Good morning. My name is Christine and I will be your operator for today’s call. At this time, I would like to welcome everyone to the Rexnord Second Quarter Fiscal Year 2014 Earnings Results Conference Call; with Todd Adams, President and Chief Executive Officer; and Mark Peterson, Senior Vice President and Chief Financial Officer of Rexnord. This call is being recorded and will be available on replay for a period of two weeks. The phone numbers for the replay can be found in the earnings release the company filed on an 8-K with the SEC today, October 24th, and they are also posted on the company’s website at www.rexnord.com. At this time, for opening remarks and introduction, I’ll turn the call over to Mark Peterson, Senior Vice President and Chief Financial Officer of Rexnord.

Good morning. Before we get started, just a brief reminder that this call contains certain forward-looking statements that are subject to the Safe Harbor language contained in the press release we issued today as well as in our filings with the SEC. In addition, some comparisons refer to non-GAAP measures. Our earnings release and SEC filings contain additional information about these non-GAAP measures and why we use them. Today’s call will provide an update on our overall performance for the second quarter of our fiscal 2014 including details on our two platforms, followed by an overview of our financial statements and liquidity highlights. Afterwards, we’ll open the call up to your questions. With that, I’ll turn the call over to Todd Adams, President and CEO of Rexnord.

Thanks, Mark, and good morning, everyone, and thank you for joining us today for an overview of our fiscal 2014 second quarter results. Starting on page four, we’re pleased with our results this quarter as we deliver slightly better operating profit on sales that were in line with our expectations going into the quarter. Through the first six months of our fiscal year, our performance in aggregate is on track with our expectations and overall strategy which is focused on driving above market core growth delivering strong operating leverage on that growth, generating significant earnings per share leverage to our ability to both delever and fine tune our capital structure to take advantage of the favorable financing environment. Additionally, given that our business model produces a significant free cash flow, we’ve been able to invest the portion of that free cash flow to execute three smaller but strategically important acquisitions and very reasonable multiples that will quickly deliver double-digit returns on invested capital to the synergies we’re able to achieve. As it relates to the second quarter, we’re confident that again our core growth continues to outpace the growth in our shared markets as we delivered 3% consolidated core growth in the quarter, which is comprised of 6% core growth in water management, in advance of the market recovery we actually see coming and 1% core growth in process and motion control. Our adjusted earnings – our adjusted operating income increased 7% from the prior year, delivering an incremental margin of 31% and sequentially from the first quarter we generated $11 million of additional adjusted operating income on $6 million of additional sales. With respect to earnings per share, our adjusted EPS increased 29% year-over-year to $0.31, $0.06 above the high-end of the guidance range we gave in August as…

Thanks Todd. Consistent with prior quarters, we’ll speak primarily to adjusted operating profit and EBITDA, adjusted net income and adjusted earnings per share, as we feel these non-GAAP metrics provide a better understanding of our operating results. Slide 5 of the presentation takes our reported results and reconciles with the adjusted results. Turning to Page 6, I’ll discuss our operating performance highlights for the second quarter. Second quarter sales increased 3% from the prior year to $515 million driven by our core sales growth of 3%. Adjusted operating income increased 7% from the prior year to $76 million in the second quarter or 14.8% of sales. Sequentially, our adjusted operating income margin increased 200 basis points from our first quarter. Our adjusted EBITDA was $103 million or 20% of sales, 170 basis points increase in the margin sequentially. Second quarter adjusted net income was $31 million resulting in adjusted earnings per share of $0.31 which increased 29% from the prior year. We generated $25 million of free cash from the quarter inclusive of approximately $30 million of incremental cash interest year-over-year. That was accelerated in the quarter primarily resulted the refinancing transaction that occurred in August. Excluding this tiny impact, second quarter free cash flow increased by $24 million year-over-year. Next, I’ll take some time on Slide 7 to walk through the operating performance and our Process and Motion Control platform. Sales in the second quarter increased 1% year-over-year to $312 million as a result of 1% core sales growth that was driven by low single digit growth in the majority of our end markets partially offset by a decline in sales for bulk material handling markets. Turning to profitability, adjusted operating income was $61 million or 19.5% of sales driven by a 41% incremental margin year-over-year. Sequentially, our adjusted…

Thank you. We will now begin the question-and-answer session. (Operator Instructions) And our first question comes from Mig Dobre from Robert W. Baird. Please go ahead. Mig Dobre – Robert W. Baird: Good morning, guys, nice steady as you go quarter here.

Thanks Mig, good morning. Mig Dobre – Robert W. Baird: First, a small housekeeping item. On your acquisitions can you sort of remind us the revenue contribution from both Micro as well as the Australian acquisition?

In the quarter, it's very amendable [ph], if you look at those acquisitions in total -- Mig Dobre – Robert W. Baird: Yes. Going forward.

There will annual basis approximately $27 million of revenue and approximately in round numbers I call it you know $0.04 or so of EPS on an annualized basis. Mig Dobre – Robert W. Baird: Okay, that’s helpful and then I’m trying to clarify something on your outlook too. Correct me if I’m wrong, but you’re core growth outlook has increased a little bit but it seems like your earnings guidance primarily reflect adjustments to interest costs, am I missing something or is that what's going on here?

Mig I think the gains for the year is from last time it's up $0.20, $0.18 from the refinancing $0.02 from sort of the quarter – I think the core growth is up primarily due to our water business and so we’re really trading you know may be some lower aggregate margin water topline based on where we're at versus a may be slightly weaker industrial topline. So the core growth is better you watch it through in terms of the mix and everything else, it's sort of you get to the same spot from the EPS standpoint. Mig Dobre – Robert W. Baird: That’s helpful and that kind of goes to my next question, which may be you can update this on your expectations by segments as to where you’re seeing core growth this year?

I don’t think we’re going to give you any discrete guidance on the platform growth, but I think when you look at the water, it's clearly well above what we’re seeing in Process and Motion Control. I think when you look at Process and Motion Control for the first half I think it's roughly flat. We think it gives incrementally a little bit better from here but still very low single-digits. I think when you look at our Water Management platform that’s going to -- through to the first half, it's sort of mid-to-high single digits and we think it'll sort of be there for the balance of the year as well. Mig Dobre – Robert W. Baird: Okay. And you highlighted a book-to-bill of one in PMC and obviously that’s encouraging, any sort of end market commentary or any other color that you can provide us there?

No, I mean I think it's again it's a customer to the diversity. I think we’re seeing a good growth in a number of end markets, energy, food and beverage as well as in aerospace. Obviously bulk material handling is a little bit weak, but we are seeing that sort of stabilize relative to the book-to-bill as well. So in aggregate it's a combination of I think our diversity as well as the work we’re doing to sort of outrun the underlying market growth or market decline to the case may be. So you know it's really a lot of effort across a bunch of different vertical markets in different geographies. Mig Dobre – Robert W. Baird: Great, and the last one before I jump back into cue, RBS a big portion of the story of Rexnord, I’m wondering if you can sort of give us a sense for what RBS has contributed thus far in a year and sort of any initiatives that you might have going on currently and how you think that’s going to play out for margins going forward?

Sure and I think we referenced that a little bit in the call Mig, but we feel really good about the momentum we’re getting both in the water platform as well as the industrial platform with productivity and cost reduction – significant ongoing cost reductions and as I look forward you know I would say that you probably see us continue to accelerate those types of things for the rest of this year and into next year because we are looking at a – I thought a more muted growth from an industrial standpoint and I think that the other things we’re doing there around footprint, the things we’re doing around ongoing productivity, product design and just getting frankly more efficient in every aspect of our business including the back office I think you’re going to see that continue to accelerate really over the next 12 to 18 months. And you’ll see a lot of that in Process and Motion Control as it relates to the RBS driven margin expansion and productivity, we’ve been working that really hard over the last three to four years inside of Zurn and we’re seeing that pay off not just in the margin, but on the growth you know we’re seeing high single digit growth in a market that is still declining you know in very low single digit but still declining. So the upshot of that is that we’re done in terms of the commercial positioning and now it's just driving the productivity and service levels to the customers and as it related to VAG, I think you’ll see that accelerate that as well. So we’re to say a specific thing would be you know probably disingenuous, it's a combination of really starting with the customer working all the way back through, engaging our people in the pursuit of that customer satisfaction and aligning goals, objectives and tools to sort of get it all done. So we’re pretty excited about where we’re positioned as it relates to that and expect the lot more over the next 12 to 18 months. Mig Dobre – Robert W. Baird: I appreciate it. Good luck in the quarter guys.

Thanks Mig.

Thanks Mig.

Thank you, our next question comes from Charlie Brady from BMO Capital Markets. Please go ahead. Charlie Brady – BMO Capital Markets: Thanks, good morning guys.

Good morning, Charlie.

Good morning, Charlie. Charlie Brady – BMO Capital Markets: On my voice we had a pretty big game here in Boston last night, so I’m trying to make it through here.

Nice win. Charlie Brady – BMO Capital Markets: Thanks, and you just told on the margin profile, [indiscernible] I guess you kind of cover that $0.04 accretive to EPS on annual basis. I think I worked the math on that, what's the – on the fixed rate again on the swap what's the rate on the fix?

On the swap, so the – so it's going to be about 255 basis points and which has LIBOR floor built into. So if you play forward two years and LIBOR is above one, we’ll be paying effectively a fixed rate [indiscernible] while 455 basis points. Charlie Brady – BMO Capital Markets: Okay. Can you comment on where you see the net debt of rate kind of going down like 4.3 right now, where you see that kind of going down by year end and kind of may be 12 months out where you get that down to?

I think we’re going to see Charlie if you look at the guidance in terms of free cash flow and backing that EPS back through EBITDA, you sort of get this sort of four by the end of March may be at 3.9 and then if you fast forward 12 months past that you are sort in the mid-three, so call it 3.4 or 3.5 zip code and that is – that again assumes no acquisitions and divestures or anything else. So we’re looking at you know being sort of mid-threes within 16, 17 months. Charlie Brady – BMO Capital Markets: Great. And one more, just can you – can you comment on how much the bulk material handling business was down in the quarter?

Yeah, if we look at the – if we look at that sort of part of our business, it's probably down high single digits, low double digits, so sort of minus 9 to call it a 11. Charlie Brady – BMO Capital Markets: Great, thanks guys.

You bet.

Thank you, our next question is from Julian Mitchell from Credit Suisse, please go ahead.

: Hey guys its Charlie for Julian. How are you?

Hey, Charlie.

Hi, Charlie.

Just had a question, you called out the incremental margins obviously in both segments in consolidated on the operating income line, just wondering if there is any color on why there wasn’t much leverages on the EBITDA margin line, just in the incremental there obviously seems like the margins came down in both segments and consolidated as well?

It's frankly just lowered depreciation and amortization. So we’re not get – it's very tough to leverage depreciation and amortizations, so when you look at the operating income, that’s sort of, I think the true things that you could influence in a relatively short period of time and so the operating income leverage is -- I think the relevant operating statistic and the absolute EBITDA margin is still very good.

Sure. And then just on the M&A pipeline any color -- I mean you obviously talked about kind of full things -- anything that you guys particularly think looks attractive or just spaces are cheaper than others or just kind of maybe some color on kind of what you guys are seeing there?

We do, Charlie. We see a number of things. As mark pointed out, you know we were able to do two deals in the quarter. You know, revenue run rates between $25 million and $30 million and EPS, $0.04 on an annualized basis, we’ll get probably half of that this year. So we like those size deals. There are a number of things that look a lot like that in both of our platforms. So I would characterize the focus of our funnel and the priority of our funnel is to do things that we can stick into both of the existing platforms where we can gain significant synergies quickly both, revenue synergies, but more importantly cost synergies. So you know, I think we’re buying at reasonable multiples with the ability to sort of leverage RBS and our existing platforms to plug these things in and make them far better businesses, when we own them, relative to standalone. So we’re really, I’d say, picking the level of activity around those types of things and there are plenty to do in both platforms.

Sure, thanks.

Thank you. [Operator Instructions]. Our next question is from Andy Noorigian of Vertical Research. Please go ahead. Andrew Noorigian – Vertical Research: Hi, good morning, guys.

Good morning, Andy.

Good morning, Andy. Andrew Noorigian – Vertical Research: I was wondering on Zurn with the market share gains you’re making in the progress on organic growth and then some of these investments starting to last, do you think as you look out through past this year the bar has kind of been raised and with the margin potentials in the business?

Certainly. I think it’s a -- and again, I’ll separate water management and say specifically to Zurn. The amount of effort that we’ve had over the last two or three years to really remake the front end of the business as well as streamline the back end distribution and fulfillment model has been significant. The other thing that I think you’ll appreciate which is the new construction recovery will aid in our margin performance as well. Right, so some of the products that we would sell in a new construction environment carry a better margin profile than some of the things we’re selling through the retrofits. So I think a couple of things, just beyond going productivity and efficiency that we’ve laid in and if we get a favorable market environment that’s going to redo at a higher rate than historically it has. And secondly, when you turn on new construction in a more meaningful way, we’re going to get a second leg of benefit there. So it’s really well positioned both for the current environment and increasingly well positioned for a non-res recovery. Andrew Noorigian – Vertical Research: So I think historically you’ve spoken to the water management segment is like a low 20s to high 20s incremental margin; potentially you think that can maybe step up to like to low 30s now if you get a recovery in construction?

Not in total. I think we’re going to probably -- I think we’re going to wait and see what sort of recovery we get. But at this point, I think solidly that should be the expectation. And if we get non-res recovering in that double digit range in a couple of years, I don’t think it’s -- I don’t think it’s not aligned to say that you would probably see it in the 30s. But I think from a base case standpoint a gradual recovery starting off with maybe plus a few points and then maybe high single digits, I think we’re going to be in that mid-to-high 20s sort of incremental range. I do believe at some point in the next two or three years, you’re going to see a double digit recovery in non-res construction. And at that point, I think it’s probable that you would see higher incremental, no question. But from a base case standpoint, we’re sort of looking at a gradual recovery over the next couple of years. But in the event and potentially, likely event that we do get a double digit sort of year; I think we could probably be there, yeah. Andrew Noorigian – Vertical Research: Fair enough. And then can you just comment on what you’re seeing in municipal markets, maybe in Europe, in the U.S. kind of customer tone and trends there?

I would characterize it as stable both in those geographies, North America and Europe. What we’re seeing, I think frankly just a lot of growth and activities in South American and the Middle East. The project size and pace in both of those geographies is really picking up. I think our funnels from a lead time and project outlook are really strong. So the stability and the mature market is good. I think we’re happy with that. But then we’re really starting to see some of the growth markets of the Middle East and South America pick up meaningfully. Andrew Noorigian – Vertical Research: Great, thank you.

You bet.

Thank you. And we have no further questions at this time.

Great, thank you everyone for joining us this morning. We appreciate your interest in Rexnord and look forward to our next update when we announce our third quarter earnings in early next year. Thanks so much.