Good day, ladies and gentlemen. 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. This conference is being recorded today, August 1, 2017. 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, Tim Reeves (1:11), Director of Investor Relations at Emerson. Please go ahead, sir.

Thank you, Chad. I am joined today by David Farr, Chairman and Chief Executive Officer of Emerson; Frank Dellaquila, Executive Vice President and Chief Financial Officer; Mike Train, Executive President, Emerson Automation Solutions; and Bob Sharp, Executive President, Emerson Commercial and Residential Solutions. Today's call will summarize Emerson's fiscal 2017 third quarter results. A conference call slide presentation will accompany my comments and is available on Emerson's website. A replay of this conference call and slide presentation will be available on the website for the next 90 days. I will start with the third quarter summary, as shown on slide 2 of the slide presentation. In the third quarter, both segments grew sales to deliver 4% underlying sales growth for the company. Reported sales grew 10% to $4 billion, including the results of the Valves & Controls acquisition, which closed on April 28 during the quarter. The quarter results reflect strengthening momentum across our key served markets. I will take a moment now to discuss our June underlying orders. All commentary refers to June trailing three-month orders, excluding currency and acquisitions, which, for the consolidated company, was up 9%, marking the sixth consecutive month of positive orders. Starting with Automation Solutions orders, the platform was up 9% with growth across all world areas, except Latin America. Europe was up low single digits; Asia, up high single digits; and North America and Middle East/Africa both increased double digits. The broad-based momentum reaches across end markets as well with continued favorable trends in oil and gas, power, life sciences and chemical markets. Moving to Commercial & Residential Solutions orders, the platform was up 8%, led by North America, Asia and Europe. Growth in North America reflected acceleration in residential air conditioning and professional tools in oil and gas and construction-related markets, as…

Tim (8:05), thanks, and thanks for that last chart. We've been looking for that one for a while. Been two years of very rugged market conditions. And I thought it'd be a good idea to update you on our project funnel that we shared with you back in our February meeting. At that time, we laid out expectations that we'd see some recovery in our aftermarket products and services, our KOB3, as we call it, followed by smaller projects at existing sites and then eventually, the formation of some of these larger greenfield projects. I do believe we are seeing this play out as expected. On the large project funnel, we have seen significant growth in the funnel as more projects are being put back into play, principally in the oil and gas, refining and the metals markets. Chemicals in North America also remains very active and very good for us. We will see several projects in the funnel get approvals to proceed in 2018, probably half of what's depicted on this chart, should have decisions in 2018, and then I'll go through the award-order-execution sales process that typically follows and plays out typically over a 12 to 24-month period. So I anticipate we'll see some of these longer-cycle deliveries start to mix into our backlog as we get into next year. But it should set us well next year and I think even maybe better for 2019. So we're pretty excited about what we're seeing right now. There's a lot of good optimism out there. I just wanted to add if I've the time, been around the world talking to customers as part of the Operational Certainty, and Plantweb Digital Ecosystem launches and there's a lot more optimism out there as we go forward. Oil price has been bouncing around the $40s, that's made some people a little bit nervous, but I think generally they are putting a lot of energy into it, and they are open to ideas to operate better, and I think we're really striking a chord there. So I think we're clearly seeing them, I think some of the investment we're seeing now in the shorter cycle of goods is related to them willing to operate better. So, very positive I think (9:52).

I'd like to add, Mike, I want to also thank you and your team for the first 100 days, the first 95 days of integration of Valves & Controls. A lot of work by you and your team, and all the Valves & Controls people out there and it's not easy and everything that's going on right now. And so high expectations as we go into 2018, but still an outstanding acquisition and really brings a lot as you know from a customer perspective.

Yes, very exciting. Even more.

Yes. Thank you very much. If you could pass it on to the team for me, appreciate that.

All right, thanks, Mike. Turning to slide 8, Commercial & Residential Solutions sales increased 7% on both a net and underlying basis reflecting strong global demand. North America, which was up 6%, was driven by robust growth in residential air conditioning, and solid growth in refrigeration, professional tools and do-it-yourself products at big box retailers. Growth of 17% in Asia was led by China air conditioning and refrigeration markets. Excluding China, the rest of the region was up low single digits in the quarter. Margin remained near record high levels and leveraged 40% sequentially versus the second quarter. Versus prior year, margin declined 50 basis points due to unfavorable mix from growth in residential air conditioning and the usual timing lag between material inflation and realization of pricing actions. This is in line with margin guidance previously communicated, and we continue to expect higher second half sales deleverage at 40% sequentially versus the first half as discussed at the Electrical Products Group Industry Conference. Full year net and underlying sales growth is expected to be 5% to 6%. And let's turn now to slide 9, and I will hand it over to Mr. Bob Sharp.

As many of you know, the Commercial & Residential business is comprised of some key franchises, if you will, very solid growth dynamics and certainly exceptional profitability and asset management. Names like RIDGID and InSinkErator and Copeland are really synonymous with the categories we serve. Our attention now is really focused on the top line, having the necessary number of incremental programs to drive sales growth above the market with a one plus kind of a point above market target that we have. A big part of that is the solutions focus, and a lot of our programs are around that. We're certainly meeting that this year comfortably above a point of market as we calculated, and we feel good about the programs and the momentum we have as you can see in our order rates going into next year. This chart shows a number of the key ones going on. In residential, certainly a big story for us is what's happening in China with heat pumps, driven heavily by Beijing's interest in air quality and some other dynamics. We have over 100% growth in that area this year after a very strong ramp up last year as well. A big news, if you noticed, one of our large customers launched some new 16 SEER to 18 SEER product with our UltraTech – multi-stage product, UltraTech, noting in the promotion that it's a Copeland technology and promoting comfort at a value, which we feel is a very key part of the U.S. market. There's been a lot of attention on variable speed over the years. In fact, this category, this area at one point was thought to be something that would be a variable speed application, and we consider it a very strong endorsement of UltraTech to have that news.…

Okay. Thanks, Bob. Let's turn to slide 10 and walk through our 2017 outlook. Net sales growth is now expected to be approximately 5% including the results of the Valves & Controls acquisition. Underlying sales growth is unchanged from prior guidance at 1%. Automation Solutions segment underlying sales is revised to down 1% to 2% versus prior guidance of down 2% to 3%. Commercial & Residential Solutions underlying and net sales growth is unchanged from prior guidance at 5% to 6%. With solid cash performance year-to-date, we now expect to exceed our $2.5 billion operating cash flow target. Based on strong operational performance and order trends we are raising our 2017 earnings per share guidance. Our adjusted earnings per share guidance is $2.58 to $2.62 and includes $0.05 dilution from Valves & Controls operations. On a comparable basis, our previous guidance per share – earnings per share guidance was $2.50 to $2.60, including the $0.05 dilution from Valves & Controls operations. As part of our continued portfolio repositioning, we anticipate an agreement on the divestiture of our ClosetMaid business in the fourth quarter. And now, I'll turn the call over to Mr. David Farr.

Thank you very much. I want to thank Mike and Bob for stopping in and talking a little bit about their businesses. Bob's had a great year with tremendous premium performance and running at record levels of profitability across the company and really making investments necessary to serve the industry and being the leader that we are in this industry. I want to thank everybody for joining us today. I also want to thank the entire global organization in delivering a very solid quarter in positive sales, improved profitability, extremely strong cash flow with – conversion of free cash flow to earnings in the third quarter of 140% and year-to-date running over 120%. So, a very strong execution, back to back years in cash flow and very, very important to us. As I said earlier, our first 100 days or nearly 100 days of the Valves & Controls acquisition are well underway. Integration is going extremely well and we're on track to have strong cash flow accretion in 2018 and earnings accretion, excluding the one-time earnings or inventory and backlog valuation, which will still flow through in the first three or four months of fiscal 2018. A great job to the whole Automation Solutions team, especially around Final Control and the Valves & Controls team. We're extremely excited about this team of the people. We're really excited about the opportunity with this acquisition and we see a lot of good upside, both in growth and also profitability and cash. The opportunities are still there. There's no difference from what we saw when we did the acquisition and the marketplace is starting to turn up and we're seeing those improvements as we come forward, so real excited about the first 100 days, but, again, we have the next 100 days and…

Thank you. We will now begin the question-and-answer session. The first question today will come from John Inch with Deutsche Bank. Please go ahead.

Morning, everybody.

Good morning, John.

Afternoon. My mistake, afternoon. Hey, did currency play any sort of significant role in the raising of the guidance versus when you set guidance last...

No, no. Not at all, John. This is not a currency driven movement here. This is just a little bit better performance relative to the underlying sales and a little bit better performance relative to conversion on profitability. So that's where we sit right now.

And then, Dave or Mike, do you have what Valves & Controls did maybe if you could pro forma it on the core growth basis in the quarter?

Core growth. What Valves & Controls did on their own self?

Yes, yes. Roughly.

Valves & Controls business was down, I would say. We had them for two months. They were down. Their order pattern had been down for quite some time. So the Valves & Controls business is still trending down the top line. As you know, we talk about, we're actually going to start pruning some of the product lines out of the Valves & Controls. We're actually going to sell pieces out of Valves & Controls. We told you that we'd shrink it first and focus on the core pieces that we really want and drive the profitability up from there.

The oil and gas projects you listed out, Mike, I think the average I think I just ran the numbers quickly, is like $49 million a project. How would you say that compares kind of versus historicals? Because if you compare it to the other ones you listed, they're actually amongst the larger ones. So I'm just curious to put it in a context.

I think the oil and gas projects we're looking at right now, there's some very sizable ones out there. I don't know if they are as big as that Prelude (27:40) type of thing that we've done in the past. But there's many of them out there. I think there's been a massive underinvestment the last few years and people are getting back in line and starting to evaluate these things. So we've added $1 billion to the funnel principally in oil and gas, a few other areas, but principally in oil and gas and there's a lot of interest there right now. A lot of things are being resurrected and starting to move.

Just lastly, Dave, I mean, I think your orders run into kind of tougher compares toward the end of the calendar year. Do you believe just based on your experience, the cadence of business and kind of what you've got going on, that maybe we – you talk sort of about 8% to 12% for a month or two at the high end. Does this thing sort of settle at kind of a mid-single-digit type of order cadence kind of over the coming quarters? Or do you think it does a little bit better? Or how should we think about it do you think?

I mean, right now, it depends really what happens relative to some of the key markets and there's some GFI forecasts which are starting to get better towards the end of this calendar year and early into next year. But I still say that our cadence is going to probably be in the 6% to 8% range as we go into the – as we get past these easier comparisons right now. But that's my first gut right now. I'd be saying that 6% to 8% type of trend and we'll see what happens, but every month goes by we'll get a better view of it, but I would say it's going to be sold single digits, yes.

Got it. Thank you. Appreciate it.

Thanks, John. You're welcome.

The next question will be from Rich Kwas of Wells Fargo Securities. Please go ahead.

Hey. Good afternoon, everyone.

Good afternoon, Rich.

Hey. Just, Dave, on the guide with A&S getting a little bit better, less worse, for the year. Bob talked about Commercial Residential Solutions being at the top end, and then the overall organic growth...

I don't know the acronym. What acronym, Rich, did you use? I couldn't understand that. I mean, we have an Automation Solutions business, we have a Commercial Residential Solutions business. Help me out here, which one are you talking about?

So Automation Solutions view...

Thank you, Rich. Thank you very much. Thank you.

A&S, Automation Solutions. So that was raised a little bit, less worse. And then CR&S was going to be at the top end of the guide. So there's no change in the underlying organic growth rate for the company, you know, negative one or plus one. Sorry. So is that just rounding? Or is that just...

It's just rounding, it's rounding, Rich, and good analytical (30:12) work there. It's rounding. We're having better conversion relative to some of the margin and the profitability mix going well for us right now. Things are trending the right way, certain businesses are doing well right now. So I think that's what's going on from that perspective. We are a little bit cautious in the conversion of profitability. We know that Bob's business in the Commercial Residential Solutions was doing some investments, but he's still getting some pretty good growth rates. We know that Mike's business was this ember (30:39) always lasts a little longer than the pent-up demand lasts a little longer, so he's getting a little bit better mix there too. So those are all things helping us right now.

And then just back on the incremental margin as you start to – I know you don't have a ton of visibility into 2018 at this point, you need a few more months of orders. But how do we think about incremental margin? You had a great number this quarter for Automation Solutions in terms of conversion. As we think about what you have in the basket right now in the backlog, and the trends right now for mid-size projects, and then eventually getting to larger projects. How do we think about 2018? Just initial view in terms of how incremental margins start to play out over the next three to four quarters?

You are going to have to run – Automation Solutions is going to have to run in the mid-30s, to – what will happen again will be the mix, and that's what we want to watch over the next couple of months. But they're going to have to run in the mid-30s on the incremental to keep driving back up towards that 19% that we're trying to get to in the next several years. So, 19% EBIT. So that's what they're going to have to run. Commercial Residential Solutions the issue for me right now is I'm talking to Bob and his team. It's all about, can they continue to run a premium growth rate relative to the market. If they can do that, then they're going to be running at record levels of profitability, and obviously from the perspective of that, we'll drive a pretty good margin, but at the same time gives them plenty of room to invest with that growth. So that's where we see it right now.

Okay. And then just last one, price/cost is still negative 25 for the year, that still (32:12)?

It's going to be a little bit more negative now. Steel pricing has been a little bit more negative from the standpoint, but still very manageable at this point in time. I think it's going to take us one more quarter to settle it out as we get into fiscal 2018 it will be a little bit better. But as you've been hearing on the calls, it's been a little bit tougher out there this year relative to price cost. But fortunately, we have a pretty good process. We got ahead of it and Bob's team was able to offset it with incremental margins relative to the price cost this quarter. And it's just – it's a little bit more challenging now than what it was, but still very manageable.

Okay. I'll pass it on. Thanks so much.

Thank you very much, Rich. Appreciate it.

The next question will be from Andrew Kaplowitz with Citi. Please proceed.

Good afternoon, guys.

Good afternoon, Andrew.

Dave, how are you doing? So, you mentioned at EPG that their business is about five to six months behind Emerson in the cycle usually, and you bought the business, didn't have much backlog. But you didn't seem to allude in your prepared remarks that the business is turning or that it had turned? Maybe give some more color on that? Have you seen a turn in that business yet?

Yes, we have. Actually, Mike showed the board today the order pattern – I guess it was not Mike, but it was Rahm Kreshner (33:33) showed it, but we're running about six months behind, five or six months behind, and they're still slightly negative. The curve is up and you think they're going to cost, what, Mike...

I think soon, because you know, we had positive orders in March. So I think they are coming.

They're coming. So, they're coming up the curve. The incline's in the right way right now. If you think about the whole all Automation Solutions curve, they are coming right up that curve, but they're five or six months behind us right now. And so incremental we're out doing sales together right now, that's starting to work pretty quickly. So that's good news.

Okay. That's helpful. And Dave or Frank, I'm a little confused, maybe I should know this, but it looks like you did negative $0.01 in your operations in 3Q and then you're guiding to negative $0.04 in 4Q. Is that just extra restructuring? I know there's an extra month in there, you only had two months in 3Q but what is that in 4Q?

It's restructuring and the amortization which is booked in the segment.

Yes. One extra month of...

Amortization.

Amortization. But you're right. It's $0.04 in the quarter versus $0.01. Exactly right.

Okay. And then, Dave, just on the large projects, it does seem like Mike is a little more optimistic. You've said that you expect them to start coming back late in 2018. Is that still what you're thinking for the majority of these large projects? Or do you think maybe things have gotten a little better in that standpoint?

I'll give you my answer on that; Mike can give you – I think that – I think our customer base, the price of oil stability, the refinery business, the global marketplace, I think the large projects – or medium-size projects are going to maybe happen a little bit earlier. I'm still a little bit cautious about the large ones. I think there's still sight of line on capital spending for my – our large customer base. But clearly they're firming. And one can be more optimistic, but I'd like to see that funnel continue to shift to the left and continue to grow on the outer side. But my feeling right now is it's a little bit better but you still have to be cautious and – because I'm going to watch the capital. And I still think our customers are being cautious with capital right now. Now, Mike, what are you feeling?

I think those are fair remarks. I mean we're getting into conversations with these guys because they want to get things ready to go.

Yes.

And we're going to look at their next couple of quarters as they make their decisions. But I think there is a lot more optimism around getting some stuff moving now, so we're going to have to see how it plays out. We saw the reports last week out of the oil companies. We know where their heads are. We're working that.

Yes. I think that there's one difference, Andrew, that last year at this time, I talked about that we saw the MRO coming; don't be surprised as we finish the calendar year fiscal year, we'd start seeing some pent-up MRO come forward. This year, that's continuing to go, but really what's going to happen this year as we go out of this year and go into next year, I think you're going to see formation of the money's being set aside for the projects. And that will be a key point for us as we go into the budget setting of our customer base in that January time period. And I think this year they're going to say okay, money's being allocated and the project is going to start being let. So maybe a month or two sooner, but will see. That's where I am right now.

Thanks, guys. Appreciate it.

You're welcome, Andrew.

The next question will be from Julian Mitchell with Credit Suisse. Please go ahead. Julian Mitchell - Credit Suisse Securities (USA) LLC: Thank you very much.

Good afternoon, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC: Afternoon. Maybe a first question on the cash flow and the usage of the cash. I think you talked previously about the $300 million to $500 million or so buyback range. Clearly, I guess you're coming in probably at the very high end of that for the year. Maybe just update your buyback thoughts and how you see the acquisition pipeline today?

So the buybacks is at $400 million, and so that's where we are right now and I mean we're pretty well stocked for the rest of this fiscal year. Yes, cash flow is good, but right now, the buyback is pretty well set at the $400 million. We're not going to change it at this point in time. We're probably looking at the same amount next year, somewhere between $400 million and $500 million next year. It's our current view of it at this point in time. From the acquisition standpoint, I don't think there's been much change. I think we're still trying – looking this year at some incremental small deals. I don't know if we're going to get those done or not. But we're typically looking again, somewhere between $500 million and $1 billion over the next 12 months of acquisitions. So our cash flow right now is very good. And clearly at this point in time, we don't have anything major burning through that we're going to ramp up share repurchase or ramp up and do a big deal at this point in time. Frank, do you have anything on there?

No. I think that's exactly right.

So that's what we see right now. Julian Mitchell - Credit Suisse Securities (USA) LLC: Thank you. And then just on the organic sales growth outlook, so I think you're guiding for about 5% growth in Q4, and at EPG you talked about 4% to 5% growth in 2018. So do we see this current trend as sort of steady? Or do you think your growth can accelerate on the revenue line, at least towards the end of the calendar year, beginning of calendar 2018 and then sort of slows down after that with orders?

Yes. So on the growth rate in the fourth quarter, we're looking at about the same growth rate we saw in the third quarter and the fourth quarter. And then I would say that we would – I mean I think what we – the 5% to 6% is the number I gave you at EPG in May. And I'm still saying at this point in time, I don't see any change at this point in time. So there'll be some slight acceleration and it's driven off of – it's going to be driven off of Automation Solutions. And from our standpoint, I mean Mike's business will continue to convert. And obviously he's got easier comparisons in the first half of this year because he was down probably on average 5%. And so he has a pretty easy comparison in the first half of next year. But I'm still looking around that 5% type of growth rate, 5% to 6% type of growth rate right now going into 2018, underlying growth rate. Julian Mitchell - Credit Suisse Securities (USA) LLC: Thanks. And on AS within the MRO piece of that, do you think you've made – you're quite some way now through that catch up MRO activity, and that will start to fade away? Or you think there's still a little bit of MRO pent-up demand left?

My point of view is it's still strong.

It's still pretty strong. I don't see – I think – I would never accuse any of our customer base of cannibalizing or not spending enough money on MRO, but I think they understand, and I think that it's going to be good for a while here. I think we're going to be positive for a while. We're seeing it in North America. We're now starting to see it in Asia. We're going to start seeing it in the Middle East. So it's starting a wave around the world right now. So it's a good thing for us at this point. I'd love to see it continue nicely in the first half of 2018. That would really give Mike a chance to get some of the medium-size projects onboard and working them. So that's what I see right now. I do not see a slowdown too much. Julian Mitchell - Credit Suisse Securities (USA) LLC: Great. Thank you.

You're welcome.

The next question will be from Steve Tusa of JPMorgan. Please go ahead.

Hey, guys. Good afternoon.

Good afternoon, Steve.

Sincerely sorry to hear about Zorro (40:43).

Yes. I appreciate it.

A lot of candor, a lot of banter over the years, but you guys both have had a very, very good run. So you should hold his head up high definitely.

I will, definitely. I've been doing that, and I brought my Rally Monkey in today, too, for Zorro (40:58) today. So I have my Rally Monkey in here, too, and I've got two baseball bats and my Rally Monkey, and we're all in here saying...

Got them right (41:04)

I mean, I have to break Tim (41:06) in. I'm going to hit him over the head with a baseball bat in a second, but (41:12) did not warn him about some of the physical things we do in our conference calls like dropping baseball bats on my floor, but go to your question, Steve. Thank you very much for your comments.

Yes, and sincerely.

Thank you.

So on the Climate business, so obviously you have some raw pressure coming through. How do you kind of see there the pricing environment as you go in? I mean, I assume you're going to be negotiating on kind of that round of pricing with the OEMs this fall, or is that pretty much kind of – or maybe year end? I'm not sure. Or is that set in stone for kind of next year? Is that something that we worry about and have to assume the OEMs are going to execute on their price increases as well, because everybody's kind of feeling the pinch here a little bit in HVAC?

Well, I think if you go back, first of all, in 2016, if you notice, we took a very nice step in margin, because we had material pricing that was very favorable versus the customer pricing changes. 2017, we do have a lag, and in some cases we have clauses where we'll pass through, so we got some pass through of that 2016 benefit we captured. And then, with the material inflation pickup, that causes a bit of a squeeze period, if you will. But, again, that's normal phasing. That'll play out into 2018. And then, for us, the cost reductions and product mix are a big part to the total equation as well, things like UltraTech, things like the K6 compressor and cost reductions, especially on DIY kind of stuff. And I would say, again, we've seen this coming for a long time. It's come as we thought, and it'll go in 2018.

Yes. We have a lot of contractual stuff around as we go back and forth, and so there's leads and lags. Last year, we had a record, record quarter in profitability, and we had that kind of price cost deposit for us. So, Steve, I think we're pretty well set, and I think the OEMs see this coming, and we're working it right now, and clearly we give back and forth in this. So I think everyone is in pretty good shape right now, and we're not behind the eight ball here at all. So we're in pretty good shape.

And then just on Valves & Controls, so we kind of move forward into this cycle and you have this new Pentair business. Perhaps not – selling in solutions may be a little bit different than selling your really, really high quality, rich margin type of products. Should we expect a different level of incrementals, perhaps a different profile of cash flow as you sell – as you go to market as more of a solutions provider as opposed to a just really super high-end device guy?

No.

No? It's same kind of pricing dynamics. You're not really – you're not just going for the revenue here?

No. It'd be the same similar dynamic. Obviously, on the mix of our business, you know, Steve, in the mix of business, our control systems are typically lower margin and certification is (43:59) higher. Valves are sort of the medium, some of the Valves & Controls stuff are a little bit lower, but the mix is there. There's not going to be any change in profitability and cash flow. It's the same. Again, the revenue, the aftermarket, the key stuff here, which we're very strong in. There's not going to be any significant change in your modeling relative to the Automations business and the Final Control business at all. I think the one thing that we do have in the long-term, it's not in the next two or three years, is really a big increase potential in the aftermarket business. So, I think Pentair and Randy Hogan had just started this and he did not have the same critical mass we have. I think in years five, six and seven I think you're going to start seeing us better service contracts, longer-term contracts, we're already starting to see some of that. That will give us a better mix than they had historically themselves.

We're working hard on the operational footprint as we go forward, so we can hit those shorter lead times with those type of products. That's the big difference.

Yeah. Big difference in the margin, too. I'm optimistic on it, Steve. I wouldn't worry about that too much right now. That's not my worst problem, there.

And then one last question, very high level and no offense to your operating guys, but you never really had operating guys on the call before, your segment heads. What was the call on bringing these guys on? I mean, it was great color. Don't get me wrong. But I'm just curious if there's any – should we be reading into this at all?

No, Steve. How many times – never try to outguess me, okay? The reason I had them on is because we made some – you're something else man. Where's my Tusa Cashmere (45:42)?

Put the bat down, Dave. Put the bat down.

I had committed to you in a session meeting (45:49) we had that I would have Mike come back after six months and talk about the funnel, remember?

Yes.

I talked about updating the funnel. So I had Mike, so I wanted Mike to do it live. I could've done it, but I'd rather have Mike do it and you have guys to have a chance to take some cheap shots at Mike. And then if I'm going to have Mike on, I might as well have Bob, so you guys can take some cheap shots at Bob and I know that there's a lot of concern out there about our flow-through profitability and things like that. So there is no call here. Just because Zorro's (46:17) struggling, the CEO is not struggling. I'll still outrun you. But thank you very much for that vote of confidence. These guys are over here dying right now, holding a baseball bat over my head.

I'll reserve the cheap shot for the next CEO. Thank you.

Okay. Thank you very much, Steve. You're a pal (46:34). Thank you.

Our next question will come from Nigel Coe of Morgan Stanley. Please go ahead.

We're not announcing succession here, Nigel. Don't worry about it, okay? Nigel Coe - Morgan Stanley & Co. LLC: I don't know how to follow that, but...

I made it to 2017, I'm going to make it to 2018, okay? Nigel Coe - Morgan Stanley & Co. LLC: All right. I have no doubt about that. I also echo Steve's comments on Zorro (46:55). Very, very sorry about that. But 15 is a hell of an age, so he's had a good run.

For a King Charles, it's a hell of a run. Nigel Coe - Morgan Stanley & Co. LLC: So just, obviously, you're not giving FY 2018 guidance here, but any help on framing out V&C for next year just in terms of revenues, underlying margins, restructuring? Any help there would be great.

Okay, I'll give you. Okay. So I would say that underlying revenues for V&C next year, we're not going to break it out, but it will still be negative. I think that as we prune it and we look at some divestiture in there, I think the core rate will start increasing, but the underlying V&C business probably will be flat at best, maybe slightly down as we continue to prune and we continue to do some things there and sell some parts off. From a profitability standpoint, clearly, what we're trying to do is we're starting at 5% and we've got to figure out how to double that. And the key issue for us is how do we get that? We've got to get back on track the plan that we laid out to the board and our shareholders and make it accretive to us, excluding the accounting charges of the valuation in inventory and backlog and that's the key issue for us. And then, obviously, driving cash flow near-term. I mean there's a lot going on right now, but I like where we are at this point in time. It will hurt us from a margin standpoint, but we're going to figure out how to make sure that we can deliver – we made a statement on cash flow accretion and slight earnings accretion in 2018 and that's the focus. So that's the framework you're thinking about right now. Nigel Coe - Morgan Stanley & Co. LLC: Right, right. How much restructuring do you think in 2018, Dave?

Okay. I think it's going to be still be around $30 million to $35 million Valves & Controls restructuring. I think you're probably looking at probably the same about for the total or rest of Emerson. So from that perspective, I think you're looking at probably total $60 million to $70 million of restructuring next year. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Great. That's really helpful. And then just...

Maybe a tad higher, but yes, that's right. I'm just, yes, that's where I see right now. We're just going through the first phase but that's what we see right now. I think Mike's trying to get $35 million done right off the bat.

We're hustling hard.

We're hustling right now. We have a lot going on. I would say we're going probably do the same amount next year. Nigel Coe - Morgan Stanley & Co. LLC: Okay. Great. And then on the funnel, which is a great job, but the $4 billion, (49:21) what kind of hit rate would you expect on that, Dave? I mean, what's been your win rate on projects? And on the $2.5 billion oil and gas, anything to call out in terms of mix of geographies upstream, midstream, subsea? Any help there would be great.

Yes, from a geography standpoint, again North America and Europe and some Middle East I think would be the principal places you would expect as far as activities go for sure. From a hit rate standpoint, I mean various kind of product lines. I would argue we've been taking share all through this period right now. And we anticipate this is going reasonably well. Our customers are coming forward with this for the technologies, towards our people, towards our aftermarket capabilities, our service centers. We're doing pretty well holding our own.

We may not get all the projects, but we will get a big chunk of the projects. And so we won't get all the projects. So we've done pretty well here. But I think the key issue for us will be Asia has picked up nicely, it's just a function of I think I said earlier, when the budgets are set at the end of this calendar year, our customers are looking at their cash flow, they're looking at the pricing, and I think we are going to have a pretty good capital spend next year, which will be good for us. Nigel Coe - Morgan Stanley & Co. LLC: Great. That's helpful. Thanks, guys.

You're welcome. Take care.

Next question will be from Gautam Khanna with Cowan and Company. Please go ahead.

Hello, Gautam.

Hey. How is it going guys? And I'll echo my sentiments on your dog and that's awful. But yes, a good run.

He's still alive, but he's hurting.

Yes, that's tough, certainly very. I understand. I was wondering if you could quantify the revenues associated with the product exits you've talked about at Valves & Controls. Maybe what they did last year in aggregate?

I'm not going to tell you off the top of my head, but, Mike, do you have an idea?

I don't have it on the top of my head. It's not a huge number, it's pruning.

Yes. Less than $100 million, I mean gut stuff. That's what we're looking at. We're going to pick here and there, and certain things like that. I just know in the short-term that hurts you as you go through that process, and the backlog has been liquidated pretty hard. So...

And they're going to be pruned for a reason which is typically their...

Profitability, yes.

(51:41)

Got it. Okay. And regarding the cash opportunity at Valves & Controls, do you have an updated view on the timing of when you'll realize that? I think you said $300 million to $400 million in your comments, but previously was it $500 million? I'm just wondering how big is it? And where does it lie within the working capital accounts? And how are you guys going about attacking it?

Okay. So I would say – I've never said $500 million, I have said $300 million to $400 million. Typically, what we're looking at right now is within 2020 we're looking at trying to get $200 million of that. I would like to see if I can get another $100 million out of that within by 2020. It makes a big difference relative to the payout ratio, our dividend or free cash flow. If you approach $300 million, we get closer to 45% on our payout. And that's ahead of schedule. And that's a big thing for us relative to our dividend or free cash flow payout. And where it sits primarily is inventory, and they have some issues with receivables because of their delivery capabilities just were not up to par versus what we would see, and our customers typically would not pay on time when you haven't delivered. And so those are the two areas we're working on right now. And I would say across all – it's going to be a Final Control thing we're going after, and that gives us a big chance of getting that $300 million to $400 million well within that by 2020. I mean you'll see it. We're going to have back to back years of free cash flow conversion of over 120%. And there's not many industrial companies that do that. And so I think that we're starting to see the benefit of that, and Mike's team is going to work it hard. And we're really going to push hard because Mike – Frank and I really want to be able to say that by 2020 we're getting close to 45% of our dividend to free cash flow ratio. That would be a very powerful statement for us to make.

Appreciate the color. Thanks, guys.

You're welcome. Take care.

The next question will be from Christopher Glynn of Oppenheimer. Please go ahead. Christopher Glynn - Oppenheimer & Co., Inc.: Thanks. Good afternoon. Dave, with the ClosetMaid process winding down there, just wondering if anything else is emerging at the margin of your portfolio? Or if kind of the repositioning and divestiture is more categorically behind you?

The repositioning that we laid out in June 30 of 2015, the three programs, are behind us when we finish this. As we say we always have little things that we look at. But as we look at the business today, and the two platforms, we're set. And now we want to operate this and so we're moving forward. There's nothing in the works other than the little tiny product lines or plants that we're looking at relative to the Valves & Controls business. So we're set, and we're looking forward to get that behind us. And I know the whole team's working hard on that and it'd be nice to have that done and we can just run forward in 2018. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. And Tim (54:46) mentioned the Middle East turning there. That was down a good bit. I'm just wondering, is that a characteristic kind of boom/bust cycle moving into a boom period you think there, with the kind of immature market dynamic in the Middle East?

Yes. I think that – a couple of things going on. I think there's a little bit more stability from a cash flow standpoint and an earnings standpoint. They've underinvested and so they're – I mean if we look at our orders right now, the orders are – Mike has been (55:12) picking up. You have positive...

Picking up. They're shorter cycle orders, but they're picking up.

They're picking up. So I would say, I think we're going to be next year, that market will be positive growth next year based on what we're seeing right now. I was not as optimistic last call, but now I'm starting to see some good things. Mike's team's done a great job of getting Valves & Controls, include them back into Aramco, back into some Saudi things that we haven't been able to get into before. So a lot of good things are moving our way in the Middle East. I think the only market I see with any heartbeat right now in Latin America is Mexico for us. And Bob's business is a little bit different. He's doing well down there, but Mike's business in the big projects, there's just no money.

NOCs in Latin America are the challenge.

Yes.

And they're just taking their time.

That's where we sit right now. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. And then lastly on the $2.60 full year outlook, what's the basis from the third quarter for that? Is it add $0.04 to the $2.63?

I'm trying to understand your logic here. Help me out – say that one more time and run it by me. I must have Zorro (56:18) syndromes here right now. Christopher Glynn - Oppenheimer & Co., Inc.: Yes. So if you look at the $2.60 midpoint for the year, what are we using from the third quarter to bridge to that?

Oh.

$0.67.

$0.68?

Well $0.68 is – excludes a penny of ops and our full guide has the full nickel of ops in it so you want to use...

$0.67. Thank you very much. That's a very good question. Next?

All right. Our next question will be from Robert McCarthy with Stifel. Please go ahead. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Good afternoon, Dave.

Good afternoon, Rob. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: I guess the first question is, in looking at kind of this recovery we're seeing I suppose, how do we think about if we go into another oil and gas swoon here? Or how should we be thinking about it? Because we got the crosscurrents of underinvestment, pent-up demand, the turnarounds, but you could be in a situation where you could see material pull back here. So how do we think about kind of scenario analysis for 2018 if we start to see a swoon again?

I mean, I haven't really mapped it out, but if you start seeing also in the price of oil drop back below $30, $20 you'd see immediately our business, Mike's business go negative, and within the next couple of quarters it would be negative and so we'll be back into slight negative overall for the business. I don't see that happening at this point in time because the global marketplace is growing. The use of oil has gone up. I think the price of oil has stabilized, but there is that likelihood, but we don't see that in our customer behavior not do we see that in the marketplaces, but it would clearly set us back from a growth standpoint and then we clearly would have to curtail any type of investments and look at profitability and clearly look at what we have to do (58:22) V&C. But I would say that's a low probability for 2018 at this point in time. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: In terms of V&C now that it's closed and you have it under the hood a little bit, what do you think is the good and the bad and the ugly there in terms of your initial expectations? What would you kind of highlight as being the most positive surprise, the most negative surprise in terms of the acquisition?

I think the one positive – the negative that the business had deteriorated in profitability a little bit more than we wanted to, so our delta where we're (58:54) coming from is a bigger leap the first year and I'm telling my guys that's what it is. We've got to figure out how to get that earnings up for 2018. That would be the worst. But at the same time on the positive side, I think the people across V&C are truly engaged and they're looking forward to working very, very hard with the Automation business, which is very global, very broad and one that can get into customer accounts and get things done. We also have the resources, the financial resources, the cash flow resources to invest in this business and so that's a good thing. So overall, Ed Monsigate (59:30) report with Mike today and Rahm (59:33) was involved in the business. Things are actually better overall – there's always some things underneath there but better overall than we thought, and we're looking forward to a very positive 2018, 2019. Just coming off a lower base, and we are where we are, and the cash flow will come out. The cash flow is there. We'll get that cash. We know how to get it up the balance sheet.

Yes. I would say very good bones. We like what the business looks like. Very good team members; really, really, really know their business. I think with the way we're propositioning moving their operating methods towards our methods, I think they're very excited about it, and we're working our way through it, and I think it will be very effective going forward.

Thank you, Rob. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Thanks.

Go ahead. You got one more. You got one more question. Go ahead. We'll give you one more question. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: I didn't want to be a mooch, but we'll get Bob involved.

(1:00:22)

(1:00:25) you still work for Stifel, don't you? You're a mooch. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Stifler's mom. Get it right. In any event, for Bob, maybe you could talk about just – do you feel good about the state of your business overall with respect to Copeland Compressors position? And, I mean, obviously, you've been incredibly strong market share there, great technology position, but do you think there's going to be a level of investment or a level of defense of the technology or share over there over the next three to four years?

We feel good about Scroll. It's been a very strong run for literally decades now, and it's still got plenty of legs. The UltraTech has still got a lot of opportunity. As we said in the U.S. residential market, we think that's the solution on efficiency and comfort. And the Commercial side, we've got some new products in the kind of 10 to 20 horsepower area that are very competitive, and doing very well right now. And then, there's certainly some of the bigger-size stuff we put things together in tandem and trios and things like that. So, yes, there's – we like that range that Scroll plays within. It continues to push higher, and it's in commercial applications that are very helpful, and then combined with the solutions capability. We feel good about the prospects there. Like I said, there are other people calling the variable speed market in the U.S. not long ago, and now you see again in that middle tier customers explicitly showing that they're using Copeland Scrolls, and they got some very important sign of what's going on.

I think the key issue here, Rob, is that the investments that we've been making for many, many years here both from the technologies around the Scrolls, the products around Scrolls, around the capabilities and solutions are really starting to pay off on a global basis. And so, the work that was done in Asia and China around some of these packages and we have a lot more we can do there. Same thing in Europe. Same thing in the United States. So Bob and his team have had a good couple of wins going to his back right now, which helps him a lot. And I think that several more of those solutions we'll be hitting later this year or early next year. So I think that our solutions approach here is not just a product focus. It's really starting to pay off, and we'll continue to invest around that. I'm very optimistic. The goal for Bob is to have a premium growth, like Mike has done in the Automation business for years. And if he can do that at the level of profitability he has, that's a big winner for Emerson and Emerson shareholders.

It's hard to find a more competitive market than China right now. And this compressor of choice in the heat pump market is a Scrolls compressor from us. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Thanks for your time.

Take care, Rob. All the best to you and thanks very much for your support and comments on Zorro (1:03:21). I appreciate that.

That's it. And so what I'd like to say is goodbye. I want to thank everybody across the organization. And, again, thank you very much for your support on our organization. We still got a couple of months left, folks. We got to make this happen. And I want to thank our shareholders for their support and look forward to seeing everybody in the near future. And, again, I look forward to wrap up the year as we get into November. Thank you very much. All the best.

The conference's now concluded. Thank you for attending today's presentation. You may now disconnect.