Ladies and gentlemen, thank you for standing by. Welcome to the Eaton Third Quarter Earnings Conference Call. At this time, all telephone participants will be in a listen-only mode. Later we'll conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. And I'll now turn the conference over to our host, Senior Vice President of Investor Relations, Don Bullock. Please go ahead, sir.

Good morning. I'm Don Bullock, Eaton's Senior Vice President of Investor Relations. Thank you to all of you for joining us for Eaton's Third Quarter 2016 Earnings Call. With me today are Craig Arnold, our Chairman and CEO, and Rick Fearon, our Vice Chairman and Chief Financial Officer. Our agenda today, as normal, will typically include opening comments by Craig highlighting the company's performance in the quarter and an outlook for the remainder of 2016. As we've done in our past calls, we'll be taking questions at the end of Craig's comments. A couple of quick items before I turn it over to Craig. The press release for today's earnings announcement this morning and the presentation we'll go through have been posted on our website at www.eaton.com. Please note that both the press release and the presentation do contain reconciliations to non-GAAP measures. A webcast of today's call is accessible on our website and it'll be available for replay. Before we get started, I do want to remind you that our comments today do include statements that are related to expected future results. As a result, those are considered as forward-looking statements. Our actual results may differ from those for a wide range of uncertainties and risks. All of those are described in the 8-K. With all that, I'll turn it over to Craig.

Thanks, Don. I know that most of you have worked through the earnings release and the details of our earnings already as I've seen a number of your reports already. So what I'll try to do this morning is hit the highlights and then maybe add some color commentary in and around the results. First of all, you noted that EPS did comment at the midpoint of our guidance of $1.15 and we're actually pleased with these results despite revenue coming in weaker than what we expected. We actually delivered strong operating margins at 16% and 16.5% excluding restructuring, largely as a result of better restructuring benefits and good cost control across the company. We had another strong cash quarter. Cash flows were $798 million in the quarter. Our cash conversion ratios in the quarter were 130%, driven by strong margins and the benefits of amortization. Year-to-date, our cash conversion ratio is 110%. We took advantage of our strong cash position and we repurchased 3.7 million shares, $243 million in the quarter, and this brings our full-year repurchases to 9.2 million shares or $560 million versus our target of $700 million for the year. Turning to page 4, the financial summary, as we've said, total revenues in the quarter came in weaker than we expected. If you recall from our earlier guidance, we expected Q3 revenues would be flat with Q2; and organic revenues actually came in down 1%, with less seasonal growth in both of our Electrical segments as well as weaker sales in Aerospace and Vehicle. Revenue is 4% lower than prior year with 3% of that coming from lower organic revenues. We did have strong operating performance, as I mentioned, in the quarter. A couple of points of reference for you. In comparison with Q2, we delivered…

Our operator will give you instructions for those of you who are going to be posing questions.

Our first question comes from Nigel Coe with Morgan Stanley. Nigel Coe - Morgan Stanley & Co. LLC: Good morning. So just as a quick clarification on some of the 2017 commentary, Craig, the $120 million of incremental profit, I'm assuming that's segment profits inclusive of restructuring, so inclusive of that increase in the restructuring. Is that correct?

That is correct, Nigel, so we're obviously increasing our restructuring expenses by $50 million, but we expect to see benefits in the year that will offset that additional spending. Nigel Coe - Morgan Stanley & Co. LLC: Okay. And I'm assuming that there's some underlying sales assumption that's forming the basis of that $120 million. Maybe you could share that with us as well, Craig?

I think at this point, Nigel, all we'd really say about 2017 is that Q3 was certainly a bit of a disappointment when we took a look at a lot of our end markets and our order intake, and we expect that to continue into Q4. And we're in such a period of uncertainty right now, with so much volatility in many of our end markets that it really is difficult to make a call on 2017. And so we made the decision to increase our restructuring, because we think this period of uncertainty will continue. But we do think it's too early to make a call on what our revenues will be next year. I think once we get past the elections and a little bit of the uncertainty works its way through, we'll be in a better position to make a call on revenue next year. Nigel Coe - Morgan Stanley & Co. LLC: Okay. I have just a quick follow on that. So the $120 million, I'm just wondering what are the boundaries on sales that you feel comfortable with that range, because obviously there's a point by which you can't get that number. So I'm just wondering what the boundaries are around that connection to protect that range.

I think the restructuring benefits are largely a function of taking out fixed costs, support costs, and really are not in any way a function of revenue. And so those benefits are essentially independent of revenue. Nigel Coe - Morgan Stanley & Co. LLC: Okay. I'll leave it there. Thanks.

Our next question comes from Ann Duignan with JPMorgan.

Hi. Good morning.

Hi.

Can you talk a little bit about your Aerospace outlook and the margins for 2016? Should we think about that as just the deferral of spending that will come back in 2017 so we don't take Q4 margins as a run rate into 2017?

Yeah, and I think that's absolutely the right way to think about it. As you know this business especially well, that the program spending tends to be quite lumpy, and you can have periods where your spending go up, periods where your programs are deferred and it comes down. And so I do think – great performance by our team operationally so we don't want to take anything away from the strong performance but, certainly, a piece of this is a function of lower program spending that will come back next year.

Okay. And I appreciate that. And then could you just comment on the Q4 guidance? Where did you get the biggest surprise across the businesses?

Yeah, what I'd say, Ann, really throughout the summer months, we principally saw a weakness across most of our Electrical end markets. If you think about the markets that have been weak all along whether it's oil and gas or whether it's large industrial projects, industrial controls, we saw each of those markets essentially weaken up a little bit throughout the summer months, and that certainly cascaded through to the order input that we saw in our Electrical Systems and Services business, which, as we reported, was down 5%. And so we saw clearly weakness there. We saw additional weakness in the North America Class 8 truck market, and that's what resulted in us reducing our forecast for that market to 225,000 units, but those are the places where we principally saw the reductions. It was really pretty broad across many of the Electrical end markets, as well as the North America Class 8 truck business.

Okay. And just quickly as a clarification on the weakness in the large industrial controls, is that related to the slowdown in investment in manufacturing, you know, LNG petrochemicals?

You're absolutely right, and you see the C30 data just as well as we do in terms of the government data, the put in place numbers, and almost every category with the exception of health care and commercial went negative in Q3. And so you're absolutely right that across all of those end markets we saw weakening this summer. Question – is that a function of all the uncertainty in the current environment? In manufacturing capital equipment, everybody's taking a pause until the air clears a little bit here around which way the U.S. is headed, but it was principally in the U.S. that we saw the weakness and really across most of those markets.

Okay. I'll get back in queue, and then I'll root for the Indians.

Yes. Thank you.

Our next question comes from Julian Mitchell with Credit Suisse. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thanks a lot. Craig, I guess I just wanted to follow up on something that you mentioned at the end of your prepared remarks about confidence in hitting targets. So if you look at 2017 overall, does that mean that you're still reasonably confident of that 8% to 9% EPS CAGR target that you laid out in February? Or you are referring to something else?

Yeah, I mean, the 8% to 9% EPS CAGR was really over a five-year period, and so there's nothing that we've seen in this kind of temporary pause that we're seeing a lot of our end markets at in any way takes away from our confidence in delivering the longer-term EPS improvement that we laid out. I think there really is a question around 2017 with respect to where some of these end markets are headed, and, quite frankly, we were surprised and disappointed with our bookings and the way a lot of the end markets kind of played out in Q3. Question – is that a temporary pause or does that play through more thoroughly into 2017? We just think it's too early to make a call. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Understood. And then on Electrical Systems and Service, profits in dollars and also the margin percentage, it's on track to fall for the third year in a row. Orders are soft, so the revenue line probably can't turn around until mid next year at the earliest. How should we think about the approach in that business aside from just cost-cutting? Is there anything more proactive you can do in terms of project selectivity, change the end market focus, exit certain business lines or something?

Yeah, I'd say in Electrical Systems and Services specifically, as you're aware, we are in fact undertaking a fairly significant amount of restructuring in that business. And so if you take a look at our margins in Q3, without restructuring, at 14.2%, we do see improvement in the underlying margins of that business. To your point around growth, in terms of this, certainly this is the business that is most closely tied to infrastructure spending, large projects, and so it is very difficult in the near-term to fundamentally delink this business or really any of our businesses from the secular trends that are taking place in these large end markets. Having said that, we have lots of growth initiatives that we're focused on in every one of our businesses, and Electrical Systems and Services included. So today, I'd say that in the short term it's going to be very difficult to fundamentally perform significantly different than the end markets that that business serves. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Very helpful. Thank you.

Our next question comes from Steve Winoker with Bernstein. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks, and good morning, all. Let's get a little more detail around the restructuring actions. First, just the 3Q to 4Q shift, maybe just a little color on what was driving the shift?

We had a $4 million shift between the quarters, as you'll note and as we talked about. In Q3 we actually delivered $10 million more benefits than what we forecasted. So the program is very much on track, and we're very happy and pleased with the way our teams are executing. But as you think about restructuring programs of this magnitude, there can always be timing associated with a number of the decisions that you make, negotiations that have to take place in some cases with work councils and unions around the world. So I would just say it's a small adjustment of timing of spending between the quarters but nothing to be concerned about. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: And while there's always pro-restructuring programs to find across a large, complex organization, these are some big step-ups. What kinds of programs are you tapping into now when you do things like all of a sudden put another $50 million on the table for next year?

And the way we would think about it, by the way, is it's really not all of a sudden, because as we've talked about in prior calls, our businesses today have a healthy backlog of opportunities to restructure. And so we are always working on a pipeline of opportunities that our businesses are advocating for, that make sense, and it's really a matter of metering these programs in, given the organization's capability of digesting all of the restructuring that's undergoing. And so today, the programs themselves, it's really more of the same. And we talked about looking at structural costs inside of our businesses, looking at management layers, span of control, taking out fixed costs, looking at the manufacturing footprint that we have around the world. So it's very much in line with the type of restructuring programs that we've done historically, which is why, quite frankly, you see a very strong payback on the program that we've announced. And so it's very much consistent with what we've done in the past. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Is the footprint a big – a very large part of this one?

Yeah, I'd say it's a mix. It's always a mixture of some footprint-related changes as well as some structural support cost-related changes, but I will tell you in all cases, it is structural costs, the type of costs that don't come back as volumes change. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: And just one other one, on the tax. The quote or the comment around the slight tax rate increase for 2017, any color there as you sort of think about the longer-term tax rate also?

Yeah, I'll handle that, Steve. We think the rate between 2016 and 2017 is likely to go up probably a point. Now, that's a very early estimate because it obviously depends on the precise mix, so I don't have a profit plan to look at. So I'm operating with some high-level assumptions. Going forward, it probably continues to go up on the neighborhood of perhaps a point a year, not more than that. And we'll have a further, more fulsome description of the medium-term outlook when we give our formal guidance for 2017. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay, thanks, Rick. Thanks, Craig.

Our next question comes from John Inch with Deutsche Bank.

Thank you. Good morning, everyone.

Morning, John.

Hi, guys. Hey, Craig, can I pick up please on the whole restructuring context? And I look back and it seems like Eaton has been doing, at least in this cycle, outsized restructuring since the second quarter of 2014. I realize that was before you became CEO, but now that you are CEO, help us understand why is there all of this sort of runway and restructuring? Like why don't you start – like why do you have so much to do? Why don't you start cutting into bone versus sort of the fat? I guess that's – help us just understand why this continues?

I'd say, John, one of the principal issues is if you take a look at the size of the company today versus what we had forecasted, let's say, going back in the last strategic planning period, Eaton is a smaller company. A lot of our end markets over this period of time did not perform anywhere close to what our expectations were. So there's a piece of what we're doing that's essentially rightsizing our company, given the current revenue and the certain size of commercial and economic activity across our enterprise. And having said that, as you're well aware as well, we built this company for the most part through a series of acquisitions. And when you acquire companies, you always acquire excess capacity in manufacturing. And if you'd said, do you have the ideal footprint, if you could start from a clean sheet of paper and redraw it, you never end up in that place if you grow a company through acquisition. And so we're really taking some steps back and saying, what can we do, what would we do if we could start with a clean sheet of paper? How would we draw it up? And from that are coming new ideas and opportunities to do it smarter, to do it better, to do it more efficiently. And so we think we're encouraged by the fact that our businesses have a lot of ideas and a lot of recommendations around things that we can do to continue to improve our margins, despite the fact that we're working in really tough operating conditions.

Is the nature of this stuff, kind of going forward, is it still a people question, or is it more of kind of like a tooling, efficiency, productive ops argument?

Really, it's about at some point in terms of kind of the support cost infrastructure around our business, we'll run out of runway there. Today, we haven't, but at some point we will. But I'd say if you look at, let's say, the manufacturing footprint around the company around the world, I think we'll have opportunities for the foreseeable future to continue to fine-tune the footprint, to fine-tune the way we serve the market. And so I think that it'll be a base level of restructuring. And what we said historically, it's a number that's order of magnitude around $60 million that will always be resident inside of our company. And so we're not even close to running out of ideas at this point around things that we can do to improve the efficiency of the organization.

And actually, it's appreciated that you actually include it in your results. Could we shift gears just for a second, you guys – you have sort of on the front line of a lot of construction markets. I know you get access to the NEMA data and so forth. What do you make of – and then, Craig, you called out light commercial markets in the U.S., I guess, or at least your results doing better, right? What do you make of this choppy non-resi data? And some people have asserted that maybe non-resi markets have peaked or passed the peak. How do you think about that in the context of the markets you serve and your own runway?

I think it's been tough to get a clear read. And that's why perhaps you're seeing so many conflicting data points and so many companies commenting on different signals. And today, as I mentioned, the C30 report is a good proxy, the NEMA data is a good proxy. And the NEMA data was pretty much consistent with what we saw in the C30 report. We saw weakening in many of the non-resi end markets in Q3. And that's really what's played into a lot of our thinking around Q4 and perhaps playing into 2017. So we still see, if you think about a walkthrough markets, we think the industrial piece, the manufacturing sector, things that have to do with capital spending, continue to be weak. And we see those markets to be down kind of low to mid single-digit this year. Now, oil and gas continues to be weak? Yep, the rig count has increased, but we've not yet seen any of that play through to any strength in oil and gas. In fact, the data was a little bit weaker in Q3 than it had been year-to-date. And so we continue to see weakness on the industrial side of the house, but, having said that, we're seeing strength on the consumer side. Residential housing, the lighting market continues to do well, the Vehicle markets around the world continue to perform well, the light end of non-resi construction, things that are really the small strip malls and really that are, I'd say, almost attached to household formations. So it really depends upon what part of the economy you're serving, and there's pockets of strength and then there's pockets of weakness, and unfortunately today, the weakness is slightly outweighing the positives. But it really is two different pictures depending upon which part of the economy you're sitting on and I know your question is, where is it headed? Which direction is it pointed towards? And at this point I'd say it's a very confusing picture.

What about, lastly, China? I mean, you're seeing some stability. Other companies have called this out as well. Do you think this is a function of their prior stimulus or do you actually think that there is more sort of enduring demand that may start to kind of go on here despite the fact that you've got all this overbuilding in these property markets?

Sure. Yeah, we too have seen the strength that other companies have talked about in China. We had a pretty strong Q3 overall in terms of our order bookings in China and we saw that in our Hydraulics business. We saw that in our Electrical business as well. So certainly, the government stimulus programs are helping. Their monetary policy is helping. Whether or not these structural improvements will continue into the future, I think it's once again another one of these points of uncertainty. And they put the stimulus programs in effect for a reason. So they had some underlying concerns. But at this point we think China has certainly stabilized. I think the risk associated with China today is less than what it was probably the last time we had a conversation about China last quarter. So we're feeling better about China but longer-term I think it remains a question mark.

Got it.

Thanks very much.

Appreciate it.

Our next question comes from Jeff Hammond with KeyBank.

Hey. Good morning, guys.

Howdy.

Hey. So just as I kind of go through the math of what you laid out on – you called out the decrementals and they were very good, but if you kind of back out the restructuring, both Cooper and the savings you got, the, I guess, underlying decrementals are pretty heavy, and specifically within Vehicle, I think that was an area you called out where you'd be more resilient. So maybe just speak, when you look at just the normal underlying decrementals, are you seeing – is it just the magnitude of the decline? Is it pricing pressure? What's contributing to some of that headwind?

I think, Jeff, overall we are that pleased with the decrementals that we're seeing in all of our businesses. And I think what we've laid out externally is that we say 35% decremental is typically what we would run across the company, and obviously that will vary slightly or in some cases widely depending upon which part of the company you're referring to. And so we're very comfortable with the decrementals that we're seeing in our businesses and we're not particularly seeing any net negative pressure between cost and price, so there aren't any particular unusual pressures there that weren't part of our plan and that we're not dealing with. Specifically in Vehicle, and as I mentioned, we're seeing a reduction in the North America heavy duty Class 8 market, which tends to be the more profitable piece of our Vehicle business. But having said that, our margins in Q3 were 15.5% in an environment where the markets are down some 35% in North America Class 8. Excluding restructuring, margins were 16.2%. So we think that's, quite frankly, very strong performance in a period of time when markets are off as much as they are.

Okay. That's helpful. And then can you give us a little more color on what you're seeing currently and prospectively in power quality and utility? I don't think you called either of those out within. And then I'm also going to be rooting for the Indians tonight.

We all are. In fact, we'll be there. So in power quality overall, I'd say we're seeing markets that are essentially flat to up low single digit for the most part. The data center market, the three-phase market we think is performing largely flat for the year, so no big differences there in terms of what we originally anticipated for the year. It varies slightly depending upon what region of the world that you're in, but for the most part we're seeing those markets to be anywhere from flat to up low single digits.

And I'd say the same for utility, too.

Yeah, and utilities. Yes.

I think that's part of your question, flat to up low single digits.

Right. And our prior guidance was essentially to be up 0% to 2%, and essentially we're running right at those levels.

Okay. Thanks, guys.

Our next question comes from Jeff Sprague with Vertical Research.

Craig, in passing, you just mentioned no significant price cost disconnects but can you give us a little bit of a forward look on what you see developing there? It would seem there are some cost pressures on the horizon. Are you able to take some price actions to counteract that? And what should we expect going forward?

Yeah, I think the way we have approached the whole price versus input cost historically is that we see it for the company as being kind of a net neutral. In periods where we're seeing inflation, we're able to pass price on to the marketplace; and in periods where commodity prices are coming down we tend to shed a little price consistent with the deflation that we're experiencing in the company. As we've said in prior calls, we have a little bit of pressure in Electrical Systems and Services in pricing, but I'd say that's kind of built into the run rate of the business at this point. And so as we think about on a go-forward basis, we don't think anything has changed and the way I would encourage you to think about price versus cost is that it's a net neutral for the company.

Thanks. And then just on thinking about cash and cash flow looking forward, maybe a question for Rick, but the cash conversion very strong this year, clearly some inventory liquidations and the like. But I'm just wondering if you kind of roll it up into next year, perhaps you had pension funding, cash taxes move around. Any early read you can give us on any of those big levers or a high-level view of what cash conversion should look like next year?

We have not done our detailed cash planning, of course, for next year given that we don't even have a profit plan in place but I would tell you that given just the size of our depreciation and amortization, and we would not anticipate any significant pension contributions at this point. We should be solidly above 100%. I don't know exactly how much above 100%, but that would be my anticipation right now.

Okay, and just quickly, you mentioned, Craig, that inventory correction in Hydraulics. I take that to mean an inventory correction going the other way, a rebuild or a restock? Is that what you were implying?

Yeah, exactly. A number of our customers had really drawn down inventory pretty significantly. So we think there was some restocking that took place in Q3 and it certainly helped with our total outlook for the year.

Great. Thank you.

Our next question comes from Eli Lustgarten with Longbow.

Good morning, everyone.

Hi

Hi. Just one clarification on all the restructuring and it's a very simple clarification. Is the bulk of this thing a permanent stepdown of cost, or is there a portion that if volume starts to come back you'd have to add back? I mean, very often it's a 40% permanent and 60% addback or so. Can we assume that this is much higher than that or ...?

Yeah, and I'd be hesitant, Eli, to call it 100% but it's close to 100% permanent stepdown. This is really taking out structural costs that we do not anticipate coming back as volume changes.

Can we talk about typically two markets. One, Aerospace is still positive but it's been disappointing in volume for across the board. Aerospace, you should have some visibility into 2017, so are we looking for this flat to slightly upmarket to continue or does the pushback from this should get pushed into next year? And can you do the same thing in the Hydraulics markets, should it improve with this restocking, does that continue, which means you can get to some positive gains in Hydraulics next year? Or is the general forecast basically a flattish kind of market year over year? Is that sort of what you're looking at as you look to 2017 based on the restocking that we're looking at?

Yeah, Eli, I appreciate the question. It's kind of the piece that we're working through right now with respect to what the 2017 outlook is going to look like for the company and for our individual businesses. And I'd say at this juncture we would prefer to defer that question given a number of mixed signals that we saw coming through the dataset in Q3. I will say that the general trends around strength in commercial side of Aerospace and the backlog that Boeing and Airbus has, there's nothing that would suggest that that doesn't continue to be a strength, and consumers continue to get on planes and fly, and revenue passenger miles were, quite frankly, quite strong throughout Q3, growing at 4% in both Europe in the U.S. and almost 8% in Asia. So that piece of the business feels like it's holding up pretty well. We continue to see weakness on the military side. So we'd really prefer to defer that in terms of our thinking on how all those pieces are going to come together, but it's pretty much playing out as expected, other than, as we've noted in Aerospace, we saw much greater weakness in business-jet and regional jet than we anticipated. We and others in the industry, quite frankly. And so that's the piece that a little bit fell out of bed on us this year in the Aerospace market. In Hydraulics, I'd say once again a lot of mixed data. You follow all the same customer sets that we follow, and you see some of the big construction equipment guys, and it doesn't look like things are getting better. They too are serving a lot of the industrial markets that are a function of capital spending. And those markets throughout Q3 look like perhaps maybe we're bouncing along a bottom here, but tough to call a turn in Hydraulics markets at this point as well. And so we hope to learn more as we come through Q4, but at this point I think in Hydraulics for certain it's tough to say that we've see the turn in the market and that we can begin to count on the markets turning positive.

One final question, there was a whole flurry of data center orders in the third quarter reported over the next couple of years. Is that figured into your thinking or being figured? Is that sort of supporting as the market as we begin to look out into 2017 and 2018?

Yeah, I think the world continues to consume and generate more and more data. And that's certainly very positive for datacenter markets. And we're seeing that strength play through our business as well. So I do think that's more of a 2017 tailwind as we think about the datacenter market overall and specifically, the three-phase part of datacenters.

And that was particularly strong in the hyperscale centers, very large centers that the web services type folks are putting in. And I think to Craig's point, that will continue simply because of the strong growth in data traffic.

All right. Thank you very much.

Next question comes from Deane Dray with RBC.

Thank you. Good morning, everyone. I'd like to go back to 4Q guidance if we could, and maybe it's hard to get too precise here, but can you share your assumptions of what sort of seasonal lift you're expecting in the fourth quarter? We've heard from a number of companies this earnings season saying they're not factoring in any sequential seasonal lift, and maybe some – would be helpful to hear your thoughts there?

I think we would be very much and solidly in that camp. And in fact what we've said is that we think that our Q4 revenues will actually be down 1.5%, a point and a half from Q3. So in fact, given the order data that we saw coming out of Q3, we're actually taking our Q4 revenues down slightly from Q3 levels. And that's pretty much across the board.

Okay. That's helpful. And then, any commentary on what you're seeing in lighting? And is there a mix between the two-speed economy, residential-related and commercial-industrial?

Lighting continues to perform well. Our business – and we think the market is up mid single-digit this year. And we continue to see a real positive performance in the LED piece of lighting, which as I mentioned, is continues to grow at double-digits, now accounts for 68% of the total business. And so lighting continues to be a bright spot. It's certainly a bright spot on the residential side of the house as well as in light commercial. And overall, they too are experiencing some of this weakness on the industrial part of lighting, but that's being overcome and offset by strength in other parts of the business. So lighting continues to be, we think, a positive growth factor as we go forward.

Thanks. I'll let you get away with that bright spot pun.

Our next question comes from Chris Glynn with Oppenheimer. Christopher Glynn - Oppenheimer & Co., Inc. (Broker): Thanks. Good morning.

Hi. Christopher Glynn - Oppenheimer & Co., Inc. (Broker): So just looking at the $180 million restructuring budget for next year, I would assume that it'd be kind of first half-weighted and maybe ESS heavy, but could you kind of help me compartmentalize those thoughts a little bit?

Yeah. We haven't laid out that level of precision yet exactly where all the dollars will flow, but I think it would be fair to say that those businesses that are struggling with weak markets will get more than their fair share of that restructuring dollars. And as you noted, we tend to do these things where it is Q1 heavy, so you could and should expect a big portion of that spending to come early in the year. Christopher Glynn - Oppenheimer & Co., Inc. (Broker): Okay.

But we should be in a position, perhaps with Q4 guidance call, to give you more color on exactly the way to calendarize the spending. Christopher Glynn - Oppenheimer & Co., Inc. (Broker): Yeah. That's helpful. I was just looking for a way to do better than prorating, really. And then the linearity question might be moot, because you've repeatedly talked about volatility and almost chaotic trends out there. But did August show particularly weak by any chance?

What I would say that as we think about Q3 overall, we saw weakness in Q3, not necessarily big discernible patterns across the quarter. So it was a weak quarter of order input, as you can see in our total order intake. And I would not say that we saw significantly different patterns between the months. Christopher Glynn - Oppenheimer & Co., Inc. (Broker): Okay. Thanks a lot.

Our next question comes from Andy Casey with Wells Fargo.

Thanks. Good morning, everybody. Back on that last question, if I can do a follow-up, the no discernible pattern by month, we're a month into the fourth quarter. Is there any color you can give? Is it just the same that you saw in the third quarter?

I'd say that we just concluded October, so we don't have all the details for the month of October yet, Andy, but I will say that, in general, the early indication would suggest that what we saw in October is very much consistent with what our expectations were for Q4.

Okay. Thanks, Craig. And then if we could go back to the U.S. non-resi construction question and ask it a little bit differently, your Electrical business multichannel sales approach should give you a pretty broad view on concept through project completion. I'm just wondering based on the feedback that you've heard from primarily the Electrical businesses, are you seeing any pullback in the planning pipeline? Or is the overall weakness that you discussed mainly a project start deferral issue?

Yeah. I think it's much more the latter in terms of project start deferral issue that more than there is negotiations and things that are in the planning stages. It's companies finding the courage to make the commitment in this volatile and uncertain environment to actually go forward with some of these larger projects.

Okay. Thanks, Craig. And then one last one on the Vehicle, you called out the weakness in Class 8. I'm wondering if you're seeing what we're seeing from like Ford or other OEMs some cutback on the light vehicle side.

Yeah, I'd say so far the light vehicle markets have held up extraordinarily well. North America running flat at very high levels; China continuing to run very strongly at high-single-digit numbers; Europe doing better than what we imagined. So I'd say at this juncture, the light vehicle markets around the world, speaking about it globally, are actually holding up quite well. The one piece of caution in North America, we do see the incentives are increasing. And if you take a look at the incentives in Q3, they were up over Q2, and that always gives you a moment of pause or caution, but overall we think light vehicle markets globally are doing just fine.

Okay. Thank you very much.

The next question comes Mig Dobre with Baird. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Thanks for squeezing me in. Just kind of a low-level question for me, I guess. I'm wondering if you can comment at all on any incentive comp changes that happened this year given the adjustment in guidance? And how those might be reset as a potential headwind into 2017?

Yeah, I'd say that our year is not done yet, so we've not made the final call on what our incentive comp will be. Our incentive comp plan does flex to the extent that the management team doesn't deliver the committed EPS guidance and commitments, our plans naturally flex. And so it would be reasonable to assume that it will be less than 100% year consistent with the results that we're seeing in the business. And so that, too, will be a little bit of a headwind as we look at 2017; but at this point, we've not made the final call on the incentive comp plan for 2016. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Okay, and then maybe going back to the Vehicle business and a question on auto. Is it fair to assume that your restructuring thus far has really not impacted the light vehicle portion of your segment? And is this something that might be on the table for next year?

Yeah, we're just not in the position at this point to make any specific announcements around the restructuring plans until we work those plans through internally and communicate them fully with our employees, we're just not in a position to comment on that. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): All right. Thanks.

Our next question comes from Josh Pokrzywinski with Buckingham Research.

Hi. Good morning, guys.

Hi.

Just to follow up on some of the earlier questions on non-res and specifically the industrial side of the air pocket that you've seen most recently. Craig, can you give any more color on what fresh observations your customers are making that want to defer? I mean we've been in a very slow CapEx environment for, call it, two plus years now. Oil and gas, I think, has shouldered a good amount of the blame for the past year at least, and I get that that's a longer cycle business in some cases so maybe there are still backlogged projects that are bleeding off, but it does seem like the tone from yourselves and a lot of your peers out there is that 3Q took another step down but the drivers seem to be unchanged versus what we've seen from past quarters. So just maybe some calibration on what's really new here, and is this an election hiccup or anything else that they would point to that would be fresh?

And I'd say once again, we're struggling with the data feeds very much like others, but we do think the thematic message that cuts through all these conversations is uncertainty, and if you think about any person running a business today and making a long-term capital commitment in the face of an economic environment and a presidential election that's been as noisy as this one with as much uncertainty around the environment that we're going to be dealing in, it's, while disappointing, a little bit understandable that companies are basically pausing and waiting to see how things play out before they make a decision around major capital multi-year commitments. And so we think that's probably what's going on. But once again, we're not 100% certain either. What we do here pretty consistently is that it's a pretty uncertain period of time that we're dealing in and most companies or many companies are cutting their capital budgets and are putting decisions on hold with respect to multi-year commitments.

Maybe I'll ask the question a little differently. Would you characterize CapEx then as pent up? So whenever this uncertainty is lifted, do you have some idea of what could come back to the market? Or do you think some of this is just lost over a longer period of time?

What gives us hope and optimism is that typically in the face of expansion on the consumer side of the economy, that that expansion in consumer consumption at some point translates to an increase in investment in manufacturing equipment and manufacturing assets so on the industrial side of the house. In historical expansion periods, it's been about a 12-month delay and we're well into that already where the consumer side of the economy has continued to grow, yet we've not seen the investment in manufacturing in the industrial side of the economy. And that would suggest perhaps there is some pent-up demand out there, but, once again, we have to wait and see whether or not it actually plays through the way it has historically.

All right. Thanks for the color.

At this point we're going to wrap up our call for this morning. As always, we'll be available to take follow-up questions for you immediately after today and for the rest of the week. Thank you all for joining us for our earnings call today.

Thank you. And, ladies and gentlemen, this will include our teleconference for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect.