Good morning. My name is Matthew, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Pentair's Q4 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question-and-answer session. Thank you. Jim Lucas, Vice President of Investor Relations and Strategic Planning, you may begin your conference.

Thanks, Matthew, and welcome to Pentair's fourth quarter 2016 earnings conference call. We're glad you can join us. I'm Jim Lucas, Vice President of Investor Relations and Strategic Planning. And with me today is Randy Hogan, our Chairman and Chief Executive Officer; and John Stauch, our Chief Financial Officer. On today's call, we will provide details on our fourth quarter 2016 performance as well as our first quarter and full-year 2017 outlook as outlined in this morning's release. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in Pentair's most recent 10-K and today's release. Forward-looking statements included herein are made as of today, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation, which can be found in the Investors section on Pentair's website. We will reference these slides throughout our prepared remarks. Any references to non-GAAP financials are reconciled in the appendix of the presentation. We will be sure to reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and a follow-up in order to ensure everyone an opportunity to ask their questions. I will now turn the call over to Randy.

Thanks, Jim. 2016 was a historic year for Pentair as we marked our 50th anniversary as a company. The year was memorable for many other reasons but, unfortunately, the challenges with the energy and industrial markets made from memories that we're looking forward to putting in the rear-view mirror. We were disappointed to have to lower our fourth quarter guidance, but we delivered against to revise expectations. When looking at 2016 on a full year basis, we did have some good memories to point to. Including ERICO, sales grew 6%. Segment income was up 11% and adjusted EPS grew 8%. And we had a very good free cash flow year with 109% conversion of adjusted net income. Now on a core basis, sales were down 1% and segment income was up slightly, which was in line with results from other industrials. Water Quality Systems was the strong performer for us once again. We have improvements to make in Flow & Filtration Solutions and Technical Solutions and those improvements are underway. As we change the structure to be simpler and more streamlined post-Valve & Controls, we're moving from three segments to two. We're combining the former Water Quality Systems and Flow & Filtration Solutions into one Water segment as this will allow us to better execute our Water strategy and lead to more predictable long-term growth. As an update, we believe the sales of our Valve & Controls business remains on-track for close in early 2017. We continue to make good progress on aligning our cost structure with the reality of a slower growth world, as well as repositioning the company with the divesture of Valves & Controls. Finally, we're introducing formal 2017 adjusted EPS guidance of $3.45 to $3.55, which represents 15% growth at the midpoint of the range. This…

Thank you, Randy. Please turn to slide number 13 titled full year 2017 Pentair outlook. As Randy mentioned, for the full year 2017, we're expecting overall Pentair EPS to be around $3.45 to $3.55 on an adjusted basis. This guidance assumes the sale of Valves & Controls closes by the end of the first quarter of 2017. We expect to achieve this guidance on core revenue of down 3% and margin expansion of 120 basis points, driven by simplifying the organization and the resulting cost-out from those efforts. Please turn to slide 14 labeled 2017 forecasted revenue. Slide 14 walks our revenue from the reported $4.89 billion of revenue in 2016 to our expected revenue of approximately $4.7 billion, inclusive of the large jobs and foreign exchange headwinds. Starting on the left, we expect volume, inclusive of one dairy job in Water and three large oil sands jobs in Electrical, to impact revenue by about four points. Excluding the impact of the large jobs, we are expecting volume to be down around two points. We're anticipating one point of favorable pricing and about one point from tuck-in acquisitions already completed. These two acquisitions consist of a small tuck-in to our Electrical & Fastening Solutions strategic business group and a biogas recovery acquisition in the Filtration & Process SBG. So, excluding the impact of year-over-year currency, we expect revenue to be down around 2%. Inclusive of another $75 million of revenue headwind at around $1.05 to the euro, we expect overall reported 2017 revenue to be down around 3% versus 2016. Please turn to slide 15 labeled 2017 forecasted segment income. On slide 15, we're walking 2016 reported segment income to expected 2017 segment income. Starting with 2016, we expect about $20 million of total headwind of the net of volume…

Your first question comes from the line of Steve Tusa with JPMorgan. Your line is open.

Hi, guys. Good morning.

Hey, Steve.

Can you just walk through the $135 million in productivity savings for next year? It's a pretty significant bump-up. What's the visibility around that?

Yeah. So, good visibility, first of all, Steve. I mean, the simplification of the organization is driving tremendous amount of opportunity to take incremental cost out. But if you think about it, we're going to – we're expecting to get $59 million or $60 million of material productivity against an inflation number of $45 million, $46 million. So, we're starting to be squeezed a little bit on the benefit and material productivity versus inflation. But we expect our net cost-out actions from the people cost minus any delta on inflation and/or compensation to yield us close to $45 million on a net basis.

Okay. That makes sense. And then on just the interest expense, the run rate exiting the year is definitely lower than what we were expecting. Are you guys – is the refi of the debt kind of in line with what you guys had talked about previously? Or is there more debt pay-down? Anything changed on that front?

Yeah. It's just that as we collected cash in the quarter, we trickled down the debt a little bit, Steve. And so, we expect to be maybe slightly lower in Q1, and then we'll see the significant benefits in Q2, Q3, and Q4.

Okay. Great. Thanks a lot.

Thank you.

Your next question comes from the line of Deane Dray with RBC. Your line is open.

Thank you. Good morning, everyone.

Good morning, Deane.

Good morning.

Maybe just start with the 4Q kind of tone of business. One of the things you talked about heading into the quarter was don't expect any sort of normal seasonality, no budget flush, and kind of see more of the same deferrals of MRO and so forth. And so, how did it play out from a broad level in terms of what you would typically see in a 4Q?

Yeah. Across the number of the businesses, as I mentioned in the prepared script, October was soft. And then, we saw a return to more normal levels except in a couple of different segments where, basically, distributors weren't remotely close to getting rebates, so they were particularly slow. The deferral in Thermal is not surprising given the – well, people are optimistic about energy. That has not really improved the spending, particularly in the larger companies. But I'd say that rates are stable and we're not assuming a bounce-back in our forecast in 2017 until we see something. So, that's how – I guess that's – (23:14)?

Okay. And then, in the change to the core revenue outlook, previously, minus 2% to positive 2%. You're now at minus 3%. You discussed, at a high level, the impact of the jobs. So, maybe just kind of next layer of detail, how did this play out in the quarter? Have you ring-fenced this in terms of its impact with regard to being at the lower – below the low end of the core revenues?

Yeah. I mean, just to cut through it, I think our core revenue, if you exclude the projects, is down about 0.6%. Let's round it to down 1%. That's generally where we were this year. And so, what Randy is saying is we don't see an improvement off of the run rates that we're at. I think we're as optimistic as anyone that we'll start to see some improvement in the industrial spending and also some return to normal spending on the downstream MRO activities. But right now, our forecast does not assume any of that.

Yeah. We've been head-faked on it before. We're not going to (24:21) again.

And just last question for me conceptually going to one segment in Water. You've got these SBGs. So, it's Filtration and Flow and Aquatics, but each of them has such a different growth potential, different end markets, different technologies. Will we still get line of sight and clarity into the SBGs on a go-forward basis? Will you have margin targets within them? Just kind of give us some color there, please?

Yeah, of course, we will. And what we see is more coherent strategy, particularly on much, much better coordination on the technology side between, say, the Residential Filtration all the way through to the process industry. I mean, these are technologies that can be applied and much more seamlessly and we can flow resources to the best growth opportunities. So, yeah, we will have separate targets. And for example in Water Technologies, it's still a margin. We can improve margin there. That's the focus there. And on the Filtration side, it's driving growth like we already have good margins, we want to drive growth like we're getting in Aquatics.

Thank you.

Thank you.

Your next question comes from the line of Steven Winoker with Bernstein. Your line is open. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks, and good morning, guys.

Good morning.

Hey, Steve. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Hey. Can we just start – I guess I'm about to lose visibility of Flow & Filtration margins with the re-segmentation. So, where do you see yourselves in terms of the margin improvement initiatives that are going on? I could obviously see what happened in the quarter, but it doesn't really probably tell the full story given with 5% productivity versus price and all that. Maybe just in price, can you talk about that a little bit?

Yeah. I think one of the things that we wanted to do in Water is we want to make sure that we can rise up and invest appropriately across the entire water space. And when you subdivide into segments, you lose that ability to generate the cash and deploy the cash back to the best growth opportunities. And there are good growth opportunities in the old Flow & Filtration space. At the same time, there is margin needs and the need to get the complexity out of it, as Randy said, the pump side of the business where there has been significant competition globally in that space. So, when we take a look at these margins – and when we get to Analyst Day, we'll certainly give you guys direction in where we are. But the real opportunity here is to say how do we disproportionally invest in the longer term. So, these are all high margin businesses with Aquatics being the highest margin and Flow being the lowest margin. But I think, ultimately, we think that they're all – got 20%-plus margin potential, Steve. On the pricing side, we're getting a little bit more price and we expect to because of commodity inflation that we're seeing. And so, where we have the distribution-related businesses, we're seeing that work its way into somewhere around the 1% range. And then where we're in projects, where we're against global competition because of the challenges of the currency, we're not getting any price. And we're obviously taking a look at those jobs and making sure that we understand the currency impact in competing on that basis. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And on the reorganization, you talked about simplification and cost-out as being one of the benefits of this. But I didn't see any kind of restructuring built into the 2017 plan on that front. Maybe some idea of how you're thinking about that?

Well, a lot of the costs we're taking out – we have operating people at corporate in three segments. It's basically that the cost and the productivity that John talked about earlier, that's the real benefit of it. And we're taking out structure which we believe is going to improve our focus and our ability to execute.

Yeah and... Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Without restructuring...

(28:36) of total restructuring cost is the estimate and that would have been spanned over the last Q3, Q4 and into Q1 of 2017. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. Perfect. And just lastly on ERICO. That was, I think, really I hope to stabilize portfolio. Here's a quarter where it was down 4% excluding days impact on Engineered Fastening. Maybe – and I know you talked about some of the dynamics there, but was this surprising to you or how do you think about the dynamics of that segment?

They surely saw an acute softness in October and it recovered. But we don't know whether we saw that in three separate businesses that were unrelated to each other. So, we think it was more channel softness that then firmed up again and there's more optimism now. So, yeah, we didn't expect – and we're back to where we thought we'd be. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. Thanks.

Your next question comes from the line of Julian Mitchell with Credit Suisse. Your line is open. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Thank you. Just a question. There's a lot of talk throughout the release of the large jobs impact and you also mentioned the sort of merits of predictable growth in your prepared remarks. So, could we assume that there has been – or there's a potential change in focus underway, away from bidding on a lot of large jobs activity? And maybe give us some sense, overall, under your definition of large jobs, how much of that $4.9 billion sales base last year came from them.

Yeah. So, good question. I think when you take a look at the roughly $90 million to $100 million of job impact that we're expecting in Technical Solutions, which is now Electrical, that's all in Thermal. And in fact, we were actually up slightly in 2016 revenue versus 2015, and 2015 and 2014 were flat. So, we've run historically roughly this $100 million to $125 million through the pipeline of always having larger jobs. With what has happened in the global oil and gas investment space, that landscape is clearly changing, and I'll let Randy talk to that.

Yeah. I mean, we're excited to win those jobs even as the energy markets turn down. They had a longer tail now. And now that they've gone down, there just aren't a lot of those large projects in hostile environment. It's basically cold environments, it's where the thermal big projects are. And there aren't as many developments there. So, we're not focused there. We're focused on making sure we get all of the MRO in Thermal we can and focusing on that more profitable. That was one of the challenges on our margins in Technical Solutions, those project margins versus MRO. And we are more focused on driving the MRO. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Got it. Thank you.

So, while the top line gets affected by the lack of projects, we don't think the bottom line is as affected. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Understood. Thank you. And then my follow-up would be around just the margin opportunities on the sort of two new segmentation bases. Should we assume, I guess, the Water margins expand in 2017 at a much faster rate than Electrical just because there's less of a large jobs impact? And maybe talk a little bit about sort of medium term margin expansion across the two segments on the new bases.

Well, actually, Electrical, we expect margins to snap back. They took a – they went backwards in 2016 versus where they've been. So, (32:32).

Well, yeah, I mean, we're looking at the same general margin expansions of both the businesses of low hundreds of basis points expansion. I think we get there in two different ways. I mean, we have a little bit more growth contribution in the Water side. And in the Electrical side, we have the benefit, as Randy mentioned, between not having the margin squeeze of the projects and we also have a fair amount of cost take-out planned relative to the volume rightsizing. I mean, as we go forward, I mean, clearly, the biggest margin opportunity is going to be in the Water side, certainly in the focused areas that Randy mentioned earlier. And we're going to see the growth contribution in the Electrical as the markets begin to recover, generate some substantial drop-through as they're higher margin businesses already. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Great. Thank you.

Your next question comes from the line of Shannon O'Callaghan from UBS. Your line is open.

Good morning, guys.

Hey, Shannon.

Hey. So, just on the marketing hire, can you give a little more color on sort of why now and why create that new role now? I mean, the growth challenge has sort of been something that persisted for a while. So, why make the move now and what do you expect it to deliver?

Well, we've actually been working on the move for a while, trying to find the right person who had experience and capability in marketing and had actually done it in industrial. So, John has worked in a number of companies including Honeywell and Kennametal and his track record is very, very helpful. So, he's going to work with our two Presidents, Beth and Karl, and me, to make sure that we have deployed people in the right place and that we are driving stronger execution on the marketing programs of the company.

Okay. And then, John, on the decisions around what to do with the proceeds from Valves & Controls, looks like you're pretty much mostly delevering a little bit of buyback. Can you just talk about the thought process of why you chose that route and then thoughts around relevering and ideal leverage ratio?

Yeah. I think first of all, just introducing some modest buyback is important to us. I mean, taking care of the creep and also just making sure that we're consistently doing that on a basis. So, we're talking about $100 million, it's a modest amount. And as far as paying the debt down, we expect that we'll bring the debt levels down. We have strong cash flow generation that can fund bolt-on acquisitions. And if we need to borrow a little bit more, we got plenty of capacity to borrow under all of our current capacity lines to fund the bolt-on or tuck-in acquisition path that we expect to embark upon.

Okay. Thanks, guys.

Your next question comes from the line of Mike Halloran with Robert Baird. Your line is open. Mike P. Halloran - Robert W. Baird & Co., Inc. (Broker): Hey. Good morning, guys.

Good morning. Mike P. Halloran - Robert W. Baird & Co., Inc. (Broker): So, on the productivity side, just back to that $135 million. Could you just bucket out where that's coming from kind of highlighting what portion of that is stranded cost, and where the opportunity set, how that looks like? And the other piece is, obviously, from the other comments, Flow & Filtration remained the focus, but just a little more granularity.

Yeah. Good question, Mike. I mean, I think we are focused on the stranded cost in the beginning. But we're really looking at is enterprise-wide reduction. So, how do we get best optimal finance cost across the entire organization? How do we get the best HR cost across the organization? So, what we've done is taken a look, as Randy mentioned, and functionalized the G&A aspects to the corporate executives and we've driven about a 10% expectation reduction off of those. And happy to say that we've made good progress against those, and embarrassed to say it was easy. But, I think we were doing a lot of costs to support the Valves & Controls organization, the global nature. And post-Valves & Controls, we have a much simpler organization to support. So, there's a huge opportunity there. Other things, we're moving 52 selling teams to 6. Obviously, some big opportunity from a structure standpoint there. So, we didn't have, at the SBG level, the selling organization. Those exist today. And so, a ton of opportunities especially after – in the non-scaled regions in the fast growth areas, same with marketing, same with technology, same with all of those structures. So, that gives you a little bit of an insight to, as Randy mentioned, the simplification of the organization structure. But more importantly, the accountability of the organization structure and the ability for us to have visibility to who's performing, who's not, and then how to partner with them to achieve it. Mike P. Halloran - Robert W. Baird & Co., Inc. (Broker): Thanks. That's helpful. And then just a clarification from earlier. It sounds like you guys are saying no fundamental improvement from current run rate assumed in the 2017 guidance. Do I have that right? In other words, pretty normal sequential pattern assumed through here. Is that the thought process?

Yes.

If you look at the waterfall that John showed, you don't see a lot of lift from growth and that's where we'd expect higher execution in sales and any recovery of market would read out. Mike P. Halloran - Robert W. Baird & Co., Inc. (Broker): Great. Appreciate the time, guys. Take care.

Thank you.

Your next question comes from the line of John Walsh with Vertical Research. Your line is open.

Hi. Good morning.

Good morning.

Good morning.

So, I guess just going back to earlier question Deane asked around the Q3 framework. I mean, clearly, you would have had visibility into the projects back then. We're hearing from other companies kind of leveraged in the industrial world that things are getting better. It does sound like things obviously got better for you through the quarter. But are there any other kind of comments on why we're no longer looking at towards the high end of that or what would have to change to kind of get back to that framework?

I think in our original thought process, in the framework, we did see and expect a little uptick in some of the core markets. And in this particular guidance range, we're assuming that those don't occur. Now, we're hopeful like everybody else that they will. But right now, in this guidance framework, we're not assuming that they do.

Okay. And then, I guess, a question about the new segmentation. I guess thinking about it from a structural tax inefficiency way, is there any inefficiency from actually splitting Water and Electrical from a tax perspective?

I don't know.

I don't know.

Okay. All right. Well, thank you for the color.

Thank you.

Your next question comes from the line of Scott Graham with BMO Capital Markets. Your line is open.

Hey. Good morning. Two questions, one on organic sales, the little bit of lower guidance that you're putting out here today. Is that – I know you've just indicated that you're no longer expecting an uptick. But is part of the reduction maybe that you put pen to paper on these projects and said really kind of crystallize that for you in realizing that those are going to be non-repeats? Because that's a minus 2% for you? Is that part of it as well?

Scott, I mean, candidly, I will share with you that a big piece of what we're trying to figure out on a longer-term basis is the impact of a stronger dollar globally and the global competition and how that affects our growth views. And then there's a lot of global change that has occurred in the last three months, a new presidential administration, there's some emerging tax strategies there but none of that has been identified, none of that has been decided. So, what is the impact on that going to be to industrial investment? And also what's going to happen in Europe and are there going to counterviews (40:53) to any decisions that our administration makes. So, we see a lot of uncertainty, from an investment standpoint, in the first half of the year that I don't think we have the ability to call. So, what we're forecasting is what happened in Q4 continue to exist until there is some type of change.

John, that's a really good answer – thank you – particularly the FX, which I wish more companies would call out. The other thing that I wanted to ask was about the impact of the organic decline vis-à-vis the $20 million worth of – in the waterfall. Is the $20 million enough? Or is there so much pricing or is the pricing component here enough where the minus $20 million kind of works? I mean, obviously, you're assuming that that's what works. But I guess with just a minus 3-ish organic, the minus $20 million looks like it could be a little bit deeper.

Yeah. So, the projects themselves didn't yield very much return, right? So, they're usually quoted on a more of a gross margin rate that's normally equal to a segment income or operating margin rate. And we did have some overruns in some of those jobs that forced those down as we took you through in Q3 and Q4. So, the price is a big factor as you got about 1% price increase helps that drop-through quite a bit.

Okay. That's great. Thanks a lot.

Thank you.

Your next question comes from the line of Nigel Coe with Morgan Stanley. Your line is open. Nigel Coe - Morgan Stanley & Co. LLC: Thanks. Good morning, guys. Good color so far. So it seems that from your comments that channel distributor ordering activity is weak in the first half of the quarter, a little bit of – maybe some channel clearance. Just the inference would be that December was stronger and, therefore, given that's – I think you said, John, down 0.6% core sales ex large projects, ex days. So, therefore, that metric, would that be a positive number in December? Just thinking about the exit rate as we exit the year.

You're talking about December of 2016? Nigel Coe - Morgan Stanley & Co. LLC: December 2015. So, just thinking about once we cleared out the channel impact, would we be back to growth in December?

Yes, a little bit, yes. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Okay. That's clear. But you're assuming that the run rate is for the quarter, not December?

No. I think we got to take a look at the quarter itself as the run rate and we're carrying that...

4 days.

...lesser days, yes. Nigel Coe - Morgan Stanley & Co. LLC: Okay. And then, just back to the cost reductions. Obviously, it's a big part of the bridge. How much of that, just to be clear, how much of that target is driven by the formation of the Water segment sort of gone from two to one in that segmentation?

Yeah. I would say we think that there is an opportunity somewhere in the $15 million to $20 million range regarding that. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Okay. And then, just finally on the debt reduction, just to be clear, so the vast, vast majority of the proceed is being used to take down debt. Obviously, that includes some of the higher cost debt. Any sense yet on the breakage costs of doing that?

No. But clearly, as the interest rate rises, it does make the costs lower for Pentair. So, obviously, looking at that every day, but we have not given guidance on what that impact is yet. Nigel Coe - Morgan Stanley & Co. LLC: Okay. And then just one more, if I may. On the large projects, is the bulk of that washed through by the second half of the year?

I think so.

Yeah. There is about – I'd say through Q3, the bulk of it is work-through, Q3. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Thanks. Great. Thanks, guys.

Or around Q4 (44:52). Yeah. That's on page 14.

Your next question comes from the line of Jeff Hammond with KeyBanc Capital Marketing [Markets]. Your line is open.

Good morning, guys.

Hey, Jeff.

Hey, Jeff.

Just with – you mentioned the presidential change and some of the moving pieces, can you just talk about border adjustments, tariffs, and how you're manufacturing footprint kind of aligns with that? Are you – in your Mexico footprint – and how some changes there might impact your thinking?

It's all speculation now. We're keenly watching and listening. We have plants all over the world. So, we're cautious and prepared to react whichever way it goes.

Okay. And then just real quick, I don't know if I missed it, did you give a corporate expense number for the year?

We did not but we should assume that it's right around $100 million.

Okay. Great. Thanks, guys.

Thank you.

Your next question comes from the line of Nathan Jones with Stifel. Your line is open. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Good morning, everyone.

Hello, Nathan. Nathan Jones - Stifel, Nicolaus & Co., Inc.: John, could you just be a little bit more precise to what the total anticipated debt reduction is post the closure of the V&C deal?

That's roughly around $2.6 billion. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Okay. So, pretty much all of it is going in there. I think you had talked before about planning to deploy a good chunk of that capital into either M&A or share repurchase. Can you talk about the decision over changing of that decision and to focus more on debt reduction now?

I think we always intended to, A, reduce the debt. And then, B, was to re-establish a more normal recurring buyback which is what I said was $100 million. And then we believe we're going to have a rich pipeline of opportunities which we call tuck-in or bolt-ons, which tend to be the smaller, much more strategic and highly-accretive opportunities.

And we'll lever up to do the ones that are prudent and create shareholder value. But we don't want the money sitting around on our balance sheet. We're waiting on that. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Okay. Fair enough. And then I think in response to Steve's first question, you talked about $45 million of cost out in 2017. When we talked about this a few months ago, that number was a fair bit higher. Is that number a fair bit higher on a run-rate basis, and it takes some time to work up to get that $45 million? And what's kind of the run rate that you would assume for simplification/cost-out of the organization post the divestiture of the Valves & Controls business?

Yeah. Just a couple of clarifications, we showed $60 million of net productivity. So, think of that as $15 million of net material and $45 million of net labor. And we do have labor inflation globally and that's the difference between the numbers we previously talked about, and these are net numbers versus gross numbers. And the other was gross, right. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Okay. And then just on the project in cold areas, if the U.S. government now looking like they're going to go ahead and approve Keystone and Dakota Access, what kind of opportunity would that be for you guys?

I think eventually, it probably will help the oil sands be more competitive, eventually when completed. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Is there any numbers you could frame around that?

Could not.

It would be speculative at this point... Nathan Jones - Stifel, Nicolaus & Co., Inc.: All right. Okay. Thanks, guys.

Thank you.

Your next question comes from the line of Christopher Glynn with Oppenheimer. Your line is now open. Christopher Glynn - Oppenheimer & Co., Inc.: Thanks. Good morning. Just on the re-consolidating of Water, you split it at one point after the Valves & Controls acquisition. So, I'm just wondering what the idea was in previously splitting that, that didn't hold or maybe that was always an interim structure for a specified goal.

Chris, we did it then so we could have a focused leadership over the different parts. We were more complex when we picked up three businesses, when we did Flow Control. And we just felt like it would get more focused leadership that way. What we've found as we simplified, right, and selling Valves, a (50:01) big a piece of the business, as we looked at simplifying the organization – I think we said it was like $27 million of stranded costs, we said there's really more we can do and there's ways we can streamline. And also as we looked at growth and we looked at where resources were in Water, we really felt that we want to remove the barriers, organizational barriers so that we could flow – John mentioned earlier all the different sales forces. We're overstaffed in some sales forces, understaffed in others. We need to be able to make the organization more facile in moving those investments around. So, that essentially is the new thought. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. That makes sense. Was there any notion at any point that Flow & Filtration was under any kind of strategic review?

No. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. Got it.

We've made progress on margins there and some of our best growth talent was on the other side. So, we've made it easier to move folks. Christopher Glynn - Oppenheimer & Co., Inc.: Sounds good.

Thanks, Chris.

And there are no further questions at this time. I'll turn the call back over to the presenters.

Okay. Thank you very much, and thanks for all of your questions and your attention over the last hour. We believe our move to two segments better positions us for more predictable long-term organic growth while also improving the cost structure of the organization post Valves & Controls. We look forward to completing the sale of Valves & Controls by the end of this quarter, at which point, we'll be able to significantly strengthen our balance sheet. We will see an improvement in EPS from lower interest expense. But just as important, we'll be able to get back to our disciplined capital allocation strategy focused on bolt-on acquisitions and stock buyback. Thank you for your continued interest in Pentair. Good day.

This concludes today's conference call, You may now disconnect.