Thank you for holding and welcome to Rockwell Automation’s quarterly conference call. I need to remind everyone that today’s conference call is being recorded. Later in the call, we will open the lines for questions. (Operator Instructions) At this time, I would now like to turn the call over to Rondi Rohr-Dralle, Vice President of Investor Relations. Ms. Rohr-Dralle; please go ahead.

Thanks, [Monika]. Good morning everyone. Thank you for joining us for Rockwell Automation’s second quarter fiscal 2010 earnings release conference call. Our results were released this morning and the press release and charts have been posted to our website at www.rockwellautomation.com. Please note that the press release and charts include reconciliations to non-GAAP measures. Additionally, a webcast of the call is accessible at that website and will be available for replay for the next 30 days. With me today, as always are Keith Nosbusch, our Chairman and CEO; and Ted Crandall, our Chief Financial Officer. Our agenda includes opening remarks by Keith and that will include highlights of the second quarter and thoughts about our outlook for the remainder of fiscal 2010. Then Ted will provide more details around the second quarter financial performance and our revised 2010 guidance. There will of course be time at the end of the call to take your questions and we’ll try to get to as many of you as possible. We expect the call today to take about an hour. As is always the case on these calls, I need to remind you that our comments will include statements related to the expected future results of the company and are therefore forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from our forecasted projections due to a wide range of risks and uncertainties that are described in our earnings release and detailed in all of our SEC filings. So with that, I’ll turn the call over to Keith.

Thanks Rondi and good morning to everyone and thank you for joining us on today’s call. At our last earnings release, I said that we believe we were seeing the signs of the start of a recovery. Our performance in Q1 had exceeded our expectations, particularly in our products businesses and we significantly increased our revenue and earning guidance in January. This quarter marked to return to year-over-year organic growth for the first time since Q4 of fiscal 2008. Product revenue in the quarter was once again better than our expectations. We think restocking in our channel benefited Q2 sales by about three points and we suspect that some of the strength in product business that we have seen in both Q1 and Q2 was due to pent-up MRO demand. In our Solutions & Services businesses revenue declined year-over-year as expected, at the book-to-bill was above one, again this quarter. Growing volume leverage in the quarter resulted in a seven point year-over-year margin improvement and a two point sequential margin improvement, in spite of the incremental costs in the quarter from reversing our temporary cost reductions and some other items that Ted will provide more detail on. We have continued to deliver very strong free cash flow with careful management of both working capital and capital spending. There are some other positive developments in the quarter, over 13% sequential growth in the U.S. and Canada with continued strength in automotive; strong growth in emerging Asia, with 24% year-to-year growth in India and 15% in China. Multiple process industry winds against in French competitors, especially in Water Wastewater and oil and gas. OEM conversion started to bare fruit, validating our focus on these important customers during the downturns, and this impact will become more important as market conditions improve. Finally, I…

Thanks, Keith and good morning to everybody on the call. We’ve posted search to our website and my comments will reference those charts. Building on some of Keith’s comments, this was very good quarter for the company with strong results in sales, earnings and cash flow and I’ll start to briefing on chart one, which is Q2 result summary. Revenue on the quarter was $1.164 billion up 10% from Q2 last year with currency contributing five points to the increase. As Keith noted, Q2 represents our return to year-over-year growth and provide evidence of the continued recovery in market conditions. Total segment operating earnings were $177 million up from $86 million in Q2 last year, very strong earnings conversion. I’ll discuss that further on the next slide. General corporate net expense was $23.6 million, compared to $14.7 million a year ago, that’s a significant year-over-year increase, and primarily due to performance based compensation were we reversed accruals in Q2 last year and incurred above the average expense this year. We also made a contribution to our charitable corporation in Q2 this year. General Corporate Net was about $3 million to $4 million higher in Q2 than our expected quarterly run rate. The $4 million of income shown as special item in Q2 last year was the reversal of previous restructuring accruals. The effective tax rate in the quarter was approximately 16% that’s considerably below our previous guidance range for the full-year estimated rate. We experienced about a five point benefit in the quarter related to the favorable settlement of our prior year tax matter. EPS from continuing operations was $0.77 up from $0.29 in the second quarter of last year, the tax settlement are referred to contributed about $0.05 in this quarters results. We recognized income from discontinued operations of…

Great, thanks, Ted. Monika, let's open the line for questions.

(Operator Instructions) Your first question comes from the line of John Inch with Merrill Lynch.

Ted, the catch-up payment for pay increase, I think through January, did that imply there is a charge coming in the current quarter? And if so, what’s roughly the magnitude?

Actually, John, we incurred expense in Q2 with the plan catch-up of about $8 million.

Okay. So that’s already in there, so there is no -- in basic.

Yeah, sorry, that’s only in Q2 and that run rate will not change in Q3 and Q4.

Okay. So this $42 million that you called out, that’s roughly the run rate per quarter. Is that correct?

Yeah, I think that’s fair.

Could you talk a little bit about the auto vertical, I just maybe sort of how much it was up. And then clearly, you’ve got a lot of vehicle launches to come. Does that give you confidence that auto, which is obviously a very rich mix for logics and other products, can continue?

Well, certainly automotive is one of the, I would say greatest year-over-year improvements for us as a business and just a put that in contact it’s up in total over the run rate at the end of ’09 over a 100% on a year-over-year basis first half of ’09 versus second half of – second half ’09 versus first half of ’10. We are seeing that certainly domestically is probably where the greatest increases have come and you’re right it has not been largely driven yet by the new platforms, particularly the new platforms at Chrysler and at General Motors. Ford continued to invest throughout the period and I would say we probably won’t see a significant delta there, but the comments I made about large CapEx spending having to pick up in the second half of the year for our products to grow. We do expect at probably in our fourth quarter that we’ll see a pick up in automotive project spending and therefore some improvement in our product sales from that and certainly the automotive is a very rich A&S content on those projects.

That’s sort of where I was going, Keith. Basically, are you classifying auto then as these large CapEx projects? Because it strikes me, I know what you said, they have to pick up, but it strikes me, at least in that vertical, it is almost guaranteed just based on what the OEs are planning, that would at least start?

That’s true, John, but the comment was make in a somewhat of a broader context of which certainly automotive we think we have the highest confidence in that picking up, where the other areas that we’re looking at is, where you looking for line expansions at OEMs as opposed to just replacing an old machine that has to be a capacity expansion in things like food and brewing and beverage and home and personnel care in particular where the capital spending is a more significant piece of the project and then also we would be expecting it to grow or needed to go I should say in the Oil & Gas sector later in our fiscal year. And with mining we’re expecting that to probably not pick up a lot and that we’ll see the revenue, but we do expect projects that will improve next year’s large capital spending in that vertical. So it's a mixture of -- across what I would say more of the heavy process industry and then new lines in what I would call the consumer transportation types of industries as to what we mean when we say the larger capital projects.

That's helpful. Just lastly, Keith, as we start this expansion cycle, how are you thinking of your global footprint, and perhaps requirement to make investments? And how would you compare it to the start of the last cycle? And by investments, I'm thinking say manufacturing capacity, I don't know, new iterations of logics, you've even talked about sales expansion right in emerging markets. How does your footprint in spending trajectory or requirements compare?

I would say there’s a lot of pieces there, so let me try to parse it a little and try to get adjust of your question. If you talk about your manufacturing footprints, we believe most of that spending is done at this point in time if you remember we started that probably about two years ago and made a significant transformation of our operating footprints into emerging markets and in particular at that point we talked about China, we talked about Singapore, we talked about Latin American in particular Mexico to a smaller degree, Brazil, and then Eastern Europe and in particular Poland. And the strategy was to grow that business, grow that footprint to be able to absorb the growth that we were anticipating at that point in particular in the emerging markets. With the significant decline that we had, we accelerated some of those moves to be ale to absorb that capacity quicker while reducing our foot print in the higher cost mature markets, so that’s been growing on and our team has done a great job of moving I’ll just say in that direction. So I think from an operation stand point and a manufacturing capacity, obviously we up to add machines or alien or may be a shift, but as far as significant investments, I believe those are behind us at this point in time. The one area that we do have to continue spending in is the evolution of our business systems outside of the United States and that’s something that is still probably a couple of years of investments in our new business system. We’re getting close to completion of that from the core functionality but as far as moving it into Europe, into Latin America and into Asia Pacific, we still have…

That’s great color, Keith. Thank you.

You’re welcome. And I’m sorry it took so long to get though it.

Your next question comes from line of Bob Cornell with Barclays Capital.

Thanks, everybody. Well, it was worth the wait, Keith. Thanks very much.

Okay, Bob. I appreciate your consideration.

What does control products revenue had to do in the second half to get to your targets, You talked about the backlog and the book-to-bill in the overall guide, but control products are running negative, I mean, when does that business break positive to or what is the outlook for control products revenues in the guidance?

Well, obviously control products is made up of the two pieces that we always say, but if you look at second half we would expect depending on where we are in the range it would go any where from, lets say about 10% growth to the high teens at the high-end of the range. So that’s what we would expect first half versus second half in CP&S.

So second half would be, is that year-over-year growth or second half or first half?

I’m sorry, it’s second half versus first half.

Okay. Now, I will let someone else ask the process questions, but one of the things that has always interested me is the growth in the machine control, the CompactLogix business. In the December quarter you mentioned a big order you got, and I think you’ve gotten lot of design wins over the last year when the market was quiet and I think you referenced the fact that could percolate as the market comes back. Maybe you could just flush out the CompactLogix machine control market. And that market is not too far smaller than the whole process market.

You’re right, Bob. And that’s why we talk about our growth accelerated being the OEM market for Rockwell Automation. It an area that we’ve focused on very aggressively the last couple of years, in particular when we came out with CompactLogix, because it is our scalable part of the logics and potential that is well suited for machine builders and certainly that’s what the target was and with that we can found that we allowing that automation portfolio and our confidence in particular, our safety components and that’s is the very strong package that we offer value to our machine builders.

When are we going to see the revenues? I mean I understand you had design win that will last 12 months…

The OEM growth is the big part of why A&S grew at the rate at this quarter. It was probably the most significant contributor to grow was the OEM improvements. So, we are seeing the growth Bob and in particular CompactLogix growth in the quarter was up in for the high 30s on a quarter-over-quarter basis. So, we are seeing that pick up and we would expect that to continue in particular as the volume of those machines where we made the conversions on over the last year start to grow more revenue for the machine builders. So we’re very pleased with where we’re at and that's on a global basis. We have very strong OEM programs in Europe, in the U.S., and in Asia-Pacific in particular China and to some degree the smaller markets in Latin America both Mexico and Brazil. So we are seeing the growth I guess would be my comment Bob to your question.

Final question. Processor growth -- group performance in the quarter?

Yes, the Logics business was up 36% year-over-year higher, basically 10 points higher than the A&S organic total and we see that as another very good sign for the future and certainly puts us back into the higher rate of growth compared to the overall company products average. And as I said, Compact was even a little bit of higher than that or I should say Compact was higher than Control and the combination was 36. So we feel very good about that pickup in the quarter.

Legacy?

Legacy grew, actually as you would expect given the fact that a lot of this is coming from MRO and to some degree OEMs, a lot of those machines are designed with the legacy systems in and so our legacy sales were up almost 10% on a year-over-year basis, so we had been talking about 10% annual declines in our legacy products. We certainly expect over the cycle that that will continue, but it’s another region we believe pent-up demand and restocking and small machines, or I should say, individual machine expenditures is what’s occurring because of that growth that we saw in the legacy business.

Your next question comes from the line of Mark Koznarek with Cleveland Research. Mark Koznarek – Cleveland Research: Could you elaborate a little bit more about that earlier comment about channel restock, contributing three points to growth. Was that your channel partners or is that end customers?

That was a specific question about our channel, our distributors. Mark Koznarek – Cleveland Research: Okay. Now, from your perspective, has the channel restocked fully? Or will we still get some additional lift from that in the second half?

No not at these run rates, we believe now that we have the appropriate levels of inventory for the current demand and obviously we said that last quarter but the demand went up so we got a little more restocking push, but given our outlook now, what we talked about in our products business, we believer we’ve seen the benefit of that and quite frankly, that’s one of the headwinds that we see in the second half is the loss of that restocking, a point in Q1, the three points in Q2 is something that we have to push against for the rest of the years.

Which is that together with your prior comment about the Logix grows overall, would those two items suggest that we have had a richer than usual mix of products, and the type of products here in the first and second quarter and that will reverse some in the second half, just setting aside the solutions business just talking about products here?

It’s tough to say, if we’re just talking products. It really is some element of mix obviously as Ted mentioned, if you took our products sales of CP&S, it looked a lot like A&S. So it’s not like we’re seeing any deviation in products in total that says, no know totaling A&S products. So I don’t think the product per se is going to see a significant change. The big mix is the one you discounted and the big mix shift for us in the second half as solutions growing in the mid-to-high teens and products much lower. So you’ll see that as a natural mix impact going into the second half that you didn’t see in the first half.

Mark, I think there could be some small favorable mix impact in Q1 and Q2 and it’s really related to the strength we have seen in North America, were obviously, we have a in North America, were obviously we have a much larger installed base and benefit from more MRO and we also look at Q1 and Q2 and think that in that period MRO spending may have been a little bit overheated. So I think there could be a small favorable impact, but as Keith noted, the big mix impact is really going to solutions versus product.

Final one here is, with the strong growth in the implied further acceleration in the second half here. Can you talk about your own internal supply and logistics situation? We’ve been hearing a little bit about constraints on certain product categories and you know is that likely to become more of an issue before debates, because of the revenue acceleration that you’re expecting?

Certainly, we don’t believe that, the logistics’ supply chain issues impacted our performance in the quarter of any significantly. There was no question that given the increases that we have seen that we are stretching the supply chain; and we’re stretching it quite dramatically. In particular, we have issues on electronic component, isolated issued on electronic components, because of the growth in, I’ll just call it the high-tech industries in a particular consumer electronics has put a number of those parts on allocation and Rockwell really is being not treated differently than other manufactures, who are demanding the same parts based upon the increase and so we’re managing through that, the impact has been the greatest in a couple of our product lines in our small controller business, the MicroLogix business in particular, and some isolated input, output devices and really in the rest of our portfolio we’ve been able to deal with it. That’s one of the advantages of having a great channel, they’re our first line of defense and they’ve been working very hard and very diligently to help us get through a difficult period driven by a very quick increase in volume. Obviously, when the supply chain shrunk last year, it shrunk dramatically and people took capacity out and now they’re hesitant to bring it back. So though we are experiencing some issues, they’re isolated, we’re managing those across the portfolios with our channel, with our sales organization and we believe the increase that we’ll see in the second half will not create a bigger problem than we currently have, we think the backlog if you will has stabilized, and we expect over the third quarter to work is done, and to be able to put that behind us and once again given the current delivery commitments on these parts. So we think, we’re passed the most difficult period and that we will work our ways through the remainder over quest of Q3 and certainty by the end of Q4 being a very, very solid position.

Your next question comes from the line of Steve Tusa with JPMorgan..

So just to clarify on some of the cost you’re loading into the back half, so 2Q, how much more cost do we have to go? How fully loaded is 2Q? So, if you could just maybe give a little more detail, I know you spend a little bit of time on this, but I wasn’t quite clear what the total incremental cost bump-up is in the second half?

Yes, basically Steve, let me walk through this and maybe kind of remind you some of things we talked of our last quarter. So basically, regarding year-over-year cost savings from the restructuring actions, we’re still counting on $120 million year-over-year, basically all of that is in the Q2 run rate. So no significant change in savings as we go into Q3 and Q4. Compared to our previous full-year guidance, we now have additional cost headwinds of about $50 million related to additional compensation expense. That includes to the cost of the pay increase that we talked about, an increase performance based compensation and it split roughly equally between those two. As it relates to performance based compensation, one thing I would remind you of is, when we talk about that, that is a very broad based performance based compensation plans that kind of works across all of our salary and in all of the employees, but compared to the Q2 run rates, there is minor increase in those expenses in Q3 and Q4.

Okay, in both quarters, so it steps up in both quarters?

But minor, minor in those quarters, okay. I would take a larger expected run rate change in the quarter is really that other spending that both Keith and I have talked about that is related to new product investment and our growth accelerators, and there we’re expecting about $50 million increase in the second half of the year. I think if anything it maybe a little bit more heavily weighted to our Q4 than Q3, but it’s about $15 million increase in the second half.

Then when you’re talking about on the book-to-bill, is that’s not entire CPS, that’s just the services and bets the solutions book-to-bill, such as the part of CPS, right?

That’s correct.

So one more question is on CPS, I think the answer to the question to Bob Cornell’s question, second half over first half, you think at the low end, CPS is up 10% at the high end, 19% for second half over first half. That would imply a relatively low rate of sequential growth at Architecture & Software. Is that inline with normal seasonality or what are you seeing in April? Or is there anything in April that you’re seeing that drives that caution? Or is this just, you’re looking at the back half of the year and your short cycle business, so you’re not sure the sustainability of the product strength?

First let me just say, we’re not quite that high on CP&S as the high end, it’s more in the mid-17% as the high end. You’re right it is about the component story that’s what’s been driving the growth so far. We believe, we’ll see some flattening out and at the high end of our guidance of our products do grow quite frankly in the second half, quite substantially. So at the low end the first half over second half, or I should say, second half over first half, we’re expecting the mid-single-digit growth in A&S and certainly that’s a significant step up from where we are at this point in time and obviously there is some normal slowdown from a summer standpoint, if you will and in some of the major mature markets, but we’re not expecting any, I’ll say, meaningful deviation from our traditional rates in those businesses. It’s just that solutions starts picking up and we see that being the predominant growth driver in the second half of our years. So we still expect and have targeted some product growth in both A&S and CP&S to hit our revenue guidance.

One last question, just looking at the 24% margin in Architecture & Software, should we still think about kind of the longer term targets here, in the context of incremental margins, and obviously anybody would be happy with a 24% to 25% margin, but I’m just curious as to longer term, where you think these things should go. I mean there’s only so much money you can throw at the business. So if you’re doing this early in the cycle, a little bit of revenue growth, I mean do we think about this as stable margins? Is there continued room for improvement here, unless like to peak out at 27%. I’m just curious as the --?

I think we have always said that we think reasonable margin targets for Architecture & Software. We’re in the mid to higher 20 range and we continue to believe that. I think what you’re experiencing this early in the cycle is the very strong volume leverage we get in Architecture & Software and our inability to ramp investment spending up as quickly as we might have like.

Your next question comes from the line of Rich Kwas with Wells Fargo Securities.

Question on the MRO comments that you had earlier, you said it was pretty strong here. Is there some expectation with that kind of fades as we move through the rest of the year and to what degree, just big picture, how should we think about that?

I think that's kind of the other piece of Steve’s question that I’ve been answer. So thank you for the question. One of the reason, we do expect that pent-up demand does pay for all to some degree and that's why we have a little slower growth in the second half of the year in our products business because it has to come from new projects as opposed to just the MRO piece of it. So that is the way to be thinking about the MRO and leads going in then it kind of stabilizes at slower growth run rate and that's the phenomena and that you're seeing in the second half of our year and it's a normal phenomenon. So I don't think there’s anything here that we’re surprised that. The surprise was how fast to change, not the best that it’s going to be going down as the recovery continues to progress, but we certainly saw such a deep reduction in both CapEx and OpEx second half of last year that's the spending just had to come and production picked up and so as IP industrial production numbers picked up, people have to support that with investment and that's what drove the MRO strength, so a natural phenomenon very solid, very steep at the start because of the drop and now starting to flatten out in the second half.

Then in terms of the restocking, it just seems that as you look at the second half of the year, I know there’s some mix changes in the growth rate relative to this last quarter may not be as significant, but it just seems like there’s some potential for some restocking, based on your bigger picture outlook and so should we think of it as three points this quarter, it was one point in the fiscal first quarter. I mean it sounds like you still see some restocking taking place in the second half?

No Rich, I think you got to got to kind of the notion of what’s reflected in our guidance for product and as Keith mentioned, on the product side, our guidance says at the low end it would be rather flat to the Q2 run rate and that the high end were up mid single-digits to the Q2 run rate. I mean if we’re up if we hit closer to the high end, there will be some natural restocking. I think our message is we don’t think that’s the big number. Its not going to be another 3% per quarter going forward even at the high end, it might be 1%.

Then just last question, China grew 15% year-over-year. Last year at this time, China was on its back a little bit. I was just curious on your comp for that 15%, and then as you go through the rest of the year, given the recent strength in China, how do you see your growth rate there with customer winds and potential customer winds and just overall growth there right now?

Well, certainly we expect in the second half of the year that China will be above the company average in growth and we would expect that to have similar numbers that you’ve seen in this quarter on a year-over-year basis. So we’ve made great inroads in China, particularly at OEM and also with this stimulus spending that has been going on in China that as driven a lot of our business and the automotive activities are also very positive there. So we see the continued evolution to a more consumer based economy and we think that both wells for us in addition to the OEM activities and pickup of our ability to address a broader suite of oil and gas industry application to China, our opportunities for us to continue to drive that higher growth rate.

Again, what was your comp last year, at this time for last year's quarter for China?

I don’t know that, on top of my head that’s something that will have run the get back to --

Okay, that’s fine. I’ll get offline.

Operator, I think we are about ready to ramp up the call. So I want to thank everyone for joining us today and if anyone has any follow-up questions, just give me call, we’ll go through that. Thanks a lot.

Ladies and gentlemen, this concludes the presentation and you may now disconnect. Thank you.