Good morning, and welcome to the Emerson Q3 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would like to turn the conference over to Colleen Mettler. Please go ahead. Thank you and good morning. Thank you for joining Emerson's Q3 fiscal 2022 earnings conference call. Today, I am joined by President and Chief Executive Officer Lal Karsanbhai, Chief Financial Officer Frank Dellaquila, and Chief Operating Officer Ram Krishnan. As always, I encourage everyone to follow along with the slide presentation, which is available on our website. Please join me on slide 2. This presentation may include forward-looking statements which contain a degree of business risks and uncertainty. Please take time to read the safe harbor statement and note on the non-GAAP measures. I will now pass the call over to Emerson's President and CEO, Lal Karsanbhai for opening remarks. Thank you, Colleen, and good morning, everyone. I'd like to begin by thanking the nearly 90,000 Emerson employees around the world for their tremendous effort, passion, and commitment to deliver the solid results we will speak about today. Over the past four months, I've had the opportunity to travel to several U.S. sites, including Houston, Chicago, Elyria, Ohio, and Pittsburgh, as well as visiting investors, customers, and our teams in Germany, Denmark, Brazil, and Mexico. I have to be honest, there is no substitute for being with our teams in person. I'm looking forward to this month's trips to India and Singapore, and I'd also like to thank our board of directors for their support and our shareholders for your trust in us. As an organization, we continue to make significant progress on all of our strategic imperatives aimed to accelerate value creation, culture, portfolio, and execution. Our culture evolution continues in earnest. We are launching our efforts with new, listening tools, a modernized employee value proposition, and a new, reinvigorated talent engine. To this end, on August first, we hired our first Vice President of Culture, Kelly Clark, who joins our company at a crucial point in time and brings unparalleled experience in culture transformation. Turning to slide 3. Emerson's portfolio transformation is well underway, and in the quarter, we made significant progress to create a higher growth, more diversified, cohesive portfolio. We took 5 important steps. Number 1, on May sixteenth, we closed the AspenTech transaction. We are very excited about the synergy opportunities, which are sized at $160 million in the funnel and the projects won to date. Number 2, AspenTech announced an agreement to acquire Micromine, the first transaction under the new structure. Micromine is an Australian-based exploration to optimization software offering, well-positioned to benefit from the minerals required to fuel the renewable revolution. 3, we announced and closed the acquisition of Fluxa, a critical life science process knowledge business, highly synergistic with our industry-leading DeltaV system. Number 4, on May 31, we closed the TOD sale. Last, 5, yesterday, we announced the sale of InSinkErator to Whirlpool Corporation for $3 billion on an 18.1x multiple of adjusted EBITDA. Prior to turning to slide 4, allow me to say a few words about our execution. This was a solid quarter, and I feel incredibly positive as we go into the fourth and into 2023. June trailing 3-month underlying orders were +10%, driven by Automation Solutions at +13%. Third quarter underlying sales grew 7%, driven by the Americas, which grew 14%. This performance occurred despite lockdowns in Shanghai, which impacted 6 plants for 2 months and continued challenges with electronics availability. Together, the two factors resulted in $180 million sales impact in the quarter or 5 points to the Automation Solutions segment sales. Adjusted EBITDA improved 20 basis points with improvement in both platforms. Operating leverage in the quarter was 27%, and we are well on track to exceed our 30% target for 2022. Adjusted EPS was $1.38, including $0.08 contribution from AspenTech. Although free cash flow conversion in the quarter was 100%, adjusted for non-operating and one-time items, operating cash flow was down, driven by working capital investments in inventory and receivables. Let's now turn to slide 4, please. In addition to the portfolio, Emerson has also made tangible steps in our ESG journey. Recently, we have established a target to reach net-zero greenhouse gas emissions across our value chain by 2045. In the near term, our objective is to reach net zero in our operations and reduce our scope three emissions 25% by 2030. Our 2021 ESG report, which can be found on emerson.com, includes more detail on our target, which is aligned with the net-zero standard set by the Science Based Targets initiative. Our goals are bold, and we have incredible, credible roadmaps that include many of the solutions, technologies, and expertise we offer our customers and the critical industries we serve. Please turn to slide 5. I am particularly excited about the opportunities in the renewable space. As I said, our portfolio is broadly relevant as an enabling technology across a broad segment of the world's economy. This includes electrification efforts such as heat pumps, as well as sustainability, a strong sustainability funnel in Automation Solutions that has grown to $1.5 billion, inclusive of decarbonization, energy efficiency, emissions management, and new energy investments in wind, hydro, solar, and hydrogen. I will share a few examples on this slide. First, starting on the left, Emerson was recently selected by Mitsubishi Power to automate the world's largest green hydrogen production and storage facility. The Advanced Clean Energy Storage Hub will convert renewable energy into storable hydrogen, which can subsequently be dispatched and converted to electricity when required. Emerson automation and software solutions were selected based on industry expertise and our leading digital portfolio. This is a first-of-its-kind facility, and it will be capable of producing 100 tons of green hydrogen per day, with storage capacity for 300 gWh of energy. That's equivalent to 150X the current lithium battery storage in the United States. Next, in the middle, along with Neste Engineering Solutions, we were chosen to provide automation technologies and software to Fintoil for the world's third-largest tall oil biorefinery. The advanced biofuel and biochemical facility will refine a byproduct of the wood pulping process to produce sustainable feedstock for biofuels, chemicals, and pharmaceuticals. The expected annual capacity of 200,000 tons will create a 400,000-ton reduction in carbon emissions. That represents roughly 1% of Finland's total emissions. Lastly, Emerson was selected by Albioma, a French energy provider, to enable the transition of its flagship coal-fired Bois Rouge plant to 100% renewable energy. Emerson's automation system and software will help convert the existing coal-fired power plant controls to utilize biomass feedstock. In doing so, this project will result in a 640,000 ton reduction in carbon emissions, part of Albioma's plan to reach almost 100% renewable energies by 2030. These projects and our net zero targets represent our continued progress in our greening of and greening by framework that Mike Train has introduced. Lastly, before I turn it over to Frank, on slide 6, I'd like to highlight a few exciting investments we've made in operations around the world. Our rejuvenation strategy and operational excellence served us well through the pandemic and in the current challenging supply chain environment. We continue to drive operational excellence with investments like the three shown here. Starting on the left. Earlier this month, Emerson officially opened our new professional tools facility in Ash Flat, Arkansas. This is a 277,000 sq. ft. facility, which will be used mainly for our Greenlee tools for electrical applications across North America. It currently employs 150 employees, and we will double the employment over the next four years. I'm very excited about this investment, and we were honored to have Governor Asa Hutchinson join us for the ribbon cutting. Next, in the middle, Emerson recently opened its Mahindra City, Chennai, India facility for fluid control and pneumatics. This is a 145,000 sq. ft. facility, which will help serve process, hybrid, and discrete customers in India and surrounding Asian countries. Lastly, we introduced a new Saltillo, Mexico, manufacturing facility for our specialty valve technologies, assemblies, and actuators using life sciences, metals and mining, and other key industries. As with all these facilities, Saltillo will use state-of-the-art factory automation capabilities, environmental designs, and include our own Emerson technology. As we close out 2022, I feel extremely positive about where we are as a business and where we are going. Our goal is accelerated value creation, and we are executing on all the critical dimensions. With that, I will now pass the call over to Frank Dellaquila, who'll go through our detailed financial results in the Q3. Thank you, Lal, and good morning, everyone. If you would, please turn to slide 8. Before I comment on the Q3, I'd like to take a minute to ground everyone on three significant events that affected the reported results. First, on May 16th, Emerson completed its transaction with AspenTech. We contributed our two software businesses, OSI and GSS, to AspenTech, in addition to $6 billion in cash, in exchange for a 55% ownership position in the new AspenTech. Please note that GSS has been renamed to Subsurface Science and Engineering, or SSE for short. OSI and SSE, which were previously reported in our Automation Solutions platform, have now been moved to a newly created reporting segment within Emerson called AspenTech. For accounting purposes, our contributed businesses will be acquiring entity. Therefore, our Q3 is the sum of our contributed businesses for the entire quarter and heritage AspenTech results from the May sixteenth closing date. Stated simply, our Q3 results include a full quarter of our contributed businesses and approximately 45 days of heritage AspenTech. As a result, year-over-year comparisons are not meaningful as the prior year includes only our contributed businesses. I encourage you to review the slides Colleen and her team have included in the appendix, which show the details of the sales by quarter and map the AspenTech financial results into our financials. As a reminder, AspenTech results are fully consolidated with Emerson line by line, with the 45% non-controlling interest deducted from earnings used to calculate earnings per share and reflected in a single line in the equity section of the balance sheet. Finally, on that subject, our contributed businesses are no longer included in our usual metrics for Automation Solutions. The second significant item is the Therm-O-Disc divestiture, which was previously reported in Commercial and Residential Solutions. The transaction closed on May 31st, and the business is no longer included in underlying orders, underlying sales or backlog calculations. We reported a $428 million after-tax gain, equivalent to $0.72. Finally, we announced on the May call our decision to exit Russia. At that time, we absorbed several cents operationally within the guidance that we gave. This quarter, we are reporting a $162 million charge, which is a $0.29 earnings per share impact, and we are debooking a $132 million of orders that will not be converted to sales. The impact of the TOD gain and the Russia-related charge will be removed from adjusted earnings. With that background, if you would please turn to slide 9, and we'll talk about the quarter. As Lal said, we believe we had a very good quarter. There were operations challenges we could not anticipate or build into the guide, but looking through them, we are very pleased with the underlying operational performance, and we believe we can deliver results for 2022 that are in the range of what we told you in May, with the exception of cash flow. Demand continued to be strong and broad-based and consistent with our previous comments around our key end markets. We missed the underlying sales guidance entirely due to the extended lockdown in Shanghai and some continued challenges around electronic components, neither of which we expected when we guided in May. Together, we estimate these two headwinds reduced sales by about $180 million in the quarter, which equates to 4 points of growth for total Emerson, and we estimate that the leverage on those sales was about 40%. Our guide for the balance of the year incorporates our expectation that our manufacturing capability in China and our component availability will support our sales plan for the remainder of the year. Ram will talk about both of these subjects in more detail in a few minutes. As a result, underlying sales were 7%, falling short of our Q3 guidance by 3 points at the midpoint. There's a lot of good news within these numbers. The business has implemented the planned pricing actions, realizing 6 points of price overall, and price less net material inflation significantly improved versus our prior quarters, according to the plan. Adjusted segment EBITDA improved 170 basis points, driven mainly by the addition of AspenTech, which added 150 basis points. Operations improved 20 basis points, as Lyle mentioned, despite the $180 million of missed sales and the deleverage on them, as price realization and ongoing cost containment measures more than offset elevated inflationary pressures from wages and freight. Adjusted earnings per share were $1.38, up 16% versus the prior year, and that includes $0.08 from the AspenTech segment, and I will provide details in a moment. Free cash flow was down 36% versus prior year, mainly due to higher working capital from increased sales and continued supply chain constraints that caused more investment in inventory than we would have expected. In May, we reduced our cash flow guidance modestly with the expectation that the balance sheet release of working capital would occur during this fiscal year. The continued operational challenges pushed this release, in our estimation, into 2023. Nonetheless, free cash flow conversion was 90% in Q3, excluding the non-operating items from net income, specifically the TOD gain, and adding back the impact to net earnings of the Russia exit write-offs. Turning to the business results, Automation Solutions' underlying sales were up 4%. As Lyle said, up significantly more, another 5 points of growth, if we were to adjust for the loss of sales in China and due to the supply chain disruptions. Process, hybrid, and discrete sales were all up, led by energy, chemical, and power, and renewable segments. Sales in the Americas were up double digits, while Europe, mainly due to Russia, and Asia, mainly due to the Shanghai lockdowns, were down year-over-year. Price realized in the Q3 was 3%, driven by programs instituted earlier in the year and accelerated last quarter to address sustained electronics inflation and continued wage and freight increases. Backlog increased by $100 million in the quarter to $6.2 billion. This elevated level of backlog will support our sales plan for the Q4 and into 2023. As I said at the beginning, backlog has been revised to reflect a $132 million de-booking in Russia, and the removal of the businesses contributed to AspenTech. Automation Solutions' adjusted EBITDA improved 70 basis points versus the prior year due to price, leverage, favorable mix, and cost controls, despite the lower-than-anticipated sales line. Turning to commercial and residential solutions, the business continues to grow strongly, up double digits. Underlying sales increased 13%, including 12 points of price realization. Sales were up in all world areas except China due to the COVID-19 lockdowns and softening demand. As we expected, climate technologies' aftermarket and commercial strength offset moderating demand in the residential portion of the business. In tools and home products, non-residential project activity remains strong. However, weakness in the retail segments continues. Backlog was flat in the quarter at $1.3 billion after removing the impact of the divested Therm-O-Disc business. Adjusted EBITDA for the platform was down 50 basis points, consistent with our expectations for the quarter. Within that, climate tech was approximately flat, as 9 points of price realization and ongoing cost reductions drove a significant improvement in sequential leverage and profit margin for that segment. The AspenTech segment contributed $239 million of sales at nearly 54% adjusted EBITDA. Once again, these sales represent a full quarter of results from Emerson's contributed businesses in addition to heritage AspenTech from the May sixteenth closing date through the end of the quarter. The heritage AspenTech sales for the period cover the second half of AspenTech's fourth fiscal quarter and reflect strong revenue growth based on normal seasonality in the business and the applicable revenue recognition rules for software sales. Together, we're off to a great start, and we look forward to driving the synergies we identified and the diversification that we envisioned for our combined businesses. If you would, please turn to page 10 for the EPS walk. As I said, adjusted EPS was $1.38, up 16%. There are several non-operating balance sheet items that net out to $0.02, notably stock compensation. We still have 2 plans that are on a mark-to-market, and they were a significant favorable item in the quarter. Automation Solutions and Commercial & Residential operations leveraged at nearly 30% and contributed $0.09 to adjusted earnings per share versus the prior year. AspenTech contributed $0.08, driven by the strong Q4 in the heritage business, net of $0.01 of interest expense attributable to the transaction. We continue to deal with various operational challenges pertaining to supply chain, logistics, and labor. I'm going to hand off to Ram to comment on these issues as they affected the quarter and how we think we can navigate them for the balance of the year. Thank you, Frank. Please turn to slide 11. Consistent with previous quarters, the operating environment remained challenging in the Q3, especially in terms of electronic component availability and the impact of the China COVID-19 lockdowns, which lasted much longer than we anticipated going into the quarter. Starting with the positives, freight and labor costs and commodity prices are all trending in the right direction and provided some relief to the overall environment. Labor, which is primarily an issue for us in our Midwestern U.S. plants, has improved from the winter months and the COVID-related challenges we have experienced. Commodity prices, mainly steel, copper and plastic resins, have all continued to decline as we had anticipated. However, the two most impactful items in the quarter were the extended China lockdowns and the electronic component shortages. As we discussed in May, our expectation was the China would begin reopening in the middle of May with full operation near the end of the month. As it played out, reopening was delayed until the end of May, with full operation not until early June. During this time, we did not expect our employees to work in closed loop operations, which would have required extended overnight stays in our factories. Therefore, we had little to no operation during the lockdowns. This delay in reopening represented roughly $100 million in lost sales in the quarter, primarily from our six manufacturing plants in the Shanghai area. We expect most of these sales to be made up in the Q4. The China lockdowns and other supply constraints contributed to further electronic component availability issues. While lead times remained stable at elevated levels, capacity challenges at our critical suppliers led to more decommits in the quarter, and we were forced to go to the open market to procure components more than we had anticipated. This drove elevated purchase price variances and challenges in converting our backlog to sales, leading to an $80 million sales miss in the quarter, primarily in Automation Solutions. Six critical suppliers for us account for about 90% of the component shortages we experienced in the quarter. Our supply chain teams have stabilized the situation going into the Q4 using a structured approach to expedite participating in supply assurance programs, and driving purposeful executive engagement with these critical suppliers, shoring up what is necessary for the end of the year. Finally, our global operations and supply chain teams continue to do an outstanding job effectively managing the ever-changing landscape, allowing us to execute successfully for our customers. I will now turn the call back over to Frank to take us through the 2022 outlook. Okay. Thank you, Ram. If you would, please turn to slide 13. As we look toward the rest of the year and into 2023, demand continues to be strong, with Emerson trailing 3-month underlying orders up double digits versus prior year. June trailing 3-month orders for Automation Solutions were up 13% versus prior year, indicative of broad continued strength across the business. Sustainability, decarbonization, factory automation, modernizations, and reshoring secular trends continue to drive investment decisions in key industries. We expect growth to continue in key process end markets like energy, chemicals, and power and renewables, and also expect favorable conditions in the life sciences and metals and mining markets, all of which will support growth into 2023. In Commercial and Residential Solutions, June trailing 3-month orders were up 5%, led by climate technologies, which was up 9%. Commercial, industrial, food, retail, and other non-residential end markets remain strong as project activity continues. Residential climate business is showing some signs of moderation, as we've expected and communicated, while our residential tools and home products business continues to soften as we first mentioned during the May call. This can be seen in the retail data as inflation weakens demand in the housing-related and home improvement markets. Aftermarket sales remain strong due to record high temperatures globally, and the European heat pump market is propelled by energy efficiency imperatives as well as the unusually warm weather in Europe. If you would please turn to slide 14, we'll talk about the guidance update. The revised guidance considers the continued robust underlying demand and balances it with the impact of the Q3 headwinds that we experienced. Emerson's underlying sales guidance has been moved to the low end of the range, updated to remove Therm-O-Disc, and to remove the businesses that we contributed to AspenTech as part of the transaction, as well as the continued supply chain constraints that Ram mentioned. Automation Solutions' 2022 underlying sales growth is now expected to be between 6% and 7%. We reduced the range modestly again to remove the businesses that contributed to AspenTech and to recognize the Q3 impact of the ongoing challenge of the supply chain constraints, principally in electronics. As Ram said, the China sales miss is expected to be recovered, but the challenges with electronics will extend beyond the end of the fiscal year. Recalibration of the sales outlook is based on our projected ability to convert orders along with the strong underlying demand backdrop, both of which should be supportive going into 2023. In Commercial and Residential Solutions, we have raised the bottom end of the guide to reflect our confidence in the outlook for the balance of the year. The guide reflects continued strong price realization across the platform. The Q4 is expected to be strong for both platforms, Automation Solutions and Commercial and Residential Solutions, supported by the solid demand and the record backlog. Inflationary pressures remain, but our pricing actions are expected to more than offset net material and other inflation. The guidance assumes no further impact on the production of COVID-19 related lockdowns in China. As Ram described, we believe we have secured adequate electronic supply to deliver the sales guide for the year. Regarding the AspenTech impact on the guide, Heritage AspenTech's fiscal Q4, which was included in our fiscal Q3, is its seasonally strongest quarter due to the timing of contract renewals and the revenue recognition rules that apply. Therefore, we expect AspenTech's contribution to revenue and earnings to be a bit lower in our Q4. The business continues to drive the synergy plan, and there is active joint project engagement between the two companies. AspenTech solutions simultaneously help customers meet sustainability and operational excellence targets, which are top investment priorities for both their customers and Emerson's traditional customers. Our combined product portfolio is well positioned to be the digital partner for process and hybrid end users. We've updated the net sales guidance to account for the AspenTech transaction by 1-2 points, and the incremental FX impact, which is now a 2-3 point headwind, as well as the Therm-O-Disc divestiture. The InSinkErator transaction will close after the fiscal year and has no impact on the 2022 guide. Share repurchase is expected to be $500 million. There's no change to the tax rate and dividend assumptions that we gave in the May guide. We have reduced the operating cash flow guide to $3 billion, reflecting the balance sheet impact of the operational issues that we're seeing. CapEx is reduced to approximately $525 million. Free cash flow has been updated to $2.5 billion accordingly. After removing the impact of the three significant non-operating items, the Therm-O-Disc divestiture gain, the Russia exit in the Q3, and the significant Vertiv gain that we had in the first quarter, our free cash flow conversion for the year will be nearly 100%. We still expect total segment operating leverage to be in the 30% range, as we have said all year, and that's as we have said in previous calls. GAAP EPS is expected to be between $5.25 and $5.35, and adjusted EPS is now expected to be $5.05-$5.15. Please turn to slide 15 for the EPS walk. Starting on the upper left, the May guide for GAAP EPS was $4.77-$4.92. Due to the revised sales look for Automation Solutions and the TOD divestiture, we're lowering the top end of the guide by $0.05. The $428 million after-tax gain on the TOD divestiture and the Russia charge are now incorporated into the guide. The revised EPS guide on a comparable basis to May is $5.20-$5.30. AspenTech adds $0.13 operationally, partially offset by $0.08 of net intangibles amortization that results from the purchase accounting on the transaction. The resulting revised GAAP guide for EPS is $5.25-$5.35. The right side of the chart walks the May adjusted EPS guide to the current guide. The guide was $4.95-$5.10. We have the same $0.05 operationally related reduction. AspenTech operations add $0.13, in this case offset by $0.03 of interest expense on debt that is attributable to the transaction. The new guide is $5.05-$5.15. For your reference, I won't go through it, but on the next slide, there is a bridge from GAAP to adjusted EPS for the fiscal year. The customary adjustment items are there, along with the three unique items that I've discussed. Before turning to the Q&A, again, I would encourage you to review the slides in the appendix that we've included that explain some of the accounting details of the AspenTech transaction. With that, thank you for your attention, and we will open it up for Q&A. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Obin with Bank of America. Please go ahead with your question. good morning, Lal, Ram, Frank, Colleen. Good morning to all of you. Good morning. I guess my first question is gonna be about AspenTech. one of the things that AspenTech has is this incredible Rolodex of clients. Can you just talk about if you have had any interaction with some of their customers on the hardware and system side, and if you could talk about any sort of early success in terms of engaging some of AspenTech's customers on the Emerson side? Thanks. Andrew, thank you. This is Lal. Sure. Look, we have a very active project funnel to begin with that we worked very closely in conjunction with our World Area Selling organization and the AspenTech channel. It's sized at $160 million today, and it's balanced it in three ways, by world area, by industry, and by the technology. We've won to date slightly over $6 million of synergy projects. That's AspenTech into traditional Emerson customers and Emerson into traditional AspenTech customers. So it's growing, and there's line of sight for another, I'll suggest, $10 million or so this fiscal year, depending on how things move over the next quarter. We have been awarded but not booked a very large project as well that's sized at $40 million with a full automation suite and AspenTech in addition. There's a lot of commercial activity. We have individuals at both AspenTech and Emerson who are responsible for delivering the synergy value and a lot of engagement. Just one last anecdote, Andrew. Last week, I met with the CEO of Ascend Performance Materials, who is not just a very strong DeltaV customer, but a very loyal AspenTech customer. Again, spent time with Phil McDivitt simply to lay out the opportunities that we have as an organization as they digitize their plants and move to a top quartile performance. A lot of great activity, working at many different levels in and across the organization, and very excited about the synergies. Just a follow-up question. I think before you talked about, potential visibility on capacity coming, I think particularly in North America, but maybe some, worldwide as well. I'm talking specifically about semiconductors, because we know that sort of, talking to chip brokers, industrial chips are still in very, very short demand. How has this visibility evolved over the past quarter? Has this moved out to the right? Are there delays in terms of this capacity coming on? Or do you still feel confident that this capacity started to come online late this calendar year, early next year? Thanks a lot. Andrew, Ram here. In terms of capacity coming online, we've really worked with our top six suppliers, and we have a very good understanding of how this capacity will come online late 2023 and into 2024. TI is an example. Two particular facilities, one in Lehi, Utah, and the other in Richardson, Texas, where we buy a lot of our components. That capacity expansion is expected to come online somewhere in the next six to 12 months. At this point, on track, but frankly, the challenge is that most of our suppliers are seeing is equipment that they will need to bring this capacity online is getting delayed. At this point, at least as it relates to capacity specific to Emerson, I think we feel pretty good that this capacity will come online late 2023 and into 2024, which was the plan. Thanks. Well, maybe an opportunity for Emerson's discrete business. Thanks a lot. Thank you. The next question comes from John Walsh with Credit Suisse. Please go ahead with your question. Hi. Good morning, everyone. Good morning, John. Hi. Just wanted to follow up on kind of how we should think about the incremental leverage, here in the Q4. I mean, I know you kind of talked about that 30% target, but I guess the first half of the year, Automation Solutions was running much higher. You obviously had the China disruptions in this quarter. Those reversed. Kind of any more granularity you can give us there on how you expect that business to leverage in the fourth fiscal quarter? Look, I think, John, good question. Embedded in our guide is an assumption for, if you just back into it, about 32% operating leverage in Q4 for Emerson as a whole. That's also approximately 27% in Q3, up to 32%, I believe in Q4. A little higher, perhaps. We feel really good about how the businesses are executing and the conversion. Obviously, we're working off a very attractive cost structure in automation, which should benefit us as we go through the quarter. Go ahead, Frank. Hi, John. Just to add just a little bit more to that. The Automation Solutions leverage in the first half, as you said, was very strong. We said it would normalize in the second half of the year, and it will. But it will be very strong for the full year off kind of a normalized level in the Q4. Then in Commercial and Residential Solutions, the leverage is accelerating as the price actions kick in, which is what we said. The second half would be stronger sequentially, both from a margin and a leverage standpoint, and that's exactly what we're seeing. Just to stand corrected, the 32 leverage would be the full year calculation, 35 approximately in Q4. Sorry, John. Great. No, that's super helpful. Obviously, congrats on announcing the transaction around InSinkErator. Just curious if you can give us any more granularity on the timing, if it might be able to get done by this calendar year, just based on some things Whirlpool said. Just any more color on, when that business will either go disc ops, or if it'll just get taken out of the business once it's sold. Thank you. I mean, John, this is Frank Dellaquilla. In terms of the timing, Whirlpool and we both hope it will, it'll close as soon as it possibly can, but it's subject to the normal regulatory approval. I would expect it will be sometime early in 2023, but we just don't know at this point. In terms of disc ops, we're looking at that. We may not, at that point clear the bar for disc ops. Although it's a very significant business to us, may not be big enough to qualify for disc ops treatment. At this point, I would expect not, but we're gonna revisit that. Great. Thanks for taking the question. Appreciate it. Thank you, John. Our next question comes from Andy Kaplowitz with Citigroup. Please go ahead with your question. Good morning, guys. Good morning, Andy. Lal, several of your peers saw a relatively big step back in growth in China toward the end of their quarter. Did you see anything like that? And could you update us on what you're seeing on the ground now in China? How much electronic-related or lockdown-related headwind, if any, are you baking into Q4? And then just sticking with the regional focus, how are you thinking about the resiliency of your European business? Sure. Good question. Yes, obviously, the quarter was challenging in China for us. The lockdowns had a significant impact in both demand and execution. That was reflected in the sales results that we shared with you. Having said that, we rebounded very aggressively in the month of June in terms of economic activity, and that has continued through early part of this quarter as well. I am relatively optimistic about particularly the automation segment, which had been on a very significant run in China, that continues as we go through Q4. There's a very attractive funnel of projects in China driven by the availability of, for lack of a better term, cheap Russian oil and gas coming into the country and investments into sustainability and renewables that are also being driven, including, I think, John, the largest Electrolyzer project in the world is actually in China. In terms of Europe, look, our Western European performance was actually quite positive through the quarter. It was offset by Russia. Parts of the former Soviet Union that were impacted obviously during the war. The Western European climate continues to be relatively resilient with growth in the quarter and expected growth as we go into Q4. Lal, can you give us more color into how you're thinking about commercial and residential solutions going forward? I know order growth actually improved a bit in June, which I assume is easier comps, but comps do continue to get easier. Could you continue to see steadier even improving order growth in the business? I know you've been relatively cautious on residential HVAC, and I think Frank mentioned some continued, cooling in that market. Forgive the pun. Has that market continued to be a little better than your expectations? There is no doubt the market has been better than expectations, John. I think if you went back to when we first talked at the beginning of the year, we expected the orders to moderate significantly in climate. That hasn't occurred to the pace that we expected. That's a pleasant surprise. There's a lot of resiliency with upcoming changes in regulations that are driving now investments in this space as well. I feel better than I did at the beginning of the year, and there's a proven resiliency there across all segments of the business. Of course, watching the residential demand very, very carefully. Appreciate it, Lal Karsanbhai. Take care, Andy. Our next question comes from Stephen Tusa with JP Morgan. Please go ahead with your question. Hey, good morning, guys. Good morning, Steve. Can you just give us an update on where you stand on price costs, and then how that plays through for the year, just in your updated guide? Good morning, Steve. This is Frank. To let on the last call, we talked about broadening the definition of price cost in addition to net material inflation to include wage and freight. We said that we would basically implement enough price in the Q3 to cover everything that we're seeing, and we did. We covered it and then some in the third. We turned favorable, and we expect to be more favorable in the Q4 as we work through this. The pricing actions are being delivered as planned, and, we're seeing some moderation in the NMI, the net material inflation, as well as kind of a leveling off in the wage and freight inflation as well at somewhat elevated levels, but it's not continuing to accelerate. The overall, price, less material, wage, freight inflation equation is improving as we go through the year. Great. Just one kind of nitpicky one on corporate. It was a lot lower than we were expecting. What's the guidance on corporate for the year? I guess there's some stock comp influence in there that you have. Is there any carryover into next year? Is there something going on there with regards to the Aspen reporting? I don't think it's Aspen, maybe it's the stock comp stuff. No, it's not. I mean, it's there were some one-timers in there last year, but I mean, it's essentially the significant move in the stock comp in the quarter. We still have two of the three outstanding LTI programs that are mark-to-market. So that when the stock price went down temporarily, there was a significant mark-to-market on that. No, there's nothing unusual going on in corporate other than the the volatility that gets introduced by that mark-to-market. Okay, great. Thanks a lot. Our next question comes from Josh Pokrzywinski with Morgan Stanley. Please go ahead. Maybe on mute, Josh. There we go. You guys can hear me? Hi, Josh. Hi. Sorry about that. Maybe just to start us off, while on kind of the totality of the funnel, obviously a lot of things have changed from, especially the process world over the past, call it six months. It probably takes a while to book some of that stuff out. any kind of dimensioning that you would use on funnel size and where you're seeing the most activity build, maybe over the last three to six months. Europe sort of comes to mind first and foremost. I know you talked about that, but maybe more broadly as well. No, I'd be happy to. The total project funnel is sized at $6.8 billion. That consists of about 440 projects between now and the end of 2024. That's kind of the visibility that we have today. As you are absolutely right, there was a lot of movement within the funnel as we went through the quarter, including projects that were booked, projects that were added, and then almost half a billion dollars of projects value that were removed from the funnel. About 13 projects, the majority of which were impacted in Russia, with a Baltic chemical complex and a Baltic LNG project that were in the funnel. Those are the big removals. But in terms of the project basically funnel size, essentially flat. What did get relatively larger within it was the renewables value of the funnel, which grew from 1 to approximately 1.5 today. Very encouraging to see. Our activity continues to increase significantly in that segment. Got it. That's helpful. Just following up on CapEx, pretty decent-sized cut, especially on a percentage basis. I understand free cash flow is sort of impacted for yourself and, for all your peers really, around the working capital situation. Just trying to gauge how much of the CapEx cut is just sort of protecting the cash plan versus more of a slowdown. A lot of the talk around growth has been pretty constructive, so just trying to marry those two phenomena. Josh, no slowdown of any kind in key investments that we're making for both growth and to improve our cost position. There's always room in sustaining CapEx, and given the challenges on the operating cash flow line, we've squeezed down the sustaining CapEx, but I can assure you everything that needs to get done is getting done. Got it. Appreciate it. Best of luck, guys. Our next question comes from Scott Davis with Melius Research. Please go ahead with your question. When could we talk a little bit about this Mitsubishi contract that you won on slide 5? I'm just trying to get a sense of the scope of these types of things and materiality, and I guess it's, when you say win an automation contract, you mean winning the control side. Does it include, things like flow meters and stuff like that? Or perhaps you can kind of address that. Hi, Scott. Good morning. Lal here. No, absolutely. It's not dissimilar to an automation scope that we would discuss relative to a traditional carbon-based project. That would include control. It includes now the opportunity for AspenTech on the analytics and optimization. Of course, at the core, we have our final control elements, which are very relevant here, and our sensor elements, so flow meters, pressure transmitters, level. It's the full automation scope that we bring to bear. A project like this can be as sizable as high as over $50 million potentially as we execute it. It has that type of an opportunity. Okay, that's helpful. Then just on the conversation of FX, I mean, big changes here in the last few months, and, you guys are obviously global, but are we just still mostly talking just translation impacts here and no real competitive dynamics as far as some competitors using currency as a bit of an advantage, et cetera? Scott. Yes, correct. We are really talking about the impact on sales growth and translated profit. We typically don't have a lot of competitive issues around currency. Our businesses position themselves defensively around currency, and then they very conservatively hedge cash flows where it makes sense to do that. No, we're not hearing anything from the businesses about being at a competitive disadvantage relative to somebody else's cost base being at a weaker currency. Super helpful. Thank you. Good luck, guys. Appreciate it. Thank you. Our next question comes from Jeffrey Sprague with Vertical Research. Please go ahead with your question. Thank you. Good morning, everyone. Good morning, Jeff. Good morning. Lal, you've been pretty busy, as illustrated in those slide items you started with, to start the call. I wonder if you could just give us a little bit more of a thought process here now on where we're at in the transformation, and maybe specifically just thinking about what you've called disconnected assets. Not expecting you to name segments or businesses by name, but how far along are we in that process of taking action on disconnected assets, and how much longer should this process take? Jeff, good to hear from you. No, I think it's a good question. We are on a journey and across all three of the strategic imperatives that I described. Along all three of them, I think we've made significant progress, and I appreciate you recognizing that. In terms of the portfolio, my commitment to our shareholders has been that, by the latest, on November twenty-ninth at our investor conference, we will portray the future state of the business and what we envision to be the end state of this journey. In the meantime, we'll continue to look at opportunities and execute along a few dimensions which I'm not really free to speak about at the moment. Just maybe on price, and I was just thinking automation in particular. I think you said 3% price there. With 12 in CRS, I back into 2. The question isn't really to split hairs if it's 2 or 3, but the question is more just about the ability to get additional price in that business. I certainly understand CRS is where you need it most, and it sounds like you've gotten it pretty actively. Is there more positive price momentum coming through the system in Automation Solutions? Maybe a comment on price and orders relative to price and revenues could give us some context there. I'll give you some last round to add some color as well. I feel really positive about the price realization in Automation Solutions. As Jeff, this is almost a decade now within that business segment that we've had positive price. The products and solutions continue to be highly differentiated from a customer perspective. The install base at over $100 billion is very relevant, and that replacement market has significant pricing elasticity in it and drives our ability to take price forward. Having said that, obviously, we have been in an incredibly inflationary environment. We will continue to drive price where we can across the product families, but we also have to drive operational improvements so that our customers can realize value from improved activity. I feel good about the environment we're in and ability to capture the value that's out there. Ram, colors? I would add that in terms of price cost, which includes the wage and freight inflation, that business has always remained green. The magnitude of price we get in that 2%-3% range. Our list price increases obviously are a lot higher. We realize a percent of the list as we go into the market and execute. That'll continue to remain positive in Q4 and certainly into 2023 and well ahead of the net material inflation as well as wage and freight. Great. Thanks, Ram. Thank you, Jeff. Our next question comes from Julian Mitchell with Barclays. Please go ahead with your question. Hi, good morning, thank you. Maybe just the first question around the free cash flow. I think with your guidance here around sort of 80% conversion to adjusted net income this year, maybe help us understand sort of, how quickly that gets back to 100% in fiscal 2023. As you work down the inventory, often that can carry some margin headwind in the P&L. Just wondered kind of any thoughts around that dynamic, and also what the contribution of Aspen is to the free cash flow in the current year? Okay. Good morning, Julian. This is Frank. we would expect the balance sheet to normalize, I would hope in the first half of fiscal 2023. I mean, we have a big sales quarter in the Q4. We would expect growth, when we start to talk about 2023. I think we have pretty good robust growth expectations for 2023. The inventory is actually in good shape. I have no concerns about what it is we have on the books. It's just simply a matter of throughput given all the operational challenges. I would expect to be in better shape on that conversion aspect of it by the middle of fiscal 2023. Margin headwinds. I take your point, in terms of having some absorption issues, but I mean, the businesses consider those and I believe those are manageable. even inside the guide that we have in for the balance of this year, there's some of that, but it's more, it's well considered within the guide in terms of that. It's just something we have to manage as we go through the adjustment on the balance sheet. AspenTech for this year, the 2022 cash flow, there was basically 0 contribution to cash flow in the Q3, and it'll be minimal as well in the Q4. That is a function of some specific items having to do with the transaction. They had to file a short period return as part of the transaction, and they accelerated a significant tax payment, which basically negated the free cash flow that they would have had in their fiscal Q4. Their fiscal first quarter appears to be their lowest quarter of the year on that score. Also is the normal timing for their incentive comp payments, which basically absorbs much of the free cash flow. Inside of our number is minimal impact from AspenTech on free cash flow. That's very helpful. Thank you, Frank. Maybe just following up on Aspen specifically. It looks like, to your point, because of some of these one-timers, I think Aspen itself is not really earnings accretive in the Q4, when we leave aside OSI and SSE earnings. Just wondering. If you could confirm that that's the case. No, no. How do you think about the? No, I'm sorry, Julian, to interrupt. No, it is in fact earnings accretive. I mean, it was $0.08 accretive in the Q3. We've built $0.10 into the guide for the year, which obviously implies it's at least $0.02 accretive in the Q4. it will in fact be accretive. I point you to slide 15, we've got AspenTech operations contributing $0.13 for the year. All right. I see. We deduct the interest expense attributable to the debt, and we get to a $0.10 net contribution for the year, $0.08 of which we had. That's helpful. Thank you. Maybe Frank, just on that point, when we're trying to think about the sort of non-controlling interest, that was a big number in Q3. How do we think about that for Q4 just as that sort of jumping off point for next year? Q4. Julian, we'll follow up with you. Let us follow up on that one with Julian, okay? Perfect. Thanks very much. Thanks a lot. You're welcome. Our next question comes from Nicole DeBlase with Deutsche Bank. Please go ahead with your question. Thanks. Good morning, guys. Good morning, Nicole. Can I just start with a couple clarification items on the quarter and the guidance? First with the China impact of $100 million, is that completely incremental versus what you guys had expected for 3Q, or had you expected, any impact? In the $0.05 of reduction in core operations plus Therm-O-Disc for the full year, how much was Therm-O-Disc versus core operations? It was incremental. Those are sales we expected to have in the Q3 when we guided in May that we lost entirely as a function of the extended lockdown. That five cents is mainly the operational issues around supply chain. Therm-O-Disc is maybe a penny or two of that. Okay. Got it. That's clear. Then can we just talk a little bit about what you guys are seeing with respect to oil and gas customers, KOB 3 versus, what is your project activity given all the movement we've seen in the oil price recently? Thanks. Sure, Nicole. KOB 3, the quarter set at 62% of automation, it's been relatively consistent in that 60 range. We expect it to be right in that 60 range as we go through the year. The project activity is very robust and continues to be. We have active engagements across EPCs, particularly Bechtel, who's taken a significant number of the new LNG jobs in Texas and Louisiana, and those are in design phase and engineering phase right now. It is combined with significant investment in the sustainability efforts as well around emissions, carbon capture, and energy efficiency. The last point is the North America shale environment is improving, and that's driven by gas demand, which is very positive, and that's both for U.S. capacity and chemicals and for Mexico as well. Thanks. I'll pass it on. Thank you, Nicole. This concludes our question and answer session and conference. Thank you for attending today's presentation. You may now disconnect.