Good day. My name is Shelby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter 2017 Results Conference 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. Ms. Maria Lee, you may begin your conference.

Thanks, Shelby. Hubbell announced its fourth quarter results for 2017 this morning. The press release and the earnings slide materials have been posted to the investor section of our Web site at www.hubbell.com. Please note that our comments this morning may includes statements related to the expected future results of our company and are 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, I'll hand it over to Dave Nord.

Okay. Thanks, Maria. Good morning everybody. Thanks for joining the call. As you can see from our release, we had a strong and certainly an active finish to 2017. We've got a lot to talk about this morning, particularly because you know, as you can see in our release, it's a much more complicated release, lot of de-activity. I think everyone is reporting with the complication of the impact on tax reform, but we've got the added complexity as we're going to talk a bit about our proposed acquisition with Aclara. So, we'll spend a little time trying to go through all of that and simplify it the best we can. First, you look at the -- our sales in the quarter were up 7%; 5% of that coming from organic growth, so good performance, very pleased to see that. Bill will talk more about some of the details there later. And our reported operating margins expanded 80 basis points. Adjusted operating margins were flat, but importantly we saw expansion in the electrical segment, which was a nice -- a direction that we've been waiting for. Some pressure on the Power side as we've seen the impact of some of the commodity headwind that we've talked about all year and as expected. So, operationally a very solid quarter. And of course, in addition we announced the largest acquisition in our history, $1.1 billion for Aclara Technologies. It's on track to close in Q1. And of course, by the way, we had U.S. Tax Reform was passed. And certainly those two items had a significant impact on our reported results of $0.37 in the quarter. When you adjust for the impact of the costs associated with Aclara, at least that we incurred in the fourth quarter, and more importantly, the impact…

Thank you very much, Dave. Good morning everybody. Thanks for joining us. Dave basically gave you the summary on page three. So I am going to use the materials and start on page four, which highlight our sales profile, the 7% growth rate to 918 million; 5% organic, 2% via acquisition. That organic represented the highest quarter we had organic sales in the year, so attractive acceleration there. Going through the end market starting with non-res, we are still growing there, the new construction being higher contributor than the renovation and relight. The data still looks good there. Our commercial construction business grew mid single-digits through the quarter versus down in that relight, you will see that our lighting business grew about 1% on units. In the industrial markets, you'll see our composite shows sideways. I think that's reflective a little bit of where we are exposed. On the light industrial side, we grew in a low single-digits area, primarily from our wiring and connectors business. On the heavy side though, we continue to have mid single-digit declines. So, our exposure skewed there has caused us to be quite flat in that part of industrial. Dave highlighted oil and gas, and he highlighted electrical side. Resi growth is still coming from single family. The multi-family flattened out quite a bit outside of the improvements and remodeling. So, towards the comment on the 2% from acquisition, that represents six different investments contributing in the quarter, and I think is a good reflection of our investment strategy to invest in high growth areas with high return potential. So those six areas, we have one in harsh and hazardous, one in gas distribution, three in power, and one as Dave had commented in the internet of things R&D side. So, I think distribution…

Thanks, Bill. Hubbell free cash flow was $299 million for full-year of 2017. The net income of $243 million included a $57 million charge related to U.S. tax reform, for which the cash will be paid over time. You can see the related increase tax liability is driving the change in the other line. Working capital with the use of cash of $29 million, the increase was driven by inventory build to support anticipated higher demand, and partially offset by stronger collection. CapEx increased as well, reflecting a heavy investment in automation. All in, free cash flow was 123% of net income, but recall that net income was burdened by the significant tax reform charge. If we adjust net income for the tax charge, conversion was approximately 100% on a normalized basis, consistent with our target and our expectations. On capital structure on page 13, we ended the year with $375 million of cash, the vast majority which was held outside of the U.S. We had $63 million of commercial paper outstanding and you can see our three tranches of long-term debt. You can also see the impact of the refinancing we completed in the third quarter when we replaced the 2018 notes with notes due in 2027 at a lower rate. Debt to cap is just under 40%, and we have ample liquidity with a $750 million credit facility back in our commercial paper. So, not much change year-over-year, although I should point out that once we close Aclara, the balance sheet will likely look different as we expect to add debt and use cash to fund the transaction. Let me turn it back over to Bill.

So let's switch to our outlook for next year, and we'll start with a pie on page 14. That looks pretty similar to what we talked about in October with you all. And you'll see that 2% to 4% expected in electrical T&D, Gordon's growth rate was 6%, if there was a couple percent of storm contribution it was performing at the high-end of that, last year they probably had some share gains in that, so we feel that outlooks justified. The industrial improving to two to four, again we had experience in '17 that was favorable on the light side. So what really helped contribute to that would be a pick-up in recovery on the heavy side, which is margin-friendly to us. And you see on the oil and gas, we were performing high single-digits throughout '17, and so, those harder to beat compares, we've got three to five for the market outlook. The first quarter will be the easiest of the year, and then we'll have some harder comps in the backside. And the non-res, those markets are still growing, in the two-ish to 3% range to see there. So that results in 2% to 4% market outlook, and you see on page 15, we'd be adding approximately 15% through acquisition. A couple of points coming from wrap brad investments we made in '17 and about 13% if we get Aclara closed in the first quarter. So that would be to total net sales in the 15% to 20% range. We'll show you a picture on the next page, but diluted EPS of 610 to 650 on a reported basis, and 695 to 735 adjusted that will assume our first quarter Aclara closed, and it would exclude Aclara acquisition-related and transaction costs and the adjusted, but will include…

Okay. Thanks, Bill. Yes, so before we wrap up here, let me just try and first close out 2017. Certainly, I like -- this time of the year I like to look back at how we view 2017, when we were looking ahead a year ago. And many of you recall that we were optimistic about the market, but there was some big uncertainty there. One was what's going to happen with trade, what's going to happen with tax policy? You can look back at some of my notes, and the calculations we were doing about border taxes and the implication of that, and what that was going to mean. So I think there was a lot of positives and negatives there. I think we navigated the year. Not having those issues, you know, in any great degree, and fortunately ending with some very positive tax reform that certainly helps us as a U.S. domestic company to be more competitive. I think we had unfortunate circumstances early in the year with the performance of our lighting business and some execution issues that forced us to really hunker down and focused on the execution, and I think the team there has done a great job of recovering. The markets have been supportive, and we've been able to -- most of the businesses actually outperform our expectations that we had going into the year. And we've been able to re-deploy some of that outperformance in investing in the future, investing in technology when you think about our iDevice capability and continuing to acquire other businesses, expanding in the gas business in particular, as well as in our core power business. So I think all very positive things to navigate the year, and I think all in all, a very successful year. I…

[Operator Instructions] Your first question comes from Christopher Glynn of Oppenheimer.

Thank you, good morning.

Good morning, Chris.

Congrats on working through a number of items and arriving at this point into 2018. So just, as we look at Power Systems, just wondering about their strong volume performance relative to the market, particularly in the second-half of 2017, if you could kind of delayer that outperformance a little bit, and maybe make a suggestion about kind of what remains relative to your added prowess relative to the market growth rates there?

Chris, I would say that when you deconstruct our power business, the distribution piece is larger than the transmission. The distribution tends to be driven more by MRO and lives off the installed base. That tends to have a GDP-type growth rate, and is driven a lot by operating expense factors. I think what we saw this year was an increase in CapEx by IOUs, and that has both distribution and transmission affects. I also think we saw a decent amount of business from renewables, particularly on the wind side that required connectivity via transmission construction to the population centers. And so it feels to us like that two to four is a sustainable growth rate for Power, and that they had an above average year here in terms of drivers pushing that volume through.

Okay, that's very helpful. And then on the acquisitions, 15%, that gets you roughly 550. Just wondering how much of that so-called balance there might be in Electrical, and when does it assume Aclara closes.

Yes, so it assumes Aclara in the first quarter. And in terms of Electrical it's really mostly in Power. So Dave mentioned the monitoring-measuring small acquisition we did in Power. And so there's very little that wraps around in Electrical. The iDevices volume that's left behind will be recognized in Electrical, but it's mostly power.

Okay. So that's six or eight weeks of Aclara in the first quarter, it sounds like?

Well, Chris, we're assuming middle of February just for simplicity. I think the contract called for -- contemplated that we would close by February 20th. That's not a hard and fast date, but that was just the target date and somewhere between that. So then we're just -- we're using a February 15th for at least our guidance purposes.

Thank you. And then for the last one, on the Lighting business, any insights or developments in terms of what you're seeing with contractor backlogs or your quotation activity that isn't translating into firm orders and backlog just yet?

I think that -- I mean there's nothing enlightening there. It's pretty spotty. I think the outlooks for Lighting and demand are pretty muted. So -- and I think we've come a long way from the go-go days of double-digit growth expectations. And I think now it's a case of navigating relatively flat markets, and trying to navigate a tougher pricing environment. We are clearly focused on making sure that we're participating in the markets that make sense for us. That's always been our strategy to focus on the more specified products where you can have a better capability of holding and commanding a price that makes our profit profile scream. So there's a lot of questions out there, but we think at least our business has stabilized, and we think where we see the market has stabilized. And that's our plan for the year.

Okay. Thanks Dave, Bill.

Your next question comes from Rich Kwas of Wells Fargo Securities.

Hi, good morning everyone.

Hi, Rich.

So Dave, what's the assumption for Aclara in terms of underlying operating performance for the year outside of the amortization. I mean how should we think about growth rate margin for that business over the course of '18?

Yes. Rich, it's growing towards the high single digits. And again, I think as we shared with you just after Christmas, there's a decent amount of visibility on their projects and their pipeline. And it's performing roughly in line with Hubbell averages on an OP basis before all the acquisition-related accounting.

All right, so, Bill, no change since the announcement with regard to margin profile growth rate?

No.

Okay, all right. Price cost, it sounds like we should think of Power as being more impacted in '18 versus Electrical. But any color there in terms of how we're trying to model this out and the impacts?

Yes, it's a function really of Power's income statement has a lower gross margin and a much lower S&A to get to a high OP level. And because of that lower gross margin they just have a higher sensitivity to material costs, Rich. So both sides of our house are feeling it. The commodities that are getting us are copper, and steel, and aluminum, including resins as well as oil prices back up here. And as Dave said, I think these are good news things. It's a sign that demand in the industrial economy is up, which is good for us. But it just creates this challenge of having to manage with price. And so Power just has a little bit more intensity to it because of its gross margin profile.

On Electrical, how are the price implementation, how has that been going with realization, et cetera? How do you feel about…

Yes, I think that they're going to be rolling out price increases, as Dave said. The expectation from the customer base I think is that they're coming, and they'll roll them out on a staggered schedule. I think the power guys tend to have more of a blanket business and quoting system, that around this time of the year you start to re-price things that go into the maintenance and repair business rather than the project stuff. And so it's till too early. So I think Dave's described an environment where I think the manufacturers are in the position of asking, and that takes a while to settle out and see what sticks, see what competitive responses. And that usually takes a couple of quarters for us to get a good beat on. And so we're at a point where we have to ask and yet it's too early for us to tell you what the impact of that will be.

Okay. And then just last two for me, on investment. So you talked about tax benefit but then net of investment. What's the investment amount for this year, what do you have embedded in the outlook?

Yes, we were assuming roughly a dime of that benefit would get put back into our employees.

Okay. And then, Bill, anything on Q1 as we -- should you think about seasonality in terms of Q1 earnings, anything that you would note as being outside the norm?

Yes, I mean Q4 from a sales perspective really was seasonally pretty typical for us in terms of what it contributed to the year. So I think the affect that's rolling into Q1 most profoundly is this price cost. Because it's too early for any price impact to offset, and yet you can really see the affect of what we're paying for our commodity. So I think there's a nice market volume tailwind, but a cost headwind from materials as we roll into Q1. I hope as you saw, Rich, that we'll be hosting an investor day, and I think we can spend more time on those effects in early March there when we're together.

Great. Yes, thank you, appreciate it.

Your next question comes from Jeffrey Sprague of Vertical Research.

Hi, good morning. This is John on for Jeff. How are you?

Hi, John.

Hi. So I guess maybe just a couple of detailed questions around Aclara. Do you have or can you tell us what the amortization amount you're using in your adjusted EPS construct, the back-out?

Yes, so what you can see, it is that as you add back the costs you're getting towards the ballpark of the high $0.60 of acquisition-related accounting. And what's embedded in that is kind of what will be a run rate for 10 years or so. But there's a, in the first two quarters, there is a much front-end loading in the form of backlog and inventory write-ups, and so it's higher in year one that will be going out in future years as a result of that.

Okay. And then one question just to make sure. So in the construct you're only excluding the Aclara amortization and not the other deals. So I think that's correct, so what I guess -- what was the thought of just excluding Aclara kind of versus all the other amort and going to kind of like a full cash EPS construct.

Yes, I think we wanted to build the logic of the flow of the page was to build the core business plus tax. Those were really the most -- we know those are going to happen. And then Aclara, being still conditional on close, and I think it felt like being able to tell you all what the impacts of the acquisition-related accounting expenses were was pretty important given the size of it. But I think we feel like the typical level of acquisition that we do, the 30s, 40s, and 50s as part of our base. That amortization gets paid for in the base.

Got you. And then one last quick one, so if we go back to the December presentation, you have that front log number that you talked about. I think it was $1 billion-plus. Was that actually one business or is that what's open competitively, and we would kind of assume you'd win your normal share of that potential front log or pipeline there. Just any color around that would be helpful.

Yes, they actually have two different concepts. One is a pipeline which is opportunities out of which you would like to win your fair share. But as soon as they get down to backlog those are situations that in their history become revenues. And there the only question tends to be does it slide by a quarter or two, and so you can sometimes get a year affect. But those become projects that they work on. So that billion-ish was really a couple of years' worth of revenues in the backlog.

Great. Thank you very much.

Okay, thanks.

Your next question comes from Steve Tusa of JPMorgan.

Hi guys, good morning.

Good morning, Steve.

Yes, so I guess this big $0.80 add-back, I mean can you just break that down for us. I mean how much is the ongoing -- I guess I jumped on a little late, but how much is kind of ongoing amortization that would have -- that stays with the business for an extended period of time?

Yes, we haven't broken it out at that level. But of the add-back, there's the expenses related to the transaction which is roughly half of the $0.35 of the red bar. And then the balance is the acquisition-related stuff, Steve. And so you're right that that is higher in year one specifically based on the inventory write-ups and the backlog write-ups, as opposed to what it will be for, let's just say, the next 10 years. But we haven't distinguished those two numbers yet.

But I guess on Bloomberg, or whatever, you kind of are guiding us to go to the 695 to 735 number. And you'll be excluding kind of the ongoing 10-year stuff going forward? Do you know what I mean, like there's one-time costs which you just highlighted, but then there's ongoing amortization. I mean that's what everybody's trying to kind of figure out and look into here because it's a little bit confusing.

Right. No, I understand. I mean our basis is guiding on reported results and providing some of the adjustments that are influencing that. But those are always subject to interpretation, and this is unusual, and it's early on, so.

Yeah, okay. On the -- I guess I'll just follow-up on that offline. On the sales guidance, I think you're talking about 15% to 20%. You have 15% coming from acquisitions. Is that just rounding when you look at kind of the guide of two to four plus a little bit of outperformance, is there just rounding in there or kind of I just backed into an ex acquisition number of zero to 5% obviously. Is there something else in there that, foreign exchange or anything else, that kind of moves that number around or is that just rounding?

Yes, just rounding.

Okay. And then one last one, specifically on price cost. You actually, on the outlook bridge, stripped out kind of the commentary around Lighting. I know last year, in the outlook bridge and on the third quarter you had in some of the moving parts to consider, you highlighted Lighting specifically. It's not really highlighted on this bridge. Obviously it's embedded maybe in material cost headwinds. Does that mean you guys think that Lighting is a little more stable here and less of a factor to call out?

Yes, I think that's a good interpretation. I guess the charts are a little busy as it is to break out that business. But I think you're also right that the pricing we expect to moderate next year, and as Dave was highlighting, their costs have improved, and so it's a much more stable operation executing much better to plan. So it's basically embedded in exactly as you said.

All right. So I have one more quick one. Just to be clear, are you guys considering going to a cash EPS number that excludes on-going amortization or is this just a one-time call-out. I know people have asked in a thousand different ways, but just wanted to kind of get it on the record. Are you guys considering this or is it, "Hey, this is just Aclara. We're just calling it after you guys?"

I would say that it's being considered, but for now it should be viewed as a one-time callout just because of the significance of it.

Perfect. All right, thanks for the color, guys.

[Operator Instructions] Your next question comes from Josh Pokrzywinski of Wolfe Research.

Hi, good morning guys.

Good morning.

Just on the T&D side, I mean two to four is a pretty big moderation. I think a lot of the enduring tailwinds excluding maybe the storm activity not repeating, seem like they're durable in the medium-term. How should we think about incremental margins if there is an upside there? I know you're grappling with price cost and mix is always a factor. But if some of the continuing tail winds that you see, particularly in Electrical T&D relative to some other niches within power strengthen up. Is that something that comes in at a decent margin again or are we still grappling with price-cost for a bit?

Yes, I'd say certainly for the first-half of the year, Josh, we're going to be grappling, that's a nice word. And we'll have to see how pricing shapes up. But it's pretty clear from fourth quarter we've got another couple of quarters of dealing with that I think.

And is there a book-to-bill that's worth discussing in the power side that could maybe bridge us from some of these higher growth rates we're seeing today. So that two to four or is that just "Hey we had a great year, and let's not start off…

No, I mean the volume ex acquisition was 6% for the year. And there's a couple of points of storm in there. So we would say it performed at 4% for '17, obviously the high end of the guide that we gave you. And we would feel like there was some share and outperformance in '17. And so you'd have to repeat that, I think, to get to the 4% again. So it's actually not -- I know given some of the storm and acquisition activity it maybe looks like a decel, but it's not actually from an operating perspective.

Got you. And then just on the oil and gas side. What's the tone and timbre from customers these days? Obviously everyone sees the oil price chart and gets bullish, but I know these things take time to kind of start back up. Can you talk to maybe inventory in the channel, any kind of typical lead/lag situation? I know that you guys have historically some offshore exposure which -- it might not get better for quite a while. Maybe just help us kind of calibrate what some of this improvement in overall activity could feed into your business, and when.

Yes, let's separate, Josh, oil from gas in your question. So, on the oil side I agree that where our dollars are really driven is deepwater platforms. And I agree with your assessment that rig count doesn't feel like it's going up anytime soon. The onshore rig count is up dramatically, let's say, 75%, but the content for us of those is much, much smaller. So you need a lot of those to get double-digit growth rates. Dave mentioned some of the diversification where we might have been more heavily dependant on oil, trying to get into industries like food processing, and chemical plants, and distilleries, and the like, to try to diversify that just a little bit. But I'd say that given the oil price backdrop it has a constructive tone, which is I think what you're asking. On the gas side, I think that there's some quite robust spending that's driven a little bit more by regulatory need and ageing need to get the infrastructure upgraded, so not so much dependant on a commodity price or on exploration. We're obviously downstream on the distribution side there. And so that feels, and to your point, you have seen lead times on orders lengthen there. So it's a business that's growing and we feel has the pieces underlying that are constructive and positive.

Awesome. If I can just sneak in one tiny extra one; if there is demand upside you guys see this year, is there an investment fold that's kind of waiting in the background that you would deploy, or is that $0.10 of investment you know, kind of targeted and already where it needs to be and probably more of interactive [ph] number?

I think you've got the question of how much cash can be brought back from overseas that will help us de-lever, and I would hate to say that we are out of the acquisition market. I think we're going to be in '18 much more opportunistic and picky about it, and try to get our big deal on board and closed and integrated and start working down the depth that we brought. But I would say we are designing ourselves to have flexibility, you know, so that we are not closed out.

Got it. Thanks, Bill.

Your final question comes from Joseph Osha of JMP Securities.

Hey, I made it. Thank you very much.

Thank you.

Two questions; first, looking at power and T&D, I mean, we have heard your comments about the storm side, I'm wondering if you have any comments on what you're seeing on the transmission side of the business? And then I have a quick follow-up.

Yes, the IOU CapEx was a positive cycle in '17. It was clearly construction going on, and I think we saw certain regions, may be the Western region was pretty active. We saw renewables contributing as they needed to be connected, and the power collected there transmitted to the population centers. So, the T side had a very positive year in '17.

Okay, great. And then, I'm not quite sure you can answer this or not, but I'll ask; can you drill down a little more into what the post acquire balance sheet is going to looking like, or do we need to wait for March for that?

Yes, I think we are going to need to wait till Investor Day, and not just on the balance sheet, but to extent we do get it closed, you know, we'd hopefully have some of the management team there and some of the product for you to see, and that could be a real showcase for us there, so we can educate everybody on who they are and what they are.

Okay, I'll be there. Thank you very much.

There are no further questions in queue. I'd now like to hand the call back to Ms. Maria Lee for any closing remarks.

Thanks everyone for joining us. Steve and I'll be available all day for any follow-up questions. Thank you.