well, I guess everybody, what are you thinking about in terms of, current thinking I should say, on capital structure for the two entities? Where are you still heading for that? I know there have been some private conversations, but don't have a sense for where that is now. Daniel L. Comas - Chief Financial Officer & Executive Vice President: I don't think much has changed versus what we communicated a year ago. We would expect Fortive to come out as an investment-grade company. You know likely they're not going to be an A-rated company, but something in a BBB range where they would be strong investment grade and clearly have a fair amount of latitude to execute M&A. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. Great. And if I could just one more. Tom, in terms of the R&D profile, I know you talked a little bit about it before specifically with Pall, but I guess overall for the company, where is – what level of R&D are we talking about for the new Danaher going forward? And do you see an opportunity to accelerate that at all as you think about also accelerating core growth in new Danaher?…

Our next question comes from Ross Muken from Evercore ISI. Please go ahead. Your line is open.

Good morning, guys. Maybe on the Life Science business, just a little bit more color commentary. You called out pharma as sort of a strong end-market it seems like on the SCIEX side. That market's been running hot for a while. I mean, how do you see the trajectory there? And then secondarily on the Pall side, biotech, there's obviously been a lot of concern in the market, particularly with the smaller companies on funding and the like. Have you seen anything in that side of the business, particularly with small to mid-size biotechs in terms of any relevant slowdowns? Thanks. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Ross. Yes – no question the pharma market is an important driver of our growth across the Life Science portfolio. And we have exposure to that growing market across virtually every one of our Life Science businesses. Pall, specific to your question around biotech and small and mid-size, continues to perform exceptionally well across the biotech market. Just to go back and talk about a few things about what's going on in that market, Pall has a billion-dollar business today that's oriented towards biopharmaceuticals. And the combination of the solutions that they've had for a number of years along with the newer products in single-use technologies continue to drive the exceptional growth that we see there. That growth, as I think many of you know, Ross, and others know is really driven by this move, the growth and the transition from small molecule drugs to large molecule drugs. And not only are those the fastest growing segment of the market, but they're also the drugs that are most significantly represented in the pipelines of both small as well as large pharmaceutical companies today. So we remain optimistic and bullish on that market, and I think there's every reason to believe that we'll continue to see good growth not only from Pall but from our other Life Science businesses that have exposure to that market.

Great. And maybe just quickly on the capital allocation side. So a lot of equity market volatility to start the year. Private equity has probably been more of a net seller than buyer. I mean how has this sort of impacted asset prices on the private side in terms of what you're looking at? And does it make sellers more apt to maybe approach a process given they saw equity prices up, down, up again, maybe they're afraid they go down again and so they want to take advantage of maybe an opening in the sort of credit markets where larger companies can acquire? I mean I'm just trying to get a feel for kind of how all this volatility has maybe helped you a little bit on the deal front. Daniel L. Comas - Chief Financial Officer & Executive Vice President: I mean volatility is a net positive for us as a well-capitalized acquirer. Your comment about private equity, it's getting a little better for them, but the leverage markets are still pretty tough. So I think all those factors play to our benefit. Now granted there are other – a number of other well-capitalized corporate players here. But we're happy to sort of compete in this sort of environment where there's a little bit more volatility and uncertainty.

Great. Thanks, Dan. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Ross.

Question comes from Jeffrey Sprague from Vertical Research Partners. Please go ahead. Your line is open.

Thank you. Good morning, everyone. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hey, Jeff.

Hey. Just a couple. First on SG&A, I guess, Dan, you kind of partially answered it speaking to the Pall R&D. But the SG&A moving up as a percent of sales, is there anything to flag there? And do you expect that sort of upward pressure over the balance of the year? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Well, if we first just take Pall out of the equation entirely, R&D as a percent of sales was flat year-on-year, but sales and marketing was up 30 basis points, and that was intentional. I mean we've stepped up some investments. We've talked about some of the opportunities in high-growth markets where we see people pulling back, and we see there's some opportunity. I think some of the success Fortive's having in China right now is probably a little bit of an example of that. And Pall brings in a pretty high sales and marketing expense when you kind of layer that in. That probably sustains itself. We see that as an important part of their go-to-market, not only their go-to-market but as I mentioned also sort of part of their R&D as well. So we don't see ourselves sort of cutting back on those investments, if anything given we have had a little bit more strength here earlier in the year, we may step some of that up.

And on tax, you mentioned creep and maybe there could be some offsets. Have you guys looked at this FASB change on stock comp and determined what, if any, benefit you'll have when you choose to adopt that? Daniel L. Comas - Chief Financial Officer & Executive Vice President: We don't think it would be meaningful.

And then just finally, the six small deals, were any of those in Fortive? And if so, what? Daniel L. Comas - Chief Financial Officer & Executive Vice President: One was Fortive. It was an acquisition for Gilbarco. Thomas Patrick Joyce - President, Chief Executive Officer & Director: And that's on top of a couple more we did late last year. So in the last four or five months, it's three deals, Jeff.

Great. Thanks, Tom. Thanks, guys. Appreciate it. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Yeah. You bet.

Our next question comes from Deane Dray from RBC. Please go ahead. Your line is open.

Thank you. Good morning, everyone. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hi, Deane.

Hey, I'd just like to go back to the 2016 guide and just to clarify, has there been any change to the core revenue outlook for 2% to 3%? And then maybe a bit on the cadence of that through the year and how might that split with Fortive? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Deane, no real change to our view of the full year at 2% to 3%. I think our comments referring to some stabilization that we've seen here in the last couple of months I think suggest – as well as by the way how that was represented in the order rates, not just the sellout but the order rates in the last couple of months, suggest that we still feel pretty good about the 2% to 3%. So I think we're going to stay there.

And how about the expectations for Fortive in the second quarter? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Yeah. We would expect that Fortive would be in the same zone, maybe a little bit better. Danaher ex-Fortive would be slightly better and that would roll up to be approximately 2% versus 0.5% of core we delivered in the first quarter.

Great. And then maybe some clarification on Hach, the softness in the high-growth markets, is there anything specific there? Is it tougher comps? Why might there be some slowing there? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Well, it certainly was a very challenging comp year-on-year. The platform overall I think comped at 10% versus last year, Deane. So it was probably, among the platforms that we have, it was probably the toughest comp perhaps across the entire corporation. So that was certainly challenging. We have seen some delays in some key projects in a couple of the high-growth markets. So that was certainly a factor there. In certain of those high-growth markets, we actually have a little bit more industrial exposure than purely municipal exposure, and that obviously had an impact in those markets.

Great. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Again, we don't – that business, you know it well, Deane, is just one of our exceptional franchises. And we're confident that business continues to – will continue to grow over time and we'll see that business' core growth rate improve here in the second quarter.

Great. And then just last one and still on the topic of Hach. I don't recall ever there being a time where Water Quality has been more front page news in the U.S. with Flint, Michigan. And just what's your expectation about the longer-term implications on water quality, water tests and how is Hach positioned? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Well, we wish we had an answer today to the infrastructure challenges that lead pipes represent in that situation. It's just terrible to see the challenges that that community has gone through. But I think if we try to look on the bright side from the standpoint of the overall market dynamics, situations like that always turn the spotlight up on the importance of regulatory oversight in municipalities around the country, and frankly, throughout the world. And so, if those regulatory drivers continue to be strengthened, to be pointed at the greatest vulnerabilities in municipal and industrial systems, that, again, while challenging for those communities, ultimately benefits consumers and certainly benefits us. Regulatory drivers have always been a key macro driver for that platform, and they will continue to be so for as long as we can anticipate.

Great. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Deane.

Our next question comes from Andrew Obin from Bank of America Merrill Lynch. Please go ahead. Your line is open.

Yes. Good morning. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hi, Andrew.

I guess on the Q, you sort of indicated that you're still on track to pay the $3 billion dividend from Fortive to Danaher. Is there any flexibility around that number if Fortive discovers a good acquisition? How flexible are you there? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Well, that's something obviously the Board would need to determine depending on obviously the size of the acquisition and what else they have in the pipeline.

It's fair to assume that there's some flexibility there. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Nothing's set until it's set.

And then just going back to GVR, the EMV investment and both growth and investment, is it fair to assume that investment is going to be front-end loaded Q1 and Q2 but you might see growth throughout the year? Is that the right way of thinking about it? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Yeah. There's clearly some upfront costs. And as Tom alluded, we also had some one-time items in the quarter and that will normalize as we get through the year.

Terrific. Thank you very much. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Andrew.

We will now take our next question from Julian Mitchell from Credit Suisse. Please go ahead. Your line is open. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Thank you. Just a question on Dental first. The growth rate was lower than I thought, particularly as Nobel should have automatically pushed up the organic growth a little bit and the comp was pretty easy. So I saw you called out Middle East and Africa equipment. But I wouldn't have thought that was a very sizeable piece of the business. So maybe just give a bit more color there. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Well, our Dental growth overall, Julian, was at a half a percent was basically in line with our expectations, modest improvement from where we've been over the last few quarters. And obviously as we talked just a few minutes ago, we're very pleased with seeing the OMX up at the rate that I talked about earlier. We saw solid low-single-digit growth in consumables and sell-out continues and actually is a fraction better than even our sell-in. So we always look at that sell-out. We have good transparency with our distribution partners, and we're encouraged by that. The Nobel Implant Systems business, mid-single-digit average daily sales growth in the quarter. We were pleased with that. The Ormco business, the orthodontics business continues to do well, and we're continuing to see on a geographic basis as I mentioned the – a couple of the high-growth markets specifically the – our business in China continuing to do well. On the flip side, on the equipment side, we have seen some challenges in Europe actually, and a couple in those high-growth markets where the equipment side has been held back a little bit…

I would now like to turn the call back to Mr. Matt Gugino for any additional or closing remarks.

Thanks, Isa, and thanks, everyone, for joining us. We're around all day for questions.