Hello, welcome to the Emerson Q2 2023 earnings call. Please note today's event is being recorded. I would now like to turn the conference over to your host, Colleen Mettler, Vice President of Investor Relations at Emerson. Please go ahead. Good morning, thank you for joining us for Emerson's Q2 fiscal 2023 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. Also joining us today is Mike Baughman, who was announced earlier this morning as our Chief Financial Officer, effective May 10th. 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 risk and uncertainty. Please take time to read the safe harbor statement and note on non-GAAP measures. I will now pass the call over to Emerson's President and CEO, Lal Karsanbhai, for opening remarks. Thank you, Colleen. Good morning. Please turn to slide 3. I'd like to begin by thanking the global Emerson team for a tremendous performance, our board of directors and shareholders for the trust that you place in us. It has been a busy first 26 months as CEO as we reinvented Emerson. The Q2 performance was exceptional. It was a quarter in which we significantly advanced our strategic agenda across the 3 dimensions of our value creation model. First, culture. In the last 2 months, we announced 2 important leadership changes. Vidya Ramnath was named as the company's Chief Marketing Officer, replacing Kathy Button Bell, who had a distinguished career at Emerson and put Emerson's brand on the map while working for 3 different CEOs. Vidya is the right person to accelerate our journey as a pure-play automation company. She brings deep technical knowledge and customer exposure, is an engineer, and for the last 4 years has led Emerson's Middle East and Africa business. We believe this is highly differentiating move for us as a company. Secondly, this morning, we announced Frank's planned retirement and Mike Baughman as Emerson's CFO. I'll say a few more words about this later in the presentation. Lastly, we completed our 1st digital employee engagement survey. We heard from 85% of our global employee base and received a high quartile net engagement score. This gives us a stake in the ground and now great perspective on the areas of strength and opportunities to better the talent experience at Emerson. Second, the portfolio. We will be finalizing the Climate transaction in the current quarter. The CEO for the joint venture has been named Ross Shuster, and we are excited by what his leadership and experience brings to the business. I'd like to thank Jamie Froedge for the work he did in the business and for his contributions over 16 years of service at Emerson. In addition, we signed the definitive agreement to acquire National Instruments. We're very excited about the company, the technology, and most importantly, the people. This is an important point. The large portfolio moves are now complete. As an investor, you now have clarity that an investment in a share of Emerson is an investment in the leading global automation company, serving a diversified set of end markets with a high growth, high profitability, and cash flow, cohesive and differentiated tech stack made up of intelligent devices, control, and software led by AspenTech. Our focus on a go-forward basis, as we did this quarter, will be on creating value with this tremendous company. Lastly, our 3rd pillar, execution. None of the work we've done would have been possible without it. The phenomenal results and momentum we have in the business is a testament to the quality of our global teams and to the strength of the Emerson management system. Underlying orders were up 7%, with late-cycle process markets continuing to exhibit strong demand. Hybrid also remains robust, driven by reshoring investments globally. From a world area perspective, Americas orders led, with China returning to growth as expected. As we look to the remainder of the year, we still feel confident in continued mid-single-digit order growth. The strong demand and steadily improving supply chain environment enabled 14% underlying sales growth in the quarter, well above our expectations. All world areas were up double digits, led by the Americas, up 15%. intelligent devices and software and control were also both up double digits. This strong sales performance and the continued operational execution of our teams led to 53% operating leverage in the quarter, excluding AspenTech. Favorable impacts from mix and price cost also drove a 320 basis point improvement in adjusted segment EBITDA to 24.6%. Adjusted EPS was $1.09, beating the midpoint of guidance by $0.11, again, driven by the strong sales and operational performance. This is a 25% increase versus Q2 of 2022. Free cash flow is up 64% year-over-year and up 23% year to date, which is on track to meet our full year expectations. Turning to slide 4. Our value creation priorities and growth initiatives around innovation and secular growth platforms that we outlined at our investor conference in November 2022 are yielding meaningful results. First, Emerson was recognized by Fortune Magazine as one of America's most innovative companies. The recognition is a testament to our innovation history and dedication from our employees to create leading technology and software for our customers. We are extremely excited to be recognized for this award and are working continuously to accelerate our innovation engine for future growth. Similarly, Emerson continues to differentiate as a leader in growth markets like energy transition, metals and mining, and software. In the Q2, Emerson was awarded the software and automation contract for Intermountain Power Agency's renewed power plant. The Utah project transforms a retiring coal-fired power plant into a clean energy plant running on hydrogen. At first, the plant will use a mix of 30% hydrogen, 70% natural gas before transitioning to 100% hydrogen by 2045. The hydrogen will be supplied by the Mitsubishi Power Advanced Clean Energy Production and Storage Hub, another greenfield project that Emerson was awarded in 2022. When complete, the Intermountain project will supply 6 Western states with carbon-free power, a critical step towards a net zero world. With our integrated end-to-end renewables and power generation platform, Emerson was chosen because of our industry expertise and proven experience in hydrogen and complex projects. Secondly, Emerson and AspenTech were jointly selected to automate and optimize the Golden Triangle Polymers facility on the Texas Gulf Coast. The $8.5 billion project is a sister facility to QatarEnergy and Chevron Phillips' Ras Laffan project that we highlighted in the Q1. Emerson will provide its leading DeltaV control system and intelligent devices, and AspenTech will provide its leading simulation software. This technology will allow the facility to operate with approximately 25% lower greenhouse gas emissions than similar projects in the U.S. and Canada. This is a great example of the differentiating strength of Emerson and AspenTech. Turning to slide 5. We remain energized and excited by our recently announced acquisition of National Instruments. National Instruments will expand our leading automation business into the attractive test and measurement space and provide important industry diversification into discrete markets. NI's leading portfolio of technology and software are well-positioned to capitalize on secular trends within semiconductor and electric vehicles, and we expect the transaction to be accretive to our long-term underlying growth. Inclusive of $165 million of synergies by the end of year 5, the transaction meets the financial criteria we have communicated. We will work to complete the customary regulatory and closing conditions and expect to close in the H1 of Emerson's fiscal 2024. We had the opportunity to meet the extended management team and to do a global town hall with NI employees last week while visiting Austin. From that meeting, we came away even more confident in the potential opportunities of our combined company. The technology is differentiated and has ample room to expand, and the talent, well, it's simply exceptional. Most importantly, I was energized by the warm reception we received from the leadership team and all the employees we met. In a way, I am proud to be an NIer now as well. Please turn to slide 6. The past 26 months have been fast-paced and an exciting journey for Emerson. We moved from a $17 billion 2-platform business to a cohesive $16 billion automation leader. It took a lot of hard work to transform this business. We now have an outstanding opportunity to create value for shareholders. It is a portfolio that is exposed to secular growth trends that are expected to drive growth for years to come. We'll remain committed to our 4%-7% through the cycle underlying growth target. Our new portfolio is higher margin at approximately 49% gross profit and 23% adjusted segment EBITDA margin. Our industry mix is more diversified than 2 years ago, focused on automation and with the discrete markets now our 2nd-largest customer end market.While we will continue to pursue bolt-on acquisitions, we're now turning our focus to executing the strategy we laid out at Investor Conference in delivering the synergies we have committed to for AspenTech and NI. Please turn to slide 7. Emerson and our board are committed to ongoing board refreshment. Yesterday, we had the privilege of announcing 2 new board members to our board of directors. Leticia Gonçalves is the President of Global Foods for ADM and a member of the company's executive council. As part of ADM, Bayer, and Monsanto, Leticia has held roles in digital solutions, commercial operations, international management, and technology development, and is a longtime advocate and driver of diversity and inclusion. Her experience in these areas and accelerating change make her an excellent addition to our board. Leticia is originally from Brazil. She's a chemical engineer and has a tremendous passion for innovation. Speaking of innovation, Jim McKelvey is a successful entrepreneur who founded Block, Invisibly, and FINTOP Capital. He brings a unique innovation-focused perspective to Emerson and will serve as a key collaborator as we continue to accelerate innovation and invest in technology and engineering. Jim has expertise in many areas, including software, cloud, and cybersecurity, which will benefit Emerson as we provide customers with leading digital solutions. They are energized, and so are we, and we are excited to have both Leticia and Jim join our board of directors. Before I turn the call over to Frank, please turn to slide 8. I would like to congratulate Frank for a distinguished career of over 32 years at Emerson and the past 14 years as CFO. Frank, I met you 28 years ago, it has been an honor to be your colleague. Please know that you created a legacy here at Emerson. We could not have accomplished what we did over the past 26 months without you, I would not have been able to lead this company without your wisdom, confidence, and support. You made us better. You made me better. Thank you for the lasting impression you left on me and the impact you made on all of us. I'm also excited to announce Mike Baughman as CFO of Emerson, effective May 10th. Mike has over 35 years of experience in finance, operations across Baxter, Emerson, of course, and PwC. I'm excited about what Mike brings to the role, please join me in welcoming him. Mike, congratulations. Thanks, Lal, and thanks to you and the board for giving me the opportunity to serve as Emerson's next chief financial officer. I'm very excited to get into the role. Good morning, everyone. I've had the opportunity to meet several of our investors and analysts. I'm looking forward to meeting more of you and working with you in the future. To my Emerson colleagues listening in, thank you for a fantastic quarter. As Lal just talked about, it's been a productive 26 months with respect to reshaping our portfolio. We're on track to achieve what we set out to do. The impressive result is a more cohesive $16 billion automation company expected to grow 4%-7% through the cycle with peer-leading margins and a more diversified end market exposure. I think of the portfolio transformation as a great start, and now we get to operate in this new environment. Execution has always been a hallmark of Emerson, and we're building on that to focus on accelerating profitable growth, integrating NI, and growing our cash flows as the supply chain normalizes. I certainly expect successful execution in these areas to result in increased shareholder value. While I'm excited about our future, transitioning to the CFO role is a little bittersweet for me personally. Frank was a major reason I joined Emerson a little over 5 years ago, and during that time, I have come to know Frank as a great finance professional and, more importantly, a wonderful person. I'm confident we'll have a smooth transition over the coming months. Thanks, Mike. Now I'll turn the call over to Frank. Lal, Mike, thank you so much for the kind words. When I showed up here 32 years ago, I didn't really know what to expect. I never could have imagined the opportunities that I would have, the things I would get to do, and above all, the people I would have the privilege to work with. The last 13 years have truly been a privilege. Leading a world-class finance organization who I respect and I trust implicitly, who never let me down. I thank them from the bottom of my heart. The last 2 years working with Lal and Ram and the people in this room and our extended team on the portfolio transformation have been truly special and just a wonderful capstone to my career. I will always be grateful for that opportunity. Thank you, Lal. I'm truly grateful for that. It's been a heck of a run. Emerson is well-positioned for the future. This is a perfect time to turn it over to Mike, who I have come to know well as a person, respect as a leader over the last 5 years. I am confident he's gonna provide the right leadership for the challenges we have again. The future is very, very bright, I'm so happy to have been a small part of it. I've enjoyed working with all of you over the last 2 years on the phone with our analysts and our investors, I couldn't think of a better way to go out. I'm very grateful, and I just am so thankful for that. Thanks, everybody. There is no crying on earnings calls, so we're gonna get on with it. Thanks, Frank. To you on chart, 9. Oh. I got you. Oh, you got 1 more. Okay. Here we go. Good morning again, everyone. Please turn to slide 9. Our Q2 financial results were outstanding, reflecting our strong end markets and operating execution. I'll summarize the results for you, so I'll provide a bit more color. Additional details are in the press release and in the slides in the appendix to this presentation. Underlying sales growth exceeded our expectations at 14%. All world areas and both business groups were up double digits, reflecting the strength in our end markets, our positioning in them, and our geographic presence. Demand was broad-based, with later cycle process markets up high teens and hybrid markets also up double digits in the quarter. Discrete demand has begun to moderate after several quarters of strong growth, but sales were still strong in the quarter, up high single digits. Safety and productivity returned to growth, up 3% in the quarter. Net sales also were up 14% for the quarter, with a 3-point drag from currency, which was essentially offset by acquisitions and divestitures. We did close our Russia divestiture in March, and we now report the business we had on the divestiture line of our net sales bridge. Our businesses continue to realize significant price. In the quarter, price contributed approximately $150 million and 5 points of growth. Backlog also grew $300 million, reflecting the strong orders. Backlog of approximately $6.9 billion to end the quarter. AspenTech revenue was below expectations for reasons they explained on their call, and I'll briefly summarize those here. Please keep in mind that AspenTech reports revenue under ASC 606, so the factors affecting GAAP revenue are complex, as explained on AspenTech's earnings call. There were 3 factors in play. The first was longer than planned project execution in the OSI business, which pushed out the recognition of project revenue milestones. This is mainly a timing-related dynamic. We continue to see strong demand trends from the power transmission and distribution market. AspenTech also experienced shorter-term contract lengths within the SSE business. Overall, the shift from perpetual to term contracts is progressing well, but some customers are choosing shorter contract lengths than we expected, and that has a direct impact on upfront revenue recognition. Lastly, AspenTech is seeing some weakness in OpEx spend in the bulk chemical market, which is impacting heritage AspenTech. For further clarification, Emerson's chemical exposure is more diversified across both bulk and specialty chemical and both OpEx and CapEx spend. Adjusted segment EBITDA margin improved 320 basis points. Leverage in excluding AspenTech exceeded 50%. Strong sales growth, favorable business and world area mix, and margin-accretive price cost all reflect exceptional execution by operations and contributed to the margin improvement. Adjusted EPS grew 25% to $1.09, we'll discuss that on the next chart. Lastly, free cash flow was up 64% versus the prior year quarter and up 23% year to date. The strong earnings growth and slight improvement in working capital contributed to that growth. AspenTech contributed $129 million to free cash flow. Please turn to slide 10. 14% underlying sales growth and 53% segment level operating leverage contributed 26% of our EPS growth quarter-over-quarter. Of that, AspenTech contributed $0.04. Currency was a $0.03 headwind, other items, mainly income tax, because we had favorable discrete items last year, were a net $0.05 headwind. The reduced share count resulting from the $2 billion share repurchase that we completed in the Q1 contributed $0.04 to earnings per share. Again, overall adjusted EPS grew 25% year-over-year. Please turn to slide 11, and we'll talk about our revised 2023 market outlook. We continue to see broad-based strength in most key end markets. In particular, we've updated our expectations for both process and hybrid markets. We have increased our expectation for process sales to a high single-digit to low double-digit growth range on the back of continued energy transition, and chemical market momentum. This market was strong in the Q2, and our customers continue to signal favorable spending plans for the rest of the year. Within chemicals, we continue to see strong CapEx spending, particularly in the US, the Middle East and Asia. Within the hybrid space, life sciences and metals and mining continue to be strong. We expect this market to grow high single digits in 2023. Reshoring continues to be a prevalent topic among our customers. We expect near and longer-term benefits from this trend. As I mentioned, discrete demand is beginning to moderate as these earlier cycle markets have been strong for the last 2 years. We are seeing this first in Europe as industrial production is affected by rising input costs. Still, we continue to hear optimism about spend on factory automation and productivity improvements from our customers. Please turn to slide 10. We'll talk about our revised guidance. Based on the market strength I described in our continued expectation of mid-single digit orders growth, we are increasing our sales and earnings guidance for the year. For 2023, underlying sales growth has been increased to 8.5%-10% year-on-year, and net sales to 9%-10.5%. We expect intelligent devices to be near the top of this range and software control nearer to the lower end. We are also increasing our expectation for segment operating leverage based on the strong H1 achievement and our H2 outlook. Continued sales strength, favorable price cost, and continued operational performance give us confidence in increasing this guide. We now expect segment operating leverage to be in the low to mid 40% range, excluding AspenTech. Adjusted EPS guidance has been raised to a range of $4.15-$4.25, up $0.15 at the bottom of the range and $0.12 at the midpoint. AspenTech is expected to contribute approximately $0.25 to this improved guidance. The strength in core Emerson operations is more than offsetting the reduced AspenTech expectation, which is incorporated into our guidance. Free cash flow is expected to be approximately $2.2 billion for the year, of which AspenTech contributes approximately $300 million. This is consistent with our prior guidance of approximately 100% free cash flow conversion on GAAP net earnings and is equivalent to approximately 85% on an adjusted net earnings basis. In the future, we will express free cash flow conversion on an adjusted net earnings basis, consistent with our other key non-GAAP metrics, adjusted EBITA, and adjusted earnings per share. The business we have today has strong cash conversion characteristics that we expect to convert over time at an average of 100% on an adjusted basis. We now expect AspenTech's adjusted segment EBITA to be slightly below 40% for the year. As a reminder, Emerson's Q3 is AspenTech's seasonally strongest quarter due to the timing of contract renewals. We believe the operating items that affected AspenTech's Q3 results reflects transitory operating and market challenges. We are as confident as ever about the long-term strategic opportunity afforded by our ownership of AspenTech and in the $110 million year 5 synergy commitment that we made. As a reminder, all of this guidance excludes the impact of Climate Technologies operations, interest income, and the financial impact of the sale, which we expect to close, we hope May 31. In the appendix, we have provided information on the post-closing financial reporting treatment of Climate Technologies. Briefly, to turn to the Q3, that guide also reflects the strong outlook for the year. We expect underlying sales growth of 10%-12%. We expect leverage to be in the mid-to-high forties in the quarter and adjusted EPS to be between $1.07 and $1.11. This represents an 18% increase at the midpoint versus prior year. We should point out for context that last year's Q3 was negatively impacted by China shutdowns and serious supply chain challenges around electronics, which at the time we estimated reduced Q3 sales by approximately $150 million, with the China impact being pushed into the Q4. Thank you for your attention. I'll turn it back now to the operator to open the call for questions. Yes, thank you. At this time, we will begin the question and answer session. To ask a question, you may press * then 1 on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press * then 2. At this time, we will pause momentarily to assemble the roster. This morning's 1st question comes from Andrew Obin with Bank of America. Yes, good morning. Good morning, Andrew. Frank, congratulations and thank you, Mike, welcome. I guess my 1st question is a lot of debate with investors, about the impact of improving lead times on orders backlog and free cash flows. You know, clearly you're starting releasing working capital, but if you're releasing working capital, perhaps you're ordering less stuff. If you're ordering less stuff, maybe somebody else is ordering less stuff. How do you think this dynamic will play out over the next 6 to 12 months? Well, I'll start off with some comments just on the underlying environment, which We're still optimistic about, as you heard on the call, Andrew Obin, mid-single digit order run rates. We came out of the quarter at 7%, and expect that range to continue through the remainder of the year. The demand environment based on our C is strong. As Frank Dellaquila outlined correctly, I think there's some puts and takes out there, and we're watching those carefully. But as a whole, we feel very good about that. Having said that, we have a very robust backlog as well. We did big build backlog in the quarter, and we continue to work through that, which gives me further confidence, obviously, in the performance of the company for the H2. Naturally, with supply chain challenges largely alleviated, of course, there's still a few issues out there, but largely alleviated. Lead times have started to come down and we haven't seen that reflected in any slow in orders. Very much as you saw quarter-over-quarter and sequentially, our order pace continued to be very consistent there. Ram, anything to add? I would say again, Andrew, I think, from a lead time perspective, distribution, for example, is less than 20% of our overall sales. You know, and, frankly, even with distributors, as our lead times have come down, we haven't seen any change in ordering patterns. Our KOB 3 business, which is the other piece that is lead time dependent, continues to be strong. No fundamental change for us as it relates to ordering patterns from our customers as lead times across all categories of products for us have come down. I know others have mentioned that, but to date, we haven't seen the impact. Great answer. Thank you. And just maybe a follow-up question on aligning Aspen and Emerson sales channel. You guys clearly highlighted Golden Triangle success of going to market together. You reaffirmed the synergies. I guess the question I have, as you work closer with Aspen, what are the opportunities to improve visibility at Emerson, right, because you have access now to a lot of CIOs. Also, what are the opportunities at Aspen to benefit from deep and broad relationships that Emerson has with their key clients, for example, in the chemical space, right? You said our relationships are much broader. What can you do to improve visibility at Aspen in key verticals? Thank you. Well, no, it's a great question. It goes back to the heart of the very robust commercial agreement that we have with AspenTech. There is world area alignment in leadership. There's sales force alignment and incentives, and very honestly, joint pursuit on, in 2 areas, capital projects, which was the example that I shared with you, and then a very robust analysis on an industry by industry basis of the white space opportunities that exist, particularly for our control system and for AspenTech. That's more of a systematic approach by the selling organizations, but 1 that will prove to be, and is proving to be quite a large opportunity as well. Ram? Yeah. Just to add, I think the customer landscape is really the way we really want to drive more C for AspenTech. Certainly, the momentum on projects is there early. As we shared with you before, 70% of the control systems that we have DeltaV innovation don't have level 3 software capability at many of our customers. 9,000 of those are in markets like life sciences and metals and mining. Those are the unique type of opportunities, the AMS systems that we have, where we can bring Aspen. That's the approach we're taking through our commercial agreement. They are very, very geographically focused as well, where we look at markets where Aspen doesn't have the strength, and that's really where a lot of the effort is being put. We'll see that benefit come through. It's 3 quarters in, obviously, the relationship. The momentum is early on projects, but more will come as it relates to the white space that I described over time. Thanks so much. Thank you. The next question comes from Deane Dray with RBC Capital Markets. Thank you. Good morning, everyone. Good morning, Deane. Hey, I also wanna wish Frank Dellaquila all the best. It's been great working with you. Congrats to Mike Baughman. My 1st question is maybe take us through the what you're seeing on the discrete side with some of the demand moderating. You know, how did it progress through the quarter? Is it isolated to some specific verticals or geographies? Because we are hearing elsewhere slowing in Europe, especially on the chemical side, but we appreciate to hear the color there, please. Thanks. Deane, Ram here. From a discrete order activity, now the discrete business from a sales perspective, we had good strong growth in the quarter, 9.5%, close to 10% growth in the quarter from a sales perspective, which was driven by backlog reduction. Orders did go slightly negative this year, this quarter, I should say, primarily driven by slowdown in Europe. Frankly, we haven't seen much of a slowdown in North America, but a slight slowdown in Europe, particularly in Germany and the segment around machine builders. We do serve the machine builder segment in Germany, which is both domestic German market as well as these machine builders export. That's really probably the 1 segment, a little bit of slowdown in the U.K. Frankly, Asia is holding up, and China remains good. That's the color. We do expect discrete to get into tougher comparisons as we get through the H2 of the year, and we expect orders to remain negative before they turn positive into 2024. Got it. Thank you. Just a follow-up, I also just want to hear Frank 1 more time here. On the free cash flow difference between GAAP and adjusted this year, that difference, how much of that is either working capital needs given kind of supply chain, or is it more from climate? Thanks. No, I mean, there is none of the difference. The difference is simply the calculation, the denominator. I mean, Ian, we're just talking about the $2.2 billion guide of free cash flow and whether we use GAAP earnings or we use adjusted earnings as the denominator. That's the difference between the conversion ratio. There's no difference at all in the calculation of the cash flow itself. Yeah. Great. Thank you. Yes, sir. Thank you. The next question comes from Scott Davis of Melius Research. Good morning, everybody. I'll echo what the other fellows, I'm sure others will say. Congrats to both Frank and Mike on the changes here. I don't wanna fixate on AspenTech. We can do that later perhaps. I will anyways. The bulk chemical OpEx, is it typically that volatile? Is this something that they've experienced in the past and perhaps you might see in the future, or is this a kind of an unusual circumstance? I think the bulk chemical dynamic, 'cause, I mean, you see many of the chemical customers say at the end of the day, with a little bit of slowing demand there and their utilization rates being optimized, the portion of the AspenTech business which typically gets impacted is their manufacturing and supply chain software suite. In terms of new purchases or new contracts around that which we have built into the forecast, that's where we're seeing slowdown. That's pretty normal. Obviously, refining for them continues to remain strong. Upstream and midstream continues to remain good. It's really the manufacturing and supply chain suite and bulk chemicals where we have seen the slowdown, and we've seen that in the past when the large chemical customers slow down spending on the OpEx side. Okay. That's helpful. Guys, assuming your stock price works, and I know AspenTech is down quite a bit from its highs, is there any interest in, and I know there's some restrictions, but those things can always be discussed in taking an even larger stake in the entity and perhaps over time integrating it fully into Emerson? No, Scott, this is Lal. Good morning. No, look, we're still very committed to the model that we set forward a year ago, close to nearly a year ago now. It works. We're seeing the commercial value. We're working the technology piece as well. Like I've said in the past, if at a point in time that changes and we have impetus to then address that through the change in the ownership structure of the vehicle, we'll think about it then, but not at this point. Furthermore, as you know and you noted, we are in a standstill period for another calendar year from now. Yeah. You got me so excited I spilled and dumped my coffee, Lal, so I'll pass it on to the next guy. Thank you. Thank you. The next question comes from Andy Kaplowitz with Citigroup. Hey, good morning, everyone. Congratulations, Frank and Mike. Lal, could you give us a little more color into your incremental margin performance both for Q2 and 2023? I know the new Emerson is supposed to record higher incrementals, you know, well into the 30s, what's changed for Emerson in 2023 that's allowing you to record, you know, low-to-mid 40s, over 50% in Q2? Is it mostly the 5% price that Frank mentioned and, you know, much improved supply chain environment? Is maybe underlying Emerson able to sustain incrementals in the 40% plus ex Aspen over the longer term, and how you're thinking about price versus cost moving forward? Yeah. I'll let Ram add some operating color as we went through the quarter. We certainly believe in the strong guide that we put together on the 40 leverage for the full year, given the early performance in the first 6 months. Look, there were a lot of things that were positive. Obviously, the execution was exceptional. I think the operating executives in the businesses performed very well and exact. The volume was important as we noted, growing the underlying sales at 14%. Furthermore, mix and price cost were beneficial as well in the quarter. A lot of things went our way there, but, honestly, working within the management system that we've designed is a very important parameter that enables our businesses to perform at a very high level here. Ram? I mean, other dynamics that certainly went our way is strong North America in the quarter, strong performance in our instrumentation and final control businesses and the leverage we got there. Dynamics around mix, certainly the price called element that Lal mentioned, but you know, fundamentally, the 14% sales growth in the quarter does help leverage. All of those dynamics went in our favor. It's helpful, guys. Then maybe you can give us a little more color into what you're seeing by region. I think China was relatively weak for you in Q1. It seems like it's better in Q2. I think, Lal, you mentioned, you know, easy comparisons in Q3. How are you thinking about regional demand, you know, moving forward for the rest of the year? Feel really good. It was a very robust quarter globally for us in terms of sales performance and very honestly orders as Ram and, excuse me, Frank outlined. China flipped for us. It was down in the mid-single digits a quarter ago. It was up both in orders, high single digits, and in sales in the mid-single digits. We feel very good, and we feel good about what we see in China for the remainder of the year as well. That's a positive. Look, North America, very robust growth, broad strength, a lot of it driven by the nearshoring elements and core strength in hybrid and process with growth of 15-ish% in sales. Europe, that's been very honestly, Andy, the biggest surprise of the year. It continues to be very strong for us with growth in the mid-teens, 14% in the quarter in sales and orders that are very strong and very honestly highlighted by energy, sustainability and life science investments. The rest of Asia, driven by India, Southeast Asia, and then an incredibly strong Middle East and Africa region as well, with significant investments in sustainability and LNG across the region. At this point in time, with the exception of the discrete weaknesses that we've already talked through, continue to see very strong global momentum as we go through the quarter here into the rest of the year. Appreciate all the color. Thanks, Andy. Thank you. The next question comes from Steve Tusa with J.P. Morgan. Hey, guys. Good morning. Good morning, Steve. Congratulations again, to both CFOs, outgoing and incoming. Thank you, Steve. Thank you, Steve. What was price capture in the quarter, and what do you expect it to be for the year? 5. Yeah. 5%. It was 5 points in the quarter, and we expect it to be 3%-4% for the year. Okay, great. Lal, I'm just curious from like a governance perspective, the Aspen results, you know, there was a lot going on there. I guess I get a high level. Some of it sounds like execution on some of these contracts, you know, perhaps in the, I guess I call it integration phase of what they're doing, even though it's not really an acquisition by them, I guess. It seems like that there were a couple things that surprised them about the assets that you guys are contributing. How does that conversation work, you know, in the boardroom there? Because those are like assets that you guys knew. I'm not sure how surprising that was to you, but it was clearly surprising to the market the way this has played out. I'm just curious, like a little more color from your perspective on the integration that's going on there and, you know, perhaps, you know, how that kind of discussion and how to move forward plays out when that type of thing happens. No, absolutely, Steve. I'll give you some color here. Maybe there's 3 or 4 here critical points. Let me first begin by saying that I continue to be, and we collectively continue to be very optimistic about the business and the differentiation that it provides as a technology solution across a diverse customer base. That's very important. Secondly, the execution of both the commercial and the technology synergies is progressing ahead of pace. We have alignment across our selling organizations, the technology teams, and, you know, I highlighted a capital project win that we worked on, and we're working on many across the world, and we have a joint funnel of pursuits. What happened in the queue? I think there are important dimensions here to talk about. The first, the company continues to perform extremely strongly. It's a Rule of 50 software business with ACV growth exceeding 11% and strong cash flow. There were 3 challenges in the quarter, and these were challenges that we have a robust communication process, not just at the board level, but at an operating level. We speak with Antonio and Chantelle, who's the CFO, on a regular basis. The first is shorter-term contracts on subscriptions at FSE, which is obviously was one of the assets that we contributed to. The assumption in the plan was on a 3 to 4-year basis of subscriptions. That was we converted or AspenTech converted those from perpetual license to subscription. The reality is that they came in more in the 1 year level. That had an impact on revenue recognition, just the nature of that conversion journey and a challenge as those customers in that market space, except subscription contracts over the perpetual traditional licenses. The second, you also referenced is OSI. It is a differentiated business in a high growth segment, as you know, but the integration has been slower. It's a business that came with a heavy service component to it, and very honestly, that migration and conversion ultimately from perp to sub on the software is taking longer than expected. We continue to be jointly very optimistic about the business. The orders in the business are strong, and we will work through the next few quarters to execute there. Lastly, as Ram described earlier, the heritage AspenTech business and the slowdown related to the bulk chemical segment there. Having said all of that, look, the plan has been reset. It's embedded in our results here. It's embedded in the outlook that we provided in the guide. The investment is, I still believe there's a tremendous amount of value creation opportunity here for Emerson shareholders, and we continue to be very committed. I think we have the processes both operating, which is CEO to CEO, CFOs, and through the Emerson management process as best we can here and through the board of directors in which to manage and to be part of the conversations and discussions with that team. Are you assuming a bounce back in your Q4 in those results? Thanks for all the color too. Yeah, of course. Look, I think we've embedded their perspective, which they shared with their investors on their call into our guide. Okay, great. Thanks a lot for the color. Thank you. The next question comes from Nigel Coe with Wolfe Research. Thanks. Good morning. Frank Dellaquila, it's hard to believe you've been CFO for 14 years, so good one. Congratulations. Good luck in retirement. Mike Baughman, congratulations. Thank you. Yeah, thanks. just maybe picking up off Steve's question there. Maybe this is a question to you, Frank. Maybe just talk about some of the moving pieces in the guide. I mean, clearly, you know, the bulk of the uplift is driven by much better revenue conversion, margin conversion. Maybe some of the moving pieces, you know, AspenTech, how's that changed in the guide? Maybe Stock Comp, any of the sort of major discrete lumps would be helpful. Well, I mean, the main driver is obviously the improved outlook for operations, the uplift in the sales, as well as the operational execution, the strong price realization, all the things that drove the strong leverage in the Q2, we expect to have in the Q3 and throughout the rest of the year. That, I mean, that is mainly the story, and that is strong enough to overcome the reduced AspenTech guide. I mean, as Lal said, we essentially incorporate their guide into our numbers. You know, they took the guide down for the year, so we've overcome that headwind as we move from the February to the current guidance. You know, those are the main pieces. that's what? $0.06, $0.07, mark to market on AspenTech? for the year, roughly, yeah, in that range. Yeah. Okay, great. Then just on the, maybe picking up off Ram's comment on the, on the sort of the install base of BCS. He said 70% don't have level 3 software capability. Does that precipitate, you know, an upgrade cycle? I know we've talked about upgrade cycles in the past, but are we at the threshold now where we might see an install base upgrade cycle? Or is it more just patching around that with some of the capabilities around software? You know, I mean, I don't know if we're planning for a major upgrade wave. I think it's more a disciplined approach with each one of our customers to, you know, address the optimization benefits and the APM benefits and some of the capabilities that Aspen brings to improve the performance of the overall automation system that is installed in many of these customers. We're going across the board, across industries, power and life sciences being the focus area. You know, everybody is very interested in digitally transforming their assets. We're seeing more and more interest from our customers to launch digital transformation programs across the automation stack, where level 3 software has an important role to play, primarily around optimization on the manufacturing suite, and then more the asset performance management and the reliability software on uptime of assets in their infrastructure. That's the journey. I think you're gonna see more and more of that. Sustainability is another area where software will get deployed, but I don't think it's a big wave. I think it's more a disciplined wave over time, and we have the opportunity to drive it. That's great. Thank you very much. Thank you. The next question comes from Jeff Sprague with Vertical Research. Hey. Thank you. Good morning. Congrats to Frank and Mike. Frank, I think it's hard to believe you've been CFO for 14 years because until we got a new CEO, we didn't have many opportunities to get to know you. The new structure is better, so congrats all around. Thank you, Jeff. Yeah. Hey, a lot of ground covered. I just wanted to touch back on capital deployment. Lal, as you said, you know, the big moves are done, and that certainly makes sense. You did indicate that you're working bolt-ons and, you know, it looks like you also maybe have a 6-month gap or so between the climate proceeds and National Instruments closing. Just wonder how that might play out over that timeframe. Is there room for some more share repurchase? Are there actionable bolt-ons that could be happening, you know, kind of over this interim period or, you know, just what we should expect there? Yeah, I'll let Frank comment as well here. No, look, we'll obviously work towards the closing of National Instruments over those 6 months aggressively. It may come sooner, we'll see. Depends on the regulatory approvals. That's gonna be the key pacing items, as you know, Jeff. The bolt-ons, we work them aggressively within the businesses. Some are competitive processes, others not, and we have 2 or 3 of those that we're looking at at any given point in time. We'll continue to do so. These are sub-billion dollar purchase price type of deals. We have a small number we're looking at right now and evaluating. Look, we're continuing to be very committed to return cash to our shareholders, whether that's through the dividend or share repurchase. As we go into 2024, we'll lay out what the appropriate plan there is and communicate that. Frank, anything to add? Jeff, I wouldn't view share repurchase decisions in the context of kind of the gap between closing Climate and closing NI. I would view it more broadly as part of the capital allocation strategy. I mean, when after we close NI, we'll have a balance sheet that's well below 2 debt-to-EBITDA on a tremendous amount of financial flexibility. We'll just continue to make those decisions in that context. Great. Then just back to chem, and I do understand you have a more diverse business than Aspen. You know, why shouldn't we kind of view this as an early warning sign of, you know, pressure in the core business in chem, and maybe just a little bit more color of what you're seeing there, because there are obviously, you know, CapEx and profitability, you know, issues kind of across a lot of that industry right now. Yeah. You know, for us, the capital cycle in chemical, particularly specialty chemical, is as good as we have seen it, particularly in Middle East, Asia Pacific, and ethylene and methanol investments in North America. For us, we haven't seen the capital cycle slow. However, what Aspen is referencing is the OpEx spend in chemical customers as they throttle their production in response to slowing demand, and therefore that translates to MSC purchases, their manufacturing supply chain suite purchases is really the dynamic that's impacting them. It's a small impact to them at this point, but given it's 18% of their sales mix, I think they've referenced that. To be honest, we haven't really seen any KOB 3 slow down or KOB 2 in chemical. Certainly many of our major project wins to date that we have been sharing with you have been in the chemical/petrochemical space, particularly in the emerging markets. At this point, we don't see that as an inflection point or a slowdown in the industry, despite the higher feedstock costs. Got it. Thank you. Thank you. The next question comes from Joe O'Dea with Wells Fargo. Hi, good morning, and congrats to Frank and Mike. I wonder just on the discrete, if you could elaborate a little bit on North America and the interplay between some of the structural, and it sounds like continued strength that you're seeing in sort of battery, electric, and semiconductors? The flip side of that, anything that you're just seeing from sort of a general industrial cyclical standpoint, whether the macro uncertainty is having any impact or whether it's more just kind of like natural digestion of what's been ordered over the last few years? I mean, in North America, to be honest, on the discrete side, we haven't seen. I mean, we obviously don't play in a big way in semiconductors and batteries yet. We play in a smaller fashion with our DeltaV business. Obviously, we'll get a lot more exposure to that dynamic with National Instruments. In the core machine automation business that we play in North America, we haven't seen a significant slowdown to date, but it is obviously slower than the momentum we're seeing in the process markets. Got it. Then, also just wanted to ask about NI and integration planning and sort of what efforts are currently underway that you're standing up, say, over the next 6 months to ensure a successful launch of the integration process there. Yeah, sure. This is Lal. We kicked that off last week in Austin over a day and a half with the management team. We've assembled a team, a steering committee, and then we have functional integration leadership across the 8 value drivers or so that have been identified. Obviously on a steering committee basis, I participate, as does Eric Starkloff. We've each named a leader on the integration team. In our case, for instance, Cervello. That's off and running. Meetings are taking place. We'll have a in-person kickoff with a large group here in St. Louis coming up, and then we'll be off and running on all the full integrations. Really good start, great organizational discussions already have taken place. Now we are excited about this work ahead of us as we head to close. Thanks a lot. Thank you. Thank you. This concludes both the question and answer session as well as the event itself. Thank you so much for attending today's presentation. You may now disconnect your lines.