Good day ladies and gentlemen and thank you for standing by. Welcome to Emerson’s Investor Conference Call. During today's presentation by Emerson management, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, February 5, 2013. Emerson’s commentary and responses to your questions may contain forward-looking statements, including the company’s outlook for the remainder of the year. Information on factors that could cause actual results to vary materially from those discussed today is available at Emerson’s most recent Annual Report on Form 10-K as filed with the SEC. I would now like to turn the conference over to our host, Mr. Patrick Fitzgerald, Director of Investor Relations at Emerson. Please go ahead.

Thank you, Elisa. I’m joined today by David Farr, Chairman and Chief Executive Officer of Emerson; and Frank Dellaquila, Executive Vice President and Chief Financial Officer. Today’s call will summarize Emerson’s first quarter 2013 results. Conference call slide presentation will accompany my comments and is available on Emerson’s website at emerson.com. A replay of this conference call and slide presentation will be available on the website after the call for the next three months. I will start with the highlights of the quarter as shown on Page 2 of the conference call slide presentation. First quarter sales increased 5% to $5.6 billion, underlying sales growing 6%. Sales trend were mixed across the end market in geographies, but the strongest growth in Process Management driven by robust energy in market and favorable comparisons with the supply chain disruption in the prior year. Gross margin of 39.7% improved to 100 basis points and EBIT margin expanded 160 basis points, a 13.1%, strong volume leverage and cost reduction benefits offset mix headwinds. Earnings per share of $0.62 increased 24% from the prior year. Cash generation was strong with free cash flow of 115% to $439 million. The results reflected solid growth in margin amid a tenuous global economic environment and kept Emerson on pace with financial, the record financial performance 2013. Next slide, P&L summary, as I mentioned, total sales grew 5% and underlying sales grew 6%. Operating profit margin of 14.6% increased 140 basis points despite a stock compensation increase of $22 million and a $12 million pension expense increase. Earnings per share of $0.62 increased 24% benefitting from share repurchases of 2.1 million shares. Next slide underlying sales by geography. underlying sales in the U.S. grew 6%, Europe declined 2%, Asia increased 6%, Latin America increased 19%, Canada grew 6% and…

Thank you very much Pat. First I want to thank everyone for joining us today, and I appreciate your time. And also looking forward to our Investor Conference, next Monday and Tuesday in Columbus, Ohio where we’re going to share a lot more information relative to our business segments and also some of the impact into our Network power systems business. Also want to thank all of the Emerson employees around the world for their excellent performance and a strong execution in our first fiscal quarter. Obviously the first fiscal quarter is always very important relative to delivering the full year. Last year that we really struggled with the supply chain issue, but this year performance is greatly improved and on track to delivering what I think in a very strong exceptional 2013 in all levels. As we look at the global economy today and the environment around the world, we did slightly better than 60 days ago, but still below trend line and still not a typical recovery that you would see from the typical economies that we state and serve around the world. We’ll talk more about that next week, but fundamentally the trend is positive, but the trend is not going to be a short recovery and I think that clearly strategic investments can be very, very important to drive growth again, as we move into 2013 and 2014. I also want to remind people out there, that Emerson presents GAAP numbers, which means that we include all pension costs, all impairment of intangible amortization and our performance share stock programs and the consolidated numbers represent GAAP numbers. Also I want to make sure people understand in the business segment, we include the pension costs and goodwill amortization and other businesses which is also a very appropriate…

Thank you. (Operator Instructions) Your first question comes from the line of Julian Mitchell with Credit Suisse. Please go ahead. Julian C. Mitchell – Credit Suisse: Hi, thanks a lot. Yes, so first I guess just on the more positives that were heard throughout last year, maybe if you could just talk a little bit about what's driven that if it’s something you’re seeing in the January order intake or something in a specific region?

As we’ve been reporting in monthly orders, we've been little bit more positive on the monthly order statements for the last couple of months. Since September, October our order trends have turned up in some of the businesses now in climate technologies, network product systems, residential solutions that have all now become a positive and driving a continuing basis on a three-month role. So from my perspective it's been improving, I would say moderate amount of improvement from that standpoint, but just a global economies at stabilize and feel more comfortable for the financial institutions, and I think money is again flowing and people are starting to make those investment. Though it’s not a real robust economic environment out there, just look what happen on an average in the second half of the United States economy. And so in total, it’s still basically you’re looking about 2%, 3% top the growth. And we'll get into the various regions that we are on next week. But I still see 2%, 3%, 4% ROI and growth in the general economic trend that we'll be facing this year. Julian C. Mitchell – Credit Suisse: Got it, thanks. And then just secondly, the issue of kind of mix comes up a lot in the slides in the different segments, and how that affects your margin? How do you see that playing at over the balance of the year? I guess, as you emphasize the margin growth is very front-end loaded, is that because there’s mix or something you think will carry on weighing on the margins over the balance of the year?

Now Julian, I think from my perspective, our business in particular Process business or the Climate business or the Residential Solutions business in a given month or quarter, we could have a surge of sales, shipment from the standpoint of the systems, versus our intimidation. I would say the last three quarters not most recent quarter, last three quarters we've had pretty good mix, and from last year as a profitability from these businesses things went our way, and so climate will have down sales last year we had pretty good mix from the type of business. And therefore they had to improve on profitability. Same thing with Process, you look at the underlying quarter process had a very, very strong systems and solutions, orders and shipments in the quarter, intimidation a little bit weaker driven the process came in quite strong, a lot of that will create a lower margin in the process world. Same thing in the Climate Technologies, we expect that mix to come back as we look at our order books right now, we look at the order pace. I would expect that margin to come back that's why we still believe that we will have 10 to 20 basis points improvement consolidated. And I will give you the business margins by each of the segments, the forecast next week, but it's not in common, you hear me talk, we will have a quarter the mix goes the wrong way, quarter goes the right way, and I would say we had good margin improvement this quarter, it could have been better with the right mix, but we will make that back up as we go into that second quarter, it just moves around, that’s what happened. Julian C. Mitchell – Credit Suisse: Got it thanks. And then just lastly just…

Yeah. Julian C. Mitchell – Credit Suisse: And then lastly, just quickly on the Network Power specifically, the decremental margins have been pretty severe in the last six months, is that again mostly kind of just mix related?

It’s mix related and we expect that will start turning here, it is starting to turn as we see that business starting to recover as I expect that will continue to improve now as we move into the year in the second quarter, yes. Julian C. Mitchell – Credit Suisse: Got it. Thanks a lot.

Thank you very much Julian.

Mike R. Wood – Macquarie Capital: Hi, good afternoon.

Good afternoon Mike. Mike R. Wood – Macquarie Capital: Could you elaborate a bit more on the comments that are expecting the Asian orders to gain momentum and in particular, what’s your visibility like in front of the Chinese New Year?

Well, we have pretty good visibility. We are doing business a long time, we see the order pay this, I mean it’s on the business as well, we will not have a good couple of weeks before the Chinese New Year then it will come back. Clearly every year the Chinese New Year just comes out a different time. We just came Ed, Mark and I just came back from an Asia trip talking versus this couple of months ago. You are seeing a recovery now in China, pretty broad across all of our businesses, early cycle guys have already started coming into the play. I would say what you will see for our businesses right now is a recovery will start happening in the second half for the more the industrial Network Power systems and process and client will go earlier and starting to move right now. So that visibility is pretty good relative to order pace and just what’s happening, so we feel good about that, same thing in India, we see that recovery going on right now. The one market, I think it’s going to be weaker for us this year will be Australia, because of huge investment in the last couple of years. But overall visibility right now in China, India, Southeast Asia pretty good. The order book is pretty good, and I think that we’ll progress things will get better assuming the economic progression continues to happen as it is, we’ll get better as the year progresses. I think you’re going to see in the second half that really get better, much better. Mike R. Wood – Macquarie Capital: Okay. And you also called that in a press release, a negative margin mix in process from the lack of higher-margin maintenance type projects. Is that already in the results this quarter or…?

Yeah. Mike R. Wood – Macquarie Capital: Okay. So we saw that impact?

You mean what happen is with a lot of discussion and I was just talking to Julia a few minutes ago same thing. In a quarter, we have things up. Clearly the MRO business, which have been extremely strong and North, South America for us prior to last quarter with – people got a little nervous about what was being discussed and concerned about the U.S. economy. So they really pull back a little bit, and I would expect as we go forward, you will see that term lose, but that make that’s already build in the quarter. That’s a pretty quick MRO as a pretty quick type of situation for us. Mike R. Wood – Macquarie Capital: Thank you.

You’re welcome.

Your next question comes from line of Steven Winoker with Sanford Bernstein. Please go ahead. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: Thanks and good afternoon. So you took up the top line, you held at the top end of the top line, you held EPS, maybe just describe a little bit of your thinking on that front?

I think from my perspective, we just looking at the general mix and I’m not getting carried away with my earnings forecast. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: Okay, all right. And this process…

I barely grown my spin back from what you guys said to be last year. You’ll see it’s been grafted on just want to say, how it grew it a little bit. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: All right, but I’m sure just as handsome as always.

I wouldn’t go that far. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: Is process fully caught up with the backlog?

Oh yes, it caught up pretty well much last year, if you push and shove last year, it's hard to track, but by the time you finish it was there, it might be a (inaudible) there. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: So now you're just in a natural demand shipping mode then?

Correct. Yes exactly right, projects moving in and out and things like that, and the key thing for me right now to be honest is the last gentlemen asked that question on the MRO, it’s North America that is, we need that to come back a little bit, people I think were a little bit cautious in the first three months, and I'm hoping as we get into this deep into the second quarter, we’ll start seeing that MRO business activity comes in. If you remember correctly, we grew over 20% last year in North America and process and so the question is to get to digest some of that, maybe the first six months this year could be kind of slow, that's what we are watching carefully right now. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: Okay and then just on receivables maybe a quick comment on just the higher level this quarter?

we are still versus last year, we are still catching up, we did way headway relative to the receivables we got at the end of the fiscal year, we will continue to make headway here as we go forward, part of the receivable delta is about, a third of it is basically prepayment from the large projects, and basically that's good thing, I mean we got large projects coming down the road in Network Power systems, and also process so that creates the balance sheet as you force, but that's a good sign, but we are making good head way, we had good cash flow, I feel very good about the cash flow this year, and if we have a strong second quarter we will start record year in cash flow in 2013. Steven E. Winoker – Sanford C. Bernstein & Co., LLC.: Okay see you next week thanks.

See you there, thank you.

Your next question comes from the line of Deane Dray with Citi Research. Please go ahead. Deane Dray — Citi Investment Research: Thank you, good afternoon.

Good afternoon Deane. Deane Dray – Citi Investment Research: Hey David, you don't often talk about Hermetic Motors but maybe give us some color about the HVAC market there and how does that relate to the compressor side and how the inventories look?

Well, our Hermetic motor goes in every compressor we sell. So and that we basically will cap the business here, and from that standpoint you saw in the quarter, our Climate Technology business did grow and we had a good record orders. Our Climate Technology orders are above the line as we say, and I expect then we see the January numbers would be above the line. I do know in January they had another good global order books, so from my perspective Climate Technology had turned, and we had two top years after one really strong year and I expect them to have a good growth in 2013 and 2014, we’ll talk about it. We maintained our investments in a big way in that Climate Technology area and we're going to start seeing some pay back in that and I think in 2013 and 2014, I'm very positive about that right now. Deane Dray – Citi Investment Research: How do you feel about the compressor inventory in the channel today?

Well. And I don't think by the way I think they expect us to serve them without rebuilding compressor inventory. I don't think they're going to rebuild the inventory, I think they expect us – we’ve shipped within days. They expect us to rotate, move round change your lines and go. So I don't worry about that too much, but I just put the way just of all. Deane Dray – Citi Investment Research: Good to hear. And then any comment, update on the sale of embedded power, how is the process?

We’ll talk about next week, but it’s moving forward and the documentation will be going out to a select group of people and it is a process I would say looking at calendar year, I don't want to rush. I mean we’re into this right and but its moving forward. And the business had a good quarter, and I think they’re going to have a very good second quarter. Deane Dray – Citi Investment Research: Great, thank you.

You’re welcome.

Your next question comes from the line of Jeff Sprague with Vertical Research Partners. Please go ahead. Jeff T. Sprague – Vertical Research Partners: Thank you. good afternoon.

Good afternoon, Jeff. Good to hear you. Haven’t seen you a long time, hope you’re doing well. Jeff T. Sprague – Vertical Research Partners: Doing well. See you next week in my home state.

Ohio was your home state? Jeff T. Sprague – Vertical Research Partners: Yeah, you never knew that.

No, I did know that. So you’re a big guy. Jeff T. Sprague – Vertical Research Partners: I know.

You didn’t go to the Ohio state, did you? Jeff T. Sprague – Vertical Research Partners: No, I did not. I wish I would.

Good, that’s good, I can talk to you again now, I won’t catch you up next. Jeff T. Sprague – Vertical Research Partners: So a question on process.

Yeah. Jeff T. Sprague – Vertical Research Partners: You characterized the backlog as strong, although it seems like orders have softened and you’ve had that huge revenue surge. Is the actual physical backlog strong or just what we see coming in the pipeline kind of didn’t propose a work, any color you could share there?

I would say both the physical is very strong, and the pipeline is very strong. One of the things and somebody asked me the question earlier, you know we raised the top line a little bit. Sales growth, we’re going to have the currency that’s going to help us with this year, finishes, and that does not give you a lot of margin as you now. So that’s one of the reasons why as we said that earlier that we look at that, the dollar definitely right now is a little bit weaker and therefore it helps us, but we don’t get a lot of earnings out of that. The backlog from the same point of the process is still at record levels, maybe not quite as high that was (inaudible) below September and the pipeline that we see is very, very strong around the world. Not a lot of – I hear about delays out there to other people, we have not had a lot of delays. The short-term impact to us has been more than North America MRO businesses, those guys slowed down a little bit and that is digesting all they did last year, but right now it looks pretty good. I expect to have a good second quarter. We’re coming off very – I mean, we grew 50-50, and we added $1 billion a year for two years, those are big numbers. And so we still expect a solid single digit growth in the process sales this year, sales in single digit and I expect pretty good profitability out of them. Jeff T. Sprague – Vertical Research Partners: Are you seeing kind of the downstream kind of more gas driven I guess, below and gas driven projects moving forward on people’s drawing boards, you think there is delays there?

Right now, we are not seeing delays. The projects are moving forward. We are bidding on, we are winning them. That’s going to help it as the year progresses and as we move into 2014, in particular North America, the oil and gas downstream projects are enormous and that’s why I am so excited about trying to get the pipelines open, why I believe in having natural gas shipping, even exploring natural gas, we need to have that natural gas flowing out there to make those investments happen. I just came back from South Africa, this is India and we are all seeing the downstream numbers coming both around the world and then also here in North America, which I am pretty good excited about. Jeff T. Sprague – Vertical Research Partners: And maybe just finally, any thoughts on kind of M&A versus share REPO, you started kind of lean into the share REPO a little bit more here, what’s the thought for the year, any change?

No change. I expect share repurchase to be in the 600 million to 800 million range. No changes at that point in time, pretty much in line what we did last year. At this point in time, we will talking next week, I do not see any big, big acquisitions. I expected to spend somewhere around $400 million, $500 million this year. When I look at the quality of assets out there, that’s not very high at this point in time and therefore we are going to generate very high levels of cash, we will pay the dividend, we will buy share repurchase and keep our balance sheet ready to go for an acquisition, but right now it’s going to be both. We are going to be passing backlogs, as 50% of our tax to our shareholders in 2013. Jeff T. Sprague – Vertical Research Partners: Great, thanks. I'll see you next week.

See you next week Jeff.

Your next question comes from the line of Scott Davis with Barclays Capital. Please go ahead. Scott R. Davis – Barclays Capital: All right, good afternoon guys.

Good afternoon Scott. Scott R. Davis – Barclays Capital: I want to go back and talk a little bit about the drives and the motors business, so I mean I think there was a new product launch that you guys were doing. I just can’t recall the timing and how that may be impacting results, can you update us there?

We will talk again about this next week, but the new drives are coming out there, they are being under, we’re starting to take orders. Our motors and drives business right now is being negatively impacted by the strength in Europe, we are very, very strong in Europe and that's been a tough marketplace. But the new drive launch is going, it’s going to be very positive, and it's going to expand our serve market. I’d expect we’ll start seeing that impact more in the second half of 2013, in particular in 2014. It started therefore we typically have a lag of people wait, the new drives. So with the European slowdown and that product launch it is pretty predictable that we would have about – I would say about five, six quarter slow down. That’s where we’re right now. Scott R. Davis – Barclays Capital: Okay, that's helpful. Thanks. And it looks like embedded had a pretty good quarter and it’s a positive surprise versus, I think most of the supplier expecting it to continue to believe down for the year, I mean is this kind of low water mark, you said this quarter, I expect to have another quarter, and how do you, and since you’re just talking about revenues, what about profits, are margins picking up there?

Yeah, they've gone through enormous restructuring. My hats off to Jay and his team here. I mean first of all we announced that we’re going to sell, that's hard to do. We took out a lot of what I call deadwood business. We’ve got two things going on the customer base like Dell, HP, guys like that, those are few things going out there. And you know from my perspective it looks to me like the order pace is actually turned up, you can't see that yet. We will shelf this next week. I think we’ll actually show you a curve. And here we’ll see that the true curve for, embedded has actually started to turn up, it’s still negative, but it’s getting, I think it might cross the line really soon. So I expect growth to start happening and I expect profitability to improve. Scott R. Davis – Barclays Capital: Okay that's great.

It’s actually still low single-digit. I mean we’re talking pretty low margin business here. Scott R. Davis – Barclays Capital: Okay. That all I have. Thanks guys.

Thank you. See you next week.

And your next question comes from the line of Shannon O'Callaghan from Nomura. Please go ahead. Shannon O'Callaghan – Nomura Securities International: Good afternoon guys.

Good afternoon Shannon. Shannon O'Callaghan – Nomura Securities International: Hey Dave so what about your own CapEx, I mean it was down a little bit year-over-year in the quarter. You are talking about taking it up a little bit, but not a lot for the year. What are you looking for to sort of losing the pulse strings a little bit with your own capital spending, what would you need to see?

Serious top line growth and growth speaks investment on the world, which we haven’t seen. I mean, you haven’t seen it at all. And our forecast is for this year global GFI will probably be up somewhere around 3%, 4%, 5%. And we can cover most of that, a lot of that with productivity. So I mean, I expect us to have a little bit increase, will be, it’s declined a bit, as it continues to trend nicely and other business come along. We can only increase as it goes down. We have the catch, but I’m just going to be very careful mitering out that, that capacity that we don’t need, until we need it. So that’s what (inaudible) me. We’re running at around $700 million, which is not a bad number. And I think it’s going stay that way if we got the opportunity to grow, let’s say the growth start to coming up nice, then you’d see us, may be take that up a little bit. But right now, I think the growth rate we’re looking at were in pretty good shape. Shannon O'Callaghan – Nomura Securities International: Okay. And then just in terms of thinking about Network Power margin improvement through the year, I mean, some of the pickup in orders recently has been in telecom, which is in quite as favorable mix as data center might be. I mean are you, I think you thought the mix would get a little better from here, but is it mix or is it the restructuring benefits from last year falling. So how do we think about what drives the margin improvement for the year in Network Power?

Well, you guys see the restructuring kick-in and we’re also starting to see some of the better mix of products. The telecom business is, yes, is improving. But the other parts of the business is starting to have pretty good standpoint. The other issues, in the first half of the first quarter particularly last year, our China Network Power Systems business was extremely strong that’s a very profitable business for us. And it really start tailing off last year, including this quarter here and the quarter we just finished that business order pace is starting to pick back up the mix, it starting to pick back up. So I’d expect this as getting the second quarter, third quarter and fourth quarter that business going to help us and that will help us mix up, and also grow. So there are couple of things that are starting to kick in the gear that will be really help us as we get into that second half of the year. I keep reminding everyone, we have 78% of our earnings per share in the first six months for the region, we had record, record levels of last year. So those mix is going to come and help us, but I want a driver, most of our earnings opportunity is really in the first half and we got hit last year with the Thailand flood situation. So, things are starting to mix right way for us. Shannon O'Callaghan – Nomura Securities International: Okay, great. Thanks a lot.

Thank you, see are you going to make it? Shannon O'Callaghan – Nomura Securities International: Yeah, I’ll be there. Thanks.

Promise? Shannon O'Callaghan – Nomura Securities International: Yeah, I’ll be there. Thanks.

Thanks.

And your next question comes from the line of Nigel Coe with Morgan Stanley. Please go ahead. Nigel Coe – Morgan Stanley: Thanks good afternoon Dave.

Hello Nigel. Nigel Coe – Morgan Stanley: Yeah. And so by the way your comments on GAAP earnings are well taken?

Just one point, I mean a lot of people (inaudible) segment were GAAP. Nigel Coe – Morgan Stanley: Right, okay.

Our pension cost down the businesses and they don’t like it, but that’s where the cost is and we also push the amortization and we did acquisition and I expect them to recover. Nigel Coe – Morgan Stanley: So there is certainly a drift we got in the sector. So just interesting in your comments on China, you definitely called the recovery fairly early in 2013, but I think you have been quite skeptical about the sustainability of the growth beyond 2013, do you still feel that way?

We will talk about it next week. I have a lower growth expectation in China for ‘14 and ‘15, though I still expect it to grow a very solid single digit. I like the way they are unfolding this, to be honest and I do – I think they are not trying to fine the pump way too fast, I like what they are doing right now, they are being very measured and I like some of the actions being taken by the new leadership team. And so right now, based on – and I will be going back over there early in March. I am very encouraged by what I see right now and if that continues for the next three or four months, then I will feel better about that ‘14 and ‘15, but right now we are going to have a pretty good recovery here as year progresses in ‘13 for sure. Nigel Coe – Morgan Stanley: Okay, that’s great. And then on India, I think it fits on to positive comment in India, so at least a year and half to two years, so just wondering what you are seeing over there right now?

The current election. Nigel Coe – Morgan Stanley: Okay. Same as the U.S. I guess. And then

They are going to put money out. India has been a tough place for the last couple of years. I think 2013, maybe in the first part of 2014 for us will be okay, then I get concern again, but right now they are prime and pump and there might be in the stand and I look at my order pays, that wasn’t great in the first quarter, but I look at what’s going on, the activity, the bookings and I see India will get better as the year progresses. Nigel Coe – Morgan Stanley: Okay, great. And then a question for Frank perhaps, the corporate expense, just the one (inaudible) this quarter, is that a good run rate for the full year?

Franco? Nigel Coe – Morgan Stanley: Frank there?

He is laughing. Yeah, go head. Nigel Coe – Morgan Stanley: The corporate expense was just 1.20 or so this quarter, is that a good run rate for the full year?

No, that is going to ramp up as we go through the year because the overlap and the performing shares is just going to be more back-loaded. Nigel Coe – Morgan Stanley: Okay, great that's fantastic, see you next week.

Good thanks.

And your next question comes from the line of Rich Kwas with Wells Fargo Securities. Please go ahead. Richard M. Kwas – Wells Fargo Securities: Hi good afternoon Dave.

Good afternoon Rich. Richard M. Kwas – Wells Fargo Securities: Have you moved to St. Louis or you are still on – where are you located? Richard M. Kwas – Wells Fargo Securities: I'm in Baltimore.

Baltimore? Richard M. Kwas – Wells Fargo Securities: Yeah.

I thought your headquarters is here in St. Louis, what are you doing on Baltimore? Richard M. Kwas – Wells Fargo Securities: We got a bunch of different locations.

But your headquarters is in San Francisco? Richard M. Kwas – Wells Fargo Securities: Okay.

Are you part of this St. Louis okay I just wonder where you were hanging out these days, so you're actually working so I can report your boss, you are actually working. Richard M. Kwas – Wells Fargo Securities: Yes you can do that for me.

I clearly noticed noted that Rich is working, when I see your boss, is that all right? (Inaudible) did you? Richard M. Kwas – Wells Fargo Securities: No I did not. Quick one on the macro China, I think last year when you gave initial guidance you said China for you would be up 5% to 10% in '13, and when I’ve seen the presentation you have a GFI expectation of 6% to 7%, and that assumes maybe growth on multiple over GFI, for you but I mean is that 5% to 10% changed or is that your potential room for upside later in the year depending what you see.

Right now my answer to be no change if it unfold the way I’m seeing it unfold we could probably have some upside, but right now it's too early to say from my perspective because I think that the changes we are seeing in China are just starting to happen, as you know I try to be very open and I see this and I feel better about it, and I'll be back there in 30 days. So if I walk away and see better about, the answer will be yes, we should be a little bit better as we more like towards the 10%. But we’ve got to sort of get in there first. Richard M. Kwas – Wells Fargo Securities: Okay, understood. And then just looking at the euro assumption here going forward?

We’ve been basically looking, I mean around 130, 132 and that was obviously 135, but that’s why part of the raised, guy who said earlier. But we’re already talking about 130 originally in the plan and now we’re now it’s up a little bit. Richard M. Kwas – Wells Fargo Securities: Currency…

Currencies are helping us in the second half. I mean we will not have much currency impact in the second quarter, but it’s going to start ramping up to add over point in this third and fourth quarter. Richard M. Kwas – Wells Fargo Securities: Okay. But you’re not assuming the spot rate for the rest of the year, 135, you’re assuming 132?

I mean, right now, I raised a little bit for like 135. Richard M. Kwas – Wells Fargo Securities: Okay.

Second half of the year, yeah. Richard M. Kwas – Wells Fargo Securities: Okay. Say at 135, okay.

That’s one of the reasons there’s a five and similar thing there as well. Richard M. Kwas – Wells Fargo Securities: Yeah, yeah. Okay, that’s all I had. Thanks.

See you and welcome. Okay, thanks.

And your next question comes from the line of John Inch with Deutsche Bank. Please go ahead. John G. Inch – Deutsche Bank Securities, Inc.: Thank you. Hi, David.

Hello, John. John G. Inch – Deutsche Bank Securities, Inc.: All right. So Europe kind of continues to disproportionately drag your ops, this quarter seem to hit industrial automation network power, are you seeing these markets begin to inflect perhaps more possibly any aspect of this, and I know there are a lot of structuring there, I mean presumably when you start to get some of these volumes, these margins could ramp back at pretty high incremental, is that a fairer statement or maybe we should be thinking about it somewhat differently, how do you think about it?

I think we can get, we have a reasonable level growth. One or two points, the growth aren’t a lot of ramp to a factory, all of sudden, I feel better about Europe today than I did 60 days ago. So I wouldn’t be surprised if we don’t grow our European business doesn’t grow in the second quarter. So what I think they will get the significant margin improvement in Europe, you got to get about 5% underlying growth for us. I mean at 2%, 3%, 4%, that’s not enough to really ramp at margin, but if you start getting up above that 5% with a restructuring underway, we should see a pretty good margin improvement and that will help us obviously in our overall business, but that’s where you have to get it. I don’t have a forecast that Europe is going to grow 4% or 5%. So I think that’s kind of the growth you need to see and I don’t see that happening for a while. John G. Inch – Deutsche Bank Securities, Inc.: But does Europe forecast assume, it not seeing better in the second half, I wonder?

Yeah. We assumed our European business starts to have growth. And like I said, I wouldn’t be surprised, we don’t have growth in the second quarter. But it’s going to be moderate growth, probably like ones you choose, which is not a whole lot of incremental volume. Right now when there is no growth and there is negative growth that you deleverage pretty hard with cost reductions, because you have cost inflation there, but with the – you get above that 2%, 3%, I start feeling better when you get about 5% that really feels good. But right now I think we are talking about once you choose this as business recovers in the second half. John G. Inch – Deutsche Bank Securities, Inc.: That make sense. I’m going to say the European strategy questions for next week, but I did want to ask you about China restructuring. You called out I think a year ago, you planned, so auto making China and as you are seeing these markets turn out the only company that’s done this. Does that suggest from a similar question to Europe, does that suggest as China comes back, which presumably can back a lot more forcefully than Europe that your margins there in terms of contribution benefit do much better than they have historically?

The answer is yes, they should. If we got the restructuring and the automation done properly in the right location, we are pretty profitable in China already, but it should help us be more profitable and more competitive. So from my perspective, I think profitability we're talking about this, I think we have room to go in this cycle on profitability. This year we've got a couple of things, we have to overcome, and we're working our way through that in the pension standpoint, and then also from the performance shares and amortization, but we'll work through that. And then if don't, we don’t add any additional costs, you're going to see us continue to leverage quite nicely. So I feel good about upward mobility and profitability to get into that 2014, 2015 range. And that's what I’m going to tell you we are going to be setting pretty good margins in 2014 and 2015. John G. Inch – Deutsche Bank Securities, Inc.: All right, thank you. See you next week.

You’re welcome. Take care.

Your next question comes from the line of Steve Tusa with JPMorgan. Please go ahead. C. Stephen Tusa – JPMorgan: Hi, good afternoon.

Good afternoon. How are you doing. You would be there next week, Steve? C. Stephen Tusa – JPMorgan: I will.

Good. C. Stephen Tusa – JPMorgan: Not sure I have heard the term handsome used on a conference call before, but there is always something...

Borrowing your red sweater from last year... C. Stephen Tusa – JPMorgan: I got a black one.

You’ve got a back at Columbus, I will wear black too then we’ll look like twins or something like that Steve. C. Stephen Tusa – JPMorgan: Hi, it's to recognize the profitability of the embedded power?

Okay. Hey you are a very dark guy.

Jay, so ignore what he just said there, Jay. C. Stephen Tusa – JPMorgan: Hey, just a question…

I understand you with this recent with climate guys, did you harass them or will you good to him? C. Stephen Tusa – JPMorgan: No, I didn’t meet with the Head of the Business, that is kind of kicked around, and that was met with the Goodman guys, the LG guys, and carrier guys, all the big guys. So just on process management there's a lot of noise in the numbers here. What was the – again the ultimate tailwind I guess year-over-year from Thailand this quarter?

I mean it’s hard to measure, because it’s now in counties up in number. But when I look at the overall for the total Emerson, you’re looking the underlying growth rate was applying to 1% to 2% range. C. Stephen Tusa – JPMorgan: Okay.

And so how I look at it, I mean that we’ve tried to keep track but it’s impossible to say what you’ve didn’t ship in a quarter or first six months of the year and what we ship back I mean is – I did not want to create an accounting nightmare of this. But this is sort of our – we looked at and so on and so forth. So obviously we did grow 24% underlying in the core of the process, but there is still very solid in the quarter. C. Stephen Tusa – JPMorgan: Yeah, so then you said it’s going to be mid single digits for the year, Europe 24% I guess your orders are kind of comping flattish right now. Will there be a quarter this year with the touch comp in the back half where the process is negative?

Right now we don’t see it. When I’m talking for the year, I would say that we’re going to be up somewhere between I’m saying 6% to 8% and right now we do not see – they get real flat. Frank give me the details of progresses. They get real flat by the fourth quarter. So if they had a bump in the fourth quarter, you could have a top line underlying negative fixed rate, then they are going to get currency of them too. So I would say the one result here right now is the fourth quarter that’s why we’re so focused on the 7% to 8%, because we had a – as you well know very strong fourth quarter’s things clicked in and the reductions in the sales and stuff like that. And so I get little bit nervous about our fourth quarter. From a profit standpoint, growth standpoint was a phenomenal quarter last year. But I think that would be the one quarter I’ll be worried about the process. C. Stephen Tusa – JPMorgan: Okay. And the margin there I mean again a very strong second half, you had stuff that we’re shipping, we did have kind of an unusual benefit to the margin, I mean it didn’t lower from an incremental perspective, you’re still 35% to 40% incremental there in the back half.

Yeah. C. Stephen Tusa – JPMorgan: Which is pretty damn good but kind of normal, so is there any weird comp on the margin that we have to think about in the second half of at process?

I think Process had a phenomenon looking EBIT margin, they had a phenomenal; their EBIT margin in the second half was close to 23.5% and if I read this correct. And so I see yeah, so we’re rightly going on forward here is that they’re going to trend towards, they’re basically from an EBIT standpoint, they were round 20% last year, and I expect them maybe slightly higher than that to a whole year, and clearly, they need to make good margin in the first half from an EBIT standpoint. And then they’re going to struggle for a comparison’s standpoint in the second half. So that’s why, I watch him right now, I would expect them to be down in the second half in EBIT margins, and up significantly in the first half. The other thing we had in there last year the best that we can tell probably about $40 million of costs, when we made the decision to protect our customer base at all costs, we’ve spent a lot of money to do that and we haven’t overcome that $40 million this year. And so a lot of that going to work our way of it. Right now, in first half, good margins, second half, I think to be down slightly to the whole year there will be up slightly. C. Stephen Tusa – JPMorgan: Got you and then on the Network Power…

Should we have forecast of that’s pretty quick, you want me to do it for you? C. Stephen Tusa – JPMorgan: And then on the Network Power ramp that you guys are expecting, I mean you said it’s going to be up year-over-year, but we’re obviously starting from a whole down 100 bps this quarter, I mean you kind of snapped back last year, I think you averaged 30% to 40% sequential incremental, a little above or around the line, but anyway, I mean should we think about last year as the appropriate sequential from a market perspective or is it little more back end weighted or how do we think about the network?

I want to see these guys to be honest, on an EBIT standpoint, I want to see them close to 10% in that second quarter. Now they don’t want to hear that, but that’s where I want to see them. And then you are going to start moving up from there on a sequential basis like we did last year. So maybe if you go 10, you go 12, then you are going 14, 15 stuff in the fourth quarter. So that’s based on how I expect them to see that unfold, but I really would hope they are going to get close. They may not get quite 10 in the second quarter, but they are going to be closer to 10 than they are 5. C. Stephen Tusa – JPMorgan: Okay, so that’s almost 300 basis point increase sequentially?

Well, (inaudible) so if you can – I am hoping to get to above nine and close to 10, that’s where I like to see, yes.

Okay, thank you.

I feel that, that’s how we have to move it. Again, our first and second quarter, we have going on right now and you’ve been around a long time, you watched us. We have different segments of our business starting to ship into play here as I always refer to them horses. And climate shift upfront now, I have got Pat Sly’s business, Residential and I have got Network Power systems and Network Power starting to improve. The sales are going to be down slightly, probably in the second quarter still, as we rake off, but they are going to start improving to positive growth in that third and fourth. But I still feel with cost reductions and the right mix that we should have a better second quarter than we had first quarter profitability. C. Stephen Tusa – JPMorgan: Okay, thank you.

So only network power guys out there be thinking about that. C. Stephen Tusa – JPMorgan: Thanks.

You are welcome. See you next week.

(Operator Instructions) Your next question comes from the line of Eli Lustgarten from Longbow Securities, please go ahead.

Hi, how are you doing friend. Eli S. Lustgarten – Longbow Securities: Not too bad and yourself.

Not too bad. Again nice to meet you today, it can be kind of brutal on me. Eli S. Lustgarten – Longbow Securities: If I got to survive next week I got to be nice know that.

Well I got plenty of guns I'll bring next week, so I am protecting myself. Eli S. Lustgarten – Longbow Securities: Just a quick question, I mean we listened to the evening call earlier today and they were sort of talking, bragging, they said they decided to (inaudible) but they've gotten a lot of work, there is going to be a lot of wind. Is there anything going on in the dynamics of that marketplace? You know, you can claim that, they had a bunch of wins now or is it just the timing in peculiar for certain contact?

It's just the timing, I think the marketplace is really stable right now and I think we I could talk, I could brag a couple of wins to. So I don't feel worried about at all. I think right now we'll present you guys next year I think we have very strong hand and recovery plan underway and so network power systems orders are green, they are above the line and that's a good sign. So I feel good about where we are right now. We are on a good progression there and I want to share next week how we’re building this business and how we are going to make this a very strong value creator for our Emerson shareholders going forward. Eli S. Lustgarten – Longbow Securities: And with climate beginning to trend one other big complaints we hear from the English, or the people who are involved in that part of business, is the adverse shift down where to lower share products that's continuing and not changing. Is there anything going on in the market place or anything you have to do to reflect the big change that seems to be going on and it looks like it's almost, it’s semi-permanent at this point of business.

We created the product for the product here, our analog performance tougher product but what we have is a pretty broad offering between both from residential up to the commercial to the transportation. So we have a broader offering capability than something like an IR. So I don’t think that – we’re still running pretty good relative to profitability I expect us to run record levels to profitability this year, even with a mix that we’re going to, I think residential were to be very strong, but you’re going to see a good story. Where our things have taken off and that’s what is making in the cost reductions that will show that we will have again a pretty good growth year, and coming back, and then also we would have some good profitability. So I think we deal with the mix every day that weaken our business and we work (inaudible). Eli S. Lustgarten – Longbow Securities: All right, enough. See you next week.

See you next week. With that, I want to thank everybody. I’m looking forward to see you next week and again thanks for joining us here today and thanks. I am looking forward to see everybody next week. Take care and bye.

Ladies and gentlemen that concludes the conference call for today. Thank you for participating, please disconnect your line.