James M. Farrell - Vice President of Strategic Planning and Investor Relations David G. Nord - Chairman, President, Chief Executive Officer and Member of Executive Committee William R. Sperry - Chief Financial Officer and Senior Vice President.

Nigel E. Coe - Morgan Stanley & Co. Inc. Richard M Kwas - Wells Fargo Securities, LLC Christopher D. Glynn - Oppenheimer & Co., Inc. Ryan K. Edelman - Vertical Research Partners, LLC Charles Stephen Tusa - JP Morgan Chase & Co.

Good morning, my name is Beth, and I will be your conference operator. At this time, I would like to welcome everyone to our Hubbell Incorporated Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. [Operator Instructions] Thank you.

Jim Farrell, you may begin your conference..

Thank you. Good morning, everyone, and thank you for joining us. I am here today with our Chairman, President and Chief Executive Officer, Dave Nord; and our Chief Financial Officer, Bill Sperry. Hubbell announced its fourth quarter results for 2014 this morning.

The press release and earnings slide materials have been posted to the Investors section of our website at www.hubbell.com.

Please note that our comments this morning may include statements related to the expected future results of our Company and are, therefore, forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.

Therefore, please note the discussion of forward-looking statements in our press release and consider it incorporated by reference into this call. In addition, comments may also include non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures and are included in the press release and the earnings slide materials.

And with that, let me turn the call over to Dave..

All right. Thanks, Jim. Thanks everybody for joining. I am just going to give a little bit of perspective on our finish to the year then I’ll let Bill in the normal course go through some of the details in the fourth quarter and full-year, and I’ll come back to wrap it up and provide more insights into our outlook for next year.

Fourth quarter results as you have seen I am quite pleased with the performance in the quarter, particularly as we are recovering from the challenges that popped up in the third quarter that we knew we are going to face for the rest of the year.

The organization certainly focused on finishing the year very strong and I think we see that in our – at least in our fourth quarter results good improvement.

You see we’ve got sales up 5% in the quarter, nice balance between the organic side and the acquisitions contributing and I think some of our markets in the quarter were particularly good and our performance in those markets, particularly on our C&I Lighting which was up double-digits in the quarter.

Our Power business putting up some good organic growth numbers are two positives. So I think that’s good and of course acquisition contributing. Currency we saw some of the currency headwind starting to creep-in the fourth quarter. And we’ll talk more about that later.

On the margin side operating margins of 14.9%, which certainly down from last year, but better than we were anticipating as a result of our focus on addressing some of the issues identified and that 14.9% includes some of the restructuring actions we talk about that, process about 50 basis points.

So all of that leading to diluted earnings per share of a $1.38 which has $0.06 restructuring cost, so all-in-all I am pleased with the recovery from the challenges that we identified in the third quarter and the actions taken and we’ll talk later about the action that are in process of being initiated and planned.

With that Bill, why don’t you get into some details and then I’ll come back..

Thanks, Dave very much and thanks everybody for joining us, we are aware that’s a busy time and a non-news items out there we are appreciative of these thing time with us this morning, I am going to use the slide that Jim reference to guide my comments this morning. I’ll be referring to the page numbers as we go through.

So I am starting on Page 3, the summary of the fourth quarter. It was a good quarter, nice solid finish to the year.

We had orders strengths throughout, right through the end of the year that provided the balance that Dave referenced, that organic growth of 3% reasonably strong through sequentially throughout the year balanced by the 3% from acquisition so 5% sales growth.

The OP margin of 14.9% observed some of the mix headwinds that we’ve been discussing all year as the non-res markets which are out growing our other markets happen to contain business with lower margins for us as well as the restructuring actions.

And I’ll just try to pause and give you a little bit of flavor of what those actions have been during the fourth quarter. Largely put them into buckets, one sort of targeted headcount reduction in businesses that we are looking for more efficiency.

And the second and larger bucket was facility rationalization so on the facility we initiated actions at four different facilities all within the electrical segment on the lighting side.

Including one distribution center and few small manufacturing locations and one slightly larger manufacturing location, where those projects reach proceeding, but they are not even I would say halfway done yet. We still have the point of needing to move the PP&E and get the production into the receiving plans.

So those projects take some time, you get some of the upfront cost now similar in the first half of 2015 and the benefits will start to see in the second half of the year and I think that Dave will be describing a new level of those activities going through 2015 as we focus on making sure we manage our cost base as efficiently and effectively as possible.

Page 4, covers the end markets and how they are contributing to that organic sales growth rate of 3% and you see on the non-res side really one of the bring spots of the end markets both new construction and rental both going strong, some of our business lines C&I Lighting that Dave referenced at double-digits and rough-in electrical both going strong as they face up against those markets.

And you see the real mix nature of our industrial end markets where the more manufacturing base broadly speaking growing modestly versus the Harsh & Hazardous and high voltage test equipment both showing strong negative trends end market wise in the quarter.

Utility market overall was positive, the strength coming more from the transmission and substation side where distribution was reasonably flat for us. And resi continues to show growth helping to support that blended 3% organic growth rate. Page 5, we try to breakdown the two components of our operating profit into the gross margin and our SG&A.

You will see on the gross margin side we are in 32.4% in the fourth quarter decline of 120 basis points largely driven by these three factors here where we saw price cost and productivity headwind in the quarter where pricing material cost were actually quite neutral.

So the headwind came on the cost inflation side that Dave made reference to where some of those costs on managing our lighting platform as we discussed on our last call as we had expected running little bit higher through the fourth quarter here. We also had to absorb restructuring cost and the mix headwind which drove the result in gross margin.

S&A is going the other way, we have improvement in S&A where the dollar increase is driven by our acquisitions and partially by some other restructuring activity.

The 3% growth rate there less than our sales growth, so resulting in 30 basis points of improvement of S&A as a percentage of sales and that continues now a good three-year trend of leveraging S&A as a percentage of sales companywide.

Page 6, is our operating profit and is really just the outcome of those two driver, so you see the 14.9% OP, $126 million with gross margin driving down in S&A going the other way and supporting.

On Page 7, we get into non-operating side of the income statement and other expense you see we picked up a couple million less expense in the fourth quarter of this year down to $8 million that difference attributable to some foreign exchange losses we had last year that did not repeat this year.

And on the tax rate side, you see a significant headwind there of 300 basis points.

That headwind was driven by discrete adjustments which more than absorbed the R&D implementation that finally came in the fourth quarter and the mix that we are describing between non-res and some of those industrial markets, it’s also has a big effect on our tax rate.

So for example, the high voltage test equipment and Harsh & Hazardous businesses tend to be more international and those earnings tend to be in lower tax jurisdictions versus our high growth areas of non-res tends to be domestic earnings here in the U.S. were at a higher tax jurisdictions.

So the net of those effects gave us about $0.06 headwind from tax. Page 8, you will see quite comparable levels of net income at $81 million for the fourth quarter of 2014, down less than a percent from prior year and you will see comparable EPS at $1.38 absorbing that $0.06 of restructuring costs.

So that $1.38 was aided by some share repurchases that we did in the fourth quarter, we acquired about 70 million worth of shares. The impact of that activity will likely be felt more next year.

You really don’t see much impact during the fourth quarter, we were buying really right up to the blackout window and so we are expecting to see that affect kind of carryover into next year, little bit more than impacted fourth quarter.

On Page 9, we transitioned here to talking now about our two segments electrical and power and we’ll start with electrical, you’ve seen in the fourth quarter there in $605 million of sales, 3% increase from prior year, which is again some of that balance Dave referenced, organic being up 2% acquisitions helping with three and FX being a two point drag, that 2% organic was being driven by strong non-res.

As we’ve discussed our commercial construction in C&I Lighting businesses both in double-digits helping drive that, at the same time industrial was quite mixed, were high voltage text equipment that was down double-digit Harsh & Hazardous down low single-digits in the quarter versus our other manufacturing base business were up.

The operating profit you will see generated $81.7 million of OP, 13.5% of sales declined from the prior year driven the restructuring cost. So all those actions that we highlighted for the fourth quarter were in this segment as well as having to bear some of the mix headwinds that we discussed.

On Page 10, we switch to the power segments and here you’ll see impressive growth of 10% up to $243 million of sales you will see the organic growth rate of 7% compares very favorably to last year, which I just want to highlight, is it was quite an easy compare last years fourth quarter, we were down about four points on power sales.

So and I think you will see next year the first quarter also slightly easy compare and I think that’s exaggerating that 7% organic growth rate a little bit.

The acquisitions of 5%, you will see skewing towards acquisitions here in power, they had quite active year we will talk about in just a minute and FX and price were each about a point drag to the overall. As we said the distribution was quite flat and that growth was being driven by transmission. and substation spending.

You see on the operating profit performance side 10 basis point improvement to 18.2% they had nice productivity benefits in this segment, but we were finding the markets to be reasonably price competitive and that prevented I think the margins from expanding further.

Page 11, we talk about cash flow for the quarter, you see a good level of cash flow, comparable levels of net income, slightly higher D&A as a result of our acquisition activity.

Working capital was slightly lower source for us as we had some inventory build in the fourth quarter supported by those higher order rates that we saw and the need to make sure we have our service levels carrying into the first quarter are intact.

You see a slight improvement in other which is higher deferred taxes offset by some pension funding and I just will pause on pension just for a minute to give you all description and some of the changes that we experienced on the pension side.

So the new mortality tables caused us to increase our liability in the order magnitude of about 5% to us that’s about $40 million and so plus we had obviously lower interest rates and that impacted us threefold.

One is we had the higher level of liabilities, two is we funded about half of those in December about $20 million pension funding and we are managing our assets in the portfolio to a higher level of risk and the net impact of all of that, we will create a drag next year on pension expenses of about $3 million as we get into taking about next year, but I just want to give you a snapshot of how that pension changes are impacting us and both the quarter and next year.

So Page 12, really switches now to the full-year results and you will see the sales growth of 6% at about $3.4 billion of sales that 6% was contributed 2% from organic and 4% from acquisitions. So again our business model showing the balance and the importance of that year-in and year-out contribution from acquisitions.

Last year, for 2013 the full-year contribution from deals was about 3%, so this showing some acceleration an increase in activity that that we’re pleased with and helping to drive our performance for 2014. And with that maybe I’ll pause and talk for a second about the acquisition program.

So for the year of 2014 we close seven deals spread across the portfolio pretty nicely one was in lighting, two were in electrical, and four in power systems that shows a nice increase by our utility business and pick up in their deal activity.

For those seven deals we invested close to $185 million OP from those was in low double-digit so it creates a little bit of drag on margin, but good contribution to earnings and we are paying in kind of the mid sevens of EBITDA multiples for those deals. That just gives you a little flavor of our acquisition activity.

And you will see the 15.4% margins on OP, so quite healthy down 50 basis points to prior year, which is about 10 to 20 better than we had discussed in Q3, so strong finish to get that better performance. You see some of that tax rate headwind continued for the full-year and quite comparable levels net income in EPS.

Page 13, we talk about the full year for electrical, organic growth was 3% total sales growth of 6% to $2.4 billion you see there, again resi demand was good for the year, non-res was good both across C&I Lighting and commercial construction and the industrial mixed performance was similar to the full year where Harsh & Hazardous high volt had negative compares year-over-year versus things like wiring and industrial controls were strong.

The operating profit of 14.1% declined to prior year, we had those cost in excess of productivity as we’ve discussed and the mix headwinds that we’ve discussed. Page 14, we have the full-year for power, you will see 4% sales growth to $961 million, Acquisition were 4%, the organic was about 2%, price in FX a drag of 2% combined.

You will see on the OP performance side, 60 basis points of margin expansion to $180 million of OP, good productivity, those incrementals if you measure them are in the 30s probably not normal, because you see this lower facility consolidation so cost prior year in 2013, the first half was impacted by a recently acquired facility that we closed.

So those costs were in 2013 and the productivity benefits were in 2014, so we see a little bit of skewing of margin expansion to the favorable from the power side.

Full-year cash flows page 15, similar story to the quarter where you had comparable levels of income, higher levels of D&A from the higher deals, working capital slightly more efficient there and you see the impact of the pension funding on other and comparable a little bit higher CapEx to drive free cash flow of $332 million, that CapEx number I think Dave at the end will talk more about some of our plans on cost restructuring actions and think we can anticipate a ramp up for this CapEx as we think about next year.

Capital structure, you see $654 million of cash that overstates just a little less in the first month of the year, in January we closed on three deals accounting to approximately $125 million of investment. So we put some of that cash to use already here in the first month, and you see a debt to cap ratio of 24% with our revolver being unutilized.

So the year end review, I will give you some thoughts and ask Dave to share his, as he progresses into our outlook. But the 6% sales growth, again I think that balance Dave mentioned between acquisitions and organic is healthy sign that our business model is exceeding, operating profit grew at 2%.

I think you saw nice performance at our power segment there 4% growth, 18.7% OP, 60 basis points and margin expansion very strong from them.

Electrical guys had to overcome some of the warranty and related expenses that we had in our lighting business as they adapt to higher rates of LED adoption and some of those mix headwinds, but we have began some very important restructuring work there in that segment that will carry into this new year here.

And just to highlight the cash investments deployment strategy here you saw about $180 million in the seven deals, dividend increase of 12% and I mention the $70 million in the fourth quarter of shares repurchased, we’ve done another 35 previously, so about a $105 million of shares repurchased for the year and at this early stage of the year for 2015 that feels like we should be thinking about comparable levels of share repurchase this year and we have authorization to do $230 million, so we do have some flexibility there.

And with that I will turn it back to Dave..

All right, thanks Bill. Yes, before we close out 2014, let me just give you a couple of comments and perspective.

We accomplished a lot in 2014 and I don’t want to loose sight of that, obviously we had our challenges, but as Bill mentioned, accomplishments increasing our dividend, investing in acquisitions, ramping up our share repurchase, I think are all highlights.

I think as we said here a year ago, we though that our sales would be up 5% to 6% with balance between acquisitions and organic and I think we outperformed on the acquisition side and I would suggest we underperformed on the organic side.

I think the markets may have contributed some of that but I think that’s an area that we got to have more focus on and we have more focused on for 2015.

Our operating profit, based on our guidance we would have been just north of 16%, finishing the year and instead we are finishing at 15.4% and I think a big part of that is some of the challenges that we faced within the lighting business for sure and maybe a little underestimation of what the mix implications were going to be around our high voltage and Harsh & Hazardous business.

So we’ve learned a lot from that.

We obviously don’t want to loose sight of earning more than $300 million better than 15% margins, but still we recognized that and we’re disappointed that we came about 30% short of our own expectations and I’ll put that equally between our forecasting on the margin expansion and our execution within the lighting businesses.

Both of those things are important to consider as we look into our guidance and things that we contemplate as we are looking at 2015 and the actions that we are taking. So with that let me turn it over to our outlook for 2015.

First on the end markets, we talked about the end markets three months ago on our third quarter call there has been some change in most of our markets and a significant change in line.

Starting, at 1 o’clock our utility business we said was going to flat, the slight growth and I think that, maybe has a little bit of improvement, more definition around 1% to 2% growth.

The residential side we said was going to be high single digit and I would say that what we are thinking that’s a little bit weaker based on some of the indicators that are out there, but still you know good 6% to 8% growth.

The non-residential side certainly all the indicators point to that continuing to improve, we are at 3% to 5% before we think that’s more or like 5% to 6%.

On the industrial side now something we think was important to separate embedded in our industrial historically was our Harsh & Hazardous business and with the movements being pretty much consistent in a business that represents 10% or so of our overall business.

It was okay to do that, but obviously there are some dynamics going on in that sector that with we wanted to make sure that we were clearly and good spike that out. So the core industrial business we still think is up 3% to 5%, last time we added up 3% to 4% that was with Harsh & Hazardous actually still continuing to improve.

Obviously, we are all aware there is a big significant change I mean we were at this time in October we’ve talk for a long time about $80 oil being above $80 being good, the low $80 being more challenging.

At the time, I think we were about $82 or $84 and since then it’s been a weakly progression to yes it might dip below $80 but it will pop back well it might dip below $70 it will pop back and that’s been ongoing. To the point that we’re at now, which is down almost 50% from that level.

So when you look at that that magnitude of drop we have been working very hard to trying assess what that means to us. And obviously in a worst case you’d say well if it’s down $50 your markets going to be down $50.

We’re obviously not seeing that yet we don’t expect to see that somewhat of a function of where you play into market, but our assessment of the end market that we participate in is going to be down 15% to 20%.

And so all of that comes together to suggest as we are looking at end market growth of 1% to 2%, we had 3% to 4% before but I think you know the impact of Harsh & Hazardous can’t be underestimated and we’ve got to deal with it. Okay.

So what is that mean to our segments, you know our power segment got a third of the business, with our slight growth in 1% to 2% on the D&P plus acquisitions with a little bit of FX headwind, we think they will be up 5% to 6%. On the electrical side, certainly we expect to participate in the solid growth in the construction markets.

We’ve got to deal with Harsh & Hazardous down 15% to 20%. Our industrial growth is up and in acquisitions we’ll contribute another 5% to 6% with some FX headwind there as well. So overall we are forecasting 5% to 7% overall sales growth, okay.

So all that is leading to in earnings per share outlook as we cite a range and this and this is something that we are coming back to providing specific earnings per share guidance, we haven’t done that for a number of years, we’ve tried to provide a lot of pieces and allow investors to make their own judgments, but with all of the dynamics that are going on, story certainly has gotten more complicated and so we want to make sure that we're clear as to what our expectations are and then I’ll take you through how we get there, but that $5.35 to $5.55 includes $0.25 of restructuring and related cost, which we are taking actions this year that we expect to realize the benefits at those levels in 2016.

And free cash flow forecasting to be a little bit less than net income, simply because as Bill mentioned we’re contemplating additional investment as part of the restructuring action in capital around our facilities, around our plant productivity and automation that will be incremental to this year’s levels. Okay.

So to try and make it even clear on page 21, I’ve got a bit of a - just to give you sense of how we look at this earnings guidance. And if we start with our $5.48 that we are delivering this year, in the normal course our core growth combined with acquisitions would be delivering some where between 60% and 75%.

$0.75 of earnings, which would put us squarely in the $6 to $6.15 range which is the sort of where we were targeting to do taking into account some of the mixed headwind that we have faced last year. Unfortunately, we’ve got two big impacts that we are facing, that we’ve got to address.

One is the Harsh & Hazardous which if you do the math on 11% of our business down 15% to 20% with what we’ve continually said is one of our highest margin businesses, the decrementals of that unfortunately painful. We’ve also got currency which the new item that were challenged by as we started this year more dramatic weakening of foreign currencies.

So the combination of those would be in the magnitude of $0.35 to $0.40.

So as a result of some of that particularly the Harsh & Hazardous market we’ve had to increase our emphasis on our cost reduction actions, we already had contemplated and initiated some around our lighting business, but to continue to improve and deliver on our productivity, we need to increase our level of investment around restructuring and take some actions to address the market challenges that we are fully facing in Harsh & Hazardous.

So that’s the $0.25 that leads us to our $5.35 to $5.55. I am very confident in that number if the market behaves as we expect. We need to execute on our plans I think the team learned a lot last year particularly in around realism in their planning and forecasting.

If we don’t have realistic forecast we guaranteed not to take the actions that are necessary to improve those forecast if we don’t like them, if we wait until they happen we are behind. And so the team is very much focused on getting ahead of that and that’s why you see a much higher level of restructuring and related cost.

There is certainly a lot of other things that we will move around in here, but these are the - whether you’ve got tax and the impact of an R&D or the implications from share repurchase both the impact from last years and what we contemplate this year and those are levers that we are working on.

So this is our starting point, it is by no means our ending point and the team is very much focused on continuing to improve and outperform this outlook. So with that, let me open it up, turn it back to Jim, open it up to Q&A. So we can address some of your questions..

Okay, let’s go ahead and open it up..

[Operator Instructions] Your first question comes from the line of Nigel Coe, Morgan Stanley. Your line is open..

Thanks, good morning..

Good morning, Nigel..

I hate to start off with the obvious question, but Harsh & Hazardous, I mean seen in the charts of scale, so if I just run the ruler over the task.

It looks like $0.40, $0.50 of headwinds you are expecting from that is that about the right zone?.

No, I’d say it’s little less than that Nigel..

Okay.

Can you give us the number?.

I would say it’s more in the $0.20 to $0.25 range..

Okay, okay.

And obviously the down 15% and 20%, can you maybe just help us think about how you got to that number, is it single in the air, any kind of guess based on customer conversations, what gives you the contents that’s 15% and 20% is the right zone?.

I would say all of those things are what we take into account as well as what others are seeing, we are accessing our own business. We think our business is probably 75% upstream.

As I said earlier, I think we started with a very simplistic oil down 50%, so the business could be down 50%, but that’s probably, that’s overly simplistic depending on where we play. We had conversations with some customers, but that they are all coming up with different views depending on their own perspective.

So I think we’ve come up with the likely scenario this 15% to 20% down keep in mind we didn’t see that didn’t happen in the fourth quarter, we are not seeing that level of down so far this year.

So and I suggest that we are contemplating that there is a more significant decline as the year goes on more to the tune of potentially finishing the year down 25% to 30%.

And it’s important and the reason we are doing that and listen I might be conservative, I hope I am, but it’s important that we are focused on what the implications are, so we are taking the actions that are possible and necessary to try to medicate that within the business and throughout the rest of our enterprise, so..

I would say Nigel, the most helpful analysis I thought we did with going back to 2008, 2009 timeframe and looking at what prices did and what impact that had on our sales and that was probably the most informative of the different techniques that you described..

Okay that’s great and I appreciate the color David, but can you maybe just talk about how this business - the price and volume impacted in 2008, 2009 and perhaps on top of that what you are assuming for price in 2015?.

I think what we saw - to me this is like a two level ratchet on Harsh & Hazardous for us.

So in 2014, the business shrunk low single-digits Nigel and in so doing I think lost some of that price power that it had and the margins went from great to good and that was part of what Dave described as maybe forecasting miss on our side during the year of 2014.

And so now we’re trying to anticipate steeper volume drop offs and that we don’t have current data as Dave was saying, the order rates are not consistent with down 20%. So we are sort of making some anticipatory guess work here..

Oh, sure.

I appreciate that but the down 15% to 20% is that mainly volume at this stage?.

Yes..

Yes. Okay, thanks, guys..

Yes..

Your next question comes from the line of Rich Kwas, Wells Fargo Securities. Your line is open..

Hi, good morning, everyone..

Hey, Rich..

Just I mean some quick math; so on the Harsh & Hazardous 30% decramental is that what you are assuming Dave and Bill on....

Yes that’s what we’re assuming..

Okay, all right..

Roughly..

And then is there a sensitivity we can think of with the growth to rig counts and the impact on your business.

I understand, its fluid right now you are not seeing that in the real-time data and you are anticipating it, but as we go forward here, is there a way to think about in terms of percentage change in rig count and how that would potentially affect your business either way?.

We tried looking at that Rich and we weren’t able to come up with an equation that would be satisfactory to you or to us..

Okay, okay..

We’ll keep looking at it though..

Okay, all right. And then on the margin decline ex-restructuring for the year within the guidance.

How much of that is M&A and how much of that is just a Harsh & Hazardous impact if you’ve yet to split out and come over 40 or 50 basis point decline if you accept restructuring?.

I think the acquisitions Rich would be around 30 basis points in margin contributing to margin decline..

Okay, so that’s most of it..

Yes..

X restructuring, okay.

All right, and then Bill on your comment about buybacks, so you expect to do a $100 million or so this year, you did $70 million in the fourth quarter, with the stock down 20 bucks or so from the highs balance sheet still in very good shape, what’s the thought process of why not to stretch the balance sheet a little bit as it relates to typical Hubbell standards and take advantage of the stock being done a bit here, more aggressively I should say..

I’ll take that Rich, that is an ongoing conversation now we have and its a certainly an ongoing discussion sometimes debate with by Chief Financial Engineer and economic guy.

And one of the issues that we are always pushing on and it’s my strong view is that I’d understand the desire to do that, but if I’ve got a choice my priority is on acquisitions which have the opportunity for earnings growth going forward. So and as you saw we closed three deals already this year or little over $125 million.

Okay, so as we are finishing the year we do ramp up share buyback, but we know we’ve got some of these transactions that are close to closing and that’s always the debate that we have when we are looking at the pipeline what’s likely, but that is an ongoing discussion and if there are an opportunity other alternatives, good alternatives we would ramp up share buyback..

Okay, all right thanks..

Thanks..

Your next question comes from the line of Christopher Glynn, Oppenheimer. Your line is open..

Thanks, good morning..

Good morning Chris..

Good morning, Dave.

Just wanted to review a little bit of the linearity for the year and I think I got my answer with the Nigel’s Q&A, but I was going to ask with the 1% to 2% organic for the year and the easier weather comp in the first quarter I guess that’s kind of offset by the you have the Harsh & Hazardous stating through the year that kind of washes that out I guess?.

I think that’s right. I think that’s right..

Okay and then on the Lighting just so we put the impact in properly, I think it translates into little over 20 million pretax.

Should we think about that all in lighting and then kind of what proportion in the first quarter and the first half maybe?.

It’s definitely not all in lighting I mean it’s really although there is a significant element within lighting. And I think it’s we are trying to execute it, the key is to execute it effectively. And the best way to do that this to would ratably throughout the year, that’s the ideal it doesn’t always look that way.

So I think we are planning on it happening that way but it may slide between quarters..

Okay gotcha. And then just in terms of some growth rates as we subdivide the organization. Could you comment on U.S.

organic growth in the quarter? And then any comments on the lighting business?.

Yes, I would say starting with lighting Chris you know we had really nice growth rates on the C&I side we had the resi business along with some of the other national account facing parts of lighting have very lumpy demand dynamics were big orders last year some destocking on some of those projects this year which created some more difficult compares there, but you saw mid-teens growth in C&I inclusive of doing a deal and more or like 10% organic.

And so very strong dynamics within lighting from a market perspective and I think trends that give us enthusiasm as we look into the New Year for lighting I think on the resi side certainly some of that data keeps coming in and mixed and some of the homebuilders are giving I think some more modest sort of outlooks certainly Texas market or things that might be over exposed to the oil space seem to be more cautious than others.

But in general I think we still the resi support is good for lighting. So, in terms of your geography question, so domestically that non-resi piece is essentially for us – essentially all domestic. And that’s where we saw some of the decent growth.

Some of them are more international facing businesses are Harsh & Hazardous and high volt which both was down I think maybe the exception would be our utility business which has got some exposure down in Latin America and in Asia.

But in general, if you are generalizing you would say our domestic growth was strong and our international growth was negative..

Well, let me just add a couple other comments on lighting Chris..

Yes..

I think that certainly we had our challenges and disappointments currently in the third quarter and the second half of the year. One of the things that comes out of that is clearly a wake up call to the team at Lighting, which they are responding incredibly well to.

One focusing on the issues that specific issues that came up, but more broadly some of the other implications and one for example when we talk about the pricing pressure and what you realize is that some of the pricing pressure is not so much the market pricing, but our attempts to try and get price to provide a margin with a cost structure, that’s not acceptable.

So it’s more of a cost issue than a pricing issue and so that’s why there is much more aggressive action going into the cost side and particularly around the facilities. What I find satisfying is that in a short period of time from feedback from a variety of market participants from suppliers to customers.

They have commented that they have seen a change in attitude and approach, much more aggressive, much more customer focus, much more thoughtful in a development of new products and the engineering around that.

So all of that are indicators to me that we’re moving in the right direction and it’s just a question of how quickly we can realize the benefits of that. So it’s still early, but I feel a lot better about how that business is moving right now..

Okay, Dave that’s really interesting color, thanks.

And what’s the timeframe on that positive feedback you’re getting is that it must just be the last couple of months even?.

Yes, it’s in the last couple of months..

Great.

And just any - what are the thoughts on warranty and obsolescence kind of one-off happenstance going forward?.

Well, the thoughts are it’s got to be better. There is a lot of focus on it and I think it’s a challenge within the industry as new participants with new technology have come in and offered up these wonderful warranties.

And that’s all fine the reality is if there is going to be a problem with a product it’s going to be early on and it’s going to be caused by poor production or poor design and that’s where our focus has been, identified root cause and have addressed those and are much more focused on that consideration in product launches.

And the challenge is to make sure that that doesn’t unduly slowdown the product launches, so you fall behind, but you just take that into account in the development process.

So I certainly expect that to be an improved performance I don’t to size that amount yet, but I’m hoping that that provide some of the tailwinds for the lighting business performance in 2015..

Got it. Thank you..

Your next question comes from the line of Jeff Sprague, Vertical Research Partners. Your line is open..

Hi, guys good morning. It’s actually Ryan sitting in for Jeff..

Hey, Ryan..

Hi, I was wondering if you could provide a little bit more color on the trends that you are seeing in transmission and substation both in the quarter and as we look out to 2015?.

Yes, Ryan, so the fourth quarter as Bill said the transmission and substation were little bit stronger.

I think some of that has to do with the timing of shipments of some of the lumpier transmission projects, again we’ve talked a lot this year about small and medium size projects and I think a few of those broke free in Q4 I wouldn’t view it as necessarily a significant uptick in underlying demand.

I think some on the substation I think there was a little bit of push at the end of the year to do some maintenance on that. So we got a little lift in Q4.

I think as we turned to 2015, I think our guys feel pretty good about again the pipeline of small to medium size projects and actually have cautious optimism that some of the larger stuff might actually come through, but again get you still to a 1% to 2% growth environment as we talked about, Q1 would probably be a lot stronger right, pretty easy comp and then it gets tougher as the year progresses..

Okay, great thanks. And then on the pricing side within power specifically where exactly are you seeing the most competitive price pressure..

Ryan that comes on larger jobs where there is just more bidding pressure, there is reasonably high percentage of that business which is maintenance and repair and it’s not on that side, it’s more on the project side..

Okay, great. Thanks guys..

Your next question comes from the line of Steve Tusa, JPMorgan. Your line is open..

Hey, good morning..

Hey, good morning, Steve..

So, just so I’m clear are you basically the Harsh & Hazardous I mean is that 100% oil and gas that business?.

No, so we’ve got about 70-ish is oil and gas, another 10% would be mining, you’re up around 80% that’s extractive industry Steve in that order of magnitude..

Okay, so that kind of dominates, it sound like you have oil and gas down 50% and other markets flat I mean it really kind of dominates the segment from that perspective..

Yes, it does Steve that’s a good point I mean the way we’re thinking about it for oil and gas is really down more or like 20% to 25% for the 75% of Harsh & Hazardous right..

Right and that’s already down right this year..

Existing the year slower but certainly nowhere near those levels and as Dave said Q1 you’ve got some projects that you know are finishing out through completion so Q1 probably won’t be at the best indicator for how this things going..

Yep..

But yes, so as Dave said I think the back half is what we’re going to watch those 25%, 30% kind of numbers..

Right. And then just on the - you’ve talked a lot about pricing, but just on the commodity side.

How are you guys planning on the commodity front, any tailwind there in 2015?.

Yes, I mean as you can appreciate Steve its moving everyday but certainly the major commodities that we have are pretty good as you know the challenges is on the pricing side. So but absolutely the coppers, the steels all should help..

And you’re embedding that, as of now..

It is embedded, but I wouldn’t embed a net benefit of pricing commodity cost rise. So at PFR it’s moving quite a bit everyday, but I wouldn’t view it as OP side..

Okay gotcha, gotcha. And the one last question, what it is on just on the bridge what exactly did you say the core was – did the core plus acquisition add this year from an EPS perspective I didn’t quite catch that..

Somewhere between $0.60 and $0.75..

Okay so $0.60 and $0.75 and the restructuring as of now do you think that restructuring is kind of you know what you need to do would you envision another major restructuring in 2016? It seems like a pretty big swing you taken here.

And then that you got a lot of good projects in the pipe I mean did you feel like okay, what good there, we are kind of control with what we’ve set out there on restructuring?.

I think its too early to call on that, I think it is when I look at one element of our cost structure which really is our footprint, the cost to shrink that are not insignificant. And I think it is possible that we get the momentum and cadence down that we would be more aggressive on that.

That’s not to say that $0.25 there would be another $0.25 incremental, but that certainly could be the level of expenditure next year, it’s possible. But again it’s too early to tell this, I wouldn’t say its all – all right go ahead..

Right, so you wouldn’t look at it and say hey $0.25 of cost this year, call it $0.30 you said, you are going to get more than that in net benefits in 2016.

So it’s not quite a $0.55 flip, it is what you are saying for 2016?.

Correct. Correct..

I think one of the drivers Steve, the success of our acquisition programs means you are adding facilities and not each one of those is a world class or global scale kind of facility. As you kind of aggregate those it creates these opportunities. And we have been doing those in [1/zs and 2/zs] kind of year-in and year out.

And I think the acquisitions program is starting to outstrip that. So that’s really kind of what’s behind it. .

So in essence, it’s kind of somewhere between a big one-timer and kind of a multi-year restructuring story, kind of somewhere between that. I guess..

Yes, I would say it’s somewhere between that. What I believe is certainly for some portion of it the benefits could be greater and so in theory you could get $0.25 more next year.

And still be able to pay for this stuff, but what I say is its still very early, but some of them – there is early cost, but tremendous benefits when you do these things, if you can do execute them successfully and that’s always why it’s a little bit more cautious to get to that point..

Okay, we appreciate you running this stuff off through the EPS guidance; because there are lot of companies that adjusting strip some of the stuff out. So thanks for the visibility in running that through, it’s a more honest way to approach it..

Okay..

Thanks..

Thanks. End of Q&A.

We will now turn the call back to Jim Farrell for his closing remarks..

Okay, thank you everyone for joining us again this morning, I know it’s a busy time. Certainly folks who have follow-up questions, feel free to reach out to me, I’ll be around all day today and tomorrow. So thanks again, and we’ll talk to you in the next conference. Thank you..

This concludes today’s conference. You may now disconnect. Thank you..