Welcome, and thank you for standing by. [Operator Instructions] Today’s conference is being recorded. If you have any objections, you may disconnect at this time. Now, I’d like to turn the meeting over to Mr. John Brooklier, Vice President, Investor Relations. Thank you. You may begin.

Thanks, Diane. Good morning, everyone and welcome to ITW’s Third Quarter 2014 Conference Call. Joining me this morning is our CEO Scott Santi and our CFO, Michael Larsen. We would also like to welcome our Erin Hoffman our new VP of Investor Relations. As you know, Erin joined us in early September and we are working on a smooth transition of the Investor Relations role till I retire in March of 2015. Erin good to have you onboard. During today’s call, we will discuss our outstanding Q3 financial results and update you on our earnings forecast. As usual, we will open the call to your questions. We ask for your cooperation on our one question, one follow up question policy as we have scheduled one hour for today’s call. Before we get to the quarterly data, let me remind you that this presentation contains our financial forecast for the 2014 fourth quarter and full year as well as other forward-looking questions identified on this slide. For a preview of the company’s 2014 Form 10-Q for the second quarter for more details about the important risks that could cause actual results to differ materially from our expectation. Also this presentation uses certain non-GAAP measures and a reconciliation of these non-GAAP measures to the most comparable GAAP measures is contained in the press release. Take care of that, I’ll turn the call over to Scott Santi, who will comment on the quarter. Scott?

Thanks, John and good morning everyone. Overall, we were pleased with the performance in the quarter and with the progress that we are continuing to make in executing our strategy. Operating margins in the quarter were a record 20.9% and were 190 basis points higher than in Q3 of last year, with a 120 basis points of that improvement coming directly from enterprise strategy initiatives. After-tax return on invested capital was 20.1%, marking the first time we’ve gotten both of these key metrics above our stated goals of 20% plus in the quarter since the launch of our enterprise strategy in 2012. Operating income of 772 million was the highest quarterly total on the company’s history and free cash flow was very strong at 128% of that income. EPS of $1.28 was up 42% versus the prior year. We were also pleased with our organic growth performance in the quarter as we had four of our seven business segments deliver organic growth of 5% or better. While we are still three or four quarters away from being able to turn the majority of our attention to the growth agenda component of our strategy, it’s encouraging to see some early signs of progress on the organic growth front in a number of our businesses. Product line and customer simplification activities remain an active element of our portfolio management initiative currently, and had a negative impact on the company’s overall organic growth rate of approximately 1 percentage point in the quarter. I expect that these activities will have a similar 1% negative impact on our organic growth rates were up most, if not all, by 2015. However, keep in mind the product line in customer simplification our core components of ITW’s 80-20 business management system and we are in the process of reapplying it to our scale of operating divisions. These activities are a key driver of our ability to continue to improve margins and returns and to accelerate organic growth going forward. Overall, we are pleased with our progress as we approach the end of year two of our five year enterprise strategy. At our upcoming Investor Day in December, we will provide investors with an updated view of our performance targets for 2017, as well as lay out a preliminary line of what we think 2018 and beyond might look like in terms of both strategy and performance. I’d like to close by thanking all of our people around the world for the great job that they continue to do in serving our customers and in executing our strategy. Now I’d like to turn over to Michael. Michael?

Thank you, Scott and good morning everyone. Okay let’s get started with the financial summary on page two. Third quarter was another quarter with solid execution and high quality of earnings with organic growth of 3.5%, record operating income and record operating margins of 20.9%. EPS of a $1.28 was an increase of 42% versus prior year. Revenues were 3.7 billion, up 3.5% with growth in all major geographies. Four segments automotive, food equipment, test and measurement and electronics and welding stood out with organic growth of 5% or better. As Scott mentioned, consistent with the first half of the year, product line simplification was a 1% drag on our overall organic growth rate. Five of our seven segments expanded margins by more than 200 basis points, with a 120 basis points from enterprise initiatives, which included increased contribution from our strategic sourcing efforts. Incremental margins were 76% and cash generation was solid with free operating cash flow 128%. We spent 500 million on share repurchases and you might recall that we raised a dividend of 15% in the third quarter. Good progress in after-tax return on invested capital with an improvement of 250 basis points. So overall, we were pleased with the strong results in the quarter and the continued positive momentum on our enterprise initiatives. On page three, a few highlights on organic growth for the quarter with North America up 4% as a result of continued strength in automotive up 8%, food equipment up 6%. Also in North America, welding was up 10% and test and measurement and electronics grew 6%, certainly some encouraging progress on organic growth. International growth was also positive up 3% in the quarter with Europe up 3%. Four of our segments were positive in Europe, with automotive up 9% and food equipment…

Thank you Michael. Moving to slide five, you’ll see the breakdown of total revenue and operating income per segment. Six out of our seven segments produced top-line growth in the quarter, while all seven segments demonstrated operating margin expansion. Our auto OEM, food equipment, test and measurement electronics and welding segments led the company’s top line growth and five out of seven segments produced operating margin over 20%. This was an outstanding quarter for the company as our enterprise initiatives contributed to improve our operating margin performance in all of our segments which I will detail now. As I cover our segments, I’ll remind all of you that our organic revenue growth excludes the impact of currency and acquisition activity. Moving to auto OEM, the segment produced another long line of solid quarters. Organic revenue grew 8% compared to worldwide auto builds of 2% and that was due to ITW’s style customer backed innovation and ongoing product penetration. By geography, organic revenue for Europe grew 9% North America increased 8% and China was up 12%. Our European businesses outperformed European auto builds by 10 percentage points due to penetration gains across all platforms. In North America our growth equaled auto builds at 8% however, Detroit where we have significant penetration only grew by 3%. In China, we outperformed auto builds by four percentage points. Profitability remain high with operating margins 23.4% a 230 basis points improvement from last year. Moving to slide six, in our test and measurement electronic segment organic revenues increased 5% in Q3, a solid improvement sequentially over last quarter. Test and measurements organic revenues grew 8% led by strength in our worldwide Instron business with growth of 22% in Q3, and both North America, Asia produced good results. The electronics business increased organic revenues by 3%…

Okay, thanks, John. So on page nine let’s start with our guidance for the quarter where we expect 2% to 3% organic revenue growth and 100 basis points of margin expansion from enterprise initiatives. Currency is a 3% headwind on revenues, so total revenues are expected to be about flat. Foreign exchange is a manageable $0.04 headwind to EPS and EPS is expected to be in the $1.07 to $1.15 range midpoint of $1.11, an increase of 21% over last year. For the full year, we are raising our EPS guidance third time this year to $4.57 to $4.65 which compares to $4.50 to $4.62 previously. At the new midpoint of $4.61, EPS is expected to be up 27% over 2013. Our organic revenue growth assumptions for the year remains unchanged at 2% to 3% and we now expect higher operating margins of approximately 20%, roughly 200 basis points of improvement. So in summary, we are pleased with our progress on our enterprise strategy and strong financial results for the quarter and for the year. In a macro environment similar to the one that we’re in today, we have great confidence in our ability to further expand operating margins and deliver differentiated earnings growth in 2015 and beyond as the team continues to execute well in our five year strategy and position ITW for a solid organic growth, with best in class modules in returns. We look forward to sharing more detail with you at our upcoming Investor Day on December 5th.

Thanks, Michael. So now I’ll open the call for your questions so please be brief to allow more people the opportunity to ask a question. Remember one question and one follow up question. We’ll now open the call.

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Rob Wertheimer, your line is now open. Robert Wertheimer – Vertical Research Partners, LLC: Hi. Good morning. So, great results in welding. I was curious if there was what the discrepancy if there is one between welding and construction particularly North America is? Does the strength in welding tend to turn around the construction or you’re turning product lines somewhere there or it’s just not as much overlapping them in the customers I would have guessed?

I might probably not as much overlap most of the strength in welding was in what I described is more general industrial and oil and gas really end markets, less so in commercial construction. Robert Wertheimer – Vertical Research Partners, LLC: Perfect. And then just one more in welding may be you don’t want to get in too much detail in the international side, but are you able to say if the pipeline delays are sort of geopolitically related or whether there is any other more economic reason to the delay?

I’d say it’s hard to say at this point. I think we’re looking at some things that just got pushed back a little bit relative to our earlier expectations on timing. I think we’ll have to wait and see. Robert Wertheimer – Vertical Research Partners, LLC: So far you don’t think it’s cancelled or gone, it’s just pushed out?

Yes. Robert Wertheimer – Vertical Research Partners, LLC: Okay. Great. I think that was my two I guess. Thank you.

Thanks Rob.

Ann Duignan, your line is now open. Ann Duignan – JP Morgan: Hi, good morning.

Good morning, Ann. Ann Duignan – JP Morgan: Can you talk a little bit about what you are weeding out on the businesses that you are weeding out, the lagging businesses. Can you just talk about – give a little bit more color on which business you are actually divesting up or discontinuing?

Well if you’re referring to the product line simplification work the way I would describe it as sort of the next level down of our portfolio strategy and really what we’re doing there is weeding out relatively small volume product lines that add complexity, but don’t really drive a lot of impact and/or product lines where we don’t have the sort of level of differentiation that we’re ultimately looking to build the company around. So lower profit, certainly lower volume product lines. And that’s going on all over the business. So even automotive that’s got the best growth rate it’s got pretty healthy product line simplification agenda underway. Ann Duignan – JP Morgan: Okay. So it’s more just 80-20 across the entire business, it’s not related to one specific end market?

Correct. Well said. Ann Duignan – JP Morgan: That’s helpful to understand. And then my follow up is on food equipment, can you just give us a little bit more color on what’s going on those businesses? And there were some pretty end results just curious to get a bit more color how much is market? How much is market penetration, innovation? If you can just give us a little bit more quantitative analysis around what’s going on there that would be great. Thanks.

Yeah I think what I would say of I think we’re very happy with the equipment sales increases in the quarter. The one in Europe certainly stands out from my standpoint where we’re plus 8% internationally overall, part of that is certainly some progress we’re making around in acquisition because last year on China, but also the core European business was actually relatively healthy given a lot of the gloom and doom in terms of the overall economic situation there. I would say overall, we’re not seeing a ton of market lifts, probably things in North America will get better but largely these numbers are driven by new product activity. Ann Duignan – JP Morgan: Any products in particular or any categories in particular, particularly in Europe I’m just curious

Yeah warewash which is our commercial dishwashing business and also refrigeration in Europe. Ann Duignan – JP Morgan: Okay. And you believe those are more market penetration not end market?

Yes. Ann Duignan – JP Morgan: Okay. I’ll leave it there. Thank you. Take care.

Andrew Kaplowitz. Your line is now open.

Hi, guys good morning. It’s Alan Fleming for Andrew this morning.

Alan, how are you?

I’m doing well. Just on Europe, you saw some acceleration to plus 3% from I think, plus 1 last quarter. And I know some of this seems to be somewhat specific to ITW with strength in food equipment and auto, but just curious if you guys view is it possible that Europe may be a little more stable than some feared and things have not slowed down as much as it seems may be if you just give a little bit more color on that market.

Yeah sure. Again, we can comment on what we’re seeing in our businesses and we had obviously a good quarter in Europe and a good September when we haven’t seen signs of slowdown in Europe. I mean we were encouraged to see automotive up 9% really continue to build on strong penetration gains in that business. Test and measurement and electronics had a good year all around and were up in Europe. We just talked about food equipment up 6% and then welding, polymers and fluids and construction you’re probably seeing a little bit more product line certification in those businesses but overall Europe for us 3% we’re pleased and we have not seen a slowdown in Europe.

Okay, helpful. And then just on construction North America I know you’re continuing to see some declines on the non-res side is there any kind of reason for hope that you guys are seeing any positive signs in that market?

The way we characterize our construction business North America it’s been bouncing around quarter to quarter it’s up a little down a little and I think we’re still waiting for some traction overall. There is a fair amount of good progress we’re making inside the business on the margin front, but from an overall demand standpoint I think we’re still not seeing any consistent trends whether it’s commercial construction activity.

Okay. All right. Thank you guys.

Jamie Cook. Your line is now open. Jamie Cook – Credit Suisse: Hi, good morning. I guess just two questions one broader and then one on test and measurement. I guess I’m surprised I mean know you’re having the market healthy something internal issues help your top line, but I’m surprised when I think about the organic growth of 3.5% just given a number of free announcements that we’ve seen across industrials and just broader concerns on the macro. Did any of your businesses see deterioration as we exited the quarter or as we look into October? And to the headlines you’ve read from other companies concern you more as you think about 2015? And then my second question on the positive test and measurement had a very good quarter. Your Instron business was up 22% I’m just wondering if you can give a color there I think last quarter you talked about some confidence may be you could see a pickup in CapEx your thoughts there. Thanks.

Yes. So, on your first question Jamie we didn’t see any of our businesses slow down as we went through the quarter. We are – if you look at the comps on a year over year basis had that made drive some of would be referring to but generally there was solid strength as we went through the quarter there. Although it’s little early to comment but we haven’t seen anything unusual that’s inconsistent with what we were expecting and what’s including in our guidance today. Now that said, I mean we are obviously we are aware of the headlines and what other companies are reporting so we continue to monitor what’s going inside our businesses and the order rates that we’re seeing. In terms of tests and measurements, they had a good year really if you go back to first quarter second quarter backlog activity particularly in the Instron business has been excellent. And we’re encouraged by what we’re seeing now keep in mind that, that business was up 8% organically in the fourth quarter last year so the comps are going to be a little bit more challenging here in the fourth quarter. But in terms of seeing a sustained pick up in CapEx cycle, probably a little too soon to call that but we say that we’re encouraged but what we saw in the second quarter in test and measurement then obviously we’re not seeing anything that would suggest that there is a slowdown in those businesses. Jamie Cook – Credit Suisse: Thank you. I’ll get back in queue.

Walter Liptak. Your line is now open. Walter Liptak – Global Hunter Securities: Hi, thanks. Wanted to go back to the welding segment and I understand your answer that general industry is where you’ve seen the pickup and North America. But I wonder if we saw a slowdown in welding this year and now it seems to be picking up I’m wondering if you can attribute that to anything pent up demand , or any different sectors within welding.

Well I’ll just go back to what I said earlier which is oil and gas North America in the quarter was strong and also the general industrial part of our business and also the commercial part was certainly much stronger year on year than we’ve seen past prior quarters. But I’ll also reference to what Michael just talked about the pickups are largely for us and the equipment area and from the CapEx standpoint I think it’s been a couple of quarters now improving demand rates in the CapEx area but I don’t think that we’re ready to call any big inflexion point we’d like to see it sustain itself around the couple of quarters. Walter Liptak – Global Hunter Securities: Does it seem like a pickup in the welding distribution channel or is it direct to…

The commercial business is what we talk about general industrial and commercial we’re talking about sort of about more fragmented part of the market most of that has access through distribution channel. I assume that the pickup in the channel the sales through the channel are function of increased demand from their end customers. Walter Liptak – Global Hunter Securities: Yeah, of course. Thank you.

Ajay. You line is open. Ajay Kejriwal – FBR Capital Markets: Thank you and good morning. Scott, congratulations good to see the organic growth rates come through here. So may be talk a little bit about some of work that’s being done, I imagined a lot of it is blocking and packing business by business but then to the extent there are initiatives at the corporate level, be it in terms of what you’re doing with incentive structures and may be other initiatives. So just give us a sense of what to expect and the work that you’re doing to drive organic growth?

Yeah sure. So we are as I said in my comments we are still another three or four quarters away from being able to bring the majority of our focus to the organic growth component of this strategy. We’ve talked I think to significant degree about the past in the end what makes all of this work is the ability to move our organic growth rate up and on an historical basis we’re talking percentage point or so improvement relative to the history. So we’re not talking about it a huge step up but a meaningful one. Right now what we’re doing is trying to manage these internal initiatives related to our structure related to sourcing in a thoughtful way to face the implementations of those in such a way that our business is continued to be able to deliver for their customers and deliver for our investors. We probably got another three to four quarters of pretty significant activity in that regard. So from an organic growth standpoint I think largely what we’ve accomplished to date is I think we’ve got the management team fully aligned around the fact that in this reshaped portfolio we have highly differentiated business that all have significant potential to drive organic growth through innovation and penetration I think that part is very clear across our management team. heading into ‘15 we will be doing some work on incentives to get that sort of further flushed out so in ‘15 and beyond we will continue we’ve already made some adjustments we’ll continue to make some more. But I think this is largely an issue for us of focus and execution with a much higher quality of portfolio that will ultimately add more potential to grow organically. Ajay Kejriwal – FBR Capital Markets: Good. And then enterprise initiatives obviously very, very impressive margin gains here. And without taking any of that thunder away from the December meeting, may be just talk about which innings you are in terms of savings from BSS and then sourcing?

Well I think the way that I would answer that Ajay is that we’re in the end of year two of five year plan that we’ve set along that we’re expecting fairly comparable improvements year by year as we go through the plan. I think a couple of years in we have some better sort of thoughts and visibility on where we think we’re going to end up on ‘17 and build the December meeting around sharing some views on that with our investors. Ajay Kejriwal – FBR Capital Markets: Okay. Thank you.

Andy Casey. Your line is open. Andy Casey – Wells Fargo: Thanks. Good morning everybody. Good morning, Andy. Andy Casey – Wells Fargo: If we could go back to the enterprise initiative for that last question you’ve increased your 2014 operating margin guidance by about 100 basis points through the year now 20 versus your initial 19 and you’re kind of at the bottom range the longer term 2017 goals. If you’re focusing on returns of the next three to four quarters before you really transition to the organic growth, are we talking about more than 200 basis points left in your view?

Yeah so I guess. Andy this is Michael. So we’re not ready to go down that path for a number of reasons. One, we’d like to give you the full picture when we get to our Analyst Day on December 5th that you’re of course invited to. The other thing I tell you is this is annual plan season for us right now so all the businesses are working through their plans for next year being able to share a much better view of what this might look like in terms of the landing spot for margins and returns at the end of the five year enterprise strategy as well as provide some detail on 2015. But what I would echo with Scott just said that we expect all our businesses to continue to improve and get a little bit better on every year on operating margins and you should expect us to describe that in more detail when we get to the analyst day on December 5th. Andy Casey – Wells Fargo: Okay. Thanks. At least the question was good for some laughter in the background.

Thank you for that. Andy Casey – Wells Fargo: You’re welcome. Regarding to the Q4 organic growth guidance for growth moderation just to clarify that Michael, is that mainly driven by comparisons and not trend deterioration?

Yes that’s correct. And if you look at the growth rates last year, we were up 3% organically in the fourth quarter we were up 1% up organically in the third quarter. We talked about test and measurement in particular having a more challenging comp and then may be a little bit of a decline auto builds as well. So that’s all factored into our guidance. And like I said we haven’t seen any deterioration in terms of our segments. Andy Casey – Wells Fargo: Thank you very much.

John Inch. Your line is now open. John Inch – Bank of America/Merrill Lynch: Thanks. Good morning everyone. So, [inaudible] what was the POS drag in that segment. I forget what you said if you’d actually called that out on the top line.

About 2 percentage points in that business, so a little bit more than some of the other segments. John Inch – Bank of America/Merrill Lynch: And Michael you or Scott said that you expected the associated drag to lessen in that 2015. When you think overall, you think POS is going to drag the company is organic, the kind of 1% cadence through 2015 or do you expect the other segments to realize the lessening as well?

I think a conservative expectation would be a 1% drag all of next year and then largely we will get it behind us. We may get out of it, a quarter or two ahead of that but I think that would be the planning assumption for now. John Inch – Bank of America/Merrill Lynch: I assume there is a sort of a degree Scott of kind of flex in that as far as naturally it lessens but then you kind of want to keep it at the 1% to sort of accomplish the initiatives, is that the way to think about it? In other words, it might naturally lessen but then you might redouble efforts to bring it back to 1%?

No, I think most of its really I would describe as in terms of impact at this magnitude I would describe it as a onetime event. This is really about reshaping the portfolio. So we did it at the macro level in terms of the divestitures and refocusing the company. What’s going on now is really about driving that same principle down to operating businesses. So it’s existing product lines that don’t carry the level of differentiation that we think are appropriate for a strategy or exiting volume product lines in the scale of divisions. So this is much more of a onetime even over a six or eight quarter period of thoughtful, repositioning and refocusing of our portfolio. We need to go through it. John Inch – Bank of America/Merrill Lynch: Now that makes sense. Just also the kind of [inaudible] is, in theory you would say POS adds beyond 15 and we get a one point boost, but shouldn’t you in theory get more than one point because less distractions spread over, less robust product lines with the terminology.

I won’t necessarily applied on a percentage basis, but major component of PLS is to get us focused on the stuff that we really have conviction about, being able to grow at the kind of earnings and returns profile we think are appropriate for the company long term. So there is an element of this that’s certainly margin and return related but it’s equally important from the standpoint of the organic growth accelerations we go forward in getting us focused on the major product lines where we have major positions and industries that really think are the right ones for the company. John Inch – Bank of America/Merrill Lynch: And then Scott, one of the phenomena have been in the quarter just the significant down shipped in the price of barrel of oil. Presumably you’ve looked at this possibly touched a little bit. If oil stays around the $80 $85 mark what do you think the impact ITW really if anything?

I actually can’t answer that. We haven’t spent a lot of time studying that one at this point. If it stays down there for another quarter we will certainly have a more up to date view, a thoughtful view, but right now I think it’s something that’s moving around but not really driving much change in our business underground right now. John Inch – Bank of America/Merrill Lynch: So if there is a more significant direct impact I presume you would have been studying it by now, without the characterization?

Yes.

[inaudible] Your line is now open.

Thank you. Good morning everyone and welcome Erin. My first question is, thinking about the enterprise initiatives and the 100 basis points in benefits that you’re expecting to see in the out years. I mean is it fair to say that you’re going to see disproportionate amount from the segments today that are below the 20% threshold because as we exit ‘14, you’re probably going to see at least four of your segments above the 20% range. Just curious how you’re thinking about it.

Like I said, we expect all of our businesses to continue to improve every year and just add to that, that some businesses are little further along than may be others. So if you look at the welding business which was in the enterprise initiatives may be a little bit more for the long run and the enterprise strategy and the ability to now focus on organic growth versus some of the initiatives. But overall, I think we’ve said before that we expect all of our businesses to reach 20% plus over time and like I said, we expect all of our business to continue to improve every quarter, every year.

And I guess may be one follow on is really you guys are nice to have a breaking out where you’re spending your restructuring spending. It looks in the most recent quarters in an auto or food equipment. There has been recently some concerns that the auto market are going to decelerate as we head into next year and clearly that’s been a driver for you guys. So just any commentary around where you’re spending on restructuring and any view on the auto markets would be helpful?

The restructuring basically follows our BSS initiatives which you know particular event based on end market conditions and in terms of we’ve deploying that spending over the last couple of years. From an auto perspective I think we are certainly in a position to absorb some modest slowdown in the end market. We have in terms of the penetration games that we have been delivering for the last 8 to 12 quarters now, one target for business where we have three years of essentially visibility in terms of new programs that we’ve got. We’ve got a pretty good pipeline of new content coming in and certainly tailwind is better than headwind. But can be still operated and generate some organic growth even if the market slows down or flattens out on our site, I think we are in a really good position to do that.

Okay. Thanks guys.

Eli Lustgarten. Your line is now open. Eli Lustgarten – Longbow Research: Good morning, everyone.

Hey, Eli. Eli Lustgarten – Longbow Research: Can we just follow up your last comment and talk about the automotive. You said three years visibility I mean the gains in your from penetration was absolutely spectacular. Can you give us an idea of what kind of thing that we can expect over the next four to six quarters because you said you had to see for 12. Would it stay at the same rate or can you give us some magnitude, some way of calibrating penetration games that we’ll see for the next

I think we’ve been running at four to five percentage points over market growth kind of rate and I think good expectation would be for us to be able to continue that. Eli Lustgarten – Longbow Research: So sustainable at least well till ‘15?

We believe so. Eli Lustgarten – Longbow Research: And second point sourcing and better buying a big part and this year everybody’s been blessed with flow of material prices going on. Is there any way if you can give us some idea of the benefit of the actual drop in commodity prices have especially company versus the initiatives we’ll get some idea how we’re leveraging that at all?

The way we reported externally is we’ll give you the price cost metric and that has been favorable all year, every quarter by 10 basis points, twice ahead of cost. So that continues…I think at this point we still describe the material environment fairly benign. There is a couple of outliers for the overall. I think all businesses are doing a good job offsetting material price inflation with price. On the sourcing side, is the bigger contribution to the over 120 basis points of margin expansion. While we don’t break it out between sourcing, what I’ll tell you is that we were very encouraged by the progress that we’re seeing on the strategic sourcing side and you see in our variable margins or gross margins with 100 basis points improvement that we believe is sustainable. So I think we’d answer your question. Eli Lustgarten – Longbow Research: And the bulk of it is coming from the sourcing side at this point, would you guess?

So we don’t break out the 120, so we don’t break it out, but like I said we are very encouraged by the positive momentum on the sourcing side and we expect that to continue. Eli Lustgarten – Longbow Research: Thank you very much

Joel Tiss. Your line is open. Joel Tiss – BMO Capital Markets: I didn’t I was going to make it. Thanks. How’s it going? As you guys move through this the 80-20 and the simplification and other things that you are working on, can you just give us a sense of how, I know you are not looking at the acquisition yet, can you talk a little bit about how you are seeing opportunities in that front to fill in different product lines and may be how the philosophy in the future around acquisition would end up changing instead of buying [inaudible]

I think we would plan to spend some time on that in December if we can defer that answer that question of Joel in December. I think as Michael said before we’d like to be able to talk about that with all of you on our investors in a way that’s more comprehensive than a quick answer. Joel Tiss – BMO Capital Markets: So it’s not too early like that was the other part of the question, it’s not too early for you guys to start thinking of acquisition? There is a lot of stuff on your plate obviously but.

Well I think it’s a matter of where do acquisitions fit in our strategy I think that’s ultimately what we want to talk about and certainly it’s not a matter of where we’re – from a financial standpoint or it’s not a matter of capability, we know how to acquire companies and ultimately where they fit in our strategy, on a go forward basis is a very different place than where they fit historically in ITW. Joel Tiss – BMO Capital Markets: And then lastly if there’s no to look at the $500 million of share repurchase in the fourth quarter as a sign that things are slowing down a little bit or if there is any concern in the operations?

No, I don’t you think how you would draw that conclusion, I mean we said that we were going to be opportunistic in terms of share repurchases in the second half of the year. We started out the third quarter with 500 million and in the fourth quarter we expect to spend at least another 500 million on the share repurchases. So there is no change in terms of our view of how attractive the share repurchases are and therefore we are continuing obviously. Joel Tiss – BMO Capital Markets: Thanks very much.

Stanley Elliot. Your line is still open.

Great. Thank you guys for putting me in Hate to go back to the welding business because there are so many things to talk about in the quarter but as it relates to the oil piece, could you quantify how big the oil end market is for welding in general?

20% of our North American business.

It’s fair to say when you talk about the general environment a lot of the growth you are seeing was more industrial production kind of a general fab which is a significantly larger part of the market if I am not mistaken. Is that correct?

Yes.

Great. Thank you very much.

Steve Fisher. Your line is still open. Steven Fisher – UBS: Thanks. Good morning, I may have missed this earlier but can you discuss the direction of various components of your business in China how they are moving in different directions or where they’re all up. Basically, we saw the automotive business leaped away up 12%, food equipment also up double digits so we said a lot about the acquisition that we did and how good a job the team has done in terms of integrating that acquisition. So now we are benefiting organic growth rates in food equipment in China of solid double digits. Polymers and fluids had a good quarter, up 5% and then the others are fairly small. The main drag really was what’s got talked about oil and gas pipeline projects been differed in China so that business was down but other than that – which was on the wielding side. Other than that we had a very good quarter again in China. Steven Fisher – UBS: Okay, great. Thank you.

Sean Wayne. Your line is still open.

Hi good morning. I would want to maybe come back to the food equipment again I mean the incremental margins in that business significant acceleration there. I mean certainly you talked about new products, can you just help me understand how much of the margin expansion was kind of volume related versus new product introductions? And then should we start thinking about this business being kind of a 20% to 25% margin business kind of going forward or was there anything of one timish in that quarter that is unlikely to repeat.

No, I mean there was nothing unusual in the quarter other than really solid execution and organic grows. To answer your question specifically, if you look at the 270 bases points of margin expansion in food equipment in the quarter, 150 of that came from the initiatives. So the work around at BSS and sourcing and a 120 bases point from the operating leverage on the organic growth. But really I guess Scott described it very well in terms of performance of that business and we think it’s very sustainable on the go forward basis.

All right. Thank you. Just know housekeeping the other income came in I guess quite a bit harder than what I would have expected in giving the run like the last couple of quarters. It means talking of what the variance was there?

It’s primarily interest income.

Ok perfect. Thank you.

Jim Krapfel. Your line is still open. Jim Krapfel – Morningstar: Hi good morning. So just on price costs I imagine while your raw material cost have come down recently. I would like to get your comments on the extent of that going forward and then also your ability to hold and increase pricing from here.

I would expect us to continue to be favorable on the price cost side of things and so saw 10 bases points in this quarter and it’s probably going to be in that range for the fourth quarter but you know as these businesses know are working to become more and more differentiated and in terms of adding value to the customers you obviously going to have more leverage for a pricing standpoint so but I wouldn’t expect that just yet but nothings really change in terms of ability to continue to get price in all of our businesses to offset the cost. Jim Krapfel – Morningstar: Okay. Thank you.

[Operator Instructions]. John Inch. Your line is open. John Inch – Bank of America: Hi so in terms of follow up come more of a big picture question Scott ITW historically has never been managed on a geographic basis now that you’ve been CEO clearly enterprise initiative have a lot of traction and momentum. The company has made a lot of structural changes, are you thinking perhaps any more about sort of managing the company as a bit portfolio in so far as having geographic exposures are concerned. I will give you an example so China you know you have done pretty well, but there seems to be significant sort of, there is an expectation China could slow in the coming years. So I don’t know how that could represent your businesses as may be a pro or con but you know how does it affect kind of corporate in the way you are looking at the world. That’s just one example, there could be lots of others.

I think where we are and we’ve done a lot of thinking about this really the most important decision that we make for the company and our shareholders of what we business we should be in. And geography is in our view kind of second condition to sort of our thinking around what business we should be in. If you look across the portfolio that we’ve assembled we’ve got $2 billion plus businesses highly differentiated in terms of the things they do for their customers. $2 billion business customers. Lots of room to move.

David Raso. Your line is open. David Raso – ISI Research: Good morning. Just a quick question, thinking about incremental margins next year, I know pensions been a help this year I meant that’s been really more just an absence of some of the curtailments you had last year. Let me just try to think the puts and takes for next year, I know you’re not going to want us to give us too much granularity, but there any items which we talked about enterprise initiatives, pension anything else that we can think about last quarters obviously incremental have been over 75%. So the baseline for next year but just trying to get a feel for the puts and takes.

I think the way I’d answer your question David is that look at ITW historically excluding initiatives have been in the 30% 35% range. And when we’re done with the initiatives, we’d expect to be at the high end of that if not for better, but we still have a lot of work going on margin expansion to come from these initiatives in ‘16 and beyond. I can’t at this point – all right I don’t want to give you at this point an incremental margin sums up of 2015 this will be part of when we get all together we’ll be able to give you our best view at that point. David Raso – ISI Research: Outside of the initiatives, sort of a historical baseline is the way to think about it? I’m sure I’m making sure when I’m listening, some thoughts I already have your pension or just any other company is leave to go. So without getting into these are kind of small pieces of a bigger puzzle. But since you are asking specifically pension has not been a tailwind this year in a significant way and we don’t expect it to be a significant headwind in 2015. The other item that is may be worth talking about is currency, we called $0.04 of headwind here in the fourth quarter which we believe which is every manageable. There could be some headwind in currency in 2015 depending on where rates are at the time and we think that’s very manageable at this point. David Raso – ISI Research: All right. I appreciate it. Thank you very much.

Thanks everyone for joining us on today’s call and we look forward to talking to all of you again. Thank you.