Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Belden Inc. Fourth Quarter Earnings Release Conference Call. This call is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Matt Tractenberg. Please go ahead, sir.

Thank you, Catherine. Good morning, everyone, and thank you for joining us today for Belden's Fourth Quarter 2012 Earnings Conference Call. My name is Matt Tractenberg, and I'm Belden's Director of Investor Relations. With me here this morning are John Stroup, President and CEO; and Henk Derksen, Belden's CFO. John will provide a strategic overview of our business, and then Henk will provide a detailed review of our financial and operating results, followed by question-and-answer. We issued our earnings release earlier this morning, and we have prepared a slide presentation that we will reference on this call. The press release and the presentation are available online at investor.belden.com. Please note there’s no www in that web address. Turning to Slide 2 in the presentation. During this call, management will make certain forward-looking statements. I would like to remind you all that any forward-looking information we provide is given in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The comments we will make today are management’s best judgment, based on information currently available. Actual results could differ materially from any forward-looking statements that we make, and the company disclaims any obligation to update this information to reflect future developments after this call. For a more complete discussion of factors that could have an impact on the company’s actual results, please review today’s press release and our Annual Report on Form 10-K. During this call, management will reference certain adjusted or non-GAAP financial information. In accordance with Regulation G, we have provided a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate. This reconciliation is in the Appendix of the presentation and has been posted separately to the Investor Relations section of our website. I will now turn the call over to our President and Chief Executive Officer, John Stroup. John?

Thank you, Matt, and good morning, everyone. 2012 was an extremely exciting and important year for Belden. In the face of a challenging and volatile business environment, we executed our strategic plan well and made significant improvements to our business portfolio. We also improved our capital structure, which will have a long-term impact on our cost of capital and value-creation initiatives. Gross margin levels are already best-in-class and we see meaningful opportunities to further leverage our SG&A investment. I'm eager to share with you a few of the key strategic actions we've recently executed, discuss the performance for the fourth quarter and full year and offer some insight into what we expect for 2013. As you've seen, we were quite active during the quarter. In November, we announced the divestiture of our Thermax and Raydex businesses for approximately $265 million. Despite our numerous attempts to build a connectivity business in the aerospace and defense sector, we were unsuccessful. Therefore, acquisition opportunities became scarce, and it was clear that Thermax and Raydex would be more successful within an established aerospace and defense company. I believe this notion is fully supported by the valuation multiple of the transaction. This transaction closed in December and the results are categorized as discontinued operations, and hence, excluded from our discussion today. The acquisition of PPC, a leading provider of broadband connectivity solutions, was announced and completed in December. PPC significantly enhances Belden's Broadcast Solutions platform and increases our competitiveness in the broadband application. I'd like to welcome the talented employees of PPC to our Belden team. And finally, late in December, we closed the sale of our consumer electronics assets in China. This action, which we foreshadowed early in the year, allows us to focus precious local management resources on more attractive opportunities. The impact…

Thank you, John. I will start my comments with results for the quarter, followed by a review of our operations and segment results, a discussion of the balance sheet and close with our cash flow performance. Please turn to Slide 6. I'd like to begin by discussing the impact of our inorganic activity to our income statement. First, as a consequence of the divestiture of the Thermax and Raydex cable business in December, results of this business have been excluded from continuing operations for 2012 and 2011. Please refer to the 8-K issued in December for prior quarter figures. Second, the acquisition of PPC closed on December 10. And therefore, the results have been included for the remainder of the fourth quarter. Third, the sale of the consumer electronics assets was not treated as a discontinued operation for accounting purposes. Therefore, those results are included in continuing operations in all prior periods up through the date of the sale in late December. And finally, Miranda is included for the full fourth quarter. The combined treatment of these strategic actions is consistent with the information presented at our Investor Day in December. Fourth quarter adjusted revenues were $481.2 million. Adjusted income from continuing operations per diluted share was $0.78 and included $0.10 from favorable discrete tax items during the quarter. Adjusted revenues for the quarter grew 9% year-over-year on $441.3 million in the prior year. Copper-adjusted organic growth declined 40 basis points year-over-year. Revenues were favorably impacted year-over-year by lower copper prices and currency translation of $9 million and $3.4 million, respectively. On a sequential basis, we experienced a larger-than-anticipated channel and customer inventory reduction with an impact of approximately $13 million or 280 basis points. Adjusted gross profit margins at 33.2% increased 450 basis points year-over-year and declined 20 basis…

Thank you, Henk. Please turn to Slide 10 for our outlook regarding the first quarter and full year 2013 results. We are off to a solid start in 2013 with an extremely strong business portfolio. We remain focused on attractive markets, favorable secular trends and share capture. With the expectation for slow global economic growth in 2013, we continue to emphasize our strategic initiatives, including our Market Delivery System and Lean Enterprise. We are confident that these initiatives position us to perform well and we are, therefore, increasing our earnings outlook for 2013. For the full year 2013, the company expects revenues to be between $2.07 billion and $2.12 billion and adjusted income from continuing operations per diluted share between $3.44 and $3.69. We expect our first quarter 2013 revenues to be between $505 million and $515 million and adjusted income from continuing operations per diluted share to be between $0.76 and $0.81. That concludes our prepared remarks. Catherine, please open the call to questions.

[Operator Instructions] We'll take our first question from Shawn Harrison with Longbow Research.

First, I wanted to get back to the comment made on the order rate strengthening, I guess, probably in the month of December and into January. If you could articulate regionally where you were seeing that and maybe a little bit on the end markets as well.

Sure. So it was across-the-board, Shawn. So in the first part of the quarter, we believe, because of the concerns folks had with fiscal cliff discussions, orders were a little weak and a little more volatile than we had seen. And we think channel partners were managing their inventory tightly, we saw that in the inventory reduction as well as customers postponing discretionary projects. We saw that improve somewhat at the end of December. We had a book-to-bill for the fourth quarter that was 1.02 and we had a book-to-bill in January that was 1.04. And so we had good strength towards the end of the year and good strength in the month of January. And it really has been across-the-board in all regions and actually in all end markets. So it feels, to us anyway, like some of that pause that people might have been taking in the fourth quarter was temporary.

I guess, with that, John, you kind of kept the, it looks like, the organic growth rate for the year unchanged. Is it just more you waiting for -- to see how the rest of the quarter plays out?

Yes. Kind of early in the year, Shawn. I mean, we don't want to let the string out all at once. So we have an opportunity to revisit this every quarter and we'll reflect on the first quarter results.

Okay. And then just as a second question, a follow-up. Henk, did you say that the EBIT margin in Asia is now 18%?

That's correct. If you exclude for the consumer electronics business, Shawn, it is 18%.

And then I guess with that as we go throughout the year, where would you expect to see most of the margin expansion going forward? It sounds like you're already at a really high level in Asia.

Yes, I think the margins in Asia are probably right where they need to be. I wouldn't expect significant expansion of margins in Asia. I would see, though, significantly improved growth rates. The management team is far more focused than they were. They're focused on the right things, the right portfolio. Pretty optimistic about our ability to generate revenue growth in Asia in 2013. Also aggressive growth expectations in South America as well in 2013. So margins in Asia, I don't see a lot of expansion from up at 18%. Obviously, year-over-year it's going to be tremendous because we're exiting so much stronger than we were. But really optimistic about growth rates.

Okay. And then so other regions you would expect, maybe the Americas, more margin expansion?

Yes, I think the Americas is benefiting significantly from the full year impact of the acquisitions that we made in the second half. So as we know, Miranda is more profitable than average. PPC's got nice margins. So I see that as an opportunity. I think there's still opportunity at the consolidated level for leverage on the SG&A investment. So gross margin improvement year-over-year is going to come largely from the full year benefit of the acquisitions. And operating margin expansion will come from that, as well as leverage on growth as well as the full year impact of the acquisitions. So the updated operating margin target that we shared with everyone in December, we feel real good about those in 2013.

Do you think on that SG&A, John, that you can maybe get it into low 17s as a percent of sales as we go through the year?

Yes, that would be aggressive, right, because that would imply sort of a 16% to 17%. That would be, I think, a little bit too aggressive by year end, Shawn. But I do think that you should expect us to continue to invest in R&D. R&D costs will roughly go up at revenue levels. You're going to see our sales and marketing costs probably go up half as fast as revenue. And you're going to see most of our G&A costs remain flat because we think we got a G&A cost structure to support a much larger enterprise.

We'll continue on to Steven Fox with Cross Research.

Just a couple of questions for me. First of all, given the greater-than-expected reduction in inventories, is there any inventory refill in your guidance for the quarter, or is that something that is sort of wait and see? And then secondly, now that you've had PPC, I guess, for an additional 6 weeks since you last spoke publicly, I was wondering if you could maybe just discuss further outlook for that business for this year from a top line and any other sales synergies you might see going forward.

Sure. So on the first question, we have a very modest expectation in the first quarter for a little bit of channel inventory restocking. It's not significant, but we do have some in the guidance. It's difficult to predict, obviously, in terms of how the distributors are going to manage their inventory. But we did see them take their inventory down in the fourth quarter, and I think that we'll probably see a little bit of restocking in the first quarter. We'll see how that goes. With regard to PPC, too early to be able to claim victory on any major synergies, revenue synergies. The team, though, is well on plan with the integration. They've already started with some of the sales and marketing integration and alignment that we planned at the outset, so they're on target with that. And the order rates out of PPC right now are as expected. So at least based on the first 6 weeks, things are going well.

Just one follow-up, John, just on the enterprise market, can you talk a little bit about any kind of differences in your expectations for the quarter within Enterprise Connectivity, whether it be data center versus LAN or product-wise. Any color there would be helpful.

Yes, so the enterprise has been probably the toughest market for us to be able to accurately project. And we're not alone, of course. But we always say we're 1 year closer to a recovery. We just don't know when that recovery is. So I think we are -- I mean, we did see a weak fourth quarter in the Enterprise business. I believe, though, that some of that weakness in the fourth quarter was temporary in terms of people postponing projects. We've not baked in significant improvement in the enterprise market for the first half of the year. We do think that in the second half there might be growth, but it's going to be very, very modest. So if there was any sort of major significant uplift or return in the enterprise market, including data centers, that's upside to our guidance.

We'll take our next question from Tony Kure with Keybanc.

Just wanted to touch on the impact of the restructuring savings. I think, last quarter, you said it was going to be $22 million, $7 million in 2012, $15 million in 2013. Are those numbers still on track?

Yes. We actually did a little bit better in 2013. $22 million is still the full year number. And we had roughly $9 million of savings that we were able to capture in 2012.

Okay, so -- but the overall total remains the same?

Yes.

Okay. And then just wanted -- what was the -- could you just talk about what the deferred gross profit adjustment, the $2 million deferred gross profit adjustment was?

Sure. That is consistent with prior practice as a result of the SOE accounting, Miranda acquisition, invoices, some software, on the U.S. GAAP that gets deferred. And for presentation purposes, consistent with our prior practice, we excluded that from our pro forma numbers, Tony.

Okay. And just given the movement in the broadcast recently, can you just talk about what the most attractive markets going forward now are for M&A and maybe provide some expectations for scale in 2013 and '14 relative to the flurry of activity in '12?

I would expect us to do a number of smaller acquisitions built around the Miranda platform. So the Miranda platform is an outstanding platform and really with only a few significant, important competitors, most notably [indiscernible]. And there are a number of product additions, technology investments that we are working on within that platform that I would expect us to do in 2013. They could be as small as $10 million to $15 million of revenue. They could be large as $100 million of revenue. The funnel is very rich there. The team is active in the area, and that's really just completing the overall solution within the area of content creation and content distribution, which, as you know, is the 2 areas that we're focused within Miranda.

Okay, great. And there's a couple of ones. CapEx for the 2013, maybe I missed it. Could you talk about what that might be?

CapEx will be around $14 million, Tony, for the full year 2013.

Okay. And then one last one on the low-margin business, sort of the pruning actions you did in the third quarter. Any more of that activity or maybe increased walking away from low-margin business?

I think it will be on the margin, Tony. I think we have some areas where our general managers are taking actions that they feel are appropriate to achieve both their organic growth and their operating margin goals. And of course, they have the discretion to turn those dials, but they're at that level rather than at the enterprise or the portfolio level.

[Operator Instructions] Noelle Dilts with Stifel, Nicolaus has our next question. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Just going back to the channel partner inventory reductions in the quarter, could you comment on whether these were concentrated in a particular product line or geography?

Well, they were mainly in cable only because that's the product line that's the overwhelming majority of where we go through distributors, so primarily cable. It was all around the world. I'm sure more of it was in the United States than it was anywhere else. But we saw it everywhere. It seemed to us like all of our large distributors were managing their balance sheet in the fourth quarter, some of them were public companies, of course, so they want to be able to present their balance sheet in a proper way at the end of the quarter. Some of them are privately held; they're just managing cash. But we never saw the turns get to an alarming number. But we saw them be a little more aggressive with inventory management than we expected. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Okay. In the Americas, you saw very strong growth in the industrial market in the quarter. Could you expand just a little bit, provide a little bit more granularity on the drivers of that growth?

Yes, a lot of it came out of our initiatives in oil and gas, as well as automation. So the team in the U.S., especially, but Canada as well, has done a very nice job of acting on the vertical markets that we identified within the industrial space that we thought were most attractive. So the fact that we can grow that business 14% year-over-year in the Americas in the fourth quarter, I think, as Henk said, is a testament to those initiatives working, the team executing them well, clearly taking share at that kind of growth levels. But also picking good markets helps. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then one last question. You've talked about getting back into the market in 2013 with the share repurchase program. Obviously, your stock's had a very nice run. Can you just give us some updated thoughts on how you're looking at that program in view of the move in the stock?

Yes, so the way we do it, it's really simple. We have a DCF analysis based on our internal strat plan and as long as the stock is trading below that, we're buyers. And I can tell you that the stock is trading significantly lower than our DCF analysis.

We'll take our next question from Brent Thielman with D.A. Davidson. Brent Thielman - D.A. Davidson & Co., Research Division: John, on the M&A strategy going forward, obviously you've been pretty active in the broadcast market. But from a geographic perspective, are there markets that are more of an emphasis for you than others?

Not really. I would say that we tend to look at the platforms. So for example, a lot of the more attractive industrial connector companies happen to be European, many of them are German. So we tend to look at it that way. There are some activities in South America that we're looking at, where the team is looking at expanding our footprint because we've done well there. We like that market. But I would say the majority of our time is spent from a platform point of view of building our funnel rather than a geographic point of view. Brent Thielman - D.A. Davidson & Co., Research Division: Okay. And then the Chinese industrial crane interest you have, it looks like it was a little lower year-over-year but near Q3 levels. Are you seeing improvement in that market such that we could see some better contributions there this year?

I don't think so. At this point, we expect that, that business will be roughly flat year-over-year. The construction market in China is not currently any better than it was. That could change, of course. But at this point, we don't bake any of that into our guidance for 2013. Brent Thielman - D.A. Davidson & Co., Research Division: Okay. So you're thinking sort of flat year-over-year for guidance?

That's correct. Brent Thielman - D.A. Davidson & Co., Research Division: Okay. And then lastly, Henk, I apologize if you touched on this, but in the reconciliation of adjusted operating income, you report amortization as $7.1 million, but the income statement says $9.6 million. Can you help me understand the difference there of $2.5 million?

Those are acquisitions that we did in the fourth quarter.

We'll now hear from Gary Farber with CL King. Gary Farber - CL King & Associates, Inc., Research Division: Just a question on your comments on the enterprise market. Could you speak to, from the outside, what should investors focus on to try to gauge if that market's getting better than sort of a slower recovery in the back half of the year?

Well, I mean, the macro numbers that we always look at, of course, is nonresidential starts, is a good macro number to look at. The leading indicator of that, of course, is ABI. And then I would say IT spend. And so when those things are moving in a positive direction, that's going to have a positive impact on our business. It's difficult to be able to know for certain how that's going to go. Currently, the projections we're looking at is that there should be some year-over-year improvement in the second half in all those areas. And like I said, we've taken, I think, a fairly conservative view of those markets given the fact that they just haven't rebounded aggressively since the peak in '07. But if those things start moving up, Gary, then you'll see it in our business. Gary Farber - CL King & Associates, Inc., Research Division: And the ABI has sort of moved up a little bit, is there some level at which it's going to make -- it's going to be more evident that there's going to be change happening?

I think it all comes down to nonresidential starts, right? So the ABI, of course, is an indication of confidence level within the architectural community and that should give you some sense of things. But you and I both know the ABI over the last 3 years has been all over the map. It'll go above 50 and then below 50 and then back above 50. It just hasn't yet been a particularly good predictor of activity. So the thing I'd look at is nonres starts. I mean, the residential market is doing well, as we all know, and typically nonres follows the residential market. That might be good news. The fact that the amount of available office square space is -- square feet is coming down is good news. So I mean, at some point, this thing will recover, the question is when. Gary Farber - CL King & Associates, Inc., Research Division: And just one last one. Do you weight -- you talked about IT spending and nonresidential, do you weight one more heavily than the other or they're sort of equally weighted as to try to determine what's going on?

The LAN market, the local area network market, nonres spending is more important. For the data center market, IT spend is probably more important. And with our portfolio the way it is today, Gary, we're still a little bit more exposed to the nonres spend than we are the IT investment.

[Operator Instructions] We'll take our question from Brett Levy with Jefferies. Brett M. Levy - Jefferies & Company, Inc. Fixed Income Research: You're at Ba2 with Moody's and B+ at S&P. Obviously, there's some disparity there. Is there a chance that the S&P rating moves up, and is that a priority for you? And then can you guys sort of talk about is there a target level of leverage that you think is most optimal for this company?

We talk to Moody's and S&P on a frequent basis, probably once a year. And we believe there is room for improvement, especially with S&P. Is it -- will it happen over the next quarter? We'll have to wait and see. On the leverage points that are optimal for the company, its current configuration, we feel the net leverage of 2.5 is an appropriate level that allows for continuing the M&A strategy in addition to completing our commitment to repurchasing shares.

And we have a follow-up question from Noelle Dilts with Stifel, Nicolaus. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: I was hoping you could just comment a little bit on -- provide a little bit more granularity on what you're seeing in Europe by country, in particular touch on what you're seeing in Germany, and then discuss some of the European expectations that are baked into your 2013 guidance.

Yes, so on a year-over-year basis, our EMEA business was down about 3.5% year-over-year. And we did see some continued weakness in Southern Europe on a year-over-year basis as you might expect. We did see a little bit of weakness in Germany, though, as well, so there was some impact from Germany. We think that, that is exports within the European community, as well as the impact from China. As it relates to our guidance for next year, it's our expectation that the European market will be no better than flat. And if there's any growth in Germany next year, which there may be based on China's performance, then that, too, would be good news for us. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Okay, great. And then one last question. Last quarter, you talked a bit about actively pruning some of your standalone lower-end cable products. Can you just provide an update on how that's going and if that was much of a drag in the quarter?

Yes. So it's really getting done at this point at the operating level, at the general manager level. So on a sequential basis, most of the portfolio management that we saw was within the consumer electronics business in advance of a sale. And there was a little bit that was done within our Enterprise business and our Industrial business, but it really was not significant. So in 2013, I think we'll see some as our general managers make trade-offs between the achievement of their operating margin goals and their organic growth goals and they'll use that as a lever as they see appropriate. But it's going to be at that level, not at an enterprise level.

And we'll take Matt McCall with BB&T Capital Markets. Matthew Schon McCall - BB&T Capital Markets, Research Division: So, Henk, I think an earlier question you said there's about $22 million of restructuring savings this year. Was that the correct number?

No. It's $22 million on the full year basis, of which we realized $9 million. Matthew Schon McCall - BB&T Capital Markets, Research Division: Okay. So that's still give you probably $0.15 this year. I'm trying to -- I guess the question is you've got some accretion from Miranda, you've got some -- or remaining accretion from Miranda to be recognized this year, obviously PPC, then you got the cost savings. I'm trying to gauge how much of the, roughly, if I start with the $2.80 of adjusted EPS this year -- or the 2012 that you just reported, go to the midpoint of your guidance range, you've got about $0.75 of incremental EPS next year. And it seems like there's very little -- even though you've seen some more, I guess, some better trends recently, there's very little organic EPS growth in there. Am I miscounting?

I think you need to include the fact that some of our restructuring savings are reinvested in strategic initiatives. So I think that's the component that you're missing in your model. Matthew Schon McCall - BB&T Capital Markets, Research Division: Okay. So then how much organic revenue-driven earnings growth is in the current guidance?

It's probably around $0.32 to $0.35. Matthew Schon McCall - BB&T Capital Markets, Research Division: $0.32 to $0.35. And what's the organic revenue assumption in the new guidance? Is it still 0 to 3?

Yes, it's unchanged from the update we gave you in December.

We have no additional questions. I would like to turn things back over to Matt Tractenberg for any additional or closing remarks.

Great. Thank you, Catherine. And to everyone on the call, thank you for joining us today. If you have additional questions, please reach out to the Investor Relations team here at Belden. We're happy to help you. Have a great day, everyone.

Thank you. And ladies and gentlemen, that does conclude today's call. Thank you all for your participation, and have a good day.