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 listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today February 7, 2017. 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 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.

Thank you, Andrea. Today, I'm joined by David Farr, Chairman and Chief Executive Officer of Emerson and Frank Dellaquila, Executive VP and Chief Financial Officer. Today's call will summarize Emerson's fiscal 2017 first quarter results. A conference call slide presentation will accompany my comments and is available on Emerson's website. A replay of this conference call and slide presentation will be available on the website for the next 90 days. I will start with the first quarter summary as shown on page 2 of the slide presentation. Sales in the first quarter decreased 4% to $3.2 billion with underlying sales down 3%. The first quarter results reflected mixed but generally improving global economic conditions. In the quarter, HVAC, refrigeration, U.S. and Asian construction markets were favorable, while the low price of oil continue to pressure spending in energy-related and some industrial markets. Solid margin performance and an income tax benefit of $0.07 per share resulted in earnings per share from continuing operations of $0.56, which reflects an increase of 22% versus the prior year. Overall, the first quarter results represent a solid start to the year. Improving demand conditions were evident across many of our served markets, particularly the Automation markets. We expect these trends to continue as evidenced by our January estimated trailing three-month order rate of 0% to 5% positive. Turning to slide 3, gross profit margin of 42.4% was flat for the prior year benefiting from cost reduction and containment actions across our businesses. EBIT margin was up 140 basis points, primarily due to savings from restructuring actions enacted over the past two years to align our cost structure to the economic conditions. Turning to slide 4, from a geographical perspective, generally improving conditions were evident with most notable improvements in the U.S., Asia and in Western…

Thank you very much, Craig. I want to welcome everybody for joining us this afternoon. I appreciate it. We just finished a 24-hour board meeting starting yesterday afternoon and going through this morning and just ending. Also, having our shareholders meeting. And fortunately all the proposition proposals passed the way the board recommended. That's a good situation. And for all your shareholders, I did get re-elected as a member of the board. Thank you very much. And for the board, for the members out there that don't like me being Chairman and CEO, fortunately the vote was a tad under 40% so I still will be the Chairman and CEO for a while here. I appreciate that. I want to also thank the whole organization across Emerson, around the world, as you all know, we've gone through a major transformation, repositioned the company, we've shaken up the organization. We've sold off the businesses. We've now finished the pure divestiture of Network Power and LSCT. We have received the cash and we're cleaning up all the final points there. We will finish that in the second quarter just like we did in the first quarter. And now we're focusing on the two core businesses. And as you saw, this is the first quarter reported, by themselves, executing around the new approach, the new strategy, the new organization. We are executing well within that and I want to thank the organization and the new people involved in this. And I also want to thank all the hard work that was done in the restructuring and the repositioning. And you can see in the profitability, it's flowing through and we saw that in the quarter. And that's a good time we're having the wind shift a little bit to our back and we're…

Next week.

Next week in New York. I haven't decided which charts we're going to show, which charts we're going to exclude and which cameras will work and won't work in the auditorium. But those are all things that are flexible and based upon the CEO discretion. And so we'll see how that goes and we'll make that call when I get there in New York later this next week. Cash flow. It is a good quarter for cash flow, though it's always the lowest quarter for us. The first quarter, it's our lowest quarter in sales and lowest quarter in profits and lowest quarter in cash flow. But really, we got a good start to cash flow and we feel good about still being en route (11:03) to $2.5 billion operating cash flow for the year and it's very important as we look at what we want to get done internally, both through acquisitions and also in dividends and investments. So really good execution. The organization's set right now with the new organization, and you'll be exposed to some of those in the discussions we have in New York next week. We're seeing the right markets move for us right now and it's a good sign. But overall, great start to the year. I believe that if the markets continue to move the right way, then we'll continue to see a good progress as we go through this year. And that's why we've increased the year a little bit based on the first quarter performance and we'll move it as we go along here. But right now, we're going to take one quarter at a time. And we just had a good quarter, and now we move to that second quarter and see where we are. As you saw on the charts, we gave you an estimate for the January. We did get the January orders, which were slightly better on a three-month roll than we did last month and a little bit of improvement in the Automation side. A little bit of slowdown in the Commercial & Residential, but that's not unusual month-to-month in that business, as some of the orders are sometimes lumpy versus the prior year. So overall, good start and we're looking forward to have a strong second quarter. We have a lot of questions I want to get to. We have probably a record number of questions. I may not get to all of them, but we're going to start it here and I'm going to cut off my comments. I just want to thank the employees; I want to thank the organization for all they did here in the last three months. And they just delivered a very strong quarter to shareholders, and I know I appreciate what they've done on behalf of the whole OC and the board. So with that, I'm turning it over. First question.

We will now begin the question-and-answer session. Our first question comes from Andrew Kaplowitz of Citi. Please go ahead.

Hey, Dave. How you doing?

Good afternoon, Andrew.

So, Dave, maybe you could step back and give us your view on the overall state of the world. You said maybe a year ago that we usually don't have more than five quarters of industrial recession, but then we proceeded to have two years of weakness. And given that it does seem like we came out of it a bit in your fiscal first quarter, do you think we should see a pretty decent snap back here over the next year, given the length in duration of the downturn? Or do you think there's enough uncertainty out there to ultimately make this sort of a slow recovery, as we've seen?

That's a lot of ask. I mean since I've been pretty bad at forecasts in the last couple years, Andrew, I mean you remember I did call that we'd turn last year at this time. But – so keep that in mind. And from my perspective right now, I think that what we're seeing is the increased investments going on from a – just from pent-up – a situation for many years. We're starting to see some of that flow out both in the sort of in the Automation space but even also in the Commercial space. So I see a pretty steady recovery here. I don't see a snap. As I've said, I've always felt that 2017 would be a good year of building that foundation and see a improvement. I see a much stronger 2018 than I see 2017. But I see right now, based on what I'm seeing from the customer base, based on what I'm hearing from some of our customers and what they're saying they're going to spend on capital next year, overall, I think the pressure is upward, as I say. So I see a pretty steady improvement for the trend line. I do not see a strong snap, but I do see pretty good momentum going into 2018 as I look at it right now. Clearly, what goes on in Washington can have a big impact and a major shift in the sentiment around tax policies or trade policies. Those things all could have a big impact. But right now, I think momentum is going the right way, and we're seeing that. And I don't see it slowing down at this point in time. But I do not see a snap, as you said.

Dave, that's helpful. And then you mentioned you're seeing an increase in MRO activity within Automation Solutions. Maybe you could give us just a little more perspective on what kind of activity in MRO. Is it across the board, including oil and gas? Did oil and gas pick up more or less than the rest of the end markets? And then, have you seen any indication that larger oil and gas projects are starting to at least get dusted off and you're having conversations on those yet?

Okay, two things going on. I think we've started seeing the MRO, when I went out and talk – and the shareholders I think in November and December, we started seeing this pick back up. The oil and gas companies, some of our key oil and gas companies, some of our chemical companies, some of our pharmaceutical companies started increasing their spending. They had kept it really, really tight, and I think as they saw, okay, there's going to be better, favorable policies to spend, encourage it, and to really encourage people to spend money, they started spending. It's a slow, okay, here's a little bit more money; you can go ahead and spend it. And I've seen the budgets being set the same way. So we're seeing a slow recovery in MRO around the world and pretty much across all segments, except for a couple of things like marine and segments like that. But it's pretty broad-based. And on projects, what we're going to see first and what we're hearing discussed right now with customers are, first, the phase of, okay, let's make some investments on the quick turnaround, the quick hitters, the productivity ones, some of the safety ones, some of the areas that maybe we curtailed spending for a while, those are going to come back first. Those are what we call in our business KOB3 quick cycle businesses. And then KOB2 is where they're going to look at brownfield typically expansion where maybe they cut the budget in half and only did half the project, or they've already had an expansion, but now they're going to look to that. And that's the discussion we're seeing right now. I personally don't believe we'll see the big projects because our customer base probably got burned a little bit the last time in this for at least 18 to 24 months. They have their hands full, in my opinion, on executing what's still left out there. They're working on the MRO, which is starting to happen, and they're going to work on the what I call the small, minor expansions to get a little bit of capacity here and there in what we refer to as KOB2. So a good mix for us, and that's what we're seeing in our funnel at this point in time. And that's the type of orders we're seeing at this point in time.

Thanks, David. That's helpful.

Andrew, you take care. Hopefully I'm a better forecaster this year than I was last year. Next?

Our next question comes from Gautam Khanna of Cowen and Company. Please go ahead.

Hey. Good afternoon, Dave.

Good afternoon, Gautam.

Hey. Great stuff. Hey. I wanted to – you've never been shy about making a call, and when...

Me? I'm a very shy person.

Right. In which quarter do you anticipate you'll see firm-wide organic growth turn positive? Is it as early as Q3? Or do you think it's more of like a Q4, Q1 of next year for that?

Based on the trend lines right now, Gautam, I'd say Q3.

Great. Okay. And you may have hesitated to say this, but I thought what you were about to say was that there is some pent-up demand in the MRO space, is that fair? And if so, how does that actually convert? Are we going to start to see a month or two here with much stronger orders and perhaps conversion at some point in the next couple of quarters?

I would hesitate to say, because I don't think any customer in our space would ever say they didn't spend on safety or key programs relative to the environment. But my opinion there from our perspective, I don't – there is a pent-up investment going into core facilities today around the productivity, around maybe efficiency and the facilities running better. So I think there will be. I don't see a surge. I don't see what I would say a strong, I think as Andrew asked me in the first question, I see a steady okay, here's your capital budget this year and this is where I want to spend the money up front and I want you to start spending the money right off the bat and that's what we've been seeing. So I think what we're going to see is this okay, we haven't spent as much money on keeping the facilities productive, safe, efficient, environmentally friendly, all those different things that you normally see with our industry, I think that's where they're going to go first. And I don't think it's going to be a surge. I think they're going to say here, you have this much money to spend but they're going to let them spend it rather than last year at this time they were starting to pull it back. So that's what I see right now, Gautam.

Okay. And one last one just on M&A, obviously you have a target to add maybe $1 billion to $2 billion of sales over the next couple of years, what are you seeing in the pipeline? And relatedly, would you ever consider splitting the company? Getting rid of C&RS and just isolating around the Automation business? Thanks.

The answer to the second question is no. We're going to talk about – I think there's a lot of logic to having the two pieces together. They're unique and there's a lot of sharing of technologies. From my standpoint, I've gone through major reposition this company. I've torn the company apart with the management team here and I feel very comfortable we have the right two pieces. They help each other from a standpoint of cash flow and earnings and technology sharing, things we can do back and forth. So there's a lot of good things there in my opinion. So, under my tenureship, maybe I'll get voted out and off the ship and somebody else will look at this but under my tenureship as CEO, we will stay within these two pieces at this point in time. On acquisitions, there are opportunities out there. Our focus right now is totally on getting FTC approval on our Pentair Valves & Control business. I would expect us to continue to do smaller type of transactions this year. And we're clearly looking, hopefully, to get somewhere between $500 million to $1 billion of additional transactions this year. Maybe not totally close but get them locked. So those are being worked right now. So we are actually working transactions and we just want to make sure right now our focus is get FTC approval so we can close Pentair Valves & Control.

Congrats on the heavy lifting.

So with that, on to next question. Thank you, Gautam. Thank you.

Our next question comes from Julian Mitchell of Credit Suisse. Please go ahead. Julian Mitchell - Credit Suisse Securities (USA) LLC: Hi. Good afternoon.

Good afternoon, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC: My first question would be around the incremental margins that you would expect to see in Automation Solutions. Classically, they have been very strong in prior recoveries. Should we assume the same this time? And maybe related to that, price of material, you've had tailwinds, really, since 2011. Do you think you'll still have a tailwind in Automation over the next 12 months?

So let's talk about incremental margins. From our perspective, we've been forecasting all year long that we'll have up margins at the Automation Solutions business. So we would expect that the incremental margin on this business will be pretty good. We will clearly keep driving trying to get the profitability back up – clearly we're going to over the next couple years, get it back up to that 20% level. This is excluding the Pentair Valves & Control but getting it back up to the level we were at 20% plus. But right now we're going to have pretty good – I would say, good leverage points like we have had historically in the past. It really is a function of how fast North America comes engaged. North America is getting engaged from a order sales standpoint because that's a better mix for us but I would expect us to have good incremental margin at Automation Solutions as we come out of this cycle and well into 2018. The game plan, as you'll see, is we want to get back to historical margins in this – well within this five-year planning period, excluding the Pentair Valves & Control which will obviously dilute it somewhat start working on that. But that's the game plan and so that's where we are right now. Relative to price cost. As I've been talking for the last two quarters, we've seen the shift. So our net material inflation is less negative, i.e., we're not getting as much commodity benefits from the cost benefits from materials as there's been a slight inflating in the economy which is a good thing in reality. And from a pricing standpoint, we are still, probably, as we usually were six months behind. So as we said, the last four or…

I think if you go back and look at all the transcripts, I've always felt that we'd be somewhere around the 5% range for the total year. Right now with the start, it may be 5% to 6% or 5% to 7%. So the recovery started last – it actually started in the fourth quarter for us. We had a positive fourth quarter in China and we had a very strong quarter. And we had a good order pace from our Automation business too, so that's starting to recover. So I think that we're going to be somewhere in that 5%, 6%, 7% growth for China this year after some very difficult years. But our position from a cost standpoint and our position from a competitive standpoint in the markets that are starting to invest, we're in a good position right now. So I think China will be a good run here for several quarters, and so I'm looking at 5%, 6%, 7% for the year in underlying growth for China. Julian Mitchell - Credit Suisse Securities (USA) LLC: Great. Thank you.

You're welcome, Julian. See you next week, I hope.

Our next question comes from Joe Ritchie of Goldman Sachs. Please go ahead. Joe Ritchie - Goldman Sachs & Co.: Hey. Good afternoon, guys. And...

Good afternoon, Joe. Joe Ritchie - Goldman Sachs & Co.: Dave, congratulations on getting a term...

Thank you very much. I actually read your report this morning. I sent it around where I said I saw Joe said something nice about me. Joe Ritchie - Goldman Sachs & Co.: Well, it was deserved after the quarter.

Yeah, I actually do read this stuff to see if it – the truth of the lending stuff practice here, things like that. Joe Ritchie - Goldman Sachs & Co.: So my first question, I think maybe just following up on Julian's question on China and specifically on your comments on HVAC efficiency regulations. We saw a couple other companies report really strong HVAC growth out of China this quarter. And so I'm just curious, do you guys expect this to be a tailwind for the rest of the year? Or does that start to subside? Maybe a little more color there would be helpful.

Yeah, Joe, it's what's in the past, what I've seen is you probably get three or four good quarters of that. So we started seeing some of that in the fourth quarter of last year and again this year. So historically, what I've seen is they run a little too heavy. They get too excited and they overbuild. But I would say this is going to run at least three or four quarters, so I would say well into our third quarter. The good part of this, though, is we're seeing a broad base across Asia-Pacific for us. So China's – yes, we had a very good two quarters here. But we're starting to see the rest of our Commercial & Residential business growing across all of Asia-Pacific. So that hopefully will come in to kick into play and help us pick up if China slows down. But right now, it looks pretty good for the whole year but my gut always tells me. I'm watching these guys for around three or four quarters, they overbuild and they scale back down. But the efficiency thing's changing. The environment stuff's changing, so we'll see. But that's what I feel right now. But I'm really encouraged by the fact that all of Asia-Pacific is really starting to invest in some of, I would say, the retail stuff and also, the food chain stuff and some of the refrigeration stuff, which is all good business for us. Joe Ritchie - Goldman Sachs & Co.: Okay. Got it. And then maybe as my follow-up here, I want to just touch on cash flow for a second. Your operating cash flow this year is expected to be flat versus last year. I guess, as I start to think out to 2018, now that you're seeing it turn, would you expect your cash flow to outpace earnings growth? Or do you think you're going to have to build inventories and maybe have like a working capital drag. Like what would your expectation be post the turn?

Historically, your statement is a true statement. We would have two or three quarters where our cash flow would fall behind a little bit from earnings. The one thing that might happen that we could do depending how fast we get our hands around Pentair, the Valves & Control piece, as I've talked about, they have close to 50% trade working capital. So they have a lot of things we want to get our hands on, but that may take me maybe into the cycle. So if we get engaged in the end of March, early April and I have a chance to work on this for two or three or four quarters, then I think then we could have cash flow actually out-run earnings because of what we have opportunities there. But historically, if 2018 takes off like I think 2018 could take off, then we would do exactly what we said: my working capital would build up a little bit; my receivables will go up a little bit. We run a very good shop here from working capital, but the benefit I'm going to have is we will very much go after the Pentair Valves & Control acquisition working capital and hopefully we can get some of that off to make up for what we go in. And maybe we'll get cash flow to grow a little faster than earnings. But you're exactly right what you said. Two or three quarters most likely that will happen. Joe Ritchie - Goldman Sachs & Co.: Got it. That's helpful. Thanks, guys.

Take care, Joe. Thank you very much.

Our next question is from John Inch of Deutsche Bank. Please go ahead.

David, good afternoon.

Hey, John. Good afternoon, John.

How are you?

Oh, not too bad. How about yourself?

Oh, I can't complain; can't complain.

You're above ground. That's good.

Yeah, exactly. Hey, Dave, you called out in the K exports of $888 million. Are you a net exporter or importer in terms of the U.S.? Is there any way you could quantify your import position?

We're basically right now – the best analysis right now we're working this issue and we're about neutral both in and ex, today.

I mean, you're a huge company in Mexico, which has served you very well. I mean, given kind of what's going on, how would you like us to think about your Mexican operations? And perhaps if required, how readily some of that stuff could be repurposed back to the U.S. or elsewhere, is that even part of your thinking right now? Or you're just going to wait and see? Or just any kind of commentary would be helpful.

Yeah, well, it's for me to know and you not to know, but that's okay. But what I'd tell you this is that we're studying a lot. We're looking at the trade flows. We have a very strong presence. As you know, we have a very global regional manufacturing strategy, which we'll talk about next week. So from our perspective, right now we're looking at the trade flows and we're looking at the different analyses, what would happen relative to the approaches coming out of Washington relative to tax policies or to tariff policies or whatever. And there are some products that we can move within 6 to 12 months. Some will take longer if we need to be. Hopefully there'll be some rational thought process out of Washington around this issue. But we are studying it really hard, and as you well know, we know how to execute around that. We did the same thing in Asia many years ago with China as we redirected where our China for China manufacturing. So at this point in time, we're looking at where we have imbalances, we're looking at the timing of what we would have to do if we had to make a change, or if it's just a minor change because of the cost structure. So we're getting ready in dealing and getting our inputs. But as you look at it right now is that, what you have to understand is Emerson will be ready. Emerson will make the adjustments as necessary and will stay competitive in this situation to make sure that we do not be penalized from a cost and a competitive standpoint. But we're going to be very fluid and we're getting ready. Let's put it that way.

That's absolutely fair. Can I ask you? You guys have done lot of advanced restructuring over the past couple of years. You've called out the profit margin benefit rise associated with the restructuring of Automated Solutions. As business comes back, and it's not so much an Emerson question, but I'd be interested in your thoughts, how much do you think you have to layer back some of these costs because companies, including perhaps Emerson, were aggressively keeping a very tight fist around, say, lack of compensation and other sort of discretionary costs? It's really a question of sort of – it's almost really kind of a margin question, right? Like how much cost has to kind of get let back into the business, assuming we go back to sort of normative levels, however you describe that based on your experience of sort of keeping costs under wraps?

Yeah, John, I think that from our perspective, we see no indication that we can't set record levels of profitability in these two businesses as we come out of the cycle and get into a normal cycle. The Commercial & Residential Solutions were running at high levels. They're working at, on the platform levels, how they can get additional cost out and do the right integration that gives them the flexibility to both have margin improvement and incremental investments. On the Automation side, historically, we've been able to, even in a recovery time period, we can get back to the historical levels. There's a level of profitability that we find that we start to under-invest in the company, but there's nothing in our cost structure that says that we cut corners to not invest in or spend money on that we're going to have to rush right back in. So I think cost will go back in when we believe that the growth is happening, and will continue to march up as we get our profitability back in the Automation Solutions business, because it did get hit quite hard from the low-20s all the way down into the 16% range. So we're looking to get that back up there. And I don't think there's anything extraordinary here. We'll get better leverage in the first part and then it will slow down as we start putting some costs back in.

Like in other words, you just don't have to go out and hire a bunch of people though as the business comes back. Is that a...?

No. No. No. We'll bring people on in certain marketplaces if we're going to expand our technology. It'll be a very systematic approach as we look at the growth in the business and the leverage of the business and we'll start making sure we make the right investments at the right time. But we always plan ahead. We know where we took them out and we'll start thinking about where we want to put them in differently because there's always a chance to put them in differently and that's what we're looking at right now.

Thanks very much.

You're welcome, John.

Our next question comes from Deane Dray of RBC. Please go ahead.

Thank you. Good afternoon, everyone.

Good afternoon, Deane.

Hey. I'd like to circle back on Valves & Controls, if we could. And Dave, kind of give us a sense of how ready the organization is for the integration process? You talked about interest and focusing on working capital but what preparation? Are you still thinking a few cents of dilution in the first year? And any updates there would be helpful.

Good. We'll give you a lot more updates in the numbers what we see for the 2017 and 2018 for Valves & Control next week but it really hasn't changed much. There'll probably be a little less restructuring. Probably around only $25 million the first year. That means more in the second year. It'd still be slightly dilutive on a earnings per share standpoint. Cash flow accretion still there. Relative to getting ready is I want to thank Randy Hogan and his team and Ed Monser, within the right scope of the government rules, we've been working on this for the last two months, or two quarters not two months. Two quarters and so the integration team is ready. The organization is its structure is known. We've already set that and we let the people know what they're going to be doing from day one. So our plans have been refined and ready to go and as soon as we get approval and we get close we'll be running. We plan to run on the block here because we've used every extra day and every extra week and every extra month here to get further and further down the playing route and Randy Hogan and his team has allowed us to work – his guys to work with us and that's been very appreciative. That way we get a much faster running start and get them integrated in. Which is a benefit for them too because they get integrated into a very large global automation solutions company, too. Which helps them but we're ready and we're just waiting to get FTC approval and we've got everywhere else done and now we've just got to get those arduous government approvals and we're going. Period. Running.

Just related to that, how are you feeling about the prospects for revenue synergies?

Very good. I think that revenue synergies will take a couple years. We've always said that but not only just from the management of the businesses but we've also been working on the integration of sales channels on a global basis. So we know how we're going to manage that by world area and the key customers accounts and where we mean to make investments and where, maybe, we need to beef up things. So I would say that maybe we've shaved off six months on getting to the sale synergies because we've had more time here but our focus really is, the first couple of years, to get the cost integration done and some of the sale synergies will start happening probably as we get into early 2018. And so I think we're ready both on the cost integration side and the sales side and the leadership side of ready to go because we've been managing it and setting it and my compensation committee has allowed me to get things approved, even though we don't own it, so we're ready to go. And that's what we've been doing.

Great. See you next week.

Thank you very much.

Our next question comes from Joshua Pokrzywinski of Buckingham Research Group. Please go ahead.

Hey. Good afternoon, Dave.

Good afternoon, Josh. She did a good job on your name, there.

Yeah, pretty close, right? We had a few extra consonants in there but I'm used to it.

It's closer than I could get, Josh.

Fair enough.

Okay.

Dave, just on seasonality and kind of, the cadence on Automation Solutions from here. I think the normal cadence would suggest that we grow sales and margins kind of sequentially as we move through the year given that this is an inflection point, at least feels like it. It seems like that should be the case maybe even more so. Anything that we should be aware of or anything you want to flag that would fly in the face of that? Especially with a good margin to start out?

To be honest, I don't think that there's any change in the seasonality and the pace is. I can't remember the first question I had on this. I don't see this being a surge. I see this being a steady mountain climbing here as we're seeing our customer base actually incrementally increasing the spend. And so I think that what we're seeing right now is a pretty marginal, I mean, the typical seasonal pattern here. The one issue will be is I'm sure you've heard a lot of the companies in our space that serve this industry saw slower amount of what I would say service and – take off the business down – I'm trying to think of what the name of that word is – when you take the plants down. Huh?

Decommissioning or idling?

Shutdown and changeover.

Changeover, shutdown. I think you're going to – we didn't see as much the last 18 months of that, and it's usually in the fall. So we might see more of that where some of these facilities that really weren't shut down that much last year and rehabbed and upgraded. I think we might see more of that in the fall this year, which will mean probably a stronger first quarter going into the next fiscal year. Because a lot of facilities really cut back the turnarounds. I'm thinking turnarounds. I think we had less turnarounds – the lowest number of turnarounds I've seen in a long, long time. And so I think that'd be the only change to your point, Josh. I think we'll be steady as we go on seasonality. We could see a bigger turnaround in our fourth quarter and then the first fiscal quarter of next year. That will be the only thing I see changing right now based on my knowledge base, which...

Right.

...as you know, is limited in this market. I don't know that much. So...

Yeah, fair enough. And just to follow up on a couple of the questions on China. I think a few of your competitors or I guess adjacent peers called out maybe a budget flush or some bigger project activity both in China and in the U.S., to some extent. Anything that you saw that suggested it felt more like a flush than a normal expansion off the bottom?

I don't agree with that statement. And I think this is a normal where they've held back from an efficiency standpoint or a capital standpoint. And I think these are the things they need to do from an environmental expansion and stuff like that. I do not have that flush. And again, I'm talking about our businesses, Josh. Maybe some of these guys have other different businesses, but our orders in Automation, our orders in Commercial & Residential do not say flush. They say this is a long-term project investments they're doing and these are planned. And it's not a flush. So that's my read on it.

Got you. Talk to you next week.

Don't know China all that well, so...

Our next question comes from Nigel Coe of Morgan Stanley. Please go ahead. Nigel Coe - Morgan Stanley & Co. LLC: Afternoon, Dave.

Good afternoon, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: What a difference three months makes, huh?

Yes. And it's – like I said, I'm never as dumb as I thought I was and I'm never as smart as I thought I am too so here we are, huh? Nigel Coe - Morgan Stanley & Co. LLC: Just want to go back to the MRO pickup in ICM process, mainly. Are we seeing anything so interesting in terms of instrumentation versus valve versus maybe controls? Obviously, there's different margin structures there. And given that MRO will almost exclusively go through a distribution channels, any comments on sell-ins or sell-out from distribution?

I think that what we've seen so far – obviously in the early cycle of a MRO recovery, you're going to get more instrumentation, more flow, which we typically would see and that's what's happening. You do see get – you do get some valve upgrades and replacements, but you typically will see the early cycle, which we're starting to see is the instrumentation and the flow side. That's the first places that gets the biggest bang for their buck on the quick investment. So that's what we're seeing right now, and I would expect that to continue. Even though the valves business has been good, I would still say that underlying decline is still in line where I would expect it to be. We're really seeing the instrumentation side and the flow side come back up on the MRO. And so I think that's going to be normal, and I don't see that changing in – for the cycle here at all. And so the turnaround for the valves will be more relevant when I get out into the late 2017, going into early 2018 and that's where the valves would see a little bit more MRO, from my perspective. Nigel Coe - Morgan Stanley & Co. LLC: Okay. And then you've mentioned that Randy's been very generous with the vetting process with Valves & Controls. Any kind of changes even at the fringes in terms of how you're thinking about the synergies? You mentioned obviously, revenue synergies a little bit further up. In terms of cost synergies, EPS accretion, anything like that?

No changes right now. I think that we still – we have reconfirmed. We probably – as we've spent more time together, we probably have seen some of the expansion of the plants, the integration of plants and some of the organizations that we've tweaked it here and there. But nothing changed from our initial strategy, what we see at this point in time. So yeah, we've been reconfirming. The key thing for us with extra time is really to get the organization structure and to get the names in the boxes of the right leadership, Randy, which has been extraordinary. He's allowed me to talk to his people relative to opportunities and things like that, which is important so we can hit the ground running. And when we do get closure from the final approval from the government, we can tell everybody this is your job and they already know it and they can go from day one, which means a lot in a structure like this on a global company. This is a very global company. So that's why I really want to commend Randy for letting me do that. Nigel Coe - Morgan Stanley & Co. LLC: Okay. And then just one more, Dave, from me. Automation orders turned positive in December, organic orders in the month of December. Is the backlog now up year-over-year for Automation?

I don't know the number off the top of my head. Frank? We'll have to look.

So EBIT is.

I would say it would have to be up a tad. Yeah. I know it is. I heard Mike say today to the board. Yeah. We've built a little backlog. Yes. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Great. Thanks, Dave.

(sic) Nigel, thank you very much.

Our next question comes from Robert McCarthy of Stifel. Please go ahead. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Good afternoon, Dave.

Good afternoon, Mr. Stifel Robby. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Let's see. I guess the first question on the cost side. I mean, obviously, there was some commentary that suggested that some cost needed to come back, but in the context of the overall structure of this company, you've taken a lot of cost out, structural cost, right, over the last couple of years. So maybe you could talk about kind of where margins could be at A&S, maybe excluding Pentair and then Commercial & Resi? I mean, what do you think are kind of the signposts going out the next couple of years? Where do you think margins structurally could get to?

We're going to show that to you next week. I mean, I think structurally we're looking at Commercial & Residential through the work that Bob's doing, both with investments, and then also, Jim Lindemann working on his organization. I think we're going to get to a – that margin's going to run around 24%, 25%. That's where it's going to run. And if the pace of business goes well and the mix right, it should easily get to 25%. On the Automation Solutions business, our goal is to get that back up into that 20%, 21%, where it was before. That's a sweet spot from us from the standpoint of our mix and what we can try to do with that. Maybe even get to 22%. This is about Pentair, based on what, if the U.S. stays well and strong in the oil and gas area. But structurally, we take a lot of cost out, (46:14) so we can take that, those businesses back up to that level in this planning cycle. So I feel pretty good about that from that standpoint, and so we're going to make pretty good money on the margins of this business as we get back up there, and we'll be setting record levels of profit margins as a total company based on what we've done to the cost structure for this repositioning effort. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: So to be clear, you've taken structural cost out?

Correct. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Yeah, well, no. Dave, sometimes, questions can be a statements on drag. Anyway, moving on. With respect to Trump, maybe you could talk about kind of in the broad scheme of things, obviously, a lot of red meat in terms of de-reg and tax benefits, but then you have border adjustability and you have some concern over trade. So it's a bit of a mixed bag here and obviously, we don't see what's going to happen with every one of these policies, but how do you manage the company through this? And what are you scrutinizing in terms of the agenda going forward as kind of key signposts for you to how to better manage the company?

Going back to – so I can't remember who asked this question to me about Mexico. I don't know if it was John Inch or someone like that. But the question for me is, right now, we're getting ready for any changes to the NAFTA agreement. We have to understand where we are today and because we've been running our NAFTA for 25 years. And so we're looking at the flows and things like that what our position is today, how much rigidity to timing if it moves up. So we're looking – that is a very important work going on at the company right now because based on what comes out of Washington tells me that, okay, either we're going to have to slow our expansion or reverse and bring some stuff back north of the border. So we're going to have to look at all those different things as based on what comes out of Washington. And generally, right now, the people are looking at more investments in the U.S. versus less investments, so are hedging their bet. Because people are investing right now, so spending's happening. The other issue, as you well know, they're looking at giving you 100% first year, I guess, amortization and depreciation, which also will have a big positive impact on spending and productivity. So my main focus right now are, okay, which way do you think they're going to go relative to the tax rate, which way they're going to go relative to any type of taxing on imports/exports? Is there going to be a slap on duties just because he's getting impatient? But right now, I'm looking at all these different things, and we're getting our options prepared so we can start moving. As you well know, we're really, really good at managing once we know the playing field relative to our manufacturing structure and where we're going to move things. And we're getting ready and we're creating options, as I've told the board, and we're prioritizing based on the competitive situations which, if I don't do it fast, I'll be at a competitive disadvantage. If I don't have a competitive issue, I don't need to do it as fast. So we're getting ready. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: The last question is just on January order trends. Anything you'd call out positive or negative in terms of complexion there in terms of what you're seeing?

The good thing that I saw as I traveled the United States in the second half of the calendar year 2016 is I knew, I could sense that there was going to be a pick-up in spending in the last couple of months because I could see the price of oil firming, I could see the budgets hadn't been spent, just based on what I felt out there. That has flowed through again on the same curve as we saw in December. So that tells me our customers are allocating capital at least equal to or slightly higher to the capital that they went out the year with. So that's a good sign for me. So that's the one thing I saw, and I want to see again in February, does that continue? Because that tells me the capital is being allocated and freed up for people to spend, and that's a key sign to me relative to my Automation side. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Thanks. I'll see you next week.

See you next week. Thank you very much.

Our next question comes from Shannon O'Callaghan of UBS. Please go ahead.

Afternoon, Dave.

Good afternoon, Shannon.

Hey, some of these areas that have already been good, you know, power, chemical, life sciences, are there any projects that complete there that cause any moderation there? Or do these also kind of cyclically pick-up with all this increased MRO spending, et cetera?

I don't see any slowdown in those businesses. I think that the pharma side of the business marketplace should be good for the rest of this year, probably early into 2018. It runs in cycles, but it looks pretty good right now with a lot of new drugs, a lot of repositioning and things going on. So I think it looks good and some of the new regulations. I think that looks good, pharmaceutical, for well into 2018. We had a big surge, and I think it will just be a steady improvement now. Relative to the power side, I think you're still seeing people upgrading their facilities. I do not see power being back down. They're still taking old coal power plants off, putting gas power plants in. We have some nuclear investments around the world. So the power looks to me like I would say through 2018, it looks pretty good to us at this point in time. On chemical, I think that a lot of that has to do with – I'm looking at what our customer base is going to be allocating relative to capital and relative to where they want to locate some of their new capacity. There's been a push to get into North America. If that continues with the low price of gas that's a good sign for us, and so we should still see a pretty good chemical spending. But right now, those three markets are, I think will trend well for us, with power probably being one of the better ones for us for at least the next 18 months.

Okay. Thanks. And then on Commercial & Resi Solutions, in addition to all the restructuring savings benefit, you called out the benefit platform leverage.

Correct.

Can you just fill that out a little bit more and how big is that of a benefit versus the old structure?

Well, it's really what we're changing – someone keeps asking the question how much is this, you just take out like cost, sales and sales people, engineering people? The platform structure is actually as a permanent structure as we change the way we do business where we're starting to integrate procurement, you're integrating some of the manufacturing, integrating engineering. You're actually taking some what I'd call real structural changes so it really lowers the cost, so what we've been able to do through this integration platform, you look at the margins of this business since we announced the Commercial & Residential Solutions business integration on our bar chart (52:49) you see a steady improvement in the profitability of this business. We had a very good improvement last year in the second half. We saw a pretty good first quarter here. So those are things that we see happening that will stay there and that also allows Bob to have money to invest incrementally. So Bob has been already starting to invest in some of the key areas relative to the food safety, some of the transportation stuff. And so I think that the reason I said the platform, this one in particular gives us a chance to reinvest in the business and pass some higher margin (53:17) on which I think you have been seeing for the last couple quarters in our Commercial & Residential business and should see for the rest of this year.

Great. Thanks a lot.

You're welcome.

Our next question comes from Christopher Glynn of Oppenheimer. Please go ahead. Christopher Glynn - Oppenheimer & Co., Inc.: Thanks, Dave. Is it time to bring out your Rally Monkey in the off-season in baseball?

Yuck. Now, am I supposed to call you Christopher or you want me to call you Chris? Christopher Glynn - Oppenheimer & Co., Inc.: Call me a happy Patriots fan.

Oh, good. That was a great game. That was a good game. Christopher Glynn - Oppenheimer & Co., Inc.: It was.

It was a good game .

The Rally Monkey is definitely out, Chris. I've got the Rally Monkey. Rally Monkey sleeps on my bed at night. It sits right there. It's ready to go at all times. You never know at my age you need a Rally, you know? Christopher Glynn - Oppenheimer & Co., Inc.: Yeah, yeah, not quite time to go out (54:13) . Hey, it's interesting to see the Automation Solutions profitability improvement really leading the end market underlying recovery there. Was that just all sustainable structural improvement or was there some favorable mix in the quarter?

We had some favorable mix. The business did do better, Chris. I'll be very honest. The business did better. They were on a good path. I think one of the guys asked earlier about this. They're on a good path. They're on a curve that you normally see a recovery. The cost reductions really have taken hold so we've got a bigger bump relative to the uplift in the profitability. They had a good mix. Obviously with the shift coming towards instrumentation, some of the flow, some of the (54:56), that does help us. Secondly, we also saw some currency help in the quarter, which we could have for a couple of quarters and we have to take some of that back. But overall, I want to tell that team has done a phenomenal job taking costs out through the last 18 months. And so when they start seeing some what I would say uplift in the trend lines, you're starting to see that improved profitability. But some things did go further away for the first quarter and hopefully that will continue in the second quarter. But overall, profitability was very good in that business. They did get benefit from mix, they did get benefit from a little bit of currency. But hats off to those guys. You're talking about how far down they are from where they were and then running those levels of profitability is darn good. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. And on the corporate spend, what are we expecting for this year? And then, is this year consistent with longer term now that you're settling into a much different overall enterprise structure?

So, Chris, it'll be still probably a little less than $500 million because we beat the first quarter, but I would say longer term that's still pretty much in great...

Yeah, I think from a run rate standpoint that's about right. We continue to work on the corporate spend and it's come down dramatically over the last couple of years, but I think that's – there are some items in there that move around like incentive comp, but I think that's probably right for a run rate for this year.

Yeah, yeah, I don't see. We're almost done with the corporate restructuring and the downsizing based on a smaller company. We're also still tweaking a little bit about what is done at the two-platform levels, what's done in corporate. There's always that discussion. We brought Mike and Bob onto the OCs so they can participate in this, but there's a level of governance as you well know that I and Frank are responsible to the board. And so I think we're getting to the point that I feel comfortable with and then, when we bring Pentair on and we have to figure out how to get them incorporated onto some of our controls and stuff like that, we're going to have to add a few there. But right now I think we've got it where we want it. And again, that's a lot of hard work to do what these guys did, to take that structure out like we did. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. Good color. And then just, seeing anything on the strong dollar from a global competitive dynamic?

No. No. I don't think the global competitive dynamic's changed much right now. The euro's been bouncing pretty tight between $1.06 and $1.08. If it goes to $1.10 it'll be a real nice wind at my back. We've got our European structure right now pretty good, because we went through this process where the euro really weakened. So right now the dynamic world is pretty set and we haven't had a lot of changes. It's been more of a, I would say, what's coming out of the political arena more than anything else is creating some changes. But we'll see what happens here. Right, we're all – I'm watching very clearly what the Washington folks decide to do relative to trade, what they do to tax. Because we are in a situation in pretty good from the standpoint of a cost structure and so we're going to have to adjust and figure out where we go from there. We're about as competitive we've been in a long, long time at running at where we are right now. Frank just told me on the backlog, we're slightly down year-over-year – up sequentially which is what these guys look at. We're up sequentially, but down year-over-year. So from fourth to first we're up, but first to first we're down which makes sense. So the trend is going up. Somebody asked that question. Anything else, Chris? Christopher Glynn - Oppenheimer & Co., Inc.: No. Chris or Christopher's fine. Just don't call me Oppenheimer Chrissy.

Oh, I like that one. I'm always looking for nicknames. Chris, you take care. look forward to seeing you next week, okay? Christopher Glynn - Oppenheimer & Co., Inc.: Thanks. I'll be in India. Bye.

Our next question comes from Steve Winoker with Sanford Bernstein. Please go ahead. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Hey, thanks for fitting me in. Appreciate it.

I just gave them authority to two more after you. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Okay. Well, I'm in Germany so I appreciate it. I stayed up for you, Dave.

(59:02) I stayed up. In fact, I was going to bed and my son called me, said, dad, you need to turn the TV back on and I said, what? Steven E. Winoker - Sanford C. Bernstein & Co. LLC: You've got to watch Tom and Bill and see how it's done. Listen, I wanted to ask you, just circle back to restructuring, just a quick point. You mentioned the Pentair restructuring Valves & Controls might be $25 million instead of the – I think it was $50 million to $70 million that you quoted originally or talked about originally. You also talked about like $50 million in the core business and it was the current pro forma business. Do you still see that still playing out?

Yes. I'll show a chart in charge next week. I'll give you quarter by quarter. It looks to me like about $50 million for our core business plus or minus that number. I can't call within $10 million and it looks to me right now around $25 million for Pentair. Again, I'll show you quarter by quarter, I'd show you how we think it's going to unfold here and what our saving's going to be. Given the fact that we're going to be as I say next week late in the cycle of getting Pentair on board, we probably won't get much of savings help for the first but we're getting some of the restructuring done that will help us early on in 2018. So that's what we see right now and we'll give you sizing relative to what we see from the other charges we have to do from a inventory standpoint, the valuation of inventory, the valuation of backlog. We have some estimates right now, but we're still working on that but we're ready to go. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Okay. Look forward to that. Also, I was at Asbury (01:00:27) last week, spent a lot of time in the Emerson booth.

(01:00:34) Steven E. Winoker - Sanford C. Bernstein & Co. LLC: I didn't even have to wear my fake mustache. It was all good and it was the busiest show I think in 14 years Dave which is either a quite good thing or a bit of a concern around peak. As you sort of look at that and by the way some of the growth in VRF for example, most of the OEMs were talking about 15% to 20% growth in VRF, also. How do you see that sustainability and by the way how are you guys currently seeing your positioning on the VRF side? Are you taking advantage of that?

We're definitely taking advantage and I'm going to have Bob talk about that next week for you guys. You know there's a lot going on around the technology area right now relative to the efficiencies, relative to the refrigerants, relative to some people not investing for some time, the energy stuff. I think there's a lot that's why the show was so strong. I think people, for a change, are going to have some money to spend and I think these guys are looking at where they can spend so that's why I think there was so much energy around that. And if you think about North America refrigeration, these guys are going through some of the biggest transformations they're going to have to ever do in efficiency and so I think especially in refrigerants, these guys are all gearing up and that's why people are so energized. And so I think we could have a good run here in North America through 2017 and 2018, which will be a good thing to have which we've been waiting for as you know. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Yes. Okay, great. I look forward to seeing how it all fits together next week. See you then.

Well, we try. I mean, don't get too excited. We might not do a very good job, you know. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: Dave, you always do a good job. It'll be fun.

And don't bring your camera. Steven E. Winoker - Sanford C. Bernstein & Co. LLC: That's not me. Hey, Dave, that's a different guy.

Okay. Next.

Our next question comes from Rich Kwas of Wells Fargo Securities. Please go ahead.

Hello, Rich.

Hey, good afternoon. How are you?

Not too bad. You're the next to the last one. You got under the net. You're sort of like got your nose under the finishing line there.

I appreciate it. Quick one on C&RS. In terms of rigid tools, that piece of the business has got a fair amount of energy exposure. What are you seeing in terms of demand trends there? And how do you think some of the stabilization of oil and energy is going to help out on the Commercial & Residential Solutions side as we think about the rest of the year?

Rich, the question – and I've forgotten – somebody asked me a question about distribution earlier and I forgot to answer it, my fault but that question is one of the early signs, when we know that the incremental spending on MRO, the incremental spending in upgrading the facilities both in oil and gas or any type of facilities, it goes through the channel, the industrial channel which is the rigid. We start seeing that channel pick back up in October. And so what that tells me is that they're seeing activity within their core marketplaces relative to industrial world or oil and gas and the chemical world and they're bringing in the tools and equipment ahead of time and they're starting to spend. So we've seen that channel improve. We've seen our orders improve, our sales improve, so that's a good sign for me. So I want to watch that going back to my earlier comment, for the next couple of months because if they continue to do that, that means it's selling through. And then their customers are actually doing the ongoing MRO, they're actually doing some of the incremental facility rehabbing or upgrading. And so right now, the trend is good and I have a lot of indicators within Emerson and that is one of them and that one is on par where I think it should be relative to the cycle. And given the fact that I run it, I understand that pretty well and that tells me they should do pretty well here for the next couple of quarters.

And how far down is the business relative to peak?

20%.

Similar to process?

Yes, 20%.

Okay. All right. Can I bring my Polaroid next week?

Yeah, you bring your Polaroid and we'll see where it goes.

See you next week.

See you later. It was good talking to you, Rich. Okay, who's last? Who's it?

Our next question comes from Steve Tusa with JPMorgan.

Steve Tusa's last. If I know it was Tusa, I would've cut him off.

Yeah, well do not...

Steve, how are you doing, Steve?

I'm doing okay. Thanks for fitting me in. I appreciate it.

And well, yeah, and I know because you never use cameras. You've never done that to me.

Absolutely not.

I know, you're very good at that because you're an honest person.

I expect now that things have turned the corner that there are going to be less slides omitted, is that what we should expect?

You didn't hear my opening comments, Steve. I talked about, I'm still having the decision. I mean had the guys and gals right across and I have five planners working with me and I have these red dots everywhere and Craig walks in there and starts looking like he's got the measles because he saw, you can't omit all those charts so we're in a strategy right now. This is the way I think. I'm thinking about omitting like 20 charts and then have them stuck somewhere that it feels like a hide and seek type of thing.

Way to blame Craig, that's real leadership.

Well, no, he's not going to get. He's going to get the chart, he's going to have them if I just do it. Now, I don't know I always have some elimination and I think over the years we've been, people have never abused it so we've been more careful about it so I give more out. But probably I'd say less omitted this year than I have in the past, Steve.

All right.

(01:06:24) just fun of it, just admit it, have it rolled it up inside somewhere.

Got it. So just on Pentair, what exactly has been the delay? Has it been kind of election at all related? And would you say that once you've got this kind of clearance from the U.S. that this thing can kind of close in a pretty like expeditious manner that this is basically the last major hurdle that you have to go through?

Yes, the biggest delay has been, we've had first of all we have a presence in the process world, as you know. We're pretty broad across the various technologies and we've had a presence in the control side. And I think a lot of both from a competitive standpoint, a customer standpoint and the challenge standpoint around the world, I think they all want to understand, okay, what would this be the impact to the industry. The U.S. was far more inquisitive about this than anybody else. They're the last of the basic approvals. Really not been government, the FTC has a lot on their plate. They've been expeditiously working with us on this thing. They've got a lot of mergers and acquisitions are working on, so I don't blame this on the government. I'd just blame it on the fact that they're doing a very thorough review. They're looking at a significant sized acquisition that will change the profile of our business and what that means from our customer standpoint. And I think they're checking the boxes like they should be checking the boxes. It's taken them longer than I thought only because you've got a lot of information that once they start getting into it they have to go through it but we're hoping here later this week that everything's signed off on, where we'd go and what we have to deal with. And that we'll close as quickly as possible as we can in March. And we've got everything ready to go from the standpoint where cash has got to be, what the organization so we're ready to go and hit the ground running and it's a lot of work of the FTC to understand the marketplace which they probably would normally not look at.

Thanks. So, Dave, you're generally a guy with a view and I think there's a lot of people out there who have opinions and a lot of guys are not giving their opinions but you're not one to shy away from that. What do you think is the ultimate outcome of the major buckets around tax reform? And in your opinion, when do you think that you get clarity on this? You're obviously creating all these plans and scenarios which you should be doing but what does your gut tell you on how far this is actually going to go from an execution perspective?

I think we will get clarity as a nation by late summer, early fall. I think it will take time to get it rolled out and so that means that's why we're getting ready from the standpoint. I believe we will get some kind of tax reform which will include probably some trade renegotiations around that and what that means relative to how we bring products in and out of the country back-and-forth. But I think it'll be tied around tax approaches to come up with a more equal tax policy and structure for the U.S. companies which will be good for us. But I think it's going to take a while for them to get that done because there's a lot of gives and takes and it will obviously include repatriation type of approach on an ongoing basis around the world so we pay it, no matter where we make the money and get the money back. So I'm looking for clarity by late summer, early fall and that gives me time, as I get into execution later this year, early 2018 based on if I have to change anything.

And then one last question, just remind us why your tax rate is so high and given you guys are pretty global company, if the U.S. moves to kind of somewhere in the 15% to 20% range how much downside you know – I would think your tax rate would already be lower than it already is. So I'm just not sure how much more – how much of a benefit that would actually be for you guys if you just said, hey, today you wake up in the U.S. it's 15% to 20%, where does that bring your consolidated tax rate to?

The reason we have a high tax rate is because we're very strong and powerful and we manufacture a lot in United States and we sell a lot in the United States, we make a lot of money in the United States, we manufacture a lot in the United States. So we've always paid our taxes on the U.S. tax structure. So our effect tax rate in United States is 37%. So based on if you really had true tax legislation coming through, Steve, where there's some changes, maybe some of the cross-border movements around and some taxes here and there to try to rebalance that, our tax rate should move down into the 20s based on what happens to the final – how does it come out. But it really makes a difference of what they do with all the different ins and outs relative to the imports, the exports what they do relative to some of the treaties. But we fundamentally pay in the U.S. that type of tax rate. So if they lower the U.S. tax rate down to 20% or 15%, say 20%, we will move down towards that. But I expect that some of the other things will go against us. But overall, our tax rate should come down with true tax reform and tax policy rather than tax edicts, so it should come down.

Okay. Great. All right. Thanks a lot, guys. Good quarter.

Thank you. All the best.

Again, I want to thank everybody for joining me today. I really appreciate it. I want to thank my organization for the great job they did the last three months and look forward to another strong second quarter. Look forward to seeing everybody in New York next week. As always, enjoy it. And look forward to taking Q&A and hear what everyone thinks about. Take care now. Bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.