Good morning and welcome to the Second Quarter 2015 Dover Earnings Conference Call. With us today are Bob Livingston, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and CFO; and Paul Goldberg, Vice President of Investor Relations. After the speakers' opening remarks, there will be a question-and-answer period. As a reminder, ladies and gentlemen, this conference call is being recorded and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Mr. Paul Goldberg. Mr. Goldberg, please go ahead, sir.

Thank you, Maria. Good morning and welcome to Dover's second quarter earnings call. With me today are Bob Livingston and Brad Cerepak. Today's call will begin with some comments from Bob and Brad on Dover's second quarter operating and financial performance and follow with an update of our 2015 outlook. We will then open up the call for questions. And as a courtesy, we kindly ask that you limit yourself to one question with a follow-up. Please note that our current earnings release, Form 10-Q, investor supplement and associated presentation can be found on our website, www.dovercorporation.com. This call will be available for playback through August 4, and the audio portion of this call will be archived on our website for three months. The replay telephone number is 800-585-8367. When accessing the playback, you'll need to supply the following access code, 67983014. Before we get started, I'd like to remind everyone that our comments today, which are intended to supplement your understanding of Dover, may contain certain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover by referring to our Forms 10-K and 10-Q for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statement. Also, we undertake no obligation to publicly update or revise any forward-looking statements, except as required by law. We'd also direct your attention to our website where considerably more information can be found. And with that, I'd like to turn this call over to Bob. Robert A. Livingston - President, Chief Executive Officer & Director: Thanks, Paul. Good morning, everyone, and thank you for joining us for this morning's conference call. Let me begin by saying that the Energy markets have been more challenging than we…

Thanks, Bob. Before we take questions, I just want to remind everybody, as a courtesy, if you can limit yourself to one question with a follow-up, we'll be able to take more questions from more analysts. And with that, Maria, can we have the first question?

Our first question comes from the line of Shannon O'Callaghan of UBS.

Good morning, guys. Robert A. Livingston - President, Chief Executive Officer & Director: Good morning. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Good morning, Shannon.

Bob, I guess I'll start with this bottom/inflection point in drilling. I mean, maybe a little bit color on what you're seeing there and are we just seeing kind of an end of the bleeding? Or do you actually see something you like there? Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Gosh, Shannon. Right now, it's hard to have rosy glasses when you look at our activity in the energy market. Rig count continued to decline during the second quarter and we track that most closely related to our drilling business, our insert business for drill bits. And we saw the low point in the quarter in the first half of June. The second half of June was up about 10% or 12% over the first two weeks of June. And I would share with you that the order activity in July is up, so far, just month-to-date, is up about 15% above what we saw in May and June. Shannon, I don't – I'm not attributing that to a market recovery. It does reflect what I believe is the coming to the end of the destocking activity we've experienced with many of our customers.

Okay. And then on the cost side, why was there only $3 million of restructuring this quarter in Energy? I would have thought – I mean, last quarter there was, I think, $18 million; you said you're going to do $6 million to $7 million next quarter. Was there a reason that there was a little bit of a lull, I would think – I would have thought it would have been pretty intense restructuring in the quarter? Robert A. Livingston - President, Chief Executive Officer & Director: Well, I would tell you – I think there would be some people within energy that would tell you that there was some intense restructuring, it just didn't cost as much as what we're going to experience in the second half. Brad is going to have to help me here with an exact number, but I think head count was reduced in energy by almost 400 folks in the second quarter. And there just wasn't a lot of restructuring cost associated with those employee reductions. Second half of the year, I think embedded in our guidance is about $15 million of restructuring costs. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Total for the corporation. Robert A. Livingston - President, Chief Executive Officer & Director: Yeah, for the corporation. And probably two-thirds of that is in Energy, Shannon. We continue to whittle away at the cost base.

Okay. So it's just how much it's costing to take it out – that's not aligned exactly with the...? Robert A. Livingston - President, Chief Executive Officer & Director: The restructuring in the second quarter did not include assets.

Okay. Robert A. Livingston - President, Chief Executive Officer & Director: It was all people related.

Got you. All right. Thanks, guys.

Our next question comes from the line of Scott Davis of Barclays.

Hi. Good morning, guys. Robert A. Livingston - President, Chief Executive Officer & Director: Good morning, Scott. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Good morning, Scott.

Can you give us a sense – I didn't see anything in the slides or commentary related to price in the backlog, particularly, in Energy, is there a – have you hit a point now on where folks who've wanted a repricing have got it, and what you see in the backlog is stable price or are we not there yet? Robert A. Livingston - President, Chief Executive Officer & Director: As soon as I answer the question affirmative, we're going to get another request for another tough discussion with a customer tomorrow, Scott. I believe that the bulk of it is behind us. I think I've shared this on the April call as well as at a couple of conferences that I spoke at during the second quarter that the bulk of the price reduction activity we've experienced in Energy has been in our drilling products as well as our rod products within artificial lift. Not a lot has changed. In our drilling products, it's still going to average for the year about 5%, and that's what we saw in the second quarter. A little bit more aggressive actions that we've taken along with some of the customer demands in rods, and that's probably averaging about 10%. Don't see it being much different during the second half of the year. And the net impact for the segment for the entire year, I would tell you it's still within the range we've been sharing with you for the past couple of calls, which is 3% to 6%, 4% to 6% in that range.

Okay. Understood. And on corporate expense, it's down $9 million year-over-year. Is that – could you give us a sense of how much of that is lower bonus accruals and how much of that is kind of real cost-out? Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Yeah, yeah. I'll take that question. I guess, Scott, about half of that is us reaching a threshold on our revised guidance whereby the long-term plans won't pay out. And so think about it as half is comp-related; the other half, about 50% of that is real cost takeout. So I would say that's related to our functional cost initiatives around reducing the corporate overhead. And then, we have miscellaneous and other stuff that normally happens in any given quarter comprise the remaining piece of that balance.

Okay. Okay. That's it. Thanks, guys. Good luck. Robert A. Livingston - President, Chief Executive Officer & Director: Thanks.

Our next question comes from the line of Steve Tusa of JPMorgan.

Hey. Good morning. Robert A. Livingston - President, Chief Executive Officer & Director: Hi, Steve Tusa.

Thank you. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Hi, Steve.

The restructuring dynamics in Energy. Could you maybe just remind us of what the expectation is? What you spent this year? What you expect to book this year in savings? And then, what the carryover is into next year? I think that's kind of an important piece, obviously, in being optimistic about next year. Robert A. Livingston - President, Chief Executive Officer & Director: Okay. I'm going to let Brad tackle that one. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Let me start and then you could follow on if I don't hit all those questions. So we're saying $40 million to $45 million total corporation this year in restructuring charges, $0.16 to $0.19 range. Of that amount, we're looking at $27 million to $30 million of that being in the Energy. In terms of the benefits, we continue to see – by the way, I'll just make mention of this now that, as we continue to work through our restructuring, our benefit estimates have actually come up a little bit since our last forecast, just more confidence around that benefit number. But in terms of Energy, I pointed out in my prepared remarks that we expect to take $90 million of cost out this year. Steve, there's two pieces to that: there's a piece that's funded through restructuring; there's a piece that's just day-to-day initiatives around structure that doesn't cost us effort – costs us money, I should say, cost a lot of effort, but money. And so Energy will take $90 million out. The run rate on that, obviously, is much more significant. For the total corporation, I would say we're on restructuring. Now, I'm going to go back to just the restructuring piece, $90 million to $95 million of benefits, the run rate will be more like $130 million to $140 million going into next year on those actions.

Okay. And of the $90 million, how much is actually from the restructuring? Brad M. Cerepak - Chief Financial Officer & Senior Vice President: The $90 million in Energy you're referring to?

Yes. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Yeah. So about $60 million to $65 million. Robert A. Livingston - President, Chief Executive Officer & Director: $65 million. Yeah.

Okay. And then I... Brad M. Cerepak - Chief Financial Officer & Senior Vice President: The rest coming through real initiatives around just cutting back the spend levels that – we expect some of that to be permanent. Robert A. Livingston - President, Chief Executive Officer & Director: And lower product cost. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Yeah.

Right. And I think you said last quarter there were $30 million of temp stuff. Is that still kind of – I guess, that's what that implies, that's still kind of the number. But you're making that sound like it's a bit more structural perhaps now. Robert A. Livingston - President, Chief Executive Officer & Director: I don't think that number has changed much now.

Okay. And then one last quick question just on Refrigeration & Food. The margin has been down in the first couple quarters here. What do you see there for the year? Is there – I know your volumes maybe return a little bit in the second half, what margin are you expecting in that business for the year? Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Gosh. For the entire year, at least 13.5%. It may push 14%, Steve.

In Refrigeration & Food? Robert A. Livingston - President, Chief Executive Officer & Director: In that segment, yes.

I mean, that's a huge, I think, bump-up from – I know you had restructuring in the fourth quarter, but, I mean, that's definitely a hill to climb in the second half. Robert A. Livingston - President, Chief Executive Officer & Director: Let me give you a little bit of color on anticipated second half margins for Dover...

Okay. Robert A. Livingston - President, Chief Executive Officer & Director: ...which I think would be helpful for everyone to understand. As we look at the second half, we are anticipating operating margins to be up about 250 basis points over the first half. Steve, the bulk of that goes back to your first question. About 150 bps of the 250 bps improvement we're seeing in the second half is the recognition of increased benefits of restructuring and lower restructuring cost versus the first half, and about 30 bps of improvement in the second half from what I would just label as normal productivity initiatives. And then...

Okay. Robert A. Livingston - President, Chief Executive Officer & Director: ...some improvement in margins from increased volume. We are looking at volume in the second half to be up. I think it's about $130 million over the first half. And we'll see some increased margin activity from that increased volume. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Keep in mind the discussion that Bob – the numbers he has given you is all to the high end of our guide range, just to be clear.

Okay, great. Thanks for all the color. It's great to have all these details, and thanks for trying to make a call on some of the stuff that's incredibly fluid over the last couple of quarters. All the detail is very helpful, so thanks. Robert A. Livingston - President, Chief Executive Officer & Director: You're welcome. Thank you.

Our next question comes from the line of Jeff Sprague of Vertical Research.

Thank you. Good morning, guys. Robert A. Livingston - President, Chief Executive Officer & Director: Good morning, Jeff.

Good morning. Hey, just a couple others, thinking about this back half, you had previously been pretty explicit about how you thought Energy would exit the year. Could you give us that granularity? Also what's embedded in your guide? Robert A. Livingston - President, Chief Executive Officer & Director: Yeah. The second half guidance – second half forecast on Energy – second half versus first half, Jeff, the revenue is down $40 million, but the second half run rate is fairly consistent with the second quarter. Obviously, that said, that means that the first quarter will be the high quarter of the year for Energy. Three months ago, I truly did anticipate that we would exit the year with a 20% margin in Energy. I still think this business is a 20% margin business. We're just not going to see it in the fourth quarter, not with the volume that we're anticipating now. I think the number we have in our forecast for a fourth quarter exit rate is 15% or 15.5% margins.

I wonder if you could actually address that kind of earnings power comment in a sense. I mean, it seems as if there is, in fact, some very significant changes going on in the market and how people are approaching fracing, kind of the geological services that Schlumberger and Halliburton are offering to drive the business. It would seem that you're not particularly well equipped to compete with that. I just wonder how you respond to that. Is there things that you need to do with your portfolio? And is there some impairment in the margin rate of this business kind of normalized going forward relative to what you saw historically? Robert A. Livingston - President, Chief Executive Officer & Director: Well, let me start first by saying we're not really a participant. I shouldn't even use the qualifier, not really. We are not a participant in the fracing market. We'll participate in the drilling activity with the inserts and we'll participate once the well has been fraced. We will participate with whatever technology of artificial lift is appropriate for that well. But in the pure fracing application, that's just not something we participate in.

Yeah. I was thinking more along the lines as they get better and better at re-fracing, we're doing less drilling and therefore... Robert A. Livingston - President, Chief Executive Officer & Director: Yeah. We're still in the early days of seeing this re-fracing application here in North America. Look, you re-frac, you've got to pull the gear out of that well. And we believe there is an opportunity for us as that gear, as that system comes out or either if it's been downhole a short period of time, a year or so, maybe two years, there's an opportunity for us on the downhole pump, either a service, a repair, a rebuild or a new pump. If it's a rather new well, it would be unusual for the rod strings that need to be replaced. But if it's an older well, we think there's an opportunity that some of these well operators may take and actually replace the entire rod string. It really does depend on the characteristics of that individual well.

And then just one follow-on on the restructuring, the paybacks are really phenomenal. So $40 million to $45 million in spend is driving $90 million to $95 million in benefit, and I heard run rate $130 million. I'm just wondering if you could... Robert A. Livingston - President, Chief Executive Officer & Director: Yeah, $130 million to $140 million. Yes.

So do you have to get into a heavier level of restructuring, so that I think you've – I guess what this implies is you've taken out people in places where they're not unionized and you just let them go and there's not a lot of severance and the like, but you need to actually adjust your footprints and get into some more costly heavier restructuring. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Yeah. You saw us take some steps – let's see, did we do this in the fourth quarter? For sure, we did it in our first quarter. You saw us take some steps in our first quarter with respect to footprint consolidation. And, my goodness, I don't remember how many field locations were actually removed during our first quarter. I mean – but double-digit number of field locations. And with that, you see a little bit of our charge activity related to some asset charges. In the second half of the year, within Energy, you'll see a little bit more activity around, I call it, footprint consolidation.

Okay. Thank you.

Our next question comes from the line of Deane Dray of RBC Capital Markets.

Thank you. Good morning, everyone. Robert A. Livingston - President, Chief Executive Officer & Director: Good morning, Deane. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Hey. Good morning, Deane.

On the refrigeration side, when you talk about the slowly to develop replacement activity, I presume that's what you were trying to fill the hole in the lost Walmart business. Robert A. Livingston - President, Chief Executive Officer & Director: Correct.

So did you miss out on orders from those customers, like not get that share or are the customers just not ordering? Robert A. Livingston - President, Chief Executive Officer & Director: We don't believe we've missed out on any orders that we had planned for the second quarter. We have seen that activity shift to the right. I'll give you a little color on that, Deane. April order activity wasn't that bad. In fact, it was probably similar to, or maybe even slightly above March activity, as we exited the first quarter. May was a surprise. I don't remember the exact numbers at Hillphoenix, but May order activity may have been down as much as 15% or 20% – 15% from March and April. June came back very strong. In fact, it was not only strong at Hillphoenix, the bookings for the segment in June were the highest monthly bookings we've seen in the last 18 months or 24 months. It was a very, very strong June. And order activity here in the first few weeks of July is quite supportive of our third quarter forecast.

Great. Thank you. And then just – could you clarify, in the negative preannouncement, you talked about the oil and gas pump market being particularly weak, can you just flesh out that? What exactly did you see, pricing, competitive dynamics? Just anything you could share would be helpful. Robert A. Livingston - President, Chief Executive Officer & Director: Yeah. There may have been a little bit of pricing. I wouldn't say there was much difference in competitive dynamics. It was all attributable to the continuing decline in the North America oil and gas market, especially upstream. And I would say we saw a little bit more distributor inventory management in the second quarter than we would have anticipated.

Inventory management by distributors, that isn't destocking? Robert A. Livingston - President, Chief Executive Officer & Director: Destocking by distributors.

Okay. That was the word I was looking for. Thank you. Robert A. Livingston - President, Chief Executive Officer & Director: Yes. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Next question? Robert A. Livingston - President, Chief Executive Officer & Director: Next question?

Our next question comes from the line of Nigel Coe of Morgan Stanley. Nigel Coe - Morgan Stanley & Co. LLC: Thanks. Good morning, guys. Robert A. Livingston - President, Chief Executive Officer & Director: Good morning, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: Obviously, you covered a lot of ground already. There's obviously a little... Robert A. Livingston - President, Chief Executive Officer & Director: We're going to cover a lot more with you, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: I really just want to dig into some points already covered. And the payback, the first $0.02 to $0.08 (40:51) of payback in your bridge, obviously, you had quite a heavy 4Q restructuring quarter as well. So I'm wondering how much of that is coming from the 4Q restructuring actions rolling forward into 2015, i.e., how much have you already realized in the first half? Robert A. Livingston - President, Chief Executive Officer & Director: Okay. I would – okay, you're asking how much is the benefits first half versus second half of this $90 million to $94 million we're talking about? Nigel Coe - Morgan Stanley & Co. LLC: Yeah. Robert A. Livingston - President, Chief Executive Officer & Director: So, I would say in the first half we've seen about $30 million to $32 million of the benefits roll through second quarter, significantly better than first quarter in terms of benefit profile. And then, obviously, the back half gives us the remaining piece with it building sequentially through the year and into next year, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: Okay. And that's within – that's for the whole of Dover, not just Energy, correct? Robert A. Livingston - President, Chief Executive Officer & Director: That's for the whole…

Our next question comes from the line of Joe Ritchie of Goldman Sachs. Joseph A. Ritchie - Goldman Sachs & Co.: Thank you. Good morning, guys. Robert A. Livingston - President, Chief Executive Officer & Director: Good morning, Joe. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: Good morning, Joe. Joseph A. Ritchie - Goldman Sachs & Co.: On the Fluids segment, you've talked about an organic growth guide of 5% to 6%. It seems like that's going to imply a bit of an acceleration in the second half on similar comps, and the order trends in the first half were pretty negative. So I'm just trying to understand what the offset is that's driving the confidence and the excellence in the second half. Brad M. Cerepak - Chief Financial Officer & Senior Vice President: So organic growth in the first half was 4% for Fluids. We're looking at 5% to 6% for the year. The low point was actually quarter one. Quarter three should look very similar to quarter two. And quarter four may be a little bit better than quarter one. It's how the waterfall looks. Joseph A. Ritchie - Goldman Sachs & Co.: Okay. And is there any... Brad M. Cerepak - Chief Financial Officer & Senior Vice President: We do see a little bit of improvement in the FX hit in the second half of the year. Joseph A. Ritchie - Goldman Sachs & Co.: Okay. But is there anything underlying? It seems like you called out oil and gas softening a little bit within the Fluids segment. So I'm just wondering if there is other end markets that you guys saw some improvement in as we were exiting June or into July. I'm just trying to get a sense for what the…

Our next question comes from the line of Julian Mitchell of Credit Suisse. Julian C. H. Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Thanks a lot. Just on... Robert A. Livingston - President, Chief Executive Officer & Director: Good morning. Julian C. H. Mitchell - Credit Suisse Securities (USA) LLC (Broker): Good morning. Just on Refrigeration & Food. I guess one sort of shorter-term question just around food equipment, seems that was down sort of high-teens in the first half; maybe just explain a little bit what's going on in the market and your own share position. And then, just more broadly, longer-term, on the segment in aggregate, how you feel about the positioning of where you are in different pieces within it in terms of the ability to drive decent earnings growth from here? Robert A. Livingston - President, Chief Executive Officer & Director: Let me take food equipment platform first or market sector first. Second half will be quite different than the first half. I would say, in the first half, most notably true in the second quarter, we saw a real absence of what I call the projectivity with our can-making equipment. We see that picking up in the second half. And we have the orders in our backlog to support that forecast. Organic growth in food equipment in the first half was 19% negative – I'm sorry, 14% negative. In the second half, it's a positive 9%. That's how much of a true change there is within this platform from first half to second half. A big boost in the second half is the rollout. We are currently engaged in right now with two key customers on some restaurant equipment and that will have a rather significant impact on the growth rates in the…

. Our final question will come from the line of Mig Dobre of Robert Baird. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Good morning, guys. A lot have been covered, so I just have one question. Maybe some color on your automation business and Energy. My understanding has always been that that's a, call it, stabler business, if you would, compared to your drilling business and yet we've seen a pretty big sequential downtick there. How should we think about this business in the back half? Robert A. Livingston - President, Chief Executive Officer & Director: The back half – Brad, you'll have to help me here with this detail. But I think the back half – the second half of the year is fairly consistent, similar with the revenue stream we saw in the second quarter. It is down from the first quarter run rate. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): But is it fair for me to think of this business as being inherently more stable than the production business? Robert A. Livingston - President, Chief Executive Officer & Director: Parts of it would be, but don't lose sight of the fact that there is, oh, Gosh, 20% – there's 20% of the automation business, maybe a little bit more than that, Brad, at least 20% of the automation business that would be connected to more of the drilling activity than well completion and production monitoring. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): I see. Okay. Thanks for the color. Robert A. Livingston - President, Chief Executive Officer & Director: Thank you.

And thank you. That does conclude our question-and-answer period. I would now like to turn the call back over to Mr. Goldberg for closing remarks. Robert A. Livingston - President, Chief Executive Officer & Director: Thanks, Maria. This concludes our conference call. With that, we thank you, as always, for your continued interest in Dover. And we look forward to speaking to you again after the third quarter. Have a good day. Thank you. Bye.

Thank you. That concludes today's second quarter 2015 Dover earnings conference call. You may now disconnect your lines at this time. And have a wonderful day.