Good day, everyone, and welcome to Crane's First Quarter 2014 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to the Director of Investor Relations, Mr. Richard Koch. Please go ahead, sir.

Thank you, operator. Good morning, everyone. Welcome to our First Quarter 2014 Earnings Release Conference Call. I'm Dick Koch, Director of Investor Relations. On our call this morning, we have Max Mitchell, our President and Chief Executive Officer; and Rich Maue, our Chief Financial Officer. We will start off our recall with a few prepared remarks, after which, we will respond to questions. Just as a reminder, the comments we make on this call may include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our Annual Report, 10-K and subsequent filings pertaining to forward-looking statements. Also during the call, we'll be using some non-GAAP numbers, which are reconciled to the comparable GAAP numbers in the table at the end of our press release, which is available on our website, www.craneco.com, in the Investor Relations section. Now let me turn the call over to Max.

Thank you, Dick. As outlined in our press release last night, excluding special items, Crane's first quarter EPS was $1.05, consistent with our expectations. Excluding the benefit from the R&D tax credit realized in the first quarter of last year, adjusted EPS increased $0.06 compared to the first quarter of 2013. Sales of $717 million increased 14%, with core growth of 1%. As we discussed at our February investor meeting, we expect core revenue growth rates to improve over the course of the year, driven by several favorable trends: Fluid Handling should benefit from a continued global economic recovery, a pickup in North American specialty chemical capital spending and worldwide infrastructure investments. We also expect an improving capital spending environment for unattended payment systems, increasing commercial aerospace OEM build rates, a further recovery in the aerospace aftermarket and an improvement in North American and U.K. nonresidential construction markets. In addition, end market dynamics will be complemented by our ongoing growth investments in all segments. Based on first quarter sales, order momentum and backlog trends, we believe that we are on track to deliver on our guidance of full year core growth of 1% to 3%. Operating profit, excluding special items, increased 12% from last year. First quarter operating margin, excluding special items, was 14.1%, which was in line with our expectations. Regarding the MEI integration, we are proud of the work the combined payment team has completed to date, and the integration is progressing nicely. The acquisition has been well received by our customers, who are seeing the value we can offer through the combination of MEI and our legacy business. We are on track to deliver both $0.20 per share of accretion from MEI this year and $25 million of annualized synergies by the end of 2016. As a reminder, we expect to incur total transaction and integration-related costs in the range of $18 million to $21 million in 2014. While certain end markets for this business can have uneven demand tied to the timing of customer capital spending, the secular trends are favorable, and we continue to expect strong long-term growth for the Payment business. In addition, we are making good progress in our previously announced repositioning actions that will benefit 2015 and '16. These actions will improve Crane's cost position in our U.K. Fluid Handling and Electronics businesses. We remain on track to incur $10 million to $13 million of costs related to these actions this year, with savings of $5 million in 2015 and an annual rate of $10 million in 2016. Overall, we are pleased with the first quarter results, and we are reaffirming our 2014 EPS guidance of $4.55 to $4.75, excluding the special items we discussed last quarter and at our February Investor Day. Rich Maue will now take you through the businesses and provide some additional financial information.

Thank you, Max. I'll turn now to segment comments, which compare the first quarter of 2014 to 2013, excluding special items, as outlined in our press release and accompanying non-GAAP tables. In the first quarter, Fluid Handling sales of $311 million declined 0.7%, with a core sales decline of 0.6%. Backlog was $351 million at the end of March, compared to $334 million at the end of December 2013, a 5% sequential increase, with broad-based strength across the business. Importantly, order momentum improved as we moved through the quarter. Compared to the prior year, backlog declined 4%. The year-over-year decline in both sales and backlog is largely a result of unfavorable comparisons in our Valve Services business, which benefited from a strong nuclear outage season early last year. Specific to our process valve business, refining remained strong in North America, China, India and the Middle East. We also saw continued strength in power in the Middle East, India and China, with ongoing softness in North America. Chemical demand remained soft in the quarter, although we play primarily in the later-cycle portion of this end market downstream of ethylene production. We continue to expect improvement in our process valve business as the year progresses and into 2015, and we are seeing increased quote activity in both the Americas and Europe, as well as momentum in our project funnel. With respect to our commercial valve-related businesses, commercial construction and mining activity in Canada continues to be soft, while our U.K. and Middle East-based businesses have seen positive order momentum over the last several months. Fluid Handling operating profit increased 4% to $48 million, and operating margins increased to 15.4%, compared to 14.7% in the same quarter last year, primarily reflecting productivity gains, with some benefit from lower pension expense. We expect operating…

Thank you, Max and Rich, for your kind words. I've enjoyed working with you and the team and the investment community. Best wishes to everyone. This marks the end of our prepared comments. Operator, we are now ready to take questions.

[Operator Instructions] Our first question comes from the line of Matt Summerville from KeyBanc.

This is Joe Radigan on for Matt. First, congratulations, Dick, on your retirement.

Thank you.

First question is on the chemical end market. Rich, I think you said that you're still seeing softness there. Is there any signs of improvement? I understand that you're further downstream, so maybe you'll see it later in the cycle. But there are companies that are seeing improvement there. So when, realistically, would you expect to see an uptick on the chemical side?

Yes, Joe, this is Max. So as we've tried to explain where we're positioned, we have a leadership position with niche severe service applications, valves and solutions, and really specialty consumer chemicals and organics, fertilizer and -- at really highly erosive, corrosive, abrasive conditions. And what we're seeing is where we have this evolution of, certainly from a U.S. standpoint, shale gas, shale gas investment, moving to ethylene capacity additions, as we're seeing the movement downstream to base polymers and downstream petrochemical, that's really where we're going to see the growth. And we continue to be consistent here with seeing momentum in the later part of the year into '15, '16. We see this in terms of our project funnel, in terms of quote activity and we feel pretty confident of this. We track our product lines, and we've got some real granularity on this. I feel really pretty comfortable around where we're seeing some of the weakness in terms of slowness, a little bit of overcapacity on chemicals in a global basis, the shift to North America ethylene investment and how it's going to translate into opportunity as we move through the back half of the year. So I hope that adds a little bit of color around what we're seeing in chemical.

That does -- that's helpful, Max. I appreciate it. And then on the margins in Fluid, the year-over-year improvement is attributable to productivity. But even sequentially, you had some improvement despite almost $10 million in lower revenue. Is that strictly productivity driving that? Is it favorable mix in the quarter? Is it a sign that the quality of your backlog has improved year-over-year? Just maybe a little more color on the margin side for Fluid.

Sure. I think one of the additional items that contributed in the quarter itself was a little bit of a tailwind from reduced pension expense. We took some actions towards the end of 2013, where we closed our U.K. pension plan and -- or froze it. And from that action, our Fluid Handling business in particular, has benefited from that. So there was a slight pickup, from a margin perspective, attributable to pension.

Okay. And then last question, just on the Aerospace margins. You had higher RD&E, which you called out. I think, Rich, you said a portion of that has concluded in Q1. So does that mean there's still some going forward? And how much of a drag, if so, how much of a drag will that be, or should we expect that to be going forward?

Yes. So we did have some conclude here in the first quarter. So the R&D spend and the other investments a little bit more front-loaded. We, at our Investor Day back in February, did communicate that we would expect to see our engineering expense return to a 9% to 10% level, compared to, I think, it was around 7%, 7.3% last year. So we're going to see that continue through the balance of the year. And we did guide to margins being down overall for the segment, as a result primarily of those R&D investments and program investments. So again, some -- while some did conclude, we will see some further investments as we move through the balance of the year. That said, we do also expect to see revenues also increase as we move through the balance of the year and also continue to see some additional favorability from mix settlements associated with the aftermarket side of the business improving.

So just in terms -- just a clarification on that, though, Rich. So I mean, margins were down over 300 bps on a year-over-year basis in the first quarter. I mean, that was just a little bit more severe than what we had modeled. Should we expect year-over-year improvement going forward on the Aerospace margins? Or is it still going to be a year-over-year headwind, where you're going to see degradation?

Yes. So you'll see it continue to improve as we move through the balance of the year as a result of those elements I just described. So when we look at our guidance on a full year basis, we feel comfortable on the margin target that we provided back at Investor Day.

[Operator Instructions] Our next question comes from the line of Ajay Kejriwal from FBR Capital Markets. Ajay Kejriwal - FBR Capital Markets & Co., Research Division: So just to follow up on that Aero margins question, your full year forecast kind of implies improvement for the rest of the year. So maybe any color on what would drive that. Is it improvement in the aftermarket business? Or I imagine the engineering spend remains kind of flattish from what you saw in the first quarter. So what would get that margin up from 1Q levels?

Yes, so the primary area will be improved absorption as we move through the balance of the year with higher sales, Ajay, as well as a better mix in the aftermarket side of the business. So we -- thinking about coming off of 2013 and our year-over-year comps continuing to improve over the last, I think it was 3 quarters or so. And then here we are again with some nice improvement in the aftermarket mix or growth over the prior year. We would expect that to continue as we move through the balance of '14. Ajay Kejriwal - FBR Capital Markets & Co., Research Division: So the aftermarket of 4% in the quarter is the expectation that, that rate picks up for the course of the year?

Yes, that's correct. Ajay Kejriwal - FBR Capital Markets & Co., Research Division: Okay, good. That's helpful. And then, Max, maybe a big-picture question. So organic growth rate 1% in the quarter. And I know there are puts and takes here, Electronics not really helping. But when you think about the organic growth profile, could there be an opportunity to improve the growth profile for the company? I know you mentioned end markets, new products and all that. But how do you think about restructuring the portfolio? How could that fit into the mix of improving the growth profile here?

Well, you asked quite a bit there, Ajay. Growth, growth profile and portfolio. We like the portfolio, as we've consistently said. We've become more focused over time, over the last 10 years. And with our 3 large growth platforms, I think it sets us up extremely well. From a Fluid Handling standpoint, now we feel very confident in our guidance of 1% to 3%. As we continue to move through the year, as we communicated on Investor Day, we have, in addition to market growth, we're driving at increasing our served market. And we gave some of those examples on our Investor Day, with the Soft Seated Ball Valve expanding market size by $350 million, examples in Gate, Globe, Check, so forth. So I'm very pleased with our teams' efforts across the board with investment in technology and driving growth. We're seeing recovery in the U.K., which is quite strong. Outside of the chemical space, I'm very pleased with our performance by product line and by region, related to power, refining. I'm seeing some real pleasing momentum there. Our Aerospace Group, as we communicated on Investor Day, we won content that is equivalent to $2.6 billion, moving out through 2020 and provides us with 4% to 5% compound average growth rate. We have combined our legacy payment business with MEI in end markets that we like, that are above GDP growth. And I'm excited about where we are. And as you know, we'll continue to look at the free cash flow that we free up and deploy to reinvest both in core, as well as through acquisition, and looking at those businesses to strengthen our core as well as near adjacencies. Ajay Kejriwal - FBR Capital Markets & Co., Research Division: That's helpful. My question, I guess, I was trying to get a response on if divestitures might be something you would consider to help drive the growth rate higher.

So we'll be consistent with how we've addressed this in the past. We've been -- deployed capital with 20 acquisitions, 19 divestitures over the last decade. And we will continue to carefully look at a pruning that makes sense, Ajay, and we do that in normal course.

And that concludes our question-and-answer session for today. I would like to turn the conference back to management for any concluding remarks.

Well, thank you, Karen. I have a few closing comments before we conclude the call. The first quarter was a solid start to 2014, and we expect momentum to improve over the course of this year. We had strong secular tailwinds in several of our businesses, and the cyclical outlook is improving for key end markets, including chemicals, aerospace and nonresidential construction. The integration of MEI is progressing smoothly, and we remain confident in our accretion targets for 2014 and beyond. We are always gaining -- we are also gaining traction with our repositioning actions and importantly, we are executing on our long-term growth investment strategy. We are on track to deliver on our 2014 guidance and remain committed to our long-term target of at least 10% EPS growth per year. Thank you for your interest in Crane, and Rich and I look forward to speaking with you next quarter. Thank you all.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a good day.