Ladies and gentlemen thank you for standing by. Welcome to the Eaton’s Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) And as a remainder, this call is being recorded. I’d now like to turn the conference over to Don Bullock. Please go ahead.

Good morning. I’m Don Bullock, Eaton’s Senior Vice President of Investor Relations. Welcome to Eaton's second quarter 2014 earnings conference call. Joining me this morning are Sandy Cutler, Chairman and CEO; and Rick Fearon, Vice Chairman and CFO. As has been our historical practice, we will begin today's call with comments from Sandy, followed by a question-and-answer session. Before we move to that, I’ll take a moment to draw your attention to the materials on page 2 of the presentation on our website, regarding certain forward-looking statements. The comments included on page 2 in the presentation, outline a series of factors that could cause actual results to differ from what we presented in these statements. These factors are also noted in today's press release and the related Form 8-K. In addition, our presentation today includes certain non-GAAP measures as defined by the SEC rules. A reconciliation of all of those measures to the most directly comparable GAAP equivalent is provided in the Investor Relations section of our website at www.eaton.com. At this point, I’ll turn it over to Sandy.

Great, thanks Don. I'm going to work from the presentation, which was posted earlier this morning and I’m going to start on page number 3, which is entitled highlights of the second quarter results. I would say a pretty busy quarter. We released that 8-K, a week ago, detailing the interaction of the several special or unusual items that we had in the quarter being the text of the gain on the sale of the aerospace business and our several legal settlements. At that point, we indicated we expected that our operating earnings per share would be in the $1.10 to $1.12 range and we’re pleased this morning they came in right in the middle of that range, but that were $1.11 above the original guidance that we gave when we began this quarter. Our sales were right on the button. We’ve said they would be up 5% compared to the first quarter than they were and our margins were very much in line with our expectations. And you recall it when we gave you margin guidance for this quarter that was before the $0.08 of restructuring that we took in the industrial sector. So I will detail how that affects the full-year margin guidelines for each of those segments as we go on this morning. Strong industrial sector, strong electrical product margins offset the weakness in the electrical systems and services margins. I will talk a little bit more specifically about electrical systems and services but the company really allowed us to command very much in line as I mentioned with our own expectations. Very strong bookings in electrical overall in both of the two segments report, obviously in aerospace as well. We also raised our guidance in terms of where we think the markets will be for that…

[Operator Instructions]

Our first question comes from Steven Winoker with Sanford Bernstein. Steve Winoker – Sanford Bernstein: Thanks and good morning. Just first question on ESS and S&S margin declined about 200 basis points, you call that would just takes mix in pricing pressure. You mentioned power distribution, power quality, was there any impact (indiscernible) your power systems from Cooper?

As I said Steve, I appreciate the question, first good morning. Steve Winoker – Sanford Bernstein: Good morning.

It was a very much an as I mentioned that we see it in the large power distribution assemblies in the power quality business and that’s specifically where we’ve seen a competitive activity and the logistic issues lays across a number of the businesses, but again is primarily in those very big assemblies. Steve Winoker – Sanford Bernstein: Okay. And within that you’d call that back up and I would recall the February investor presentation, roadmap to about 16% in 2015 and it looked to me like I think two thirds of that was some synergies, I mean I am just talking about this segment, electrical systems and services and the rest between market and outgrowth. I assume this changes your outlook on that basis now? Or you’re making it up something it up someplace else? Or how are you thinking about that?

Yes, I think if you recall we also had increased our margins in electrical products and as you see, we’re pretty consistently getting that available from the revenue and bookings point of view as well as getting the higher margins. I think it’s a little early to put a number on 2015 and we would really like to get a better sense for how bookings progress here in the third quarter and obviously the second quarter was much improved in terms of the magnitude of the bookings as well as we think the quality of the booking. So a little early, I appreciate your question, but I think we will be in a better position to really be able to answer that we come out of the third quarter. Steve Winoker – Sanford Bernstein: Okay. And then just finally on the guidance first half to second half, I looked backwards. It looked to me like normal seasonal growth first half to second half as more or like to 15% ramp and then you would called out incremental synergies being weighted towards the back half of that $95 million and I am not sure the $0.05 really reflects that. I mean you can maybe talk through that a little bit more?

Obviously a lot of – as you get underneath that $500 million of the higher volume in the second half versus the first half, a couple of issues relative to market. As I mentioned, we saw the vehicle markets and the hydraulic markets on a year-over-year basis were far stronger in the first quarter than they were in the second quarter. I mentioned that when we’re talking about the vehicle businesses that we think the NAFTA heavy duty business will be relatively flat from this point forward and that you’ve had roughly to 74,000 units production level which is basically what you need kind of finish these next two quarters, so won’t get as much of an impact there so by deduction it was an Hydraulics here we call its generally weaker in the second half than in the first half each month so what really prepared us is Aerospace in electrical and you saw the very strong bookings in both those segments 9% in Aerospace and 6% to 7% in each of the two segments in electrical and so that’s why we’re really looking for the higher sales levels. Steve Winoker – Sanford Bernstein: Okay. And then on the some of the incremental synergy of that $95 million now first half versus second half.

Yeah. And that’s the additional 2% either you see of the about $25 million of additional benefits that higher in the second half than there is in the first half. Steve Winoker – Sanford Bernstein: Okay. All right, thanks.

Our next question comes from Joe Ritchie with Goldman Sachs. Joseph Ritchie – Goldman Sachs: Hi. Good morning, everyone.

Good morning.

Good morning. Joseph Ritchie – Goldman Sachs: Just to stand with ESS margins for a second and can you clarify a little bit more Sandy what do you mean by higher logistical costs, because it seems like a lot of the unexpected variants was in the legacy Eaton Business. If I’m just trying to get a better handle of that.

That’s primarily freight cost, that it’s a – it’s been a surprise to us how quickly free cost move during the second quarter and part of this has to do with the size of the equipment that we’re shipping and its moved up quiet significantly during this time period. Joseph Ritchie – Goldman Sachs: Is that something that is expected to continue just given that you’ve had, now stronger bookings in ESS moving forward, I would imagine if that’s the business insulting that has subsides in the near-term.

That’s part of the reason why we moved to our guidance, you’re right that’s one of the reason why we moved our guidance down for the balance of the year. Joseph Ritchie – Goldman Sachs: Okay. And then I guess one other question on ESS, you mentioned pricing pressure and clearly, the bookings number with a positive this quarter plus seven, talk us through maybe that the pricing or competitive dynamics that you saw in the bookings that you put into your backlog just this quarter.

Well, as I mentioned earlier we’re comfortable at the improvement that we’re forecasting the second half really is driven by what we’ve been able to successfully book here during the second quarter. I think if you look back over the last six, some quarters in this segment, you saw our bookings levels that when they were positive we’re in this kind of 1% to 2% range then you recall it they went negative in the fourth quarter in the first quarter, those tend to have in this kind of the business which is a backlog based business tend to be sort of a precursor what’s going to happen in the next quarter so, we’re pleased how we see that we had a very strong quarter in all by what I would say is the large power of quality types because that side of market continues to be weak. But the power distribution side, whether and each of the end markets are continue to be quite strong. We’re seeing good indications of continued strength in non-residential and oil and gas in particular so that we are encouraged by what we saw here in the second quarter now obviously we got to ship it and we are pretty comfortable we know how to do that but we don’t think these logistic costs are likely to go away. Joseph Ritchie – Goldman Sachs: It's interesting to me you think about the margin for the business for the back half of the year, you are basically implying something over the 14% for ESS which you are comfortably there last year, and so I guess a one last question on ESS. Can you kind of talk through may be the puts and takes to the specific margin guidance like where could be disappoint or potentially be more positive or constructive on in the back half

Yeah. I think in the guidance that we provided are they can add a lot more homework character to it is, I think that one thing we always tried to stress for people understand any of electrical systems and service business hence they have a higher data to it both when the market is expanding or contracting because it tends to be a lot of large projects are tend to go into expansion if you will, equally true in terms of what happens with the mix of projects that can change from quarter-to-quarter and we’ve obviously did not have a good quarter in that regard here in the second quarter with the knowledge of what we have got in our backlog at this point, our best view is that we’re going to see the improvements that you’ve referenced in terms of second half being a stronger half than the first half, but it’s still not to the level that we’ve had anticipated originally this year and that’s why we reduced the guidance for the second half. Joseph Ritchie – Goldman Sachs: Great. Thanks. I will get back in queue.

Our next question comes from Scott Davis with Barclays. Scott R. Davis – Barclays Capital: Hey, good morning guys.

Good morning Scott. Scott R. Davis – Barclays Capital: Can you give us just a little bit more color on aerospace margins in 80 bps down a year and you said half of that was from structuring. I would have thought in and up 9% sales environment you’d have been able get some operating leverage is that just more of a mix issue?

Yeah its again a whole series of different projects in there, but I would say this is very much in line with our guidance I wouldn’t be as concerned myself about this thing moving a couple of tens of a point one, one direction or another, the real issue that we are particularly pleased was is the aftermarket business is starting to rebound you may recall it over the last two years we’ve talked about that one of the challenges is with the commercial OEM production increasing as quickly as it is after market hasn’t been able to keep up with that. And we’re now starting to see, seasons that fill in and we think some of the initiatives that our team has underway to help in larger aftermarket business are really starting to show up. So we’re not yet seeing a 20% increase in what we’re shipping in terms of aftermarket because this stuff has some lead time as well, but we are starting to get to a point where it’s a more representative percentage of the total business. Scott R. Davis – Barclays Capital: Okay. Fair enough. And then question on ESS, that your comment on pricing pressures and I guess I am little surprised that incremental I mean power quality particularly in Europe has been weak now for a couple years, few years. Why is that incrementally getting worse on price. Is there – it’s just a function of excess capacity or it’s just someone in there as an rationale trying to gain share or new entrance anything that’s changed.

I don’t think – the single phase piece that we’ve talked about which really is over in the product side, I think those conditions have been fairly similar with the weak server sales around the world. This tends to parallel or be a pretty good surrogate for the demand that we see then on the accompanying UPS and that continues to be much as the same issue. I think here on the larger products which tend to be the three phase products which tend to appear for us more in this systems and services segment. We’ve got a couple of things going on, one we talked when we were at EPG this year about the fact that there is a change in the technology of the power solution in the large data centers. I remember that’s not the biggest part of this market, but there you’re ending up with a little less power quality equipment in a little bit more power distribution equipment in average large data center. I think that’s going on its not as much of a technology change inside the UPS itself it is, it’s a change in terms of how people are utilizing them. So I’d say that change is going on, but I would say we still have not seen the large enterprise system data center is accelerate to the extent that we’ve seen the kind of mobile or let me call them hyper scale mobile data center is really come on and so then the enterprise have typically been the people like the big financials and large industrials and they’re not spending as they were a couple years ago. Scott R. Davis – Barclays Capital: Okay, fair. And then just clarification, Sandy you commented about that the tax status if you're to do a spend obviously that – it’s off the table, but is there anything that would impact you selling a business.

No. Not versus any other normal sale that you’d make in terms of looking at price and looking at after-tax proceeds. Scott R. Davis – Barclays Capital: Okay. Fair enough. Great and thank you. Appreciate it.

Our next question comes from John Inch with Deutsche Bank. John Inch – Deutsche Bank: Thank you. Good morning everyone.

Good morning, John. John Inch – Deutsche Bank: Hi. So I just, I realized there is a lot moving parts, but in a nutshell so the 500 plus second half volume Sandy, if you compare the second half of 2013 versus the first half that was up 222 what is bridging the gap is it truck, is it something else, because you’re taking your market forecast down, so I’m just – just in a very high level, what’s the accounting for the sort of $2.70 delta incremental second half volume this year versus last year?

Again we’re seeing the aerospace market continue to grow fairly consistently. We’re seeing hydraulics slow in terms of that growth this year. Better vehicle year-over-year growth, and that’s different than we saw in the second quarter where it was a little solid and the rest of it’s the electrical business. John Inch – Deutsche Bank: Would you characterize your guidance as – I’m just trying to put this into a context, because obviously, we don’t want to get into third quarter, and have to cut this forecast again, is it an extrapolation of the run rate that you see or are you leaving yourself any kind of cushion with respect to kind of the 3% and then the 4.5% out growth?

Yeah, the 3% is our best estimate of these markets, and of course we can be wrong on that, but it’s our best estimate at this point. So, we are not trying to build a cushion, John – or be overly rest of it, it’s our best estimate at this point. John Inch – Deutsche Bank: Can I ask about hydraulics, we had three quarter in a row of high-single digit or low-double digit bookings, and what exactly – why did that not manifest itself into some better top line, was it – I mean were there any sort of cancellations of orders, I mean I’ve realized, you’ve got a lot of exposure to say North American Ag, is there anymore color you can give us. We all know what the China headlines are – is there anything else, that’s going on that might account for that discrepancy?

Our bookings numbers are net of cancellation, so don’t simply gross book and not report cancellation. So, we’ve seen, if you go back, really, you recall it a year ago, it was a fairly weak booking number in the same quarter. Since then, we’ve seen three quarters that were really quite strong, and then we’ve seen the second quarter, that obviously came down. I think what we’ve seen is, the industrial activity has been okay, not great. And the biggest increase was occurring in the mobile side of the marketplace. So, was these with the ag manufacturers, who have clearly backed off at this point. And construction equipment, is okay in the U.S., it’s not great outside the U.S., and it’s pretty awful in China, and I’d say that, that’s where the difference has been, China has actually gone down further.

In gentlemen, on the last call we’ve pointed out that often the OEs when they start ordering they’ve quite long dated orders, and so that means that you will have a surge of orders, but they extend that over a long period of time. And that’s why we had some of a gains we had in the prior quarters, as Sandy mentioned actually OE orders were down in the second quarter. John Inch – Deutsche Bank: Rick are you suggesting that the three quarters of the strength that actually can still manifest itself even though it’s kind of in future quarters even though the markets are under the pressure you just described.

Yes. Some of those orders do extend out. Now they are subject to cancellation, but some do extend out into the future.

But John, we’ve mentioned in numerous forms that often what you’ll see large OEM’s do as reserved capacity through orders and they can adjust those, but if they come out of a period of weakness they are trying to ensure they are going to have forward capacity. John Inch – Deutsche Bank: One more from me what would you say to this question that’s out there with Cooper on the ESS side you perhaps there has been pressure on you with respect to market share and so you’ve actually – you’ve actually had to take price action specifically to Eaton versus the market to try and preserve some market share. I mean, is there aspects of some of that in perhaps some of the mix within the ESS business.

I don’t feel so, I think if you look across the two businesses, the channel based business where you tend to have more of a mix of product where you’d be presenting a mix of product into a channel, I think you’re seeing very solid performance and would have been more likely if your premise was right you would have seen that in the products area. The other segment tends to be one where you are bidding on individual jobs their individual transactions and they don’t always have all the products as your premise was. So I would say no I think you’d see the reciprocal of this performance if that was true. John Inch – Deutsche Bank: Okay. Thank you.\

Our next question comes from Ann Duignan with J. P. Morgan.

Hi, this is Mike (indiscernible) for Ann. I just had two quick questions. Can you talk about the margins again in Electrical Systems and Services? And I guess if would have pass the 200 basis point year-on-year decline. How much would you put in each of the three buckets you identified?

They are about equal. There is not an overload in any one of the three.

Okay. And then following up on that in aerospace you mentioned 20% growth in bookings for the aftermarket. Any idea or color around how much of that might be provisioning related.

Hard for us to know exactly, because after market for us really includes spares, repairs and overhauls and so what we are beginning to see is we are beginning to see some of the news planes that came into service three years ago start to really get into the after business, but you are still seeing the commercial and you are seeing these releases from the large commercial OEM increased in double digit numbers and so that continues to put pressure and trying to get after market to catchup with that kind of number, what we are particularly pleased about in this quarter is the strength was both on the commercial side and military side. And so pretty broad-based strength in that regard.

Okay, thank you.

Our next question comes from Andy Casey with Wells Fargo. Andrew M. Casey – Wells Fargo Securities LLC: Good morning. Another question on the margin guidance, I’m trying to build up the 26% incremental margin embedded in the full year guidance after – from doing the math, right what appears to be a first half 19% extra structuring in Q2, and you’ve somewhat addressed it aero side and S&S, but also within that, it looks like you’ve fairly sizeable ramp in electrical products. Is it fair to look at implied second half electrical products incremental margin to be something north of 30%?

I have to do the same calculation you are doing, but yes, again remember our guidance for the segment is higher than what we have achieved for the first two quarters, so I want be sure we’re doing the math the same, but it’s – we are assuming that we continue to have even higher margins in the second half than we had in the first half, and we feel pretty confident in that. Andrew M. Casey – Wells Fargo Securities LLC: And is that just underlying demand, Sandy or are there more synergies falling into the second half than there were in the first half?

There are more synergies in the second half, if you back that chart that we referenced…

But that’s broken up separately, Andy. So you have the normal…

Yeah. Right now, I mean – that you have in the second half of the year, and obviously a big step up from Q1 to Q2, and then you step up again, about $150 million into Q3 in revenue, and just a slight decline in Q4. And what we’re saying is, we believe of that 26% incremental is appropriate for that revenue increase second half over first half, and we’ve broken the synergies out of the separate line item. Andrew M. Casey – Wells Fargo Securities LLC: Okay, and then just a higher level, and thanks for that Rick and Sandy, a higher level question, if you step back and look at through demand trends, just within North America, I mean we’re seeing kind of mixed performance, but in general things continue to get better, but it’s a little odd, do you have truck acting well, construction okay, but not great, and then what appears to be underlying progress and improvement for electrical businesses, and what are you seeing out there, is it just continued hesitancy for the large projects to get underway, and if so, what’s causing that?

I think you describe it right, it’s okay if not super. But I guess, you look at the flash PMIs at 56%, orders of almost 60%, manufacturing industrial product was up pretty solidly high single digits here in the U.S., here in the second quarter. We are seeing more signals we think around non-residential that it looks like it’s picking up some more, the residential is drifted a little bit more and you’ve all seen those numbers, we don’t see utilities moving substantially at this point. The construction equipment is a little better but mining is not great. I think on the ag side it’s weak. And if you think about the vehicle Markets, Class 8 is strong, light vehicle continues to be pretty strong almost a 17 million SAR in June and then weak government spending. So you do end up with a little bit of a Ying and a Yang, and that’s why we say, we think, overall you end up with subpar economic growth in the U.S., but it’s better than the rest of the neighborhood. And so when you’re looking at Europe, still struggling to get its full momentum, South America is pretty rugged, China still an attractive overall number, but very inconsistent by market vertical within China. So I would agree Andy with your general view on it, and that’s why we say we still think the 3% is the right number we don’t think – for overall Eaton Markets we don't think four is possible with the start, that the year started with. Andrew M. Casey – Wells Fargo Securities LLC: Okay. Thank you very much.

Our next question comes from Julian Mitchell with Credit Suisse. Julian C. H. Mitchell – Credit Suisse Securities (USA) LLC: Hi, thanks. Just on hydraulics, the bookings numbers have been bouncing around a lot so I just wanted to check. The sort of operating earnings ex-restructuring were about the same year-on-year in Q2. When you are looking at the second half, you basically assuming a very similar EBIT progressions what you had last year in Hydraulics.

And generally Julian just in our Hydraulics business with its more heavy mobile loading, generally the first half is a little stronger, the third quarter tends to be the weaker quarter for hydraulics, when you look through the year. And we don’t think that’s likely to be substantially different this year. Julian C. H. Mitchell – Credit Suisse Securities (USA) LLC: Okay, will your hydraulics earnings be kind of up or down year-on-year in the second half in your guidance?

Though I have to – full year-to-year comparisons, we really been looking more in terms at our first half versus our second half.

It should follows the normal seasonality that you saw last year though, Julian. We don't see any reason for us to be different than that. Julian C. H. Mitchell – Credit Suisse Securities (USA) LLC: Got it. And then in electrical products, as you pulled out a couple of times, you’re looking at a steeper sort of margin jump year-on-year in the second half than what you had in the first half; is that solely related to the sequencing of Cooper synergies or is there something in the underlying business that’s also driving that?

You are seeing pretty strong growth, again I remember second quarter up 6% from the first quarter up 4% from last year, you’re seeing six very attractive quarters in a row of growth about what the most people consider the markets to be. So I think you are getting some leverage in the business there in addition to the fact that, then we get the synergies to drop in as well. So I think we’ve got both of those working for us quite well there. Julian C. H. Mitchell – Credit Suisse Securities (USA) LLC: Thanks. I mean just lastly, I hate to come back to this, but electrical systems and service, is there – at some point a view on kind of the market segments that it targets or something more strategic, I guess you’ve had it for about a year and half now, you moved some costing back in Q1 out of products, so I guess is there anything changing strategically on how you’re viewing what’s happening there or is it just sort of a bunch of bad one off items in the first half and those should normalize?

Yeah, I wouldn’t say it’s a change in market segments, because we serve with our market shares, we serve the very broader array of what’s out there, clearly we’ve made some very substantial progress in oil and gas, but it’s not there is a different economics if you will to that set of end markets activity which is more an issue of logistics, this particular mix. And as we’ve said, from pricing that really comes, we think from this weaker period of demand, and so we’re encouraged with what we’ve seen with our bookings here in the second quarter. I don’t want to overplay that, but it’s the best set of bookings we’ve seen in six quarters, and I think that’s significant in itself. Julian C. H. Mitchell – Credit Suisse Securities (USA) LLC: All right. Thank you.

Our next question comes from Jeff Sprague with Vertical Research. Jeff T. Sprague – Vertical Research Partners LLC: Thank you. Good morning, gentlemen.

Good morning, Jeff. Jeff T. Sprague – Vertical Research Partners LLC: Sandy, I was wondering if you could come back to your comments on the spin, and may be just a little color on – or the difficulty in doing one so that speak, the color on kind of controlling regulation or law that brings you to that conclusion. And I’m also just wondering, there’s obviously been some fresh speculation from myself and others, but these questions have been out there before, I’m just wondering why, what kind of learning aside to your limitation now, does this reflect the fact that you yourselves have dug in and looked at it much more closely, and have found the roadblock or is there some other explanation?

Jeff, let me comment. Because of the legal steps we had to do to complete the Transaction for Cooper, there are a couple of code sections that make it not possible to do a tax free spin for five years, and it’s a conclusion our team can do it, it’s not a simple analysis, but they came to it and then several outside advisors corroborated that. So, we are very certain of that analysis is accurate. And, Jeff it’s not new knowledge, we’ve been well aware of this all along and I have tried to indicate that, we had no intent to do any such actions, we’re just trying to help make it clear for people that it’s not simply an issue of will, it’s also an issue of some very technical issues at this point. Jeff T. Sprague – Vertical Research Partners LLC:

It actually would be taxed higher than just an asset sale for some complex reason. Jeff T. Sprague – Vertical Research Partners LLC: Okay.

So that has been difficult to make work economically. Jeff T. Sprague – Vertical Research Partners LLC: Okay. And then just shifting gears back on price, one of your competitors noted that there was some price pressure in lighting and some of the low voltage areas of their portfolio. Are you seeing that anywhere in the lighting specifically or any of the other kind of industrial low voltage businesses?

Again our lighting businesses and our electrical products segment in terms of just thinking where it appears for us and you can see our margins are continued to be quite strong there. I think as the LED conversion goes on, clearly there and we’ve talked to this on a couple of occasions, there is a payback competition if you will between LED and to the traditional lighting sources that were very comfortable with – where we are positioned with our technology leadership there. Jeff T. Sprague – Vertical Research Partners LLC: And then, just finally from me just a comment on pension, I get it it’s an early read but the market could be in all kinds of gyrations between now and year-end with paper and everything else, that does your comment reflect something idiosyncratic at Eaton intention or is it just the general view on where we think rates and other kind of items might be?

We were simply trying to give some general indication of what would likely happen to our pension expense next year and the easiest way to do that was simply to say if interest – discount rate stayed about the same, just based on our asset performance and based on some particular things that happened in 2014. We believe that you would see a reduction on expense of about $35 million next year. That can change and will change but it give you a rough indication of what might happen. Jeff T. Sprague – Vertical Research Partners LLC: Okay. Thank you guys.

Next question comes Chris Gleynn with Oppenheimer. Christopher D. Glynn – Oppenheimer & Co., Inc.: Thanks. Good morning

Good morning

Good morning. Christopher D. Glynn – Oppenheimer & Co., Inc.: I just had a question in the wake of the two legal settlements if you could comment on, if there is – you see any potential for customer backlash and market place push back?

I really can’t comment, we don’t expect any at this point, but no further comments. Christopher D. Glynn – Oppenheimer & Co., Inc.: Okay. And then on the tax rate, we have 6% for the year. There are a number of adjustments obviously, so it would be helpful if you could just address the 3Q and the two second halves specifically, what we’re looking out for tax rate?

We are expecting the tax rate in the third quarter will be much like the second quarter, it will drop we believe based on our visibility right now, a bit in the fourth quarter. Christopher D. Glynn – Oppenheimer & Co., Inc.: Okay. Thanks.

Our next question comes from Nigel Coe with Morgan Stanley & Co. Nigel Coe – Morgan Stanley & Co. LLC: Yeah, thanks. Just a couple of clarifications. I hate to dive back into ESS margins, but Sandy can you put finer points on what's causing the second half improvement versus the first half and you’ve mentioned price mix and freights and hopefully then we have the higher volumes coming through in the orders, is it repetition of Boeing leverage on the order pick up or is it, are we seeing improvement in price mix. And if you can just give us – if you can just give us quite a bit of detail on price mix delta you’ve seen, second quarter and second half?

I’d say it’s both of the items you mentioned, one is obviously it’s having the far stronger quarter of booking. We start the quarter with a full backlog, and secondly we’ve got, I’d say an improved look in that backlog versus what we had as we came through the last quarter. So I’d say bulk of those items are – were influencing our thinking relative to the second half being stronger than the first half? Nigel Coe – Morgan Stanley & Co. LLC: And what’s caused the improvement in price mix in the last three months?

It’s better pricing. I don’t mean to be flip about it, but it happens to be the mix of projects and there are 100s and 100s of individual projects that are represented in any one month. So it’s very hard to be, it’s this project or it’s that project, but it’s a collective math of what we’ve seen in terms of projects in the marketplace and what we’ve landed. Nigel Coe – Morgan Stanley & Co. LLC: Okay, great. And then, Rick, just coming back to the pension of $35 million, does that bake in the penalty schedule?

Yes, it does. Again, this is still half year away. But it does bake that in. Nigel Coe – Morgan Stanley & Co. LLC: Okay. Thank you very much.

We are going to have time this morning for one additional question because of the number of other calls going on simultaneously, we want to be respectful of that. So we have time for one more question this morning. And that comes from Jeff Hammond with KeyBanc. Jeffrey Hammond – KeyBanc Capital Markets: Hey, guys. Most of my questions have been answered. Can you just talk about what’s driving the better free cash flow guidance?

That’s slightly lower free cash flow you mean, and we reduced both operating cash flow and free cash flow by $200 million and it's two factors as our working capital performance has not improved to the extent that we had thought it might and then secondly the reduction in the net point of our earnings guidance that’s what behind the $200 change. Jeffrey Hammond – KeyBanc Capital Markets: In the working capital is that related to the Cooper deal that you’re hoping to get improvement there or.

No. It’s much more broadly just in terms of where we really seen receivables and inventory so far this year. So, it’s really a tuning up based upon where we are at high year. Jeffrey Hammond – KeyBanc Capital Markets: Okay. Thanks.

I want to thank you all for joining us today. As always, we'll be available for a follow-up question both this afternoon and the remainder of the week. Thank you very much,

That does conclude our conference for today. Thank you for your participation. You may now disconnect.