Good morning. My name is Tasha, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2017 Results Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to the call over to Ms. Maria Lee, please go ahead.

Thanks, Tasha. Good morning, everyone and thanks for joining us. I am joined today by our Chairman, President and CEO, Dave Nord and our Senior Vice President and CFO Bill Sperry. Hubbell announced its third quarter results for 2017 this morning. The press release and earnings slide materials have been posted to the investor section of our website at www.hubbell.com. Please note that our comments this morning may include statements related to the expected future results of our company and are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Therefore, please note the discussion of forward-looking statements in our press release and consider it incorporated by reference into this call. In addition, comments may also include non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures and are included in the press release in the earnings slide materials. Now, let me turn the call over to Dave.

Thanks, Maria. Good morning, everybody. Thanks for joining us. I'm going to start on page three of our earning slides to give some introductory comments and then turn it over to Bill for some quarterly details. As you saw on the release this morning with very strong results across the company in the third quarter. On the sales side, you saw that sales were up 5% driven by organic growth of four and acquisitions of 1 point. This is the highest level of organic growth we've seen in 10 quarters. So, we're very pleased with that. Power of course led the way with 9% sales growth, 8 points of which was organic, driven by growth in the underlying transmission distribution markets. And about 3 points from storm-related volume, Bill will talk a little more about that later, it's hard to get that précised but, it certainly was a good contributor for us on the power side. The harsh and hazardous business as well as our gas connectors and accessories were also benefiting from strong markets, and competitive positioning, and each saw double-digit organic growth in the quarter. On the operating profit side, when you look at that particularly pleased as our reported operating margin you see was 15.4%, that's up 40 basis points year-over-year. I want to adjust that for a restructuring related cost, margins were 16%. That's the first time in more than three years, both the electrical segment and the power segment expanded margins. And keep in mind this includes the investment in the Internet of things, R&D via iDevices, that's embedded in the electrical segment. I am also happy to say that the lightings manufacturing and distribution performances stabilized. Some of the problems we saw earlier in the year, we've put a lot of attention on, we…

Thanks very much, Dave, and good morning, everybody. I appreciate you spending time with us here today. And I guess I too feel we had a good quarter. As we assess our performance, we thought there are some really good things. We had strong organic growth as David referenced. Lot of that growth came in attractive high margin markets, which is good news, able to expand gross margin offering, profit margin, while investing in R&D as David mentioned and remediation of the restructuring driven lighting inefficiency, I think are pretty good positives. And really on the negative side, as we'll talk to as we get to our heavy industrial markets still showing weakness as part of the portfolio. And that's where on page four, we start we're talking about the markets and you can see the market strength if you see those green arrows starts with the oil and gas side. In oil, double-digit growth, in harsh and hazardous definitely not a V-shaped rebound like we might have experienced back in 2009, but a very welcome sign of recovery and an attractive market for us. On the gas side, where we sell components to the distribution side of that infrastructure, double-digit growth there as well. So good green contributions there. And then power systems, you'll see both distributions and transmission showing strength and that strength is really beyond typical MRO type and there is capital expenditures and project business that's helping to drive that, and I think the noteworthy of industrial composite you see that being sideways, which is really comprised of the lighter industrial being positive and the heavier industrial being negative. So, on page five, we've got our adjusted operating income picture, and you can see, we grew operating income from $142 million to $152 million, that $10…

Sure. We ended Q3 with $386 million of cash, as it's typical almost all of these cash were international, and we have a little more than a $1 billion of debt. In the third quarter, we completed the refinancing of senior notes that were coming due in 2018. We issued new tenure senior notes at 3.15%, and used the proceeds to redeem the existing notes which were at 5.95%. So, we've reduced our interest expense while keeping the debt level the same. Our reported third quarter results include a loss of $0.11 from this early extinguishment and we expect to see benefit from the lower interest expense starting in the fourth quarter of this year. So, a healthy balance sheet with comparable debt levels year-over-year and lower interest expense going forward. Now, I'll hand it back off to Bill for the outlook.

So, page 14, we have summarized our outlook for the balance of 2017. And I've highlighted changes we have made since the July call, we have made a few tweaks to this. First, on electrical transmission and distribution, we've raised that outlook from 1 to 3, to 2 to 3. On the resi side, we're tweaking down from 4 to 6, to 4 to 5. And on the industrial side we had been expecting 2 to 4, and you'll see here 2 to 3. So, the result from all this is a 2.5% to 3%, market outlook, but you can see some tweaks to slightly stronger T&D and slightly weaker on the industrial side. And on page 15, you'll see how that boils down into our EPS range, so, where we were on our July call was 5.40 to 5.60, and as Maria just highlighted the refinancing of that debt, took about $0.11 out, and we've got since then based on our third quarter performance and our outlook, we've narrowed the range by $0.10 and took the lower end up, which effectively adds a nickel to the guidance to get to the 5.40 to 5.60, you'll see here. We're still anticipating a heavy cash flow fourth quarter to catch us up to net income. So, that concludes our remarks about 2017, and I was going to ask Dave to give you our thoughts and early preview on 2018.

All right. Thanks, Bill. Before we get off 2017, again but, be really appreciative of all the efforts, when I look at the performance in the third quarter, I think everybody, the whole organization is really performed and as delivered. And what's particularly satisfying is that when we look and cut through it, when we look at the performance year-to-date, we actually are performing as we expected which was, the expectation we would do a little bit better, the markets would be supportive. And I think all of our business has experienced that. We've got the benefit of storms, that have helped us, so, about not without some challenges in operationally. And the one challenge that we've had that's self-inflected challenge that we've had in lighting, which I think, we've put a lot of attention into trying to stabilize and right that, so, I'm particularly pleased with how the third quarter is really reflective of what we expected as we started the year. Still more work to do to finish the year, no question, you don't know, what you could be facing over the last couple of months, but I think the third quarter is a good setup to a very solid finish to the year. So, what that do for next year, well I'm on page 16, in an early preview of our end markets, as we typically do with this point, I want to provide our initial thoughts on how next year shaping up, but we'll give our official guidance in January. But for now, we expect the end markets next year to grow in the aggregate 2% to 4%. So, similar to this year and pretty balanced growth across the key markets. Certainly, the strength in the transmission, distribution and oil and gas are going to continue…

[Operator Instructions] Your first question comes from the line of Nigel Coe of Morgan Stanley. Your line is open.

Thanks. Good morning. So, Dave I just wanted to confirm the bars on page 17 on upscale.

Correct. We know you get your ruler, so we made sure that they were all just all equal way for now.

Okay. I have my ruler here. It's about 2018, which would be nice. Okay, so to move on to the serious part of this conversation, so you mentioned the benefits to power from the storms. How sustainable do you think this is? I'm assuming you get some in 4Q. Do you still see 2% to 4% growth, notwithstanding benefit in the second half of the year?

Well, there is a couple of things on storms. Yes, there is still some carry over into the fourth quarter. You also have what is very difficult to size, which is when you send 30,000 alignments to Florida that means there's work not being done in someplace else. So, it's the catch-up work that comes back online, that didn't occur. And then the other piece is that it's still early on, but we're seeing some of the quoting activity is in certainly that critical efforts that are necessary in Puerto Rico. And so that's certainly is going to continue through the fourth quarter and probably somewhat until into the early part of next year.

Right. Okay. And then, I know you were talking about - I mean I joined this call late, so I apologize if - your facility in Puerto Rico where is production right now compared to previous storm?

Right now, it has limited production, probably operating with about 10% to 15% of the employee base, but we've got some supplemental power coming in this week and we expect to be back to close to full production by the end of the month.

And then just a final one, I'm sure lot more questions would be addressed elsewhere, but on the inventory, you built up in lighting, are we now at the level that you feel comfortable given the kind of demand, the environment you see going into 2018 and just when you build inventory, degrees of - there is obsolescence or some potential pricing, discounting the price to ship the inventory?

Yeah. So, the bulk of our lighting inventory investment module was on the resi side, which tends to move faster and has much lower experience rate of obsolescence and so, yes, we would say the question is we feel good that we've got the inventory necessary to drive very competitive service levels and that we've invested in the right areas.

Great. Okay guys. Thanks a lot.

Your next question comes from the line of Christopher Glynn with Oppenheimer. Your line is open.

Thanks. Good morning guys.

Good morning Glynn.

Just wondering, with electrical margins with the inefficiencies done now in lighting, does that flip your net price cost productivity to a tailwind going forward?

Yeah, so in the quarter the electrical had negative price that was driven by lightning. And so, when you look at sort of the price cost mix that the pricing was with a big offset. But it certainly helps not to have that drag in the cost inflation pace.

Okay. And then just wanted to know if you could give your latest status report on lightning competition how it looks, anything that characterize as truly structural what's the magnitude verses kind of seeing the typical machine?

We don't see anything unusual at least in the space that we're in. It's nothing different that we have seen. I would say there is no - more we can tell a rational behavior other than a big factor has been low cost entrance that have put pressure on the market overall more single line offerings that can be done at a lower price, but not at the completeness of the solutions. And in some cases arguably not with same level of reliability, but that's the world out we live in. And one of the things that we're doing as well as it's being focusing even more with discipline on, where those products, because we have so many such a breadth of product offering Chris, to the extent that we see areas where that pricing is not competitive, we just won't participate in that market, and that may being giving up a little bit volume or share, but we can certainly make it up on the products that we are a leader on have great technology, have a broader solution and a broader package, and that's where we find success.

That's great. One clarification, Maria said down momentarily, did you say rational or irrational?

No. Irrational behavior.

Okay, got it. Thanks Dave.

First that's all relative with the present your position, we think anything, any competition like that is irrational, we rather everybody, keeps trying to drive price up, but that's not the case.

Got it.

Your next question comes from the line of Rich Kwas, from Wells Fargo Securities. Your line is open.

Hi, good morning, everyone. I just thought following up on lighting, Bill what were some housekeeping, it's always the volume price, and then if you have that for commercial C&I in residential?

Yes, for the nine-months, they gained about a point of volume and gave up a couple a point of price, so net sales were about, was down one.

Sure. That's for the nine-months, not just the quarter levels.

Yeah, that's the nine-months, yes. And for the nine-months the resi piece grew a better than the C&I piece.

And then my recollection was you started to have the price headwinds about this time last year, you're starting to comp against that you're talking about pricing being incremental headwind in 2018, should we think of that as less worse, and what you've experienced this year?

Yeah, it's less worse, yes.

Sure. On power, so 5%, ex the storm benefit, you've outperformed the market, historically speaking when you've had these surges you've kind of the growth is moderate in the year following, or the couple of years following. How do you see the cycle playing out here, I mean, some of the structures guys are talking about good visibility, for the next year, so, in feeling good about growth? Your outlook seems to apple that, what are your thoughts about outgrowing the market versus what you've pegged 2018 at preliminarily?

Yeah, I mean, you hit on the couple of the big themes. First is the growth rate that we're envisioning is positive for next year, but not as high as the five points that we've been running at in the last couple of quarters. For us, we think of reach that MRO cycle, as really driving something GDP-ish, so, I don't know 2.5-ish, maybe it could 3% with that and so to do 5, implies, that there's some capital spending going on, and I agree the visibility on that, I think our team feels that they can see that. Of course, those are always subject to being delayed and pushed out. So, I think, we're feeling like there is a decent spending tailwind here, there's some CapEx, there's some MRO in it, and yes, it's below kind of performance this year, which then suggests what can you do on a new product development side and is there share gains that come to be an innovation.

And what's the balance of your distribution transmission growth wise for next year anticipation.

Yeah, I don't know that we've separated that. I'd say that the T has been much more volatile this year than the D. so that comes into play as well.

Okay. Last one for me, the deals done this year, as we think about benefits for next year, my recollection has been, you do deal, then they typically are neutral or maybe even slightly diluted initially, but it takes a little bit time to integrate. If you think about contribution for AT and C&E or bar or errors regarding contribution from deal done this year, is there a way to quantify or at least top down look, think about impact for the next year positive impact from an accretion standpoint?

Yeah. I would say conceptually just to be clear on the word accretion for us the deals are accretive to earnings. I think you're referencing the sometimes the margin.

Right. Right.

So, that's true. And so, then you're saying in the second year as you burn off some of the acquisition accounting and the integration matures that margin naturally creep up in your two of a deal and I would say our experience with that is yes. So, we didn't deal it out as its own area, but conceptually what you're saying is true.

Okay. Thanks.

Our next question comes from the line of Jeffrey Sprague with Vertical Research. Your line is open.

Good morning folks.

Hey Jeff.

Dave, I couldn't help but chuckle the iDevice sounds good, but is anything hub-less good for Hub.

Okay.

So back to your arrows they are not to scalable, but I think we know what a bunch of remark you know are, right, I mean, correct if I'm wrong, kind of the restructuring variants carry over affect versus lower structuring is $0.25 I think.

Yes.

The lightning headwinds where what probably $0.10 or $0.15?

That's not the right range.

On refinancing?

The refinancing if you include the actual loss and the early extinguishment so that' $0.11 and then the interest expense is another $0.7 to $0.8 next year, because we have a little of it this year in the fourth quarter.

Okay. And then given once upon with restructuring, how do you guys think you'll convert on the incremental margins on revenue growth? There's some price pros noise in there, but should be some volume leverage?

Yeah. I think although those sources are all working in interesting ways I think we have some market growth. You know Jeff in places where we have traditionally had a little bit better margin that would help drop through and you're right that their savings coming through from restructuring and then you've to think about what commodity prices and inflation and investing and all of that stuff does. So, we'll be more explicit about that in January, but I think you're right that some of the more known elements, which would be growth in good margin areas, plus some benefits from restructuring those are good places to start.

And when you're thinking about putting writing aside, which is kind of maybe a special case on price. It feels like we've been inflation area in the environment and now from an industrial standpoint and I guess as long as industrial materials are going up you're always applying ketchup to some degree but now with maybe a little bit better end market tone, in other words better kind of demand side of the equation, do you think there's actually a prospect to get up, get caught up on price relative to cost in 2018, even if it's not on a full year basis, perhaps by the time you're excelling 2018?

I think you've phrased the question exactly right, which is the increase for example in steel throughout 2017 and now the copper and aluminum contributions to that I think make asking or some price industrially more palatable, but I do think you're probably applying ketchup and for us that with a six months lag, you're applying ketchup. So, I don't think it offsets but you're right about the actions and the support to ask for price generally and I'd say you're also right to put lighting on the side of that. I think those are two different buckets.

But you're right. By the end of the - by the second half of next year, you could be on the top side of it. If demand holds and certainly, that certainly our history, there's the lag you catch up and assuming that at some points, the material cost would moderate, but demand is there, if you'll get ahead of it for sometimes.

And one thing just to add we had, we're able to get some price, and we've got some price in the non-lighting electrical business, so, we've seen some of that traction is here already. It's a really power we hadn't got in that price, outside of lighting. And where that, potentially, could be a better next year as well.

And then last one for me, putting aside tax - which could change everything. How do you think your tax rate tracks in the next year?

Yeah, I think that's we would anticipate at this stage, thinking about that as flat net of policy changes. We're always working to come up with planning ideas to help get that better, I think, geography ends up being a pretty big driver of year-over-year for us. And so, we'll again, we'll talk more about that in January.

All right, thank you.

[Operator Instructions] Our next question comes from the line of Joseph Osha from JMP Securities. Your line is open.

Good morning, everyone. I'm sorry, I don't have a good one liner like Jeff did.

Okay.

I wanted to return to lighting a bit, you commented on lot of the very aggressive we've priced, to do single lines solutions, you're seeing. I'm wondering especially with iDevices, sort of taking iDevices into account, how are you sort of trying to reposition the higher end of the portfolio and add your intelligence in value to maybe hold-on just in pricing and share in that segment of the market?

Well. We've been working with on controls within lighting beyond iDevices. We've - system that we introduced earlier this year, that's been well received. So, clearly that's an area of focus, took it - to add capability, not to the point of complexity of being a tier 4, building system solution, but certainly having products that are enabled to operate within any building systems. That's kind of the being the, as I mentioned the capability with an iDevice and that's been strategy within the lighting business already. So, it's really marrying those two capabilities and advancing that to make the higher margins specified product, that is always been at the core of our lighting business and success even more in demand.

And so, I take it from your comments then that I should not necessarily expect anything more ambitious into say for example, something that looks like predicts more of a building control type solution, it's going to be a stay more and tier 3 segment in the market?

Yes.

Okay. Thanks a lot.

Okay.

Okay. Steve and I will be around all day, if there is any follow-up question, so feel free to reach out. Thanks for joining us today.

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