Good day, everyone, and welcome to the Ingersoll-Rand First Quarter 2011 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the call over to Ms. Janet Pfeffer, Vice President, Investor Relations and Business Development. Please go ahead, ma'am.

Thank you, Christie. Good morning, everyone. Welcome to Ingersoll-Rand's First Quarter 2011 Conference Call. We released earnings at 7:00 a.m. this morning, and the release is posted on our website. We'll be broadcasting, in addition to this phone call, through our website at ingersollrand.com where you will find the slide presentation that we will be using this morning. This call will be recorded and archived on our website and will be available tomorrow morning. Our release this morning included the announcement of our intention to divest the Hussmann North American Stationary Refrigeration Equipment business as well as the Service, Equipment and Installation businesses in Mexico, Australia and New Zealand. Therefore, the results of operations intended to be divested have been reclassified to discontinued operations for the first quarter 2011 and all prior periods presented. Earnings referred to in this call, unless specifically stated, will mean earnings from the continuing operations of the company. If you would please go to Slide 2. I'd like to remind you that statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the Safe Harbor Provisions and Federal Securities laws. Actual results may differ. Please see our SEC filings for a description of some of the factors that may cause actual results to vary from anticipated. In addition, please refer to Slide 18, which covers the use of non-GAAP measures to describe the company's performance. Now I'd like to introduce the participants on this morning call. We have Mike Lamach, Chairman, President and CEO; Steve Shawley, Senior Vice President and CFO; and Joe Fimbianti, Director of Investor Relations. With that, please go to Slide #3, and I'll turn it over to Mike.

Thanks, Janet. Good morning, and thank you for joining us on today's call. In the first quarter, we continued our focus on driving top-tier operational performance and delivered strong revenue growth of 13%. We expanded margins 240 basis points and more than doubled earnings per share. First quarter earnings from continuing operations was $0.35 per share at the top of our first quarter earnings guidance range. For the quarter, revenues were $3.1 billion, up 13% versus prior year, 12%, excluding currency. During the quarter, we continue to see strong bookings, as most of our businesses are showing solid growth. For the company, orders were up 12% and 11%, excluding currency. Order rates improved in each of our segments except for Commercial Security, which was down slightly due to timing of projects -- orders in China. Our backlog also increased by 7%. Operating margin for the quarter was 7.4%, up 240 basis points, primarily driven by volume and productivity. In early April, our Board approved a 71% increase in our dividend and a $2 billion share repurchase program. These are both indications of our progress and strengthening our financial position, which has enabled us to move from a singular focus on debt reduction over the past three years to a more balanced capital allocation strategy. Please go to Slide 4. This morning, we announced our intention to divest the Hussmann North American Stationary Refrigeration Equipment business as well as the Equipment, Service and Installation businesses in Mexico, Australia and New Zealand, which total about $800 million in revenue. During the past several months, we have conducted a comprehensive study of the business and ultimately concluded that although the business has substantial margin expansion potential, it was in the best interest of Hussmann and Ingersoll-Rand to look at strategic alternatives for Hussmann.…

Thanks, Mike. Please go to Slide #8. The Climate Solutions segment now includes the Trane Commercial HVAC and Thermo King Transport Refrigeration businesses and the North American Stationary Refrigeration Service businesses, which if you remember, were integrated with the Trane branches post acquisition. Total revenues of $1.7 billion for the first quarter were up 17% and 15% excluding currency effects. I'll talk first about the Trane Commercial HVAC business. Trane's global Commercial HVAC first quarter revenues were up 14% versus prior year on a reported basis and 12% excluding the effects of foreign exchange. HVAC revenues in North America increased 12%. Revenues were up 8% in Europe and the Middle East, and Asia was up more than 30%. Global commercial equipment revenues increased 16%, with year-over-year improvements in all regions. Global Parts, Services and Solutions revenue increased by 12%, continuing the momentum that we saw last year. Shifting to orders, our global Commercial HVAC orders were up 12% on a reported basis and 10% excluding foreign exchange, driven by global equipment orders which were up 13%. For the global Thermo King Transport business, revenues increased 25%, which is consistent with significantly improving markets compared with last year. Our worldwide refrigerated truck and trailer revenues grew almost 40%, with strength in all key regions. Global bus HVAC, APU and marine container revenues increased substantially due to improved end-market activity. Thermo King orders increased by over 20% in the first quarter. The operating margin for Climate Solutions was 5.9% in the quarter, a 3.7-point margin improvement versus first quarter 2010 driven by volume gains and productivity, partially offset by higher commodity costs. Please go to Slide #9. Industrial Technologies first quarter revenues were $641 million, up 18% on a reported basis and 17% excluding FX. Industrial markets continued to be strong after…

Thanks, Steve. Please go to Slide 15. Our updated forecast for 2011 is based on a steady improvement in most of our markets. We continue to expect a recovery in the U.S. and a slower recovery in European economies, growth in Asia and mixed activity levels in our major vertical end markets. We believe activity levels indicate continued recovery in Transport Refrigeration, Industrial, Commercial HVAC Parts, Contracting and Service, as well as signs of improvement in Commercial HVAC Equipment and the Residential HVAC Equipment, both driven by replacement volume. We expect to see a continuation of challenging conditions in the U.S. nonresidential new construction market for most of the year, which will continue to primarily impact the Commercial Security and HVAC businesses. The announced intent to divest to describe [ph] Hussmann business removes about $800 million from our continuing revenues. Taken that into account as well as reflecting favorable exchange rates and improved order rates for principally in both industrial and climate, we're updating our revenue range for full year 2011 to $14.6 billion to $14.8 billion, up 10% to 11% compared with restated 2011 revenues up $13.3 million. Climate Solutions revenues are expected to be up 10% to 12%, with high single-digit increases in HVAC Equipment and Contracting, Parts and Service and mid-teens gains in Transport Refrigeration. We expect Industrial to show gains of 12% to 14%. Residential is expected to be up 6% to 8%, with HVAC up mid- to high-single digits while Residential Security will be up low- to mid-single digits due to continued stocking controls of Big Box retailers and a slow housing recovery. Commercial Security is expected to show a mid-single-digit year-over-year improvements due to its exposure to nonresidential building, especially in North America. Let's go to Slide 16. Let me take you through the…

[Operator Instructions] And we'll go first to Julian Mitchell from Crédit Suisse.

Thanks. I wonder if you could give some clarity just on the gross productivity? I think you gave a net number in the EBIT bridge, but just kind of -- you said, I think, it's line with your expectations. Does that mean you're hitting the 5% full year target already?

Julian, we're having a very difficult time hearing you.

Okay, sorry. Could you hear me now?

Julian, I think your question was to tell you how we're doing on gross productivity relative to 5% expectation?

Yes, exactly.

If you look at the chart that we provided in the presentation, which we now take a look at the waterfall of what impacts on our revenue -- or our margin growth, and first thing is that we did 240 basis points. So I said that as long as we're within a range that's increasing the revenue -- I'm sorry, operating margin by over 200 basis points, we're hitting our targets. So if you look at that waterfall, we're on a target as we expected.

Right, but on the -- just to get there, I mean how -- so the gross productivity is sort of, you're hitting around 5% are you already?

If you look at the total year guidance we gave last quarter, which gross productivity netted against other productivity, nonmaterial productivity, we're right there. If you look at the amount of improvement driven by the net of productivity and other inflation, we're right on our plan.

Okay, great. And then on price net of material inflation, you had quite a good narrowing of that negative from Q4 to Q1. Do you think that trend line continues through the year or it stays where you are in Q1 for another couple of quarters? Or do you think drawing the trend from Q4, Q1, you can kind of extrapolate out to the second half?

Yes, good question. Actually, both pieces are moving. We did better on price in the quarter than we expected. Even with the guidance we gave in a few months ago, because our prices are sticking, but we saw more inflation. In Mike's commentary -- and we expected to see the commodity inflation with copper and aluminum, et cetera, but steel is starting to stick it's head up and it's also starting to create tier-2-type pressure on components pricing that we use to assemble into our products. So net-net, we're right about where we thought we would be in the first quarter. We're still upside down, price versus inflation, but we're not upside down any further than we thought going into the quarter. And we kind of maintain that gap. And if you remember the guidance we gave for the year, we would be upside down about 30 basis points. And so if you look at both numbers, because price is sticking, we're getting better price than we expected, but we’re also seeing more inflation. So net-net by the end of the year, we're still upside down by that 30 basis points but both prices improved and inflation has increased.

Thanks. And then finally, just quickly on Security. I mean, the weak -- you had weak revenues, orders don't look great, but you're guiding for, I guess, for an improvement in the second half. What’s sort of driving that assumption of an improvement?

Yes. If you look at the macroeconomic market information that we use, it's early to dodge, put in place information, new construction indices, et cetera. And what you see is those things, actually, returned almost parity, in other words, 0 growth in the first quarter of this year. But our Security business lags those market indicators by almost a year, so what we're expecting to see -- and also, if you remember last year, we outperformed those indices because of our aftermarket position and capability. So what we're expecting for the rest of the year as we get towards the second half, just by tracking the lag associated with the comparables on -- of the -- that put in place new construction plus our aftermarket strength, we expect to see a little pickup in the second half and the markets, actually, to turn in early 2012.

Julian, I’d add that last year in Q1, we were -- in Q2 for that matter, we were really in the heavy throes of executing the Shanghai Expo security work. And of course, that doesn't repeat. And interestingly, there's a number of very large projects, rail-related projects that we're involved with now, as far as the security work goes there, and I would anticipate closing those in Q2, Q3. So a lot of what you're going to see is Asia kind of coming back on with growth, but that creates a little bit of a comp issue for us as well.

Great, thanks.

And our next question comes from Jim Lucas from Janney Capital Markets.

This is Mike Wherley, standing in for Jim. I just want to follow-up a little bit on the Security. You said that there's a timing issue of an Asian order. Was that the rail order you just mentioned?

Yes, it's more than one, Mike, but that would be a very large order. And so, yes, there's a couple of infrastructure orders in China around airports and rail that would be meaningful contributors in Q2, Q3.

Do you see any sort of broader impact of the government trying to slow things down there?

Not to this point. It's subtle. The last, I guess, the 12th 5th-year plan [12th 5-year plan] puts agriculture at the top of the list. And frankly, from that point of view, it's favorable for things like our Thermo King business which has got enormous upside to get that moving in China as an example. So I think we may see a shift from some of the infrastructure projects and security, but I think it's also favorable in terms of what you're seeing with the focus that will be put on as an example, agricultural yields and through transport.

Okay, thanks a lot. And then the other question I had is, so the part of Hussmann that you're not putting up for sale is the Service part that was integrated into Trane, is that correct?

Correct.

And was that about –- I’m estimating about $400 million last year?

Yes, we don't break that out, Mike. But the point, I guess, is it's so integrated that it doesn't make sense to pull it out, and we certainly provide service and transition services to a buyer.

Okay. But was that ever discussed as something that might be sold as well either with potential buyers or it's just, that was off the table since it was so integrated?

Yes. At this point, Mike, I'm not going to get into the details of sort of the strategy around that. I'll certainly be clear about that at the close.

Okay. All right, thanks a lot.

Thank you.

And our next question comes from Josh Pokrzywinski from MKM Partners.

Just looking for an update on the contingency number that you put out there last quarter. And then, I guess as a follow-up to that, just on the, I guess, against the backdrop of 2Q guidance, how should we think about that kind of pre- and post-Hussmann discontinued ops? What would that be and what would that have that been with Hussmann?

First of all, in the contingency, we didn't have much contingency in the first quarter guidance. And I'll just simply say that we still have contingency left in our year, okay? And as regards to the second quarter, the second quarter has the biggest impact of the disposition because we’re carrying all the support costs that will be stranded in our continuing ops line and what we're transferring into discontinued ops is the pure Hussmann EBIT type of a number. And that would have probably about a $0.06 impact on the quarter. In other words, if we will roll this thing up, due to the seasonality of the Hussmann business, it's about a $0.06 dilution in our second quarter because of that.

Josh, I think, maybe to answer your question, had we not taken Hussmann to disc ops, we would've been raising guidance by $0.10 to $0.12.

Got you. Yes, I just wanted to see how that shook out in the second quarter.

No, I appreciate the question because it gives us a chance to provide some clarity for any confusion. But clearly, for the full year, had we continued, we would be raising guidance $0.10, $0.12 of it, for the year, that is. In the second quarter, Josh, it would've been $0.05, $0.06, I think.

Got you. Should we think of the bulk of what's left being in the fourth quarter, since seasonally that's one of the stronger quarters for Hussmann?

Yes, it's kind of interesting. It's actually last year, last year or so, it's been in the third quarter. But we hope to have the restructuring in place and all the actions we have to take to mitigate the stranded cost largely in -- underway by the third quarter.

Got you. All right, thanks very much, guys.

And our next question comes from Eli Lustgarten from Longbow Securities [Longbow Research].

Thank you. Can I just get a couple of clarifications, in your guidance, you touched on foreign currency impact. Can you go overall, what -- currency is not positive for most people, what is in the guidance at this point for foreign currency?

Yes, again, the euro is a big player for us. Yes, I need to turn away from the phone for a second here. If you look at the spot rate of euro mid-April, it was about 144.

It's 145 today.

Yes. And versus our 2010, that's up about 8.7%. So that is a big impact on our Climate businesses, our Industrial businesses, mainly.

But I guess, my question is how much of that, if you would have waived guidance for a $0.10 to $0.12 impact, how much of it is coming from currency?

Well, the currency is a pretty low leverage. And leverage is about 10%, maybe slightly less, because one other thing that's happened to us in currency is, it's the yen has gone the other way. And yen is a counterflow currency for us. In other words, we buy a lot of engines and Japanese product in yen. So that goes the other way, which kind of nets out to the pretty low leverage on that additional revenue.

Yes, but it's still saying that there would be a good 1/3 or something like that from the $0.10 to $0.12 improvement, would've it come from currency or some number like that, that's what I'm trying to drive at. And the other follow-up question is, the tax rate has gone up from 24% to 23%. That's about $0.04 or something, I guess. What's causing it to drop and what's the implications for next year's tax rate, is that something that you're all concerned about?

Well, it's actually kind of a technical change because -- and also, I'll remind you that share count is up to 350, 345, so tax and share count, about offset each other.

Yes, I realized that.

The technical aspect of the taxing is, the income that we're losing with Hussmann is all U.S. income. And I think we have talked about this before, about the fact that as we increase or decrease U.S. income, we get a much bigger incremental effective tax rate. So when you think Hussmann out of the mix and look at what's left in continuing ops, what's left is less U.S. income so that causes a drop in the tax rate.

So the tax rate for next year, do you have any sense of where the tax rate will go? I mean, just sort of getting a sense for what the increase looks like.

Yes, the guidance we've given repeatedly at various meetings, looking at a long-range projections, after 2013, we're guiding about mid-20s.

And nothing changes with this divestiture, correct?

No, it's just -- it really kind of splitting pretty fine hairs at that point.

I think the mid-20s guidance long-term, Eli, is good for what you're doing. And then, we're just kind of have to tune that each year, okay, based on how we see the year shaping up and where the income is going to be earned.

And can you talk about what's going on in Industrial Technologies, the strength of the marketplace and growth. It looks like it can actually gain some momentum for the rest of this year, both in volume and profitability.

They continue to do a good job there. I think they're really approaching, at least in the air and productivity side, record margins there, where volumes are still not back to where they were. So we're getting what we wanted to get. It's the first real indication we get of major restructuring that was done in major product launches and how those play out in a sort of rising environment, so the leverage there has been good. If you kind of look at the guidance that we're giving long term around that business, 16% to 18%, very pleased with what we're seeing here in terms of the incrementals on that business. So will strength continue at that level, I mean obviously, it's part of a cycle in a recovery here. But from what I've seen to this point in time, we're feeling good through the guidance that we've given or the framework through 2013 about achieving long-term margin rates of 16% to 18% in this business.

All right. Thank you very much.

Thank you.

And our next question comes from Jeffrey Hammond with KeyBanc Capital Markets.

Just, I guess, I want to dive a little bit into the Res [Residential] HVAC margin, which you laid out a number of things, and just how might we see those issues play out going forward? And maybe more broadly, it sounds like the overall margins are the same in your guidance or a little bit better. And I guess Hussmann coming out maybe helps, but how are you thinking maybe any changes business-by-business in terms of how you're thinking about full year margins?

Yes, let me take the Res HVAC topic, then I'll let Steve do the second. But Res HVAC in 2009, it's one of the major beneficiaries of a lot of the capital that we put in around products, refresh product improvement. And what you're seeing late last year and right now in this business is a lot of new product actually hitting our plans, hitting the consumers at this point in time, being received very, very well. So we had about a 30 basis point market share gain for a total motor bearing units. But when you break that out, it's about 110-point gain in air handlers, which is exactly the product that you guys saw when you were down here visiting us, called the Hyperion [Trane Hyperion]. Now what's happening is that, that product family is being launched. You're really building lots of mixed models going through the plant, old and new coming through the same plant. I think that our expectation is you're going to see gradual recovery of margins in that business. And I think that margins will actually improve year-over-year by the end of the year, but we're going to go through this period of transitioning these plants and product portfolios likely through late summer in that business.

I think, Jeff, to answer the second part of the question, in terms of expectations of margins in the rest of the portfolio, if you look at our current guidance for the year at midpoint, we're up a little bit from what we thought for the year in terms of margin performance. I think that's driven by the fact that we've seen a better mix coming from more Thermo King truck trailer volume that we had thought earlier in the year. We're looking at -- quite frankly, the biggest issue is we're sighing sort of a big breath of relief about the realization of price. That's looking more solid. Even though we didn't increase the delta price cost or reduce it, the fact that we're feeling much better about it, it gives us more confidence in the base plan. And also, quite frankly, if you look at what Mike said, Residential coming back to a more normal volume -- I'm sorry, more normal level of operating margins by the end of the year and a little bit of help from Security late in the year, I mean all that makes us pretty confident that the margins we have in the midpoint were pretty solid.

Okay. And then just a quick follow-on on Res, you had good growth in the quarter, orders kind of slowed. I mean, how would you characterize your view of kind of sell-in versus sell-through and how you're thinking about just underlying demand as we move into the selling season?

Yes, clearly, if you look at it from the point of view of our independents, depending on whether it was the Trane or the American Standard brand, we would've had 17% to 19% growth through the independent wholesale distribution channel. As you look at the sell-through, which is our view from sort of company-owned distribution aspect, you're seeing something in the low-single digits there. So this is going to normalize, I think, toward, as it always does, between those two channels because of the lagging effect. And again, I look for that mid- to high-single digit Res number to really follow through for the year.

And if you remember last year, we have various similar dynamics. First quarter was very heavy with folks who sell on to the distribution channel.

Restocking.

And it leveled out before the end of the year. And if you really look at the industry projections, we're still saying that the overall motor-bearing unit market is only going to be up mid-ish single digits for the year.

Industry restocking levels, probably, it will crawl back up into kind of the high-single-digit weak area, and I kind of think that there's more of a new normal here which is not what it used to be in terms of the weeks. Distribution would carry in terms of inventory. So I'm not looking for major swings in sort of demand coming from sort of stocking programs. I think that what we're focusing on is really paying attention to the sell-through that we're seeing and that's how we're looking at our demand plan.

And our next question comes from Mark Koznarek from Cleveland Research.

Could you guys review the margin outlook by segment?

Yes, I mean for full year, probably, it would be that I'd be comfortable doing that, Mark. And let me give you kind of, sort of the plus/minus sort of 50-basis-point-type ranges here. I think that from a Climate perspective, you'll be looking at something in the 9.5 on the low to the 10.5 on the high. Industrial, it's probably going to be something closer to 14 on the low and could go 14.5-plus on the high. Residential, I think it's going to go, probably, 10 on the low, which is a point better than last year, maybe 50 basis points higher than that if we can sort of move through the plant conversions effectively, very effectively. Security, it's going to grow margins again this year. I would tell you that, here, you're probably looking at something between maybe 20.5 and maybe 21.5.

Okay, great. And then, just, could you touch briefly on what the current debt-to-cap is? You don't provide the full balance sheet, so what is that at the end of the quarter and what's the target range for the company?

We'll call you back on that, Mark, okay?

Okay. That's it for me, thanks.

And our next question comes from Andy Casey from Wells Fargo Securities.

Thanks. Just a question on Industrial. Eli kind of touched on it, and I was hoping a little bit more clarity. You've raised revenue guidance approximately 3 points from the last time. Could you break out the change by currency and volume price?

Yes, oh gosh. Full year, I don't have it broken out that way, Andy, so we probably going to have to get back with you on that as well.

Okay, then.

Rather than -- I can give you round numbers, but I think that's just going to be trouble, okay, so let me -- let's just get back with facts on that for you.

Sure. And then, in anticipation of that, you shifted the mix within the overall guidance from replacement growth to higher industrial activity from the previous guidance. Is that because the industrial activity started out faster than you expected or you're expecting it just sustains at these levels.

Andy, we might have confused this but we're actually seeing great replacement businesses happening around HVAC and Industrial, okay, in terms of how that's working. And so I think the strength we are seeing here is certainly in the replacement market across both Climate Solutions and Industrial Technologies. And what we haven't seen come back in is of course, any kind of real new construction activity which would affect both Climate Solutions and Industrial Technologies.

Okay, I'll follow-up with you guys later on that. And then -- then a shot at this new continuing operations portfolio. Would that have had a higher productivity performance in 2010 than, I think, what you reported was something like 4.6?

Yes, Andy, if you go and you kind of retrace the steps here, we were not making some of the larger productivity investments in the Hussmann business, which kind of led to some of the disconnects that I think we were having around not being able to discuss productivity in those quarters at the same level they have done until we have gone through this process. And so early on, as we would've started this thought process, this framework 2.5 years ago, we would had certain cadence around Phase 2 of that restructuring, including a much more investment in the Hussmann business. We didn't do that as a result of going through the process we're going through. And ultimately, clearly, we would move onto utilizing those investments in what would be the core businesses going forward.

Okay, so implied, it should be higher than the 4.6?

There's a lagging here, of course. What I'm saying is that the investments we have planned in that business didn't happen. You saw that in Q3 and Q4 last year. And you're seeing a more of a refocused back on the course. So I wouldn't say it would be higher or lower, it's just that it's going to move toward the core businesses going forward.

Okay. Thank you very much.

And our next question comes from Robert McCarthy from Robert W. Baird. Robert McCarthy - Robert W. Baird & Co. Incorporated: I wonder if I could come at Andy's question a little bit differently. I heard you earlier, Steve, say that something like 2/3 of the increase in the revenue forecast was due to currency. And I'm speculating that with improved expectations for price realization, there isn't really a lot of volume increase in your revised outlook. And my further sense is that first quarter was a little better than what you were looking for, as seen in the delivery versus guidance. So have you really changed your outlook for the balance of the year? And if you haven't responded to what appears to be favorable indicators, is that some measure of a hedge against potential issues surrounding Japan, and is that something that you can help put a, some kind of a breadbox around for us?

Well, again, as I said earlier, we still have contingency in the forecast, the guidance for the remainder of the year. And if you take a look at -- we're just more confident that the things that we see as increments to our original guidance will fall through at this point in time, so that's kind of what you're getting. As far as Japan goes, maybe Mike can address how we see the Japan thing.

From a business perspective, fortunate, not much involvement there. We have daily calls relative to the supply chain and daily updates on that but have had no issues to date, don't foresee any issues to date, because we're really only affected by a few areas here and we got ample demand here. So it would be in small diesel engines and we're in good shape there. It's on a few controller boards, and we found alternative sources there. I don't see any impact there at all. Long run it’s an opportunity, if we get involved, hopefully in rebuilding of what's going on there. But no impact whatsoever in terms of the quarter or the outlook on what's happening in Japan. It's a very small business for us today. We've only, in the market, have 150 people in the market. So just to give you a sense for it. Robert McCarthy - Robert W. Baird & Co. Incorporated: That's very helpful. The other thing I'd like to do is just clarify or recast something to make sure that I'm understanding it correctly. Your full year guidance is unchanged but would've gone up without the fact that you're taking Hussmann out and that creates a $0.10 to $0.12 discontinued ops drag. And you, I believe, have indicated that you'd seek to offset any impact versus on full year basis with share repurchases. Yet, you didn’t, you’re not going to speculate on a new share count number in the table of the various outlooks of guidance that you provided. Am I reading all that correctly?

I don't think so. I think we need to recommunicate here. Everything we have given you is, sends [ph] share buyback, okay? So we're allowing $0.10 to $0.12 of improved earnings to fall through from the operations, all right? We talked about, yes, some of it is from foreign exchange, some of it is from price, some of it is from, maybe, a little bit of volume, mix impact, okay of richer mix is also helping that. That's the 10% to 12% -- or $0.10 to $0.12, I’m sorry, that we're using to offset the dilution of Hussmann in this guidance. We need to be very, very clear about this, okay. It's very, very important. We chose not to guesstimate what the impact of any share buyback is even though we're committed to starting the program in the second half of the year, as we said, because we just don't know what the timing of the closure of the Hussmann, the disposition is going to be. That will be a big factor in terms of how much cash that we have to put into the program and the timing of which we can employ that cash. And the timing is probably a bigger deal at this point in time because the later in the year we go, obviously, the less impact it's going to have on our total year earnings. So that's why we chose not to say anything about that because we'd rather come back at you in the -- as we talk about the second quarter performance and give you a much more definitive number there than trying to guesstimate something at this point.

Rob, also too, on currency, we're taking a relatively conservative outlook on the euro. I think we're looking at maybe 141 outlook from here forward and the spot today at 145. So what actually is built in to our plans is more volume. It's just not sort of FX carrying it, yes, it's 1/3 or 2/3, but the FX piece of this is kind of predicated on a 141 euro going forward. So just to give you some sensitivity around how we're thinking about the euro. Robert McCarthy - Robert W. Baird & Co. Incorporated: But with a different mix in the plan. Thanks for the clarification, Steve. I think is was...

I'm glad you asked the question, because one of the things we talked about this morning is, one thing we have to communicate in this call is just that. And we want to make sure everybody got it. Robert McCarthy - Robert W. Baird & Co. Incorporated: Okay. Thank you.

And our next question comes from Deane Dray from Citi.

Thank you. Hey, I joined a little bit late so I don't know if you covered this, specifically around the price costs. I know, Steve, you touched on it in Q&A. But the last update we had was pricing expectation increase of 2% to 6%, and it sounds like the realization initiative was 1.5 percentage points but that you think is higher. Where does that stand today?

Yes, Deane, I'm going to give you a quick answer because I think we covered some of this on the call but it basically, we would be sort of increasing sort of the price realization piece at the margin line, maybe 30 basis points, at the revenue line, maybe 50 basis points, completely offset by an increase of the same magnitude inflation. So we're keeping a 30 basis points GAAP. And you're right, what we're seeing is higher realization on a spread of price increases on the marketplace you're getting out towards higher realization, what's in that umbrella of opportunity in that price spread.

Okay, that's helpful. And then on the full year forecast, the updated forecast for 2011, the operating margin, that 50 basis points on the high end, is that all attributable to the taking the Hussmann Equipment business out?

No, it's about a push, Deane. It's just due to the things we said. I mean a little better mix. If you look at how this portfolio now looks versus what it did three months ago. And you got the volume impact as well, Deane, coming in. I mean there's a piece of volume in this forecast again, it’s not just FX, it's has a meaningful volume increase based on what we got baked in. So you get a little bit more leverage on our fixed cost.

And then if we were to take a guess at what the operating margins in the businesses that are being divested, obviously Equipment less lower than Services. Would it be sort of mid-single digits as a fair number run rate of the revenues you're divesting?

Deane, we said at the beginning of the call, if you didn't -- if you weren't there, it's unfortunate. We -- because of the fact that we're heavily engaged in the process, we mentioned that we're not going to answer any specific questions about Hussmann.

Okay. Are there other divestitures being considered? I know I asked this last quarter. Is this still an ongoing portfolio reshaping or do you think this is done?

Well, I mean if you look at the portfolio, Deane, and I think a lot of the real heavy lifting has been done. So I will always say that we're always going to take a review of our portfolio and understand what makes sense going forward. But I think this was one that has been on your and everyone's radar screens for some time, so there's nothing else that we’ve got at this point in time teed up that I think is certainly of this magnitude at all.

Great. That's helpful. Thank you.

And our next question comes from Andrew Obin from Bank of America Merrill Lynch.

Yes, just want to clarify something. As I look at Slide 18 of the fourth quarter presentation, we have productivity of 2.9% and 1.2 points of contingency. And as of Q1, we are at 2.3 percentage points of productivity. Does this mean that we should see a meaningful ramp up in productivity throughout the year?

Andrew, I'm not tracking your numbers here completely. So you're going to our guidance bridge?

Yes, I'm looking at Slide 18 of the fourth quarter presentation where productivity target for the year, where you've given the productivity target, 2.3...

Andrew, I got it. I think what you're doing though is you're giving off of the slide, you're netting inflation against it. If you're looking at productivity netted against other inflation and you're looking to see if that spread actually increases, correct?

I'm just -- I'm sorry, maybe this is very naive way of saying, but there's a productivity number in the bridge of 2.9%.

Andrew, that was netted against other inflation assumptions that we had for the total year, okay?

Okay. And 2.3%, is that netted?

Yes.

And Andrew, first half, second half, I would see total productivity increasing slightly. And I would also see other inflation probably flat to moderating. And so, yes, we would expect to see more margin expansion, greater leverage in the second half of the year. So whereas the first half of the year has been, let's call it, the 25% range, 26% range in terms of leverage, we would expect the back half of the year, particularly the fourth quarter to look more like the leverage that we're intending. So yes, you're going to get that from the spread between productivity and other inflation increasing. And price, as we said, price to direct material, that spread it's going to be maintained.

And Andrew, the phenomenon has been sort of this way for a long time in our company, is that if you look at the volumes that we get in the second and third quarter, those are the highest of the year. If you look at the guidance that we've given for Q2 versus in our revenue in Q1, you'll see probably a substantial increase in revenue. And volume is somewhat -- I'm sorry, productivity is somewhat volume related, particularly when you look at material productivity. So the more material you use, the higher your productivity numbers are. So that sort of, it pins it together.

So we should see continued improvements sort of on that throughout the year?

The back half is better than the first half in terms of operating leverage. I think that’s the essence of your question. And you're correct around productivity being offset with sort of other inflation widening, yes? And price would be the spread maintained at about 30 basis points for the full year.

And just a follow-up on what were write-downs on Hussmann related to? Could you give us several big buckets?

I'm probably going to put that in the bucket of not going through any detail here on that, Andrew. And again, I promise we'll be very transparent on that as we, of course, we need to be, when the transaction is complete.

Sure. But does it -- am I correct in saying that write-downs imply that Hussmann is not performing in line with your expectations?

Well, I mean we're selling the business, Andrew, because we want to focus on businesses that we think are closer to our core. And that get us to our long-range targets that we've set around $5 to $5.75 a share, 50% operating margin. So if we felt that the investment required to do that was greater than what we are prepared to do relative to other investments, which is the case that we've got, then we decided to exit the business.

Terrific. Thank you very much.

Our last question comes from Steven Winoker from Sanford Bernstein. Steven Winoker - Sanford C. Bernstein & Co., Inc.: Thanks for taking the call. I, like with Deane, was on another call, so I'm joining late. Apologies if I'm asking something that's already answered. But first, can you actually give us the number on gross productivity for that quarter? Did you do that already?

It's a great quarter to transition as to the fact that we want to focus this on two points of operating margin, which has always been our goal. I can say that because we exactly hit the number that we were supposed to hit from a gross-productivity perspective. I'm not taking a weak quarter here. But I think that when you look at the mix between restructuring and investments and how we intend to get our 2 points of margin expansion, clearly, it's changing. It's changing from a heavy emphasis on some restructuring. In the last year, a year and half, around the plant, we've [indiscernible] work we've done to a move toward, I would say, a smarter investments going forward and more surgical decisions around where we place plants in line. So again, I don't want to go through a quarter-by-quarter, blow-by-blow on plus or minus 5%. I want to go through a full year view of, "Are you guys going to get your 2 points or not get your 2 points?" And that's how I want to try to transition this view from our point of view. Steven Winoker - Sanford C. Bernstein & Co., Inc.: Mike, so you're going to give us the gross productivity numbers annually, not quarterly, that's the bottom line.

We're going to give you an operating margin improvement goal and targeting annually, and that's what we're going to work towards. Steven Winoker - Sanford C. Bernstein & Co., Inc.: But you're saying, you might not even give us the gross productivity numbers annually?

Well, we gave you that waterfall bridge and Andrew was talking about earlier. Steven Winoker - Sanford C. Bernstein & Co., Inc.: That's not gross productivity, that's net inflation. The reason I ask, I understand trying to move the Street off of a number that you put out there some time ago, but it does reflect real activity and value-add and a lot of people's view of the business. So I just -- I'm trying to understand how we think about that longer term and...

And what we're suggesting, if you think about longer term, is actual margin expansion Steven Winoker - Sanford C. Bernstein & Co., Inc.: All right. I guess, really moving on, on Hussmann. Without any specificity as you mentioned, but just strategically and maybe you hit this already, we finally have a consolidated industry, the 2.5 players now between you guys, Hill PHOENIX and Kaiser [ph] going over to Lenox, the first chance you might actually be able to hold onto some of that margin, I mean was the investment to a different business model of there, basically fewer plant, more modular, putting you in a position where that was the trade-off? Or was it still that you didn't feel like the industry have become significantly more favorable?

Yes, simply put, as you look at the opportunities we have in the company to drive margin expansion and to focus management resources and attention, it leans toward the other side in the balance of the portfolio. And anything that we would do that I would take, I would say, an inordinate proportion of time away from what that mission and goal is, we weren't prepared to do. So it's refocusing even tighter on what we now think to be the core business around HVAC, around both Transport and our HVAC Commercial business and our other businesses in the portfolio, which I won't get into detail here, but clearly, I've made the comment already that I don't see any portfolio change in the magnitude that we're doing here with Hussmann. Steven Winoker - Sanford C. Bernstein & Co., Inc.: Okay. And you mentioned, last quarter, SIOP was something you thought might be a continued problem or issue into the first quarter. It doesn't -- I'm not seeing that as much. Did your -- the SIOP issues you had in the fourth quarter ease going into this quarter?

Yes. In the fourth quarter, I'd said, that we had eased those issues because we solved the problem in the fourth quarter. And it did, it turned out that we did not have a problem in the first quarter at all, so yes. Steven Winoker - Sanford C. Bernstein & Co., Inc.: Okay, great. And last -- I'm sorry, just to sneak one more in. The whole R-22 issue and shipping it dry, I continue to hear it from your competitors that that's happening in the marketplace, that you guys I think have still held firm to not doing that. And if that's true, you're not experiencing any share loss on the ground there?

Well, listen, I mean if you go, the numbers here again, we got a 30-basis-point improvement in share again. We got a 110-basis-point improvement in the quarter on the product we're launching, which is 410A. And the reality is that we believe that as your transitioning from the old product to the new, the last thing you want to do is to propagate this mixed model running through a plant in terms of the efficiency you gain in that plant. So our focus is converting the industry to its intention, which was the 410A fluid [R410-A]. Steven Winoker - Sanford C. Bernstein & Co., Inc.: Yes. No, that's great. And I think it's like great integrity decision, high integrity decision. I was just wondering if you were seeing share loss, you're saying you're not?

No, it turns out, we're getting share gain. It's a 30-basis-point gain. And specific to the product we're launching, it's a 110 points of gain in the quarter. Steven Winoker - Sanford C. Bernstein & Co., Inc.: Okay, thanks a lot, guys.

Thank you.

Thank you, everyone. And Joe and I will be around if you have follow-up questions. Have a good day.

That concludes our call for today. Thank you for your participation.