Good day ladies and gentlemen. Thank you for standing by. Welcome to Emerson's Investor Conference Call. During today's presentation by Emerson management, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, November 3, 2015. Emerson's commentary and responses to your questions may contain forward-looking statements, including the company's outlook for the remainder of the year. Information on factors that could cause actual results to vary materially from those discussed today is available at Emerson's most and recent Annual Report on Form 10-K as filed with the SEC. I would now like to turn the conference over to our host, Craig Rossman, Director of Investor Relations at Emerson. Please go ahead, sir.

Thank you, Caroline. Today I'm joined by Dave Farr, Chairman and Chief Executive Officer of Emerson and Frank Dellaquila, Executive Vice President and Chief Financial Officer. Today's call will summarize Emerson's fourth quarter and fiscal 2015 results. A conference call slide presentation will accompany my comments and is available Emerson's website. A replay of this conference call and slide presentation will available on the website for the next 90 days. I will start with the fourth quarter and fiscal year summary on page two of the slide presentation. Net sales in the quarter decreased 15% to $5.8 billion with underlying sales down 7%. Net sales for the fiscal year decreased 9% to $22.3 billion with underlying sales down 2%. Both the quarter and the year were significantly affected by number of economic headwinds. The continuation of lower oil prices resulted in both capital and more recently operational spending reductions by our global oil and gas customers. General industrial capital spending was slow throughout the year, particularly in energy related markets. Emerging market growth was sluggish with weakening conditions as we exited fiscal 2015. In response to the weakening demand, we accelerated our restructuring programs in the fourth quarter with a total spend of $128 million, which exceeded our August conference call guidance by just over $40 million or an impact of approximately $0.04 cents per share. For the fiscal year total restructuring expense was $221 million. During the quarter we also incurred $52 million of costs and taxes related to the spinoff of Network Power, $10 million for transaction costs and $42 million of income tax expense for planned repatriation of earnings in 2016. On September 30, we announced the completion of the divestiture of the InterMetro business resulting in a gain for our shareholders. Reported earnings per share for…

Thank you very much, Craig. Welcome everybody this afternoon. And Frank, thanks for joining us today. Glad to be with you and glad to get this fiscal year behind us. It's been a very challenging year. And as we know, we are in a global industry recession for our businesses right now. We just incurred our third negative underlying sales growth and we will have two more, and I'll talk a little bit about that. I want to thank all the global corporate and business teams for their support and efforts throughout this year as we dealt with a year that started out very strong with underlying sales growth in the first quarter of over 5%, to immediately going into an extremely tough marketplace throughout the year. Restructuring efforts, the cost savings, the announced sale of two businesses getting done in one year, the announce of our repositioning with Network Power being spin or sold and/or the sale of Leroy-Somer CT this year. A lot going on. As I look at the effort and the performance the last several months, we're starting to see the stabilization of some of the markets. We're also seeing the benefits of the restructuring, which we started back in February aggressively and ended up spending over $221 million as the year got more challenging, we're starting to see the benefits flow through. We had a fourth quarter of over 20% operating margin in a very difficult year with a lot of down sales and a lot of challenging currency and price costs. As I look forward here, I see the underlying order pace running around this 10%, 11% negative probably for the next several months. As Craig highlighted, I firmly believe as we've talked about for several conference calls now, a very challenging first quarter.…

Thank you. And we'll go first to Julian Mitchell with Credit Suisse. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thank you.

Good afternoon, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Good afternoon. Just a question on the notion of organic sales maybe turning back up again in the June quarter of next year. As you said, that's after five quarters of decline, so are you just kind of taking the template of prior downturns that lasted around that long and applying it this time? Or are you seeing something specific in the orders in either energy or broad emerging markets that you think support that improvement?

First of all, we look at the pace of how fast we came down. We look at historical trend lines. At that point in time, I see nothing that early that far out relative to the pace. It's just, I look at what we've gone through, through some difficult economic downturns over the years. Sometimes it's four, sometimes it's five. The more challenging ones typically are five. I am not assuming there is a global recession. I'm assuming the global environment is very similar to what we're facing today, challenging, in certain markets doing okay, certain markets not doing okay. But we get to a point that you get low enough and our pace of business and the type of marketplace we serve, they will start investing in certain space again. So that's where I come from, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thank you. And then just around Network Power, the clean profits, stripping out restructuring, I think were still down about 40% for 2015 as a whole, down 30% something exiting the year. So I just wondered how that plays into the spin decision and at what point you think we might start to see the earnings in Network Power stabilize.

From the standpoint of spin, I think what's unfolding in Network Power is still within what we planned. When we look at 2016, it's still well within its plan. So we can either spin or we can look at a potential strategic sale. From my perspective, as I look at the pace of orders and what's going on right now, we're starting to see some stability. And I would expect to see that nose turning up as we get into the early 2016 calendar year based on what we're seeing trend line from these guys at this point in time. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thanks. And just a very quick follow up. Any color on the price net of raw materials impact on margin in 2016?

I mean, the price cost, it's pretty neutral at this point in time. My gut tells me it'll probably potentially be a negative, what I call red as we get into 2016. It's always a function of pricing pressures and the currency trends we see in the net material inflation. But right now, it's pretty close to being neutral. But, I guess I would say this year probably could end up being slightly negative as we get into 2016 just based on what I see out there from a competitive standpoint. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Great. Thank you.

It's something we can manage, to be honest. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Yes. Thanks.

Thank you.

And next we'll go to Johnny Wright with Nomura.

Good afternoon, guys.

Hi, Johnny.

Hi. So maybe just kind of following up on that question on the inflection second half of the year. Looking at the slides, you talked about expectation of improvement in Industrial Automation. What gives you confidence on that sitting here today? And what really are the key risks to that kind of coming through in 2016?

It's really a function around how much people cut back spending for the last 18 months, and looking at the trend lines in the customer base, and looking at some of those reinvestments that will start happening. People are not going to keep – they're going to eventually have to reinvest some money. And we do have a pretty good installed base out there. So that's where it comes from. And we're not talking about a very strong recovery. I mean, after you go down for three tough quarters, after we go down 10% this quarter, after we go down 6% the next quarter, it's not unusual to see historically a company like Emerson, who's globally well established with installed base quite significant, to have a little bit of recovery coming in that sixth type of quarter. So I mean, I'm not looking at anything unusual from a marketplace standpoint. And we're again, I'll say, we are expecting the economics environment around the world to be slightly weaker or about the same as we are facing right now. So the risk would be if we truly went into a global broad recession, then you clearly say okay, the industrial space will be a little bit weaker than I'm thinking. But I don't see any indication we're going to go to a global broad recession at this point in time.

Okay, great. And then on Process Management, the margin front for next year, clearly a lot of restructuring had been focused there. You've got a tailwind from that. Can you just maybe talk about some of the other dynamics, particularly out on the pricing front and where you're going to be seeing margins coming out next year for Process?

You know, from my perspective, the restructuring underway and the work that Steve Sonnenberg and his whole team have done has been extremely good. And we will have clearly I would say the most negative pricing environment we've seen from those guys in a long time. However, we do have our unique installed base part, so basically our day-to-day MRO, small project business will help us there. So with the restructuring effort underway, we expect our margins to be trending upward in Process based obviously after a shocker this year with the restructuring, but we expect our margins to move back up on a comparison basis versus this year. Even with down sales, because the effort, the restructuring, the effort that these guys have undertaken to get the costs out and assuming a negative price environment, which we are assuming with Process, we're expecting our underlying profitability this improve next year in Process Management obviously relative to this year, but at pretty high levels relative to historical levels.

Sure. And when you say that, are you talking about in terms of reported margins, so including the restructuring in both years?

Yes, exactly.

Okay.

You see, the Process Management team, if you look at the restructuring they got done this year, they got a lot of restructuring done this year, and they have some left in the $60 million or $70 million next year. But they have got the big part of it behind as of right now, which is a good position to be in. So what was the total restructuring for Process, Craig, this, for the year? What did they do? You got the chart there.

I have to pull it out in front of me. Sorry.

(24:26)

Rossman, you already gave us those speeches, have a beer.

He's tracking down lunch, have a beer.

I mean and then Farr hits him with questions.

$90 million.

$90 million.

$90 million, so they got $90 million done. They've got a lot of restructuring done this year, and so of the $221 million, they got $90 million. So I think they are in good shape going into next year. It's going to be a very difficult first half for Process. They had a very strong first quarter, but I really feel good about what they've got accomplished from the restructuring standpoint and the costs taken out.

Great. Thanks for your time, guys.

Thank you very much. Appreciate it.

And next we'll go to John Inch with Deutsche Bank.

Hey. Good afternoon, Dave, Craig.

Good afternoon, John.

Good afternoon. So I wanted to start with you expect $250 million of savings from actions that you took in 2015, which was $221 million. How do you get more restructuring benefit than what you actually spent? I'm not suggesting you won't, I just want to understand how that's going to work.

Depends on the costs you take out and what type of programs, type of cost layers you take out. I mean, we went in pretty hard to get overhead costs out and some redundancy costs out and we typically get a good payback for that. So we went after it.

David, this restructuring, do you think it can hold? Like in other words it's a little bit of a question of say the mix of variable adjustment versus structural and how – do you have to give some back to the customer? Does some creep back as the business trends better? Maybe you could just help us peel the onion a little bit in terms of what you've done, because it was obviously very aggressive in the quarter. So just trying to understand.

It's been aggressive the whole year. We just didn't do it all last month. I know people think that, but it's actually worked its way through and a lot of it's been planned for since starting in February. I mean, I'm not going to go back and tell you exactly what we did. It's clearly that's what I would call our own information. We did spend the money. We will get the savings built into it, and there will not be a creep. We have built into plans. We know the pricing will be tough in certain marketplaces next year, but that's why we're working the restructuring as hard as we've done. It will stick, and from a standpoint of profitability, we generate very high levels of profitability. And I'll say it again. Despite a very challenging year in 2015, we did generate 17.3% operating profit on down sales, and we're planning on trying to generate 17% of operating profit next year on down sales. So we know what we're trying to do here relative to profitability, John. So this is one I'm not going to give you any more details. You've got to trust me. We know how to manage our cost structure at Emerson.

Maybe just lastly, Dave, can I ask you, post the spin of Network Power, so I realize you've also made comments that you're looking to pick up the pace of M&A a little bit. But in theory, right, post the spin of Network Power, then Emerson's a smaller footprint. Do you modify then the dividend accordingly? So you say, well we're now 4/5 of what we were, so we'll modify the dividend in some manner by that? It's not really a leading question to be negative, it's more just trying to understand how this is going to work with respect to your dividend, because the dividend's very important.

I've been very clear on this. We will not be reducing our dividend. The new company, the new Emerson that comes out when it comes out in 2017, let's say it's around $15.5 billion in size with margins of over 19%, margins generate very good levels of cash flow, more than enough cash flow to justify the current dividend payment and continue to increase the dividend and doing share repurchase and doing acquisitions. So the business that stays behind is a very strong operating performing return company that can generate enough earnings and enough cash to pay the dividend as we're structured right now. We are not going to be adjusting our dividend payout for the new Emerson.

Got it. Thanks much.

You're welcome, John.

And next we'll go to Steven Winoker with Bernstein. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks, and good afternoon guys.

Good afternoon, Steve. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Hey, Dave, what are the actual underlying GFI growth rates then that are embedded in your guidance for 2016?

On the global G7 basis, I'm embedding around 2.5% basis growth. This year is around 2%, 2.1%, we're in slightly improvement and a global basis. So it's slightly – about the same on the GFI. This is the G7, the bigger markets, so that's what we're looking at. If you look at the overall forecast out there, it's much higher than that right now and I don't believe it at all. I think we're going to be trending in this low 2%s. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Right, and then – but you still have that picking up during the pace of next year, right?

Yeah, as you go into the first half of the year, you're probably looking at what we've been seeing the last six months, in the low 2%s, around the 2.2%, 2.3%, and then I think you then start moving that up in the little bit higher 2%s in the second half of the year as people start turning back into – they've got the stability. They've got the restructuring. They've got the needs they need to start investing in. So I'm not looking for a big sudden spike but I'm looking that to start trending up toward the mid to higher 2%s. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And you talked about -

By the way, that's not what the economic forecast is, as you know. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Yes, that's why I'm asking you and not a bunch of economists.

I am a dumb unliked CEO so what the hell are you asking me for? Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: So you mentioned increased activity in evaluating the acquisition of key strategic assets. You talked about consummating several for 2016. Where is your head and current thinking in terms of the size and directionality in Process and Industrial versus Commercial & Resi? So what kind of expectations should we have on what these things look like?

Most of them are going to be – right now what we're pushing pretty hard are what I would call more of a private type of companies out there. I really would like to consummate, even though we're talking only about – I'd really like to consummate over $0.5 billion within the industrial process, industrial automation area, and I'd like to consummate maybe $100 million, $150 million over on the Commercial & Residential area as I look at 2016. These are actions that we're going out and encouragingly, we've been talking to private shareholders and companies that we've been courting for some time, and given the tougher marketplace right now, they are much more receptive to it. At this point, I do not see any big strategic, say public type of transaction underway, but we're going to keep working the knits around the corners. And particularly, I'm going to start working pretty hard in Asia, too, because I think Asia's got some opportunities that, with their markets being stressed right now, that we want to go after, too. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: ]>: Okay.

So we've got the businesses working real hard. Primarily I would say 90% of the money will end up in the industrial asset base over the process world. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Great, and one more thing. I know you don't give quarterly guidance, but just given your commentary in this call and you talked about basically 20% year-on-year decline which is more – higher sequential than the usual amount and decrementals, I'm assuming of about 30%, and then you've got the restructuring offset. I mean it sounds to me like we certainly, in the tough comps, certainly should be having a number down here well less than $0.45 to $0.50. But just directionally?

I would directionally, I'd be more around the $0.50 range. I mean last year we reported $0.75, the year before that we reported $0.65. Our sales, I mean if you think about 2014, coming off that 2014, where we had $5.6 billion in sales and we had a OP margin around 14% and then $0.65 EPS, we're going to be about $1 billion below that in sales, but we've got restructuring underway and helping us. So I think we'll get pretty good flow through. I would be thinking around a $0.50 number for that first quarter. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay, guys. Thanks. Good luck.

You're welcome. Now I'm doing that one time, that's it. I'm not giving quarters out.

And our next question will come from Mike Wood with Macquarie Securities Group. Mike Wood - Macquarie Capital (USA), Inc.: Hi. Dave.

How you doing, Mike? Mike Wood - Macquarie Capital (USA), Inc.: I applaud the aggressive restructuring actions. Just a question first on Process. You mentioned downstream providing growth opportunities. Curious if you're seeing growth there, and if you can give some color in terms of what subsectors are growing on the downstream side.

I mean, what we're seeing is continuing the investments going on in some of the petrochemical areas, the chemical areas, some of the pharmaceutical areas, sort of the areas that people are making those investments using the lower cost of energy both on the oil side and the gas side. We've been seeing the proxies go through. They're not as large as we thought originally, but they're still going forward. And I don't see people backing off on that. I mean, the projects that Sasol has underway going down in Louisiana, which is a big customer base for us, that's moving forward. So the opportunities are out there. And I anticipate as we get into the spring and early summer of 2016, some of the companies that have been cutting back on capital and cutting back on, what I would say, necessary investments are going to have to let the money go. I mean, they've got other costs adjusted. So I think that our underlying MRO, which is a good business for us, will improve and get better as we get into 2016. So, it's not totally dead out there. The big oil and gas projects obviously are struggling. But the other investments around the chemical and petrochemical are still happening for us. Mike Wood - Macquarie Capital (USA), Inc.: Okay. And you mentioned the restructuring. I may have missed this. Did you quantify how much you do in the first half of next year?

We're going to do, let's say we're going to do $60 million to $70 million. I think what, Frank, we're going to do 60% of it?

About 60% to 70% of it in the first half, yeah.

70% in the first half. Mike Wood - Macquarie Capital (USA), Inc.: Great. Thanks, Dave.

You're welcome.

And next we'll to Scott Davis with Barclays.

Hi. Good afternoon, guys.

Good afternoon, Scott.

I'm trying to get a sense, I was in China a few weeks ago and I walked back pretty darn embarrassed. And it seems like there's some sequential slowdowns there. And if you look at your numbers, it shows exactly what we saw. And do you have any sense of, I guess a couple things (35:12-35:16) as much of an inventory destock as anything else? Or are things sequentially getting worse there and that concerns you as you go into 2016?

Well, we are planning for a down 2016 in China. From my perspective, we've had two very challenging quarters. I fundamentally believe there has been a destocking going on. Basically what we can tell, Scott, right now I think the worst of that is behind us. I do believe we will have a challenging first quarter because we had a very good first quarter last year. So I mean it's probably going to be strong double digits down in sales. But I personally don't think it's getting worse. I think that they are trying to reposition. And I expect that we will have a down year next year. But we'll manage our way through it, get a little bit better as we go forward as they start reprioritizing their investments. But right now, I mean we had a down 18% in the fourth quarter. We're probably going to be down around 15% again in the second quarter, or the first quarter. And I think we'll probably be down around 10% in that second quarter, and then we'll start getting better as we go forward. But we're going to be down somewhere around 3%, 4%, 5% for the whole year in China. So it is going to be a tough year. I'm not looking for any sharp bounce back there. I agree with you.

And just as a follow up, I mean, is that the region? I mean, you cited some price risk versus raws next year. I mean, is that the region where you are the most concerned about excess capacity and price?

I'm not concerned about that is much there. My price risk comes into play in the large global projects where monies are being spent. There are projects being done out there. And clearly the pricing risks will come in on those projects. And you clearly are trying to protect your customer base. You're trying to protect something. So that's where I would see the pricing pressures on the industrial side. On the commercial side, the Commercial & Residential, I would say Asia would give me the most price pressures. But I also typically have the most cost opportunities there too. So my price pressures, I don't worry about China next year as much as I worry about the big global projects. There are not that many out there, and people are going to be hungry fighting for those projects.

Okay. Good color. Good luck, guys. Thank you.

Take care, Scott. All the best to you.

And next we'll go to Gautam Khanna with Cowen & Company. Gautam Khanna - Cowen & Co. LLC: Yes. David, to follow up on that last comment you made, have you seen any of this price pressure yet in the orders you have been recording? Or is that something that's still on the comp?

We see it today, and we have continued to see it. You know, our net material inflation has clearly been helping us from an ops (38:01) standpoint, because the inflation environment we've been feeling for the last three years has been negative on materials, so that's helped us. But at the same time, I've had three years of what I would call it, negative price. I think that the pricing pressures has already happen on the bidding. Our customer base knows that the global marketplace is a challenge. They know that commodity prices have come down and they are utilizing that. And obviously, we work that very hard. We're aware of that. And for my cost structure standpoint, and we've been able to make that up, but I would say we will probably have in the end, when we add up all the numbers next year, my gut tells me we have a slightly negative net price material inflation to hit us a little bit. Not big, but slightly. I just think it's going to be there as we all work this issue for the next six months or seven months to get through this transition. So it's there, and I'm openly talking about it, and it's happening, so that's what's going on. Gautam Khanna - Cowen & Co. LLC: Okay. And then you already addressed the China question, but I was just curious, elsewhere are there any regions where you're actually worried about another leg down, a more significant step down in demand where things could get substantially worse?

The only place I see right now on the markets is we're already seeing the impact in Eastern Europe and Russia. We've already seen that. I'm a little bit worried in the Middle East as our big Middle Eastern customers both in oil and gas and petrochemical investments, if they cut back even more to protect their cash flow for various reasons, whatever they need the money for. So I would say that market for us, you're talking about a $1 billion marketplace, I would say that has the biggest risk at this point in time. I think we've taken a big hit in Latin America and Brazil, Mexico. I still think that will be negative next year, but I think we've taken a big hit. My concern is the Middle East. I think there's a risk for a bigger down than we're planning. We're planning it down, but I think it could be a bigger one. Gautam Khanna - Cowen & Co. LLC: Got it. And one last one. At Climate Tech, do you expect to start to comp positively as early as the March quarter as you lap this year 2014 pre-build? Or when do expect that business to start to see positive?

I would expect the comps to turn positive in the second quarter. Gautam Khanna - Cowen & Co. LLC: Okay.

We watch our customer base report, and we know they are working through that inventory. They have done a great job of managing that inventory, and getting it out and getting the sales. So I would say we'll have a negative first quarter, and then we'll start comping more favorable in that second quarter. Gautam Khanna - Cowen & Co. LLC: Okay. Thanks a lot, guys.

You're welcome. Take care. Have a good afternoon.

And next we will go to Nigel Coe with Morgan Stanley. Nigel Coe - Morgan Stanley & Co. LLC: Thanks. Good afternoon, Dave. So you mentioned something very interesting. I think when you mentioned that the bulk of the channel destock is behind you, I think you were talking about China specifically. Could you maybe just broaden that out in terms of what you're seeing globally on inventory destock and when you think that might be behind you?

My inventories in Europe are – I look at our channel and it's pretty good. Because of the channel partners and the channel you sell into, money was hard to come by so the European channel's in pretty good shape. I look at my channel in North America, I would say it's in decent shape right now in the businesses we sell into. The last piece of this working through would be the climate areas is all the pre-build we have there. But I would say the channel is in decent shape. Probably as we get through this calendar year, it will be in really good shape. And so we saw the inventories being built and people anticipated the second half being stronger. We saw the destocking happen this quarter. I think the plan in, we have built into our plan for this quarter where underlying sales might be down say 10%. I think that will work its way through it on the destock from my perspective, as I see the channels. Nigel Coe - Morgan Stanley & Co. LLC: Okay. So as we get into calendar 2016, that should be behind us?

Yes, I would say yes, unless you had a step down and overall a recessionary environment. Right now, I think people are planning for very, very, very low growth and they're getting their inventories down and they're working it very hard. It's the same thing we've been doing as a company here. I'd say we have one more quarter basically of getting our inventories down, and then typically we're no different than the global distribution channel anyway. So I think that's exactly right. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Very helpful. And then just in a similar vein, Dave, clearly the MRO spending is still pretty tight with the oil and gas companies. Any sense on when we might start to see some of that action coming through?

I don't think you'll see any action in that space until the second half of calendar year 2016. That's why I think Process will be down in growth next year. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Thanks, Dave.

You're welcome.

And our next question comes from Shannon O'Callaghan with UBS.

Good afternoon.

Good afternoon, Shannon.

Hey, Dave, just a follow up on the Climate. So in terms of it returning to growth, when you get past the SEER comps, which make sense, but China was down 27% Climate. I mean, is that going to be an offset to that, or can you explain a little bit what you're seeing in Climate in China right now?

Well, Climate had a very strong first half of the year in China as they built inventory up in the channel, going back to one of the previous questions. And they're quickly taking it out right now. So I think what will happen is the typical plan in China is they over-build, they take it back down, and then they'll start building back up again. So I would expect that China would start seeing some improved second half numbers, most likely still negative for the first two or three quarters, and then getting up and positive in that fourth quarter. So the destocking is still underway. I think the major destocking will be done by the end of that first quarter in China.

Okay. And then just obviously the pressure is significant now just sort of across the business and a lot of restructuring to do. But typically when times are difficult like this, Emerson likes to invest and take share and come out of the downturn even stronger. I mean is that happening, or are there examples you would give sort of across the portfolio where you feel like you're playing offense even though there's obviously a lot of restructuring to do as well?

We are continuing to play offense. I will share a lot with you in February on this issue. We are not cutting back in certain strategic areas where we think we have unique opportunities to gain share. So yes, we are restructuring, but we're restructuring in an area and areas that we feel that are not strategic relative to gaining that growth opportunities. And so we're continuing to invest and restructure Emerson. Very good at this gas pedal and brake at the same time. And so we're playing that game because what we want to do is come out of this and continue to grow our core markets in particular on the two strategic businesses we're going to have when we finish this in 2016. So the board has been keenly interested and tuned to what you're saying there. They do not want us to get to the point that we're cutting really strategic growth opportunities and opportunities we see out there. So we're working it very hard. We'll share some ideas with you in February. But suffice it to say that our game plan is get the costs down, which we are right now very quickly, and then take advantage of those opportunities when they come back at us.

Okay. Great. Thanks.

Thank you very much.

And next we'll go to Robert McCarthy with Stifel. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Good afternoon, Dave. How are you doing?

Good afternoon, Bob. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Yeah, so I guess the first question I'd have is with respect to kind of monthly order trends. And obviously, you're not disclosing those anymore but you're still tracking them. Could you speak to what kind of month you would see as kind of critical to think about whether we would see the kind of growth that you're talking about for the plan for 2016 versus potentially something worse? In other words, when does that comp kind of appear in terms of the backlog, in terms of the order trends where you can declare victory or think about something incrementally worse?

Okay. First of all, we will continue to disclose our orders once a quarter, and so the next time where we disclose will be in?

December.

December. So we will be putting orders out there. This month-to-month stuff, given that we're the only one doing it, it was kind of crazy. We will disclose it in December, and then we'll true them up in February when we report the quarter. So you'll still get access to them. But what I'm looking at as I map out the year, I just unloaded, or unfolded for you all on the phone earlier is what I expect is that we should see on a comp basis, in order for us to have second half underlying sales growth, I have to see my order pace start getting above that line, across that line, the zero line as we get out of that second quarter. So when we report orders in the end of, let's say the March quarter, the March timeframe, you should start seeing that number approaching that 0% range. And if not, and if it's still negative 5% or 6% then we'll go back to the conversation I had earlier that we will not see the positive recovery in that third quarter, and then we'll have a sixth down underlying sales quarter. So that's the benchmark you need to look at. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Understood. And then just moving to Process Management and just given what you've seen – this has been picked over a little bit – but given what you've seen about what you expect in terms of behavior across the board in terms of potential cuts, and you mentioned the Middle East as a potential negative there, do you feel like you have a good sense that we're going to see a bottom here and the implications for margins here? In other words what is baked into your current plan?

I think right now we expect the market we see today is going to continue to be weak in front of us for at least two quarters. That's what's baked into our plan. And then some stability, and we will have down underlying sales in the year of 2016. The restructuring effort is based on down underlying sales. I believe I've talked about down 3%, 4%, 5% with process underlying sales. And so we baked in that type of down, say down 5% underlying sales, into the cost expectations in trying to get the restructuring done so we can try to deliver improved profitability in 2016 and continue to make the strategic investments we need to make. So I expect Process to be facing some pretty challenging headwinds for the next couple quarters. We will start seeing, as I get out in February or I get in January and talking to various investors, I'll be able to start seeing some of the early parts of process on the MRO, the instrumentation side. If I start seeing that improve, that will give me a good feeling that we've reached that bottom and we have a clear visibility to that second half as we leave 2016. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: The final question real quick is just in terms of the Network Power, in terms of this parallel process, I mean obviously there's limits as to what you could say about it. But I guess how do you think about the decision around price, timing, etc. versus going the spin route versus a potential sale to a strategic. I mean what are kind of the qualitative factors that you are stressing? Is it speed in terms of exit or is it valuation? How should we think about it?

From my perspective – I have one perspective. It's called valuation, producer responsibility to my shareholders. Maximize the value for my shareholders as I look at, and the board looks at do we do a spin versus if we have a strategic alternative with a buyer coming in and asking us. That will be the key issue for me, is strategic valuation for my shareholder. If we think we can make more money for my shareholder doing a spin versus a sale then we'll go that route or vice versa. If we're going to have this done by the end of this fiscal year, then we'll have to make this decision sometime in late spring, which way, we going to go left or are we going to go right. And so that's the type of timeframe that we're heading on. We just reviewed this with the board, the timeline and the approaches and keep them up to speed. But that is the decision making process. It's all about maximizing the value for my shareholder, which I am one of. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Thanks for your time, Dave.

You're welcome.

And next we'll go to Jeffrey Sprague with Vertical Research Partners.

Thank you. Good afternoon, Dave.

Good afternoon, Jeff.

Hey, one quick point of clarification before my question. You said to an earlier question you've had three years of negative price. Did you mean three years of negative costs?

No, I think the price. If you look at the underlying pricing of our, I believe we've reported three years of negative pricing as a company.

Okay.

This has been unusual. And we're about to go into the fourth year, I think with 2016. Even though the Fed is giving free money to everybody, the environment out there has basically been pretty tough in overall pricing of a total company – this is total company. And so I've had negative pricing basically, and net material inflation's helped us protect our profitability. And I think that we're going to see that next year, I think the negative pricing will be slightly higher but my net material inflation will be higher because of what opportunities are out there. But that's what I see and that's the type of market the industrial world has been facing for a while.

Right. But you were not in the so-called red in 2015 but you will be in 2016, by your estimation.

Right now we're not red. I think there's a good chance that we could have a slight red to that, Jeff, to be honest. My gut right now, that's all it is. I play this by feel. I know the pricing environments out there, I know the net material environments out there. You could have a couple of things go a wrong way and you could have a slight negative net material price pressure, but it's going to be very, very slight if at all.

The main thing I wanted to touch on is cash. We haven't really talked about that yet on the call other than the opening remarks. So historically, your cash flow has actually been a lot less cyclical than your earnings, not surprisingly. We didn't really see that play out in 2015, and you made a comment about getting the balance sheet ironed out by Q2 of next year. Obviously you had the SEER build and all that going on. Can you just give us the lay of the land on how you expect cash and kind of the working capital dynamics to play out for next year?

Yes, historically, we get hit like we got hit in the second half of the year – typically it takes us two to three quarters once that hit happens. So we had a very good fourth quarter from a cash flow standpoint. I'm starting to see that if I look the overall inventory levels and I look at where we sit at this point in time, trade working capital is now starting to get back into line where should be, where the normal progression to see what I would call the healthy,. what I look at the 11% to 14% percent of sales of cash flow. But I think right now we're in pretty good shape. It was a tough year last year. We also had the extraordinary thing last year, we had some tax payments that we had to make in the sale of the divestiture which goes to the cash flow which mucks that up a little bit. But overall – let me see your calculator there. As I look at the cash flow last year, we did $3 billion – operating cash flow we did $3 billion, and we had $22.3 billion of sales, $23.3 billion of sales. So we were around 13.4%. I look at next year, we're going to be up around that 14%, so we are moving back up to where we need to be next year. I think it's well under our control. I think Frank and Ed Purvis did a good job and got the businesses focused, and we've pretty well got a forecast in front of us right now that makes sense, which I laid out to you and that allows us to really work that balance sheet.

And in that construct, Dave, are you including the cash repatriation you are expecting from Network Power in it?

No, we're not. That will unfold – I mean first of all, I mean that cash flow is already inside the company. It's been earned over the years, but we have not incorporated movement of cash flow, which is quite significant from both the sale/spin of Network Power and/or the Leroy-Somer CT. So there's going to be some cash flow moving around. We will be repatriating cash flow in 2016 and probably early 2017 on this whole process, which would bring to money back into the United States and we'll end up paying the taxes.

And then just one last one, same topic, is just the cash costs of what you're trying to execute in the repositioning, you've got this $300 million to $400 million marker? I am assuming some of that might just be asset impairments and the like. Can you size that for us?

No. If we had an impairment, we would have to take the impairment now, Jeff. The accounting is pretty straightforward. If I thought that we were going to have an impairment, I would have to take it now. The cash flow that you saw, that number is what we're going to spend on transaction growth. Some of it's tax, some of it's advisors, and that's true cash flow that's going out. There will be another bit of cash invested in some of the investments we may have to make in IT, with some the investments we have to make in other areas, but that's not a big number overall. Probably we're looking at another $100 million, $150 million of additional cash investments that we might have to make on top of the expense spend, to the point you're getting at.

Okay. Great. I appreciate it, Dave. Thanks.

Okay, you're welcome. Thank you, Jeff.

And next we'll go to Christopher Glynn with Oppenheimer. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Thanks. Just wanted to dive into understanding another one of the numbers used, the $250 million benefit to the global cost structure. Is that just the savings or does that also incorporate some of the benefit from lower restructuring expense?

It's the savings, just the savings. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay. So there's another tailwind from the lower expense, then?

So we're trying to protect our operating profitability at around that 17% range despite the fact that our sales will be down again next year on top of this year. So that's what we're trying to protect right now. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay. And then from a kind of very broad high level view on the energy markets, how is consolidation phase of that cycle shaping up from your perspective, either on the supply chain where you play or in the producer complex? And is that kind of as expected so far, or how is that staging up?

On the customer base, I think it's still early. There is some action going on right now, but I still think there's more to come based on what unfolds and when you see that, when you see what happens to the pricing, the price and the demand out there. From our perspective as a supplier in the marketplace, I think it's really early. I think you'll start seeing more opportunities happening in 2016 and maybe even all the way into 2017. Early stages still. Christopher D. Glynn - Oppenheimer & Co., Inc. (Broker): Okay. Thanks.

You're welcome.

And next we'll go to Rich Kwas with Wells Fargo Securities.

Hey. Good afternoon, Dave.

Good afternoon, Rich.

Industrial Automation, should we think as it's currently constituted, should we think of margin improvement similar to the cadence in Process that you're anticipating on a year-over-year basis? I know you didn't do as much restructuring last year in IA, but just how should we think about that?

Yeah, we are right now, because of our Industrial Automation, the makeup of where those assets fit, and as we said, there's a lot more international. So there is a lot more being done here in the first and second quarter. But we do anticipate I mean margin improvement next year from the standpoint of what's been accomplished and also what we're doing regarding executing right now here in the first quarter. So do we anticipate, we actually do anticipate underlying improvement and margin improvement in Industrial Automation. I do not expect the top line growth to be as negatively impacted as the Process as these guys have gone through a lot of the shake-out and build-out. And so, their basic day-to-day business will stabilize. So I think that the Industrial Automation will face a little bit better top line marketplace, not quite as negative. And their restructuring they've got done will help them pick up their profitability in fiscal 2016.

And that will be back half weighted, probably more so?

Yes. Yes. That's a good way to think about it.

Okay. All right. And then just on US construction, you had a comment there for C&RS around you good construction markets. It sounds like you think resi and non-res are still going to be pretty good in 2016. What's your latest on that considering there has been some moving data points out there on the macro front?

I think that resi, residential market, will continue to progress at a good pace. The way I look at the resi, I look at the GFI, it's been the last couple quarters, it's been 8%, 9%. And I think that's going to continue to be that 8%, 9%, 10%. I personally think that the non-res investments on the gross fixed investment have been trending downward. I think that trend will continue to come downwards and stabilize in the low single digits. It'll still be positive, but I still think that the trend line is not up but down, even though I think that people think that it will turn around in the second half of 2016, I am not of that opinion. Our forecast is built on the fact that it doesn't, it bottoms out and stays there.

Is that energy contagion influenced in your view?

Yes, it is. Yes, it is energy contagion.

Okay. Great, thank you.

Yes, I think it's.

And next we'll go to Steve Tusa with JPMorgan.

Hey. Good afternoon.

Good afternoon.

So you said $300 million to $400 million in the cost. Does that include the assumed taxes you would pay on the, not the Network Power stuff, but the other stuff you're selling out of Industrial Automation? Or is that a different bucket?

Yes, we have it, if we sell the assets of Leroy-Somer CT, then and we have a tax gain, that will be separate based on what we sell the price for. That's not included in the numbers. What we're talking about is all the reorganization of trying to get these assets repositioned either for a spin or a sale, a network and also reposition for L-S CT. So that does not include that. So if we get a good value for the sale of Leroy-Somer CT, then we'll have some incremental taxes, but we'll also obviously have a cash and a gain at the same time, too.

Can we use the Power Transmission sale as kind of a guide for the book value dynamics on those businesses? Or was there something unique about the taxes that you paid on that divestiture?

I think that this asset, people do want this asset. It is a unique asset from the standpoint there's a couple things that will make it different. One of them being that you have, the alternate business has a strategic, one large strategic customer. I think that I don't see the multiple, or the same type of multiple. Although it will still be a good multiple, it will not be the same dynamics that we had. And we bought these assets later in say the life of Emerson. The Power Transmission assets were bought, of lot of it was bought in the 1960s and 1970s, a little bit in the 1980s. But if you look at Leroy-Somer, that acquisition was done in 1989 and then a lot of the alternate business was done later, say in the 1990s and the 2000 time period. So I'd say the basis is probably higher.

Okay. And then one last quick one, just on the Network Power side. I look at the EBIT contribution and the EBITDA contribution, and it looks to be, I don't know, around like 10% to 12% of the total. But a few people I've talked to say that the free cash flow generation of that business is higher than average. It outpunches its weight relative to EBITDA and profit. Is that correct? Is there something unique about their ability to generate cash over and above what they do on EBIT versus the other segments for any particular reason?

Well, one of the things, issues is on the Network Power businesses, there's amortization going on there which is not cash flow. So they do have because of that. So what you see, there is good cash flow bent generation. You're exactly right, Steve. There's good cash flow generation, better than you normally see, because there's amortization. It is a good cash flow generation business.

Okay.

So we take that into consideration when we look at the total (63:31). It is different than most people would think because of that issue. You're exactly right.

Right. That makes a lot of sense. Thanks a lot.

You're welcome. With that, is that it?

We have no further questions.

Okay. Thank you. I want to thank everybody for calling today. Good questions, and I appreciate your input and support. And I tried to give you a little bit more clarity on what we see here for the next two to three quarters. Hopefully you have a better understanding for that. Look forward to meeting with you in Texas, and I guarantee, you will not have a foot of snow in Texas like we had a foot of snow in Boston a couple years ago. But I will look forward to meeting you down there, and I wish you well and have a safe holiday and Thanksgiving vacations. Take care now. Bye.

And that will conclude today's conference call. Thank you everyone for your participation.