Ladies and gentlemen, thank you for standing by and welcome to the Lennox International Second Quarter 2015 Earnings Conference Call. At the request of your host, all lines are in a listen-only mode. There will be a question-and-answer session at the end of the presentation. As a reminder, this call is being recorded. I'd now like to turn the conference over to Steve Harrison, Vice President of Investor Relations. Please go ahead, sir.

Good morning. Thank you for joining us for this review of Lennox International's financial performance for the second quarter of 2015. I'm here today with Chairman and CEO, Todd Bluedorn; and CFO, Joe Reitmeier. Todd will review key points for the quarter and year, and Joe will take you through the company's financial performance and outlook. In the earnings release we issued this morning, we have included the necessary reconciliation of the financial metrics that will be discussed to GAAP measures. Financial results reflect sold businesses and discontinued operations. You can find a direct link to the webcast of today's conference call on our website at www.lennoxinternational.com. We will archive the webcast on that site for replay. I would like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Lennox International's publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Now, let me turn the call over to Chairman and CEO, Todd Bluedorn. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks, Steve. Good morning, everyone, and thank you for joining us. With margin expansion across all three business segments, Lennox International set new highs for total segment margin and profit and strong revenue growth in the second quarter. Total company revenue was up 6% at constant currency with growth in all three businesses. Total segment margin for the company exceeded 120 basis points to a record 13.5%. And adjusted EPS from…

And first line of Steve Tusa with JPMorgan. Please go ahead.

Hi, guys. Good morning. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hey, Steve. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Good morning.

First just on the resi front, can you just clarify – you said I think – I think you said volumes were up low single digits there. What was the benefit from pure price and then mix, broken up? Todd M. Bluedorn - Chairman & Chief Executive Officer: We'll lumped them together and we said price and mix was a positive – full 4 points for the...

Okay. So, I mean, I assume mix is the – with that kind of 14 point swing there, I assume the mix is a pretty significant percentage of that? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah. In the order of magnitude I think it's – the mix is greater piece – than price for that piece. But again, sort of on the guide points, we raised the guidance for flat for resi mix to plus $5 million. So that reflects it. Maybe let me go a little bit on – a little digression on the 14 points improvement in the mix, which is a big number. The vast majorities, you can expect of that mix improvement is homeowners and homebuilders moving from 13 SEER to 14 SEER. So a small step up that crosses the threshold on how we historically report this. In prior periods, when we quoted SEER mix up a couple percentage points or so, a larger slice of that move was made up of people moving to our premium products, our Lennox Signature Series, our 16 SEER, 18 SEER and even up to 26 SEER. All that being said, I think it's good news. We had some concerns as we went into this transition in the South and we said if things went as we expected or hoped that we'd have some mix upside; and that's what we're seeing. It's going as expected. We pre-build an appropriate level of 13 SEER to support our customers this year and we think others have done the same. Pricing has been rationale and we're seeing a relatively smooth transition from the 13 SEER to 14 SEER in the South and Southwest. Obviously, we'll know more as we go through the rest of July, August and early September. But so far, so good.

And why the – is there anything specific that underlies the caution around commercial and the retail accounts? I mean, is that just – you make it sound like it's a macro call on retail sales or – is that it? Or is it something around your visibility on your backlog being led there? Todd M. Bluedorn - Chairman & Chief Executive Officer: It's both is the short answer. And let me again sort of step back and talk about the Commercial business overall, because we had a really good quarter; but let's talk about both sides of the business. Half of what we do is non-national accounts. Revenue now is up double-digits in the first half, both first quarter and second quarter, and the momentum continues. That reflects the broad recovery in the commercial market and that we're gaining share in emergency replacement. The other half of our business is in national accounts. We had – we're down 20% in first quarter, we're now up high single digits in second quarter. But we're cautious on the macroenvironment and not only the tepid retail sales that everybody sees, but just conversations with our customers. Commercial HVAC national account third quarter backlog is down year-over-year. So to directly answer your question, we see backlog, and it's down. But we have two-thirds of the backlog coverage for our revenue target in Q3. And so we've reflected all this in our updated guidance. Since I – in first quarter, to sort of be very clear about all this. In first quarter we were surprised. We now think we have a perspective on what's going to happen in the balance of the year and we rolled it into our guidance.

Okay. And then one last question just on Refrigeration. One of your key, I guess, customer/competitors out there has really kind of continue to see weakness in your business. I think you're taking some share. But there are some claims you guys are doing this by price, which make a little sense. I mean, the margin entitlement for the industry seems to be a lot higher than where you are. So why not show margin – you guys can show margin improvement and still be a little bit more aggressive in your approach to providing value to the customer. Is this a one-off? A) is this your approach; and then, B) is this a one-off with a couple particular customers? Or is this something that you see the opportunity to kind of continue to hammer away at into 2016 as well? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think I'll broaden the answer and not directly respond to the question. And what I'd say about this, I think we've demonstrated at Lennox International, we know how to price, we know how to sell premium product, we know how to get price and mix in the marketplace, and we want to do the same thing with our Refrigeration business. There are some times with certain customers that you bite off volume, and when you know you're going to be able to take your costs down over time and for the life of the contract, it can be a positive contract for you even if upfront it's some aggressive pricing. But, look, we have aggressive margin targets for the corporation and for Refrigeration; we're not in the business of bottom feeding.

Sure. And, sorry, the life of this particular contract, does this go into 2016 and 2017? Todd M. Bluedorn - Chairman & Chief Executive Officer: It is a multi-year agreement.

Okay, great. Thanks a lot guys. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks.

Our next question is from Jeff Hammond with KeyBanc Capital Markets. Please go ahead.

Hey. Good morning, guys. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hi, Jeff. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Hey, Jeff.

So great margin progression in Residential. Can you just speak about – to get 50% incrementals, can you just speak to how you think about that into the second half? It seems like price, costs if anything should get better. Todd M. Bluedorn - Chairman & Chief Executive Officer: I don't know if we do quite 50% for the balance of the year, but we're seeing a very good momentum in the Residential business. It's reflecting the mix up that we saw in the summertime and reflecting the $5 million increase in resi mix. I think the majority of that's going to be in second quarter, a little bit in third quarter, and then when we get into furnace season second half of the third quarter and fourth quarter you won't see all that benefit as we go from 13 SEER to 14 SEER on air conditioners. It reflects what we're doing in Mexico and it reflects a continued material cost reduction. And then our resi business, maybe second quarter is our big volume quarter and so that's where we saw sort of the biggest hits on the MCR.

Okay. And then you said that the transition is kind of playing out as you thought with maybe a little bit of mix upside. So can you maybe just speak to where your 13 SEER inventories sit in the Sunbelt and what you're hearing about the competitive landscape, and how that kind of plays into the second half? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah. We're going to have plenty of inventory as we see it today. I'd like to – maybe we want if it really continues hot. But short answer is we plan to have inventory that last us through the – at least last us through the summer selling season. Again, since we own distribution, I'm not overly concerned, if we have too much, because we can reposition it as needed. What we're hearing from the marketplace is our major competitors are in pretty good shape. But I think we'll know – there's a hot spell right now. I think we'll know more as we get through the end of July. We've heard sort of on a micro level that some distributors maybe short, but it's unclear to me how much the OEMs have in reserve, but so far it's playing out as we have hoped.

And then just real quick on the July comment in the hot spell, have you seen at least your unit shipments normalize here into the third quarter? Todd M. Bluedorn - Chairman & Chief Executive Officer: We've seen – so far, we're off to solid start in the third quarter that the heat is now hitting in the Upper Midwest. And I live in Dallas and it's been 100 degrees for the last week, and we still expect residential shipments to be up for the industry mid-single-digits and volume normalize second half of the year. So I think that's a long answer to say, yes.

Okay. Thanks guys.

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

Hi. Good morning, everyone. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hi, Rich. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Good morning, Rich.

So just on Residential. Todd, the incremental caution was – it sounds like with May coming in weaker in some key areas, that's really it. But as you think about what happened in June and here in the first part of July, would you say that there is – how cautious is that outlook? Because it seems like maybe there's some room for upside on the Residential side if the heat sticks with us. Todd M. Bluedorn - Chairman & Chief Executive Officer: Let me decouple the comments that I made in the script. I think – because I think there's two caution flags, sort of two things that I waved; one on resi. I think you have it spot on in the sense of – it's reflecting what happened in May. So that's sort of a rearview mirror point of view that says, for a full year number – the full year of our revenue guides always – if it's just a hot summer beginning to end, then we do great. And so lowering the high-ends reflecting that once you miss [Technical Difficulty] (26:22). The forward-looking caution is around national accounts. And what I was signaling there is, we're down 20% first quarter, we're up close to 10% in second quarter in national accounts. It's a bit of a rocky ride right now on our national accounts on our Commercial HVAC business, and I just wanted to send a signal that people shouldn't bake 10% in third quarter and fourth quarter in their model for national accounts, because we're not sure that's going to happen. All that being said, it's in our new guidance. So we've accounted for – both of those cautions in our new numbers.

So relative to your comments you discussed back in the middle of June around national accounts and whatnot with some – potentially some incremental caution, it sounds like June came in better than expected, but maybe there's some push-out that's more likely to occur in – or could occur in Q3, that's really around the caution here? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah. You've got it.

Okay. All right. And then commodities – so you're keeping the $15 million, it seems like – how would you characterize – I know you're covered on a lot of the copper and whatnot, but steel is down pretty significantly and there may be some benefit here in 2015. How would you characterize, how – there is some upside potentially there, how comfortable are you with the $15 million? And then, as we think about next year, it seems like there should be some potential upside to metals in terms of your cost and whatnot, how do we think about that or start to think about it? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah, I think on 2015, I think you captured it right. I mean, we sort of forecast what we think steel is going to do and we rolled that into our guide. $15 million is sort of our best point of view right now, and steel is lower than what we have in our forecast, and then we have some upside. 2016, we have a running head start; because of copper, we'll guide all that in December, but we're now halfway through 2015. So we're already hedging for 2016. And so when you're hedging it, $2.55, $2.60 a pound of copper, which is what it's been recently, that's going to be lower than our average purchase price in 2015. So, yeah, short answer is we've got a running start on commodities in 2016.

Okay, great. And then just last one on the mix. So just to clarify, so the mix, you got the benefit on the RNC with the shift of 13 SEER, 14 SEER, but I might have missed, what – if you strip that out, what's the replacement activity in terms of mix? That sounds like it's a positive or a greater positive than expected? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah, I mean, I didn't – we didn't call out mix by segment as you're asking it. But the short answer is, on AOR, add-on and replacement, we had sort of thought there was going to be neutral mix and we're seeing positive mix up.

Okay. All right. Great. Thank you.

And we'll go to Jeff Sprague with Vertical Research. Please go ahead.

Thank you. Good morning, gents. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hi, Jeff. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Good morning.

Just back to kind of the 13 SEER, 14 SEER, is there anything to glean here about kind of price elasticity and what the retail customer will take? In other words, it sounds like maybe we all overbuilt 13 SEER, right, the push to 14 SEER is easier than we thought. And you're not going to be stuck with the 13 SEER, but in retrospect maybe the industry needed a little less? Todd M. Bluedorn - Chairman & Chief Executive Officer: I understand the question. I think the – there has always been price elasticity with the consumer, right? Because they buy a unit once every 12 years and equipment only accounts for half the total ticket price. It's always been how do the OEMs play it and how do the dealers play it against each other. I think the important thing has been, there is a smooth transition. And if the smooth transition could have taken place a different way that would have been fine, but it's a little bit of a prisoners dilemma. We didn't want to be the only guy who didn't have 13 SEER, if others did, and so we needed to make sure we had it. We always want to have the low cost solution and we have the low cost solution and we feel good about it.

Great. And then on non-national accounts; Todd, is there any particular vertical in there that's driving the business? Todd M. Bluedorn - Chairman & Chief Executive Officer: Jeff, it's pretty broad recovery for us in the verticals we play in unitary. So light manufacturing, even schools are up year-over-year, low rise office buildings, and then sort of coming out at not from an end market vertical, but more of sort of how we go to market, the emergency replacement initiative, and all the investments we've made there in the new products, and the same-day delivery, it's all paying dividends and we continue to – we think we're gaining share. We don't think the non-national account markets growing mid-teens, but that's where we're growing.

Great. Thanks a lot. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks, Jeff.

And we'll go to Keith Hughes with SunTrust. Please go ahead.

Thank you. Shifting back to Commercial real quick. You talked about some of your backlog numbers early in the call. Is some of the up and down that we've seen in the first half, is that driven more by units going to new construction of retail, or is this deferment or something to do with the normal replacement cycle that you could see? Todd M. Bluedorn - Chairman & Chief Executive Officer: It's more about planned replacement, Keith. On the new construction side, as you well know, I'll say it for others on the call, we have longer visibility to that and once they – for lack of a more elegant phrase, once they're baked on the land and the construction starts, they don't really waive those off. Where you sort of having the ups and downs is planned replacement.

Okay. And in Refrigeration starting in the third quarter, we'll have fully anniversaried all the issues in Australia with referring to (32:10) tax, is that correct? Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Correct. I'm hoping the words Australia refrigerant doesn't leave my mouth on the third quarter call.

All right. Congratulation on a good quarter. Thanks. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Yeah. Thanks.

And next question is from Robert Barry with Susquehanna. Please go ahead.

Hey, guys. Good morning. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hey, Robert.

I'm sorry, if I missed it, but the 2% volume in resi, did you break that out between the performance in the AOR and the RNC? Todd M. Bluedorn - Chairman & Chief Executive Officer: No, we didn't break volume out. What we said was revenue on both businesses were up mid-single digits. Both side of the business were up mid-single digits.

Did you see a bounce back in the RNC piece? I know that it was waived down in the first quarter by weather? Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: We saw it bounce back some, but still below our overall 10% guide for the year. And so what we're counting on and expecting is – and I think you see it in the builder confidence numbers is a big second half for the year. And from permitting and from starts, I think we've seen the preconditions for that to happen.

Yeah. I mean, how are you thinking about the pent-up demand equation given that kind of low volume number, especially given we're at near record consumer confidence levels? Todd M. Bluedorn - Chairman & Chief Executive Officer: Well, I think pent-up demand is still the case. I think there was some – in Texas, which is a big market for us and for the industry, I mean, it rained the entire month of May and even beginning of June it was still wet; and the Upper Midwest, which is a real swing area – because it always gets hot in North Carolina, the question is does it get hot in Chicago, does it get hot in Wisconsin, and those places have just turned hot the last few weeks. And so I step back and say, if you had told me this weather pattern in a normal year without pent-up demand, I'd say our volume is going to be down especially given the year we had last year. But the fact that it – our unit volume is up a couple points and we got strong pricing and mix, and revenue is up mid single-digits, I think all that's good news.

Got you. And then maybe just lastly, I just wanted to check in on the share count guidance, 45 million weighted average; I assume you'll end the year then significantly below that number? Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Actually, I think we'll be slightly below that number, but for the full year, it'd be approximately 45 million shares.

Right. But the ending share count number, that will be below 45 million. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Yes. That's correct. Todd M. Bluedorn - Chairman & Chief Executive Officer: Short answer, it'll be below. And I mean, sort of the math is right on our ASR we got 70% upfront, we'll get 30% when we settle out. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Correct. Todd M. Bluedorn - Chairman & Chief Executive Officer: And then we'll also issue shares for incentive programs at the end of the year. And so that's sort of the high level... Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Yeah.

And the settling out, is that happening kind of evenly between 3Q and 4Q, or is it weighted? Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: They don't give us visibility of that, it's just a requirement. But what we will expect that it'll be probably late third quarter, early fourth quarter, when it's all settled.

Got you. And what's a normal level of annual issuance to model? Like share issuance as an offset. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: For dilution from share based comp?

Yeah. Yeah. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: I don't have that number up. Todd M. Bluedorn - Chairman & Chief Executive Officer: (35:23) we'll get back to you with the number.

Okay. Got it. Thanks guys.

And next we'll go to Sam Eisner with Goldman Sachs. Please go ahead. Samuel H. Eisner - Goldman Sachs & Co.: Yeah. Thanks very much and good morning everyone. Just a quick question on the Residential business. You commented obviously about the Texas issues as well as the Upper Midwest. Can you talk about how much that was a headwind for you guys in the quarter maybe on – talking about days that you were able to be open throughout the course of the quarter, or even just the year-on-year decrease of volume? Todd M. Bluedorn - Chairman & Chief Executive Officer: If I knew, I'd tell you. I mean, it's sort of a tough one to quantify in a direct way. You just know it's a headwind, then you track the order rates, and you know sort of how you're down in these big markets. Our – we have a large independent distributor that we sell through our Allied brands in Texas and they were down year-over-year, and we see those kind of performances, as you know weather had a big impact. Samuel H. Eisner - Goldman Sachs & Co.: Got it. And then regarding the $5 million of incremental mix. Was any of that recognized in the first half of the year, or is that all second half weighted? Todd M. Bluedorn - Chairman & Chief Executive Officer: We called out for Residential that that mix was up 4% – excuse me, price and mix was up 4%. And we said the majority of that was mix and a piece of that was that $5 million. So short – long way around the barn. More of the $5 million was in second quarter – more than half of the $5 million was in second quarter. Samuel H. Eisner - Goldman Sachs & Co.: All right, great. Thanks. I'll hope back in queue. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks.

And we'll go to Mark Douglass with Longbow Research. Please go ahead.

Hi. Good morning, gentlemen. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hi, Mark.

Todd, you were talking about the mix in resi in the 2013 to 2014, and prior quarters a lot of it was in the premium, are you still seeing the move into premium? It just got dwarfed by the 2013 to 2014? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think that's true. I also think part of the issue was, or part of the point was last two years – certainly, last year we came out with our ultimate home comfort system, 26 SEER unit, new control system, and really sort of pushed that hard. And I think we got a big bump last year, more than a normal sized bump last year on what our guys refer to as raising the ceiling of the mix, whereas second quarter this year was more about raising the floor of the mix.

And on mix, on Commercial, the negative [Technical Difficulty] negative mix to margins, is that mostly from the national accounts? Is that how we think about that, or what drove the negative mix in Commercial? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think what drove the negative mix in Commercial was sort of in the details of customers and what type of boxes they buy and what type of product that they buy. And that's sort of code words, where we sold as a percentage basis less of our sort of very high-end highest efficiency product line and more of our more standard type units.

That wasn't an effective VRF? Todd M. Bluedorn - Chairman & Chief Executive Officer: No, VRF (38:34).

Okay. Thank you for taking my questions. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks.

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

Good morning guys. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hey. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Hey, Shannon.

Hey. Just on this planned replacement, the swinging around of this, the down 20% in the first quarter – I mean, the second quarter sounded like even month-to-month was pretty choppy and must have finished strong. Is this different than the way you are used to that business operating? And, I mean, is there – are there customers sort of waiting until the very end of the quarter or something to do things? Or is there anything you've learnt about kind of the current psychology around that that's leading to these kind of big swings? Todd M. Bluedorn - Chairman & Chief Executive Officer: Well, I think I'd say this, I'd say Commercial has always been highly cyclical. When the market turns like it did in 2008, it's a marble falling off the table. So there is huge cyclicality in the business, because planned replacement, they can differ. I think what it reflects right now is sort of month-to-month thinking of some of these big retailers given the uncertainty of that segment of our economy. And they and we know that these lower their operating costs and are good things for them to do if you have a two-year or three-year horizon, but some of these retailers are sort of pulling it back in and I think that's what this reflects. In terms of the end of the quarter, the way our business – I think is similar to other business and how people spend money, we tend to have a rush at the end of quarters, and we got some good news this quarter.

Okay. And then on the restructuring in Refrigeration, what's the – how does that benefit ramp in the back half? And then what's the carryover there in 2016? Todd M. Bluedorn - Chairman & Chief Executive Officer: Again, it's all in the guide. We have $2 million or $3 million of benefit this year from the restructuring actions we took in Refrigeration and order of magnitude on an annualized basis, it's twice that. So sort of another incremental $2 million or $3 million next year year-over-year.

Okay. All right. Thanks guys. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Thanks.

And we'll go to Julian Mitchell with Credit Suisse. Please go ahead. Julian C. H. Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thanks a lot. There've been a lot of questions on U.S. mix and so on. So maybe just switching to Europe, a bunch of the companies reporting last week seemed to be seeing better trends there. Your own Commercial business, I think organically seems to have picked up a little bit as well. Anymore color you can provide? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah. I mean, we're seeing what you referred to. About 40% – 45% of what we do is in Europe, is in France, and that market has appeared to rebound somewhat and we – so we're up mid-single-digits costs in (41:23) FX. We also saw some growth on a year-over-year basis in some of our North African and Turkey markets. And so, again from a very tough 2014, we saw some pickup, but really the improvement has been in France. Julian C. H. Mitchell - Credit Suisse Securities (USA) LLC (Broker): Thanks. And then just within your gross margin, you had a very good improvement in Q2, Q1 had been down, and last year was flat. So I guess when you're looking forwards from here, do you think that that gross margin performance can be replicated or even improved upon? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think the initiatives that we're taking around material cost reduction, around the factory benefits in Mexico, I think all those continue to provide fuel in the engine. I think the swing will always [Technical Difficulty] (42:12) because sometimes commodities go the other way on you. But when you have a quarter like we did this time where everything is in…

And we'll go to Walter Liptak with Global Hunter. Please go ahead.

Hi. Thanks. I want to go back to the SEER 14 mix again and just make sure that I'm understanding this right. I guess, as you go into the third quarter in the Upper Midwest, which I think is more of like a SEER 13 region, that's where you'll have some lower margins flowing through and that mix of SEER 14 plus coming back down a little bit? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah. I mean, I wasn't so much trying to – I think that's probably true, but I wasn't trying to lead with that point, I was just trying to lead with – the peak of the summer selling season is where you get the cleanest read of what's happening with the SEER mix improvement. And as you go into the furnace season, you're just selling fewer air conditioners and it's quite frankly a less important metric.

Okay. Yeah, I get that. But the regions that were hot in the second quarter sound like they were SEER 14 regions anyways, and that's probably a part of the reason why you had this significant improvement in SEER 14 mix? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think that's fair. But just sort of parenthetically, you can – we make decent money on 13 SEERs in Wisconsin and Chicago and some of the southern markets tend to be very competitive. So I'm not worried about that we're going to have negative mix, because we're selling air conditioners in Wisconsin. I hope we can sell as many there as we can.

Okay. All right, fair enough. And just a question about the CapEx. You brought that down $5 million for 2015. Was there a program that was lowered or how should we think about that? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think it just reflects operational execution, and things are taking a little longer than we sort of had put in our plan, and we just want to reflect it in the guidance. But all the things are going to happen at just – some of the expense – CapEx will be in January, February rather than November, December.

Okay. Got it. Okay. Thank you. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks.

Our next question is from Josh Pokrzywinski with Buckingham Research. Please go ahead.

Hi. Good morning, guys. Todd M. Bluedorn - Chairman & Chief Executive Officer: Hi, Josh. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: Hi, Josh.

So, Todd, if you were to characterize this mix environment right now in resi, and clearly you're starting to see the benefit of that 14 SEER adoption. Can you say how much progress we've made to what the market will look like on an underlying basis in 2016 and beyond? So are we halfway there today? Are we two-thirds of the way there today? I mean, I guess, it looks like it's clearly happening earlier. Just trying to figure out how much of this we've kind of pulled from 2016 into 2015 in terms of the step-up? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah. Well – I don't – the short answer is I'm not sure. I think that sort of tied to the question of how much 13 SEER is still in the channel, and how much all of us still have between now and the end of the year. But what will happen in 2016 is the metrics we gave won't be 14 SEER and above, it'll be 15 SEER and above, because 14 SEER all of a sudden becomes the new sort of minimum number that you're talking to in many parts of the country. I think sort of the bigger question around how the future environment is going to look is where the 14 SEER pricing in the South and Southwest shakes out at and where it stays at, and how far does it go down now that it becomes a new battleground. And it really hasn't been tested yet, because 13 SEER still remains the battleground even in the South because when the deal gets tough where – everyone who has 13 SEER is going to lead with 13 SEER, because that's still the most competitive product we have. I'm optimistic and the $5 million residential mix uptick that we guided to sort of reflects that optimism, that's all going to shake out. But I don't think we'll know until we get into 2016, how it's all finally going to settle down.

Is it fair to see that you're seeing a good level of voluntary adoption there, i.e., there's still inventory in the channel, but maybe not that price down affect yet? So we're getting a little bit of the good and maybe not all of the bad yet? Todd M. Bluedorn - Chairman & Chief Executive Officer: That's probably fair.

Okay. And then just on the national accounts business, not to beat the dead horse here, but I remember some – our make-up business from the first quarter that you said was spaced out more or less evenly over the rest of the year, maybe a little back-half weighted. Is that how it played out in the quarter? You took a bite of that push-out business, but didn't make all of it up? Or was 2Q kind of a bigger make-up quarter in that than you would have expected? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think Q2 is probably a bigger makeup quarter than what we've expected, number one. Number two is, I think, my sort of role in color commentary that changes as I talk about this, reflects the role in color commentary that our customers are giving us. And so it may sound like I'm on the one hand on the other hand, but what it just reflects is a changing dynamic in conversation with customers.

Got you. Okay. That's helpful. And then, on the caution that you guys are seeing, I've heard pent-up replacement – planned replacement push outs, it sounds like new square footage growth is also a bit of an impediment. Which one is the bigger issue? Because I guess deferrals don't get deferred forever but maybe Walmart doesn't wake-up and decide they need to add 5% to their store count either. So just trying to understand how much of each of those dynamics is at play here? Todd M. Bluedorn - Chairman & Chief Executive Officer: Sort of in – sort of quarter-to-quarter color, sort of the this role in color commentary I'm giving you is more about the planned replacements being pushed out sort of the new store construction six months out; we have pretty good visibility on that and customers don't change much.

And the tone on new store construction – is it more healthy or maybe pulling back a bit? Todd M. Bluedorn - Chairman & Chief Executive Officer: I think it's a mixed bag, it's a mix bag. I mean, some of the big retailers – I mean, Walmart has been very public about what they're doing – and that – but that's always been reflected in our numbers from the beginning of the year. The color commentary that I'm specifically giving is more sort of the incremental ignoring Walmart and our Commercial HVAC is – we know what they're doing and they're sort of broadly sticking to it. It's sort of the other pieces of the pie.

Got you. Understood. All right. Thank you. Todd M. Bluedorn - Chairman & Chief Executive Officer: Good. Thanks.

Our final question from Steve Tusa with JPMorgan. Please go ahead.

Hey guys. Sorry. A quick follow-up. What are you hedged into copper this year? Todd M. Bluedorn - Chairman & Chief Executive Officer: We're probably 85%, 90% hedged at this point. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: That's about right...

No. What price? Todd M. Bluedorn - Chairman & Chief Executive Officer: We don't give that. Joseph W. Reitmeier - Chief Financial Officer & Executive Vice President: We don't give that. It's a great question, but we're about 80% hedged though.

Okay. So you give it for next year, but you're not... Todd M. Bluedorn - Chairman & Chief Executive Officer: I think all I said for next year was, I've said when copper is about $2.50 to $2.60, like it is today, you get a running head start for next year. And then I said in December, we'll guide to the commodity. So I'm not suggesting, say, 100% next year is going to be $2.50, $2.60. I'm just reading the thermometer, what it says today and reflecting that's good news.

I got it. Got you. And then one last question to Jeff's point around, I guess, you've used the term overstocked or whatever it was, what are the mechanics of that? Can you just talk about, to the extent that you have some – I wouldn't really deem it as extra 13 SEER, because there's still demand for 13 SEER out here. So what are the mechanics and how that plays out? And it doesn't seem to me there should be any material financial impact. I mean, more mix is – more 14 SEER is a good thing. So I guess what are the mechanics of that fundamentally and financially? Todd M. Bluedorn - Chairman & Chief Executive Officer: Yeah, it's danger of answering it theoretical. So I was just sort of rolling with Jeff's question. I think his broader question was, if you knew how everybody was going to behave, could you all have just gone directly to 14 SEER and that's what I was trying to answer. On the question of 13 SEER, zero concern. I mean, we – the details are we can – people can sell 13 SEER until July of 2016. And so there's a long way to go between now and July of 2016 in the South and Southwest. And if we get there, and it's not where we wanted to be, then we have by then probably 220 PartsPlus stores and 10 or 15 regional distribution centers, we have a great logistic network, we'll just move the product where it needs to be moved.

Right. So it's not like there is a write-down or anything like that. I mean it's – the inventory is so good. Todd M. Bluedorn - Chairman & Chief Executive Officer: We're not selling lattice. So the 13 SEER we have in the South, we can sell to you in a home at Connecticut or New York.

Right. Okay. Thanks a lot. Appreciate it. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks.

And I'll turn it back to the company for closing remarks. Todd M. Bluedorn - Chairman & Chief Executive Officer: Thanks, operator. A few points to leave everybody with. The company posted record profits in the second quarter with margin expansion and revenue growth of constant currency across all three businesses, which was great to see. We expect further success in second half 2015 and are well positioned for another year of record margin and profit on strong revenue growth. Thanks everyone for joining us today.

Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.